The Nizkor Project: Remembering the Holocaust (Shoah)
Nuremberg, war crimes, crimes against humanity

The Trial of German Major War Criminals

Sitting at Nuremberg, Germany
2nd May to 13th May, 1946

One Hundred and Twentieth Day: Friday, 3rd May, 1946
(Part 7 of 12)

[GENERAL ALEXANDROV continues his cross examination of Hjalmar Schacht]

[Page 72]

Q. How far did you personally participate in helping Hitler to power? I continue this question: under what circumstances and for what purpose did you, in February, 1933, organize a meeting between Hitler and the industrialists? This subject has already been mentioned before.

A. I did not help Hitler to come to power in any way. All this has been discussed here at great length. In February, 1933, Hitler had already been in power some time. As to finances and the industrial meetings of February, 1933, that has profusely been gone into.

Q. What particular role did you play in this conference?

A. This, too, has been discussed in detail. Please refer to it in the record.

Q. I have already familiarised myself with the reports, but you have not explained events sufficiently clearly. In order to shed some more light on the question, I shall refer to defendant Funk's testimony of 4th June, 1945. This is Document No. 2828-PS. I quote defendant Funk's testimony:

"I was present at this conference and money was demanded, not by Goering, but by Schacht. Hitler left the room and Schacht made a speech in which he asked for money for the election campaign. I was present, present as an impartial witness, inasmuch as I enjoyed a close friendship with the industrialists."
Does this testimony of the defendant Funk represent the truth?

A. Herr Funk is in error. Document D-203 has been presented here to the Tribunal by the prosecution.

Q. But -

A. Please do not interrupt me. The prosecution has submitted this document, and this document shows that Goering directed the request for financial aid and not I.

Q. In this connection defendant Funk declared in advance that this speech was made by you and not by Goering. I ask you now, which statement represents the truth?

[Page 73]

A. I have just told you that Herr Funk is in error and that the evidence of the prosecution is correct.

Q. Then what part did you play in connection with this conference?

A. This, too, I have already stated in detail.

Q. In quite sufficient detail -

THE PRESIDENT: The Tribunal has already heard a long cross- examination, and it does not desire to hear the same facts or matters repeated. Will you tell the Tribunal whether you have any points which the Soviet Union are particularly interested in, which have not been dealt with in cross- examination?

GENERAL ALEXANDROV: Mr. President, in his statements the defendant Schacht did not reply in sufficient detail, nor were his answers sufficiently clear. I am therefore obliged, in certain instances, to refer to these questions again. It is, in particular, not clear to us, what part the defendant Schacht played in this meeting of the industrialists. It appears to me that defendant Schacht did not give a sufficiently clear or well-defined reply to the question which I had asked him. As for the other questions, they are few in number and I imagine that after the recess I can try and finish with them in about thirty or forty minutes. All these questions are of interest to us since they enable us to determine the guilt of the defendant Schacht.

THE PRESIDENT: Very well. The Tribunal is not prepared to listen to questions which have already been put.

GENERAL ALEXANDROV: Perhaps now you will find it desirable to declare a recess, in order to continue the cross- examination after the recess.

THE PRESIDENT: No, General Alexandrov, the cross-examination will continue up to the recess.

Q. Do you admit that while acting as President of the Reichsbank, and Minister of Economics, and Military Plenipotentiary for questions of War Economy, you played a decisive part in preparing the rearmament of Germany and, consequently, in preparing for a war of aggression?

A. No, I categorically deny that.

Q. You were General Plenipotentiary for questions of War Economy?

A. Well, we have spoken about that here many times already.

Q. I did not hear it from your own lips, not once.

THE PRESIDENT: He has admitted throughout - and, of course, it is obvious - that he was Plenipotentiary for War Economy; but what you put to him was, whether he as Plenipotentiary for War Economy took part in rearmament for aggressive war, and he has said over and over again that that was not his object, that his object was to gain equality for Germany. He said so, and we have got to consider whether that is true. But that he said it, is perfectly clear.

