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DR. SAUTER: Mr. President, as proof of the fact that the
defendant Funk was not in Germany at the time of this
discussion with Goering on 14th October, 1938 I have
submitted several documents in the Document Book Funk, they
are extracts from the Volkischer Beobachter, Nos. 5, 6, 7
and 8 of the Funk Document Book. These documents are
submitted chiefly because they show that, in fact, from 13th
October, 1938 until 15th October, 1938 Funk was at Sofia, in
Bulgaria and, therefore, could not have been present at the
Goering meeting on 14th October, 1938.

What Funk said in Bulgaria about economic relations I need
not read in detail. But I would like to refer especially to
his speech of 15th October, 1938, Funk Document Book Number
7, in which the defendant Funk, particularly in the first
paragraph, declared publicly that the thought of an economic
union between the German economy and the south-eastern
European economy was in his mind and in which Funk, quite
definitely, rejected a one-sided dependence of the economy
of the South Eastern States on the economic system of
Germany.
Therefore I beg the Tribunal to take judicial notice of
these documents as evidence, and in order to save time I
will not go into them further.

Q. Witness, under Document 3562-PS the prosecution has
submitted a document dealing with a conference on 1st June,
1939, you, yourself, did not attend this meeting, but
according to the list of those present several
representatives of your Ministry were there, as well as the
representative of the Reichsbank. At this meeting the
probable financial needs of the Reich in case of a war, the
productive capacity of the German economy and that of the
Protectorate in case of a war were discussed. There is a
marginal note in this record which says that the record was
to be submitted to you. Can you state very briefly whether
this was actually done?

A. No, it was not done. I have the document here.

Q. Please go slowly.

A. If this document had been submitted to me I would have
affixed my initials "W.F." to it. Besides, this document
deals with the continuous discussions, which I have already
mentioned, about the financing of the war, and the measures
to be taken in the field of civilian economy in case of a
war. The decisive measures, for finance, were naturally
prepared by the Reich Minister of Finance, and these
measures were discussed at length at this conference, at
which the question of meeting the expense through taxes was
one of the chief topics. In any event, a variety of such
discussions was carried on continuously at that time among
the representatives of the various departments, and they
took place in the office of the executive council of the
Plenipotentiary for Economy. By accident I have now found
this name which earlier I could not remember: this was the
institution - the committee - which was founded in the days
of Schacht and was later continued.

Q. Dr. Funk, on 30th March, 1939 you made a statement of
your programme in a speech before the Central Committee of
the Reichsbank. (I have included those excerpts from the
speech which have a bearing on this trial in the Funk
Document Book, under No. 9. I am reverting to this speech
because it was delivered before the Central Committee
shortly after the defendant assumed his office as President
of the Reichsbank, and represents his programme as president
of the Reichsbank in connection with various matters which
have played a part here.)

Dr. Funk, perhaps with just a few brief words you might give
us the essential relevant points of your speech.

A. I do not believe I need do that. I briefly mentioned a
while ago that in these months I carried on international
discussions about the necessity for a new order in
international economic relations, and that I also pointed
out Germany's readiness to play a positive part. Therefore,
I do not think I need read anything

                                                  [Page 119]

more from this speech; it is only meant to show that at that
time I did not work on preparations for war but endeavoured
to bring about international economic understanding, and
that my efforts were recognized publicly in foreign
countries, especially in England.

Q. This intention to establish favourable and confident
relations with foreign countries, that is with their
financial and economic circles, was, I am sure, a deciding
factor in a later measure to which you already referred a
little while ago, namely that compensation to foreign
shareholders in the Reichsbank, who, I believe, were chiefly
in England, Holland and Switzerland, was assessed and paid
in a particularly loyal manner.

A. Yes, I have stated that already.

Q. Dr. Funk, you mentioned earlier a letter which you wrote
to Hitler. This letter would be interesting to me in so far
as I would like to know just why you wrote it, and why in it
you spoke of your proposals, even though in the main they
were concerned with things which did not actually originate
with you. Perhaps you will explain, in a few words, this
letter.

A. The tone and contents of this letter can be explained
from the general mood which existed everywhere in Germany at
that time. Beyond that it is a purely personal letter to the
Fuehrer: in it I thanked him for his birthday wishes. For
this reason the letter is a little emphatic in its style.
When I spoke of "my proposals," this may be traced back to
the fact that I personally, some time before, had explained
to the Fuehrer what measures would be necessary if a war
broke out. And, in the main, those were the measures which
were adopted later as a result of conferences with the other
economic offices, and to which I referred in this letter.
Thus it was not quite correct for me to say "my proposals."
I should really have said, "The proposals worked out,
together with the chiefs of the economic offices."

