Archive/File: imt/tgmwc/tgmwc-11/tgmwc-11-108.06 Last-Modified: 2000/01/13 [Page 367] DR. KAUFFMANN: If a defendant tried to exterminate churches, then he would not take an action exactly opposite to that policy. The witness will be able to attest to this fact. THE PRESIDENT: With reference to churches or with references to individual people? DR. KAUFFMANN: Individual people as representatives of the church of course. I do not believe you can separate the two. THE PRESIDENT: The Tribunal thinks that the question is incompetent. DR. KAUFFMANN: Thank you. Then I have concluded my examination of the witness. THE PRESIDENT: The Tribunal will adjourn. (A recess was taken until 14.00 hours.) THE PRESIDENT: Have you finished, Dr. Kauffmann? DR. KAUFFMANN: My examination of this witness is finished. THE PRESIDENT: Does any other member of the defence want to ask questions? DR. SAUTER (counsel for defendant Funk): Mr. President, I have some questions to put which are, of course, not in any way connected with Kaltenbrunner, but with reference to subjects which will have to be dealt with later during the case of the defendant Funk. However, since the witness can be called only once, I have no other choice than to put to the witness now these questions, which really ought to be put later. DIRECT EXAMINATION OF THE WITNESS HERMANN NEUBACHER. BY DR. SAUTER: Q. Witness, you said today that the German Foreign Service had sent you to Roumania, I believe, on economic questions. Is it correct that during the time you were working in Roumania, you were also representing and handling economic interests in Greece? A. In the autumn of 1942, notwithstanding my assignment n Roumania, I received a special assignment, together with an Italian financial expert, Minister d'Agostine, to prevent by proper methods the total devaluation of currency and the total disruption of the economic structure in Greece. Q. Witness, were you suited for such a very difficult task by training and previous experience? Please tell us briefly, what posts you held before, so that we can judge whether you were capable of carrying out this task in Greece; but please, witness, be very brief. A. I was one of the foremost economic leaders in Austria; at the age of twenty-eight I was a director; at thirty I was the general manager of the Viennese Settlement Corporation, and at the age of thirty-three I was directing a large combine in the building trade and building material industry. I was an executive of the Austrian National Bank and a member of the Austrian Customs Auxiliary Council (Zellbeirat). I was a member of the Russian Credit Committee of the City of Vienna and a member of the Commission of Experts for the investigation of the collapse of the Austrian Credit bank Corporation. Therefore I brought vast economic experience to this task. Moreover, I was entirely familiar with the economic problems of the Balkans since I had last worked on economic questions relating to the Balkans in the central finance administration of I.G. Farben in Berlin. Q. Witness, several days ago, when I visited you in prison, I gave you a report of a commission of the Royal Greek Government, addressed to the International Military Tribunal, and I asked you to read it and state your opinion. Is this report correct? DR. SAUTER: Mr. President, it is Document USSR 358, and it has the additional number UK 28. [Page 368] Q. (continued): Witness, in this report of the commission the matter is presented as if it were through German authorities that the economic structure of Greece was totally destroyed and Greece was plundered, etc. In the end this reflects on the defendant Funk. Please don't go into detail, but tell us briefly, what is your impression in this connection? THE PRESIDENT: Yes, General Rudenko. GENERAL RUDENKO: Mr. President, I would like to make the following statement before the Tribunal: In regard to the Report of the Greek Government, which was presented before the Tribunal by the Soviet Prosecution as provided by Article 21 of the Charter, it seems to me that the question of the defence counsel, asking the witness to give his opinion on this particular matter, should be rejected because the Witness is not competent to give an opinion on the Report of the Greek Government. The defence counsel can ask him a concrete question in regard to any particular fact, but that is all. DR. SAUTER: Mr. President, if it is desired, I can, of course, put the questions individually. It will probably take a little longer but, if the Soviet Prosecution so desires, I agree. May I now question the witness? Witness, is it correct ...? THE PRESIDENT: Wait a minute. Dr. Sauter, what exactly is it that you want to ask the witness about this report? DR. SAUTER: The report of the Greek Government, which has been submitted by the Soviet Prosecution, states, for instance, that Germany, after occupying Greece plundered the country and brought about a famine by exporting an excessive amount of goods. It states that the country was charged excessive occupation costs, and that the clearing system severely handicapped the country, etc. Through this witness, who, as the economic expert of the German Foreign Office, handled these problems in Greece at that time, I propose to prove, first, that these statements are untrue; second, that this state of affairs existed when the German troops marched in, and was not created by the German authorities; and, last, that it was the defendant Funk who tried repeatedly to improve matters for Greece in the clearing system, and had considerable amounts of gold brought to Greece. THE PRESIDENT: Well, can't you put a few short questions to show that the scheme which this witness introduced into Greece was in accordance with international law and was not unfair to Greece? If you could do that, that would meet the case, wouldn't it? DR. SAUTER: Yes. That is what I wanted to do, and I am sure that the witness would have done so on his own initiative. BY DR.SAUTER: Q. Now, then, witness, are you acquainted with the viewpoint of the German economic authorities and particularly of the defendant Funk in regard to the question of the clearing of debts incurred by Greece and the question of how Greece was to be treated within the clearing system? A. Concerning the mutual financial charges and obligations I had spoken to the Finance Minister, Schwerin von Krosigk at one time, and it was proposed that at some later date after the war, the claims and counter-claims were to be settled on the basis of a common denominator. Q. And at that time, during the war, how was the question of this clearing account dealt with? A. Regarding the economic events in Greece, I can give you information based on my own observations only starting with October, 1942. At that time, when I first came to Athens, the Greek currency had already been considerably devaluated and the circulation of banknotes had increased by something like 3,000 per cent. Greece also suffered an economic set-back due to the fact that, apart from a progressive inflation, an attempt had been made to introduce in Greece a planned economy with ceiling prices according to the German pattern. The result was, of course, that the merchants selling Greek goods suffered losses when they were [Page 369] paid later. On the other hand, the importers of German goods made tremendous profits, because they paid the Reichsmark at the rate of 60 on the clearing account and were reselling the goods at a rate of about 30,000 by the time I arrived. This chaos, due to the inflation and attempt to introduce a planned economy on the German pattern, could be remedied only by transforming the black market in Greece into a completely free market. The two experts of the Axis powers, at the end of October, 1942, introduced this measure with considerable success. Within a few weeks all shops and markets were full of goods and foodstuffs; the prices of food dropped to one-fifth, and prices of manufactured products to one-tenth. This success was maintained for four months in spite of increasing inflation. Q. Dr. Neubacher, is it true that the defendant Funk, who was Reich Minister of Economy at that time, proposed during conversation or in correspondence he had with you that, in spite of the shortage of goods prevailing in Germany, a considerable amount of goods should be sent from Germany and other European countries to Greece? A. After discussing together the difficulties of my task, Reich Minister Funk and I agreed that a maximum of goods should be transported to Greece. I secured not only 60,000 tons of food at that time but also large quantities of German export goods, since it was hopeless to try to stop an inflation or the effects of an inflation of prices if no goods were available. Reich Minister Funk supported exports to Greece with the view of restoring the market conditions to normal with every means at his disposal. Q. Are you aware, witness, that since transport from Germany to Greece had become impossible, the defendant Funk made every effort to have goods transported on neutral ships, furnished with British navicerts, in order to combat as far as possible the already impending famine? A. I think that was between 1941 and 1942 when I had not yet arrived in Greece. In 1943, when Greek waters became closed to us, because all ships were being torpedoed, and the railroads had become the objects of incessant acts of sabotage and dynamiting, I, with the help of the Swedish Ambassador, Alar, who directed the International Relief for Greece, applied for British navicerts for food transports to Greece. The British granted this application and, when our own means of transport ceased to exist, the Swedish boat Halaren, loaded with German food supplies for Greece, went from Trieste or Venice to the Piraeus once a month. Q. And Funk, the Reich Minister of Economy at that time, played an important part in these actions, didn't he? A. Reich Minister of Economy Funk took a very active interest in the Greek question, a question which is unique in the history of economy, and he supported me in my efforts with every means at his disposal. Q. Witness, do you know anything about the fact that the defendant Funk advocated in particular that the occupation costs should be kept as low as possible, and he took the view that it would be preferable that a considerable part of the occupation costs should rather be charged to the German account than to the Greek account so that Greece should not be overburdened too much financially? What do you know about that? A. I know too little of the details of what happened in Berlin; but at long intervals I reported to Reich Minister