GENERAL ALEXANDROV: In my subsequent questions it will be quite clear why I touch precisely on this question.

How long did you occupy the post of General Plenipotentiary for War Economy?

A. I have just stated that I do not understand the question - for what duration? All this has certainly been stated here already.

THE PRESIDENT: We have the date when he became Plenipotentiary for War Economy and the date when he ceased to be.

Q. I should like to remind you of the duties imposed on you as General Plenipotentiary by the Reich Defence Act of 21 May, 1945. I shall quote a brief excerpt from Section 2 of this law, entitled "Mobilisation":

"Point I: For the purpose of directing the entire war economy the Fuehrer and Reich Chancellor will appoint a "General Plenipotentiary for War Economy".

[Page 74]

"Point 2: It will be the duty of the General Plenipotentiary for War Economy to utilize all economic possibilities in the interest of the war, and to safeguard the economic well-being of the German people.

"Point 3: Subordinate to him will be:

the Reich Minister of Economics,
the Reich Minister for Food and Agriculture,
the Reich Labour Minister,
the Reich Minister for Woods and Forests
and all other Reich officials directly subordinate to the Fuehrer and Reich Chancellor.

"Further, he shall be responsible for the financing of the war within the sphere of the Reich Finance Ministry and the Reichsbank.

"Point 4: The General Plenipotentiary for War Economy shall have the right to enact public laws within his official jurisdiction which may differ from existing laws."

You admit that this law gave you extraordinary powers in the sphere of war economy?

A. This document is before the Tribunal and I assume that you have read it correctly.

Q. I am not asking you whether I have read the document correctly, I am asking you whether you admit that by this law you were given extraordinary powers in the sphere of the war economy?

A. I had exactly the full powers which are described in the law.

Q. Do you admit that these were not ordinary powers, but special, extra-ordinary powers?

A. No, I will not admit that at all.

Q. In other words, you considered that the Reich Defence Law of the 21st May, 1935, was just an ordinary law whose function -

A. It was simply an ordinary law.

Q. And you also considered the functions imposed on you by this law as General Plenipotentiary for War Economy ordinary functions?

A. As very ordinary regulations which are customary with every general staff.

THE PRESIDENT: The Tribunal will adjourn now.

(A recess was taken.)

THE PRESIDENT: Yes, General Alexandrov.

GENERAL ALEXANDROV: Mr. President, taking into consideration the Tribunal's desire, as well as the fact that Mr. Jackson has already questioned Schacht in detail, and having read the minutes of this morning's session, it has been possible for me to shorten considerably the number of questions in my examination. I have only two to put to defendant Schacht.


Q. Defendant Schacht, on 21st May, 1935, the Reich Government made a decision with regard to the Reich Defence Council. The decision was as follows, citing Point I:

"It is the will of the Fuehrer and Reich Chancellor that the Plenipotentiary General for War Economy shall take over this responsible directorate (Leitung), and is, as with the Reich War Minister, holder of the executive power, independent and responsible for his own sphere of activity to the Fuehrer and Reich Chancellor."
Do you admit that you carried through actively this decision of the Reich Government; and that you took an active part in Germany's economic preparations for aggressive war?

A. No, Sir, I definitely do not admit that.

[Page 75]

Q. On 4th March, 1935, in your speech at the Spring Fair in Leipzig, you said the following, citing from Document USA- 627:
"My so-called foreign friends are doing neither me nor the cause a service, nor a service to themselves, when they try to bring me into conflict with the impossible, so they say, National Socialist theories, and present me, so to speak as the guardian of economic reason. I can assure you that everything I say and do is with the full consent of the Fuehrer, and I shall neither do nor say anything which he has not approved. Therefore, the guardian of economic reason is not I but the Fuehrer."
Do you confirm this speech you made at the Spring Fair in Leipzig?

