dtufail/nuremberg-trials-corpus huggingface dataset:
of Reich Cabinet, 15 March 1933. (USA 578) ......................... V 669 *2963-PS Minutes of meeting of Reich Cabinet, 20 March 1933. (USA 656) ......................... V 670 *2977-PS Affidavit of Funk, 14 November 1945, concerning positions held. (USA 10) ......................... V 683
*3324-PS		Funk on the Organization of War Economy, published in Germany in the Fight. (USA 661) ......................... 	VI		42
*3501-PS		Affidavit signed by Max Amann, 19 December 1945. (USA 657) ......................... 	VI		207
*3505-PS		Extract from "Walter Funk - A Life for the Economy", 1941, by Paul Oestreich. (USA 653) ......................... 	VI		208
*3533-PS		Statement of Funk concerning positions held by him. (USA 651) ......................... 	VI		216
*3544-PS		Interrogation of Funk, 22 October 1945. (USA 660) ......................... 	VI		217
*3545-PS		Speech by Funk, from Frankfurter Zeitung, 17 November 1938. (USA 659) ......................... 	VI		239
*3562-PS		Letter from chief Plenipotentiary for Economy, 1 June 1939, transmitting minutes of meeting concerning financing of war (USA 662) ......................... 	VI		248
*3563-PS		Extracts from German publications concerning Funk's positions and activities. (USA 652) ......................... 	VI		251
3566-PS			Notes for files, prepared by SS-Scharfuehrer Sigismund, concerning General Manager of German Broadcasting, 1 March 1937 ......................... 	VI		254
*D-203			Speech of Hitler to leading members of industry before the election of March 1933. (USA 767) ......................... 	VI		1080
*Chart No. 1		National Socialist German Workers' Party. (2903-PS; USA 2) ......................... 	VIII		770
Chapter XVI Part 10
Contents
Chapter XVI Part 12
12. HJALMAR SCHACHT
The prosecution concedes, at the outset, that although Schacht believed that the Jews of Germany should be stripped of their rights as citizens, he was not in complete sympathy with that aspect of the Nazi Party's program which involved the wholesale extermination of the Jews, and that he was, for that reason, attacked from time to time by the more extreme elements of the Nazi Party. It further concedes that Schacht, on occasion, gave aid and comfort to individual Jews who sought to escape the indignities generally inflicted upon Jews in Nazi Germany. Schacht's attitude towards the Jews is exemplified by his speech at the German Eastern Fair, Koenigsberg, on 18 August 1935, wherein he said:
"The Jew must realize that their influence is gone for all times. We desire to keep our people and our culture pure and distinctive, just as the Jews have always demanded this of themselves since the time of the prophet Ezra. But the solution of these problems must be brought about under state leadership, and cannot be left to unregulated individual actions, which mean a disturbing influence on the national economy   *   *   *" (EC-433).
The foregoing concessions should render it unnecessary for Schacht to produce evidence upon these matters.
But the solution of these problems must be brought about under state leadership, and cannot be left to unregulated individual actions, which mean a disturbing influence on the national economy * * *" (EC-433). The foregoing concessions should render it unnecessary for Schacht to produce evidence upon these matters.
The prosecution's case against Schacht is that he planned and prepared for wars of aggression and wars in violation of international treaties, agreements and assurances, and that he knowingly and willfully participated in the Nazi common plan or conspiracy to plan, prepare, initiate, and wage such wars. The evidence establishes that Schacht actively supported Hitler's accession to power; that he was the chief architect of the financial plans and devices which made possible the huge program of rearmament in Germany; that he played a dominant role in the economic planning of, and preparation for, wars of aggression; and that he contributed his efforts willingly and with full knowledge of the fact that the leader of the conspiracy, Adolf Hitler, was determined upon attaining his objectives by launching aggressive wars.
A. CHRONOLOGY OF SCHACHT'S OFFICIAL POSITIONS.
The chronology of Schacht's official positions is as follows:
(1) Schacht was recalled by Hitler to the Presidency of the Reichsbank on 17 March 1933 (3021-PS).
(2) Schacht was appointed acting Minister of Economics by Hitler in August 1934 (3021-PS).
(3) By secret decree, Schacht was appointed General Plenipotentiary for the War Economy in May 1935 (2261-PS).
(4) Schacht was awarded honorary membership in the Nazi Party and the Golden Swastika on 30 January 1937, "the highest honor the Third Reich has to offer" (EC-500).
(5) Schacht was re-appointed for one year as President of the Reichsbank on 16 March 1937 (3021-PS).
(6) Schacht resigned as Minister of Economics and General Plenipotentiary for the War Economy in November 1937 (3021-PS; EC-494).
(7) Hitler appointed Schacht Minister Without Portfolio at the same time (3021-PS).
Schacht was re-appointed for one year as President of the Reichsbank on 16 March 1937 (3021-PS). (6) Schacht resigned as Minister of Economics and General Plenipotentiary for the War Economy in November 1937 (3021-PS; EC-494). (7) Hitler appointed Schacht Minister Without Portfolio at the same time (3021-PS).
(8) Schacht was re-appointed for a four year term as President of the Reichsbank on 9 March 1938 (3021-PS).
(9) Schacht was dismissed as President of the Reichsbank on 20 January 1939. in connection therewith, Hitler expressed his deep gratitude for Schacht's past services and his gratification that Schacht would remain to serve him as Minister Without Portfolio (EC-397).
(10) Schacht remained as Minister Without Portfolio until January 1943, when he was dismissed by Hitler. During the period from the time of his dismissal as President of the Reichsbank until the end of 1942, he continued to receive the full salary he had been paid as the President of the Reichsbank, and thereafter received a pension from the Reichsbank. As Minister Without Portfolio, he received a large salary from the Nazi Government and other emoluments of the office (3724-PS).
B. PRIOR TO 1933, SCHACHT ACCEPTED THE NAZI PROGRAM AND HELPED HITLER TO POWER.
Schacht met Goering for the first time in December 1930, and Hitler early in January 1931, at Goering's house. He thought that Hitler was "full of will and spirit" and a man "with whom one could cooperate". Thereafter, he actively supported Hitler's accession to power (3725-PS; 3729-PS).
Schacht's belief in the Nazi program and his undivided loyalty to Hitler are revealed in his letter to Hitler dated 29 August 1932, wherein he pledged continued support to Hitler after the latter's poor showing in the July 1932 elections and preferred advice concerning electioneering tactics. The letter includes the following statements, inter alia:
the Nazi program and his undivided loyalty to Hitler are revealed in his letter to Hitler dated 29 August 1932, wherein he pledged continued