Q. Dr. Funk, have you concluded?

A. No. I would like to explain this whole letter in just a
few words, since it is apparently one of the pillars of the
prosecution's case against me.

As I have said, it was the time when the two mobilised
armies faced each other. It was the time when the entire
German people were in a state of great excitement because of
the constant provocations in Poland, and the ill-treatment
of the German population in Poland. I personally did not
believe that we would actually have war, for I was of the
opinion that diplomatic negotiations could again be
successful in preventing the threat of war and indeed in
avoiding war itself. After the Fuehrer's almost miraculous
successes in foreign policy, the heart of every true German
beat faster in the expectation that in the East also
Germany's wishes would be fulfilled: that is, that my
separated home province of East Prussia would be reunited
with the Reich, that the old German city of Danzig would
again belong to the Reich, and that the problem of the
Corridor would be solved.

The overwhelming majority of the German people - and I too -
did not believe that this question would end in war. We were
rather convinced that England would be successful in
exerting pressure on Poland so that Poland would acquiesce
in the German demands on Danzig and the corridor and would
not enter into a war. The testimony of the witness Gisevius
must have made clear to everyone in the world that England
did nothing at that time to exert a soothing and
conciliatory influence on Poland. For if the British
Government knew that a conspiracy existed in Germany in
which the Chief of the General Staff, the Chief of the OKW,
the Chief of German Armament and other leading military
personalities and generals were involved, and that an
overthrow had been prepared for the event of war, then the
British Government would have been foolish indeed if it had
done anything to assuage and conciliate Poland. The British
Government must have been convinced that if Hitler should go
to war, a coup d'etat, a revolution, an overthrow would take
place, and that, in the first place, there would be no war
and, secondly, that the hateful Hitler regime would be
removed. Nobody could hope for more.

                                                  [Page 120]

Q. Dr. Funk, we do not want to talk politics, but rather
return to this letter of 25th August, 1939. I would like to
refer again to Document 699-PS. Let us at present deal only
with this letter. If I understood you correctly, I can
summarize your testimony as follows: this rather
enthusiastic letter to Hitler was written because you were
hopeful that Hitler would succeed in reuniting your home
province East Prussia with the Reich, and would now finally
settle the corridor problem without a war. Did I understand
you correctly?

A. Yes, but at the same time I feel I must state that I, for
my part, did everything to ensure that in the event of war
the peace economy would, without disturbance, be converted
into a war economy. But this was the only time at which, as
Plenipotentiary for Economy, I was active at all with regard
to the other economic departments and the fact that I
referred to my position in this letter may be explained
quite naturally, because I was proud that I had for once
done something in this official position - for every man
likes to be successful.

Q. Dr. Funk, we are still concerned with the question of
whether you knew of Hitler's intent to bring about a war,
especially to wage aggressive war, and to make conquests
through aggressive wars. I would like to put to you a few
questions which, for the sake of simplicity, you can answer
with yes or no; I would like to know only whether your
knowledge and your surmises agree with the statements made
by a few witnesses and some co-defendants.

For example, Reich Minister Lammers testified that you found
it especially difficult to see Hitler at all, that an
audience was granted you only rarely, and that even on one
occasion I believe you waited for days with Lammers at
headquarters for the promised audience, and that you had to
leave again without having gained admittance. Is that
correct?

A. Yes, I am sorry to say.

Q. Now a further question: We have been confronted with
several documents which say explicitly - I believe they are
records of Lammers - that the Reich Minister of Economics,
and at one time also the Reich Foreign Minister, had
requested to be called in to these discussions, that
Minister Lammers did his best to bring this about, but that
Hitler did not allow it, that he expressly barred you and
the Reich Foreign Minister from attending these discussions,
even though you pointed out that important matters of your
department were being dealt with. Is that correct? Perhaps
you can answer with just yes or no.

A. The meeting which you are mentioning was concerned with
the deployment of labour. I myself had no direct connection
with that, and the Foreign Minister probably did not have
any marked interest in it either. So I assume that for these
reasons the Fuehrer did not need me, for, as I said
yesterday, his directives for the conduct of economy were
given, up to the year 1942, to the Reichsmarshal, as the man
responsible for that activity, and after 1942 the directives
were given to Speer, because from that date on armaments
dominated the entire economic life, and all economic
decisions, by express order of the Fuehrer, had to give way
to armament needs.