A. I admit it and would like to make a statement.

I have said repeatedly, first, that my foreign friends, as far as I had foreign friends, did not do me a service when they said publicly that I was an adversary of Hitler, because that made my position extremely dangerous. Secondly, I said in that speech I would not do anything which would not be according to my conviction, and that Hitler did everything I suggested to him, that is, that it was his opinion also. If I had said anything to the contrary, that would have been expressed. I was in complete accord with him so long as his policies agreed with mine; afterwards I was not, and left.

GENERAL ALEXANDROV: I have no more questions, your Honour.

THE PRESIDENT: Do you wish to re-examine, Dr. Dix?

DR. DIX: I will put only a few questions which arose from the cross-examination.



Q. During the cross-examination, the New Plan was again dealt with without Dr. Schacht having had an opportunity of explaining it and of stating what role, if any, that plan had in the economy of rearmament and who was the originator, the responsible originator of the New Plan. Therefore, may I put this question to Dr. Schacht now?

A. The New Plan was a logical consequence of the economic development which followed the Treaty of Versailles. I mention again only briefly that by the removal of German property abroad, the entire organization for German foreign trade was taken away and therefore great difficulties arose for German export.

Without those exports, however, payment of reparations or such, was out of the question. Nevertheless, all the Great Powers, particularly those who were competing with Germany in the world market, resorted to raising their tariffs in order to exclude German merchandise from their markets or to make it more difficult for Germany to sell her goods, so that it became more and more of a problem to develop German exports.

When Germany, in spite of this, tried by lower prices at the cost of lower wages, to maintain or to increase her export trade, the other powers resorted to other means to meet German competition. I recall the various devaluations of foreign currencies which were made, again impeding the competition of German products. When even that did not suffice, the system of quotas was invented; that is, the amount of goods which were imported into a country could not go beyond a certain quota; that was prohibited. Such quotas for German imports were established by Holland, France and other nations; so here, also, German export was made increasingly difficult.

All these measures to hinder German export led to the situation - that German nationals, also, could no longer pay even private debts abroad. As you have heard here, for many years I had warned against incurring these debts. I was not listened to. It will be of interest to you for me to state here briefly that Germany,

[Page 76]

against my advice, had within five years contracted as large a foreign debt as the United States had throughout the forty years before the first World War.

Germany was a highly developed industrial nation and did not need foreign money, and the United States at that time was going in more for colonial development and could make good use of foreign capital.

When we were no longer able to pay our interest abroad, some countries resorted to the method of no longer paying German exporters the proceeds from the German exports, but confiscated these funds, and out of these paid themselves the, interest on our debts abroad; that is, effecting a settlement, so to speak. That was the so-called Clearing System. The private claims were confiscated in order to meet the demands of foreign countries.

To meet this development, I sought a way to continue German exports. I set out a very simple principle: "I will buy only from those who buy from me." Therefore, I looked around for countries which were prepared to cover their needs in Germany, and I prepared to buy my merchandise there. That was the New Plan.

THE PRESIDENT: I do not know what we have to do with this, Dr. Dix.


Q. Well, to make a long story short, the New Plan had nothing to do with the intention to rearm, let alone with any aggressive intentions.

A. Absolutely nothing.

Q. In this connection, can you give an estimate as to what percentage of German economic production was armament production?

A. That question has been put to me in previous interrogations and at that time I was not able to answer it, because I could not recall what amount Germany expended on her armament. Now, from the testimony of Field Marshal Keitel, we have heard here that armament expenditure during these years when the Reichsbank was still co-operating, 1934- 1935, 1935-1936, 1936-1937 and so on, amounted respectively to five billions of Reichsmark, seven billions of Reichsmark and nine billions of marks; that is the estimate of experts. The production of the entire German economy during these years could be estimated approximately at fifty to sixty billion Reichsmark. If I compare that with the armament expenditure, which has been stated here by a witness, then we find that armament expenditure amounted to about ten to fifteen per cent of the entire German economy during the years when I had anything to do with it.

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