Funk about the situation in Greece and I know that he made my reports the basis for his own interventions. He was perfectly aware of the fact that the Greek economic problem during the war and within the blockade was so infinitely complicated that all efforts had to be made to prevent a complete dissolution of the economic structure; and he intervened frequently to assist in averting the catastrophe. Q. Witness, did defendant Funk act in such a way that the Greek currency, the drachma currency, was devaluated or that it deteriorated, or did he, on the contrary, endeavour to back the value of the drachma, particularly for the purpose of preventing a catastrophic famine? Please state briefly what you know about that. [Page 370] A. Reich Minister Funk always made every effort in the latter direction. He proved that by enforcing exports to Greece, and finally by the grant of a considerable amount of gold for the purpose of slowing down the Greek inflation, which grant, in accordance with the Four-Year Plan, involved the gravest sacrifice for Germany. Q. You say "a considerable amount of gold." There was very little gold in Germany during the war. Can you tell us how large the amount of gold was which the defendant Funk sent to Greece at that time for the purpose of backing the drachma to some extent and preventing the impending catastrophe? How large was the amount? A. All told, one and one third-million gold pounds were invested in Greece and Albania, to my recollection, to back the currency, and more than one million gold pounds of that went to Athens. Q. One and one-third of a million gold pounds? A. Greece and Albania got that amount. Q. And now, witness, I have a last question. Is it correct that all these efforts on the part of the German economic management and the German Minister of Economy were often frustrated and foiled, particularly by Greek merchants. To quote just one example, there were cases where German factories sold German engines for 60 drachma to Greek merchants - that is to say, 60 drachma which had actually no value - and the Greek merchants sold these same engines which they had bought for 60 drachma from Germans to the German Armed Forces at 60,000 drachma a piece. These are supposed to be cases which you discovered and on which you reported to the defendant Funk, and that is why I am asking you whether that is true. A. I have the following comment to make about that: It did, in fact, happen, but I want to state that the Greek business men had to do that in consequence of inflation and the black market. The Greek people are much too intelligent to be caught up in an inflation. Every child there is a business man. Therefore, the only possible method to counteract this obvious speculation, which in itself is not amoral, was that of transforming the black market into a totally free market by means of purely economic measures, and that was the aim of these measures. Q. This transformation of the black market into a free market, which was after all a problem which also played an important part in France, was brought about by your activity in agreement with the defendant Funk? A. Yes, I introduced this measure together with my Italian colleague d'Agostino at the end of October, 1942. DR. SAUTER: Thank you very much, witness. Mr. President, I have no further questions. DR. STEINBAUER (counsel for Seyss-Inquart): Mr. President, members of the Military Tribunal, for your information I am going to examine the witness on the question of the Anschluss. BY DR. STEINBAUER: Q. Witness, you have described to the Tribunal your economic activities. Were you not active politically as well? A. I was politically active as the chairman of the Austro- German People's Union (Oesterreichisch-Deutscher Volksbund). Q. What were the aims of that Austro-German People's Union? A. The Austro-German People's Union was an institution which stood above parties and religious denominations and which aimed at revising the Anschluss Clause prohibition in the peace treaties and solving the question of the Austro-German Anschluss peacefully by a plebiscite. In the executive committee of this Austro-German People's Union, all parties were officially represented with the exception of the National Socialist and Communist Parties. The German organisation of the same name was under the leadership of the Social Democratic President of the German Reichstag, Paul Loebe. [Page 371] Q. Thank you. I have here a list of the executive committee which is dated 1926. You appear as chairman and Paul Speiser as deputy of the State Councillor (Staatsrat). Dr. Arthur Seyss-Inquart is named as treasurer, and then there, is Dr. Benedikt Kautsky, one Georg Stern, Public Councillor and President of the Banks' Association, and a certain Dr. Stolper. Is that correct? A. Yes. Q. Why did all these members who represented different political parties and religious denominations strive towards the Anschluss at that time? A. After the Treaties of Versailles and St. Germain, a movement on the broadest basis started in Austria for the union of this country, which was suffering from severe economic depression, with Germany. Men from all parties and all religions joined this movement, as you can see from the names which you, Herr Doctor, have just mentioned.
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