Q. Dr. Lammers, in his testimony on 8th April, stated, I
quote:

  "The Fuehrer objected many times, namely, to Funk. There
  were various reasons for objecting to Funk. Hitler was
  sceptically inclined towards Funk and did not want him."

Thus far the testimony of the witness Dr. Lammers. Can you
explain why Hitler was disinclined towards you?

A. No, only by the objective explanation that he did not
need me.

Q. In other words, he considered any discussions with you
superfluous.

A. Yes.

Q. Witness, in connection with the topic "Aggressive Wars,"
I would be interested in the following: In the indictment,
on Page 30, of the German trial brief it is set forth that
you personally, and through your official representatives,
participated in the preparation for the aggressive war
against Russia, and as the sole proof for this, Document
1039-PS, Exhibit USA 146, is submitted. I repeat,

                                                  [Page 121]

Document 1039-PS, Exhibit USA 146. From this document it
appears that you, defendant, at the end of April, 1941, had
allegedly a discussion with Rosenberg - who was responsible
for the Eastern Territories - about the economic questions
which would arise if the plans for attack in the East were
to be carried through. I ask you, Dr. Funk, to note the date
of this discussion: the end of April, 1941, just a short
time before the beginning of the war against Russia; and in
order to refresh your memory I want to point out that at
that time, that is, before the war against Russia, Rosenberg
had already been nominated as Hitler's Plenipotentiary for
the uniform handling of problems in the Eastern Territories.
I am asking you now to define your position, and to say
whether it can be deduced from this discussion that you
participated in an aggressive war against Russia or its
planning and preparation, and if you did participate, how?

A. I knew nothing about an aggressive war against Russia. I
was very much surprised when I learned from Lammers that the
Fuehrer had made Rosenberg Plenipotentiary for Eastern
European problems. Lammers stated here that I was advised of
this nomination for personal reasons, because he knew that I
was very much interested in economic relations with Russia.
Indeed, our mutual efforts, Russia's as well as Germany's
had succeeded in considerably expanding our trade relations;
for in earlier times, that is, before the first World War,
German trade with Russia had been the decisive factor in the
balance of German trade, and had amounted to several billion
gold marks. The Russians, I must say this here, delivered to
us, grain, manganese ore and oil very promptly, while our
deliveries of machines lagged behind for the natural reason
that the machines had first to be produced, because the
Russian orders were mainly for specialized machines. To what
extent army supplies were sent to Russia, I do not know, as
I did not deal with these. And so I was surprised by the
appointment of Rosenberg. He called on me for a short
discussion, in which he told me that the task given to him
by the Fuehrer also included the handling of economic
problems. Thereupon I placed a ministerial director in my
ministry, Dr. Schlotterer, at Rosenberg's disposal to work
on these problems. And when the Ministry for Eastern Affairs
was founded, as far as I know, in July, Dr. Schlotterer,
with some of his colleagues, took over the direction of the
economic department in Rosenberg's ministry. And,
simultaneously, as far as I remember, Dr. Schlotterer became
a member of the Economic Operational Staff, East. This was
the institution of the Four-Year Plan, which has been
mentioned repeatedly here during the proceedings, and which
dealt with all economic problems in the Occupied Eastern
Territories.

Beyond that, I had nothing to do with these matters.
Naturally, I asked Lammers as well as Rosenberg, just what
this signified, and both of them told me that the Fuehrer
was of the opinion that a war with Russia would become
unavoidable, that along the entire Eastern Front the
Russians had concentrated large reinforcements, that the
discussions with Molotov, in which I had no part at all, had
been unsatisfactory, that the Russians were making demands
regarding the Baltic, the Balkan regions, and the
Dardanelles, which could not be satisfied by Germany, by the
Fuehrer. At any rate, this affair was as complete a surprise
to me as to the German people, and I am convinced that this
war was a great shock to the German people.

THE PRESIDENT: The witness spoke of July. Did he mean July,
1940?

DR. SAUTER: As far as I know, July, 1941 -

THE PRESIDENT: You mean July, 1941? That was after the war
with Russia had begun. The witness can answer for himself, I
suppose, can he not?

Did you mean July, 1940?

A. The discussion with Rosenberg was at the end of April or
the beginning of May, 1941, and the Rosenberg Ministry was
founded in July, 1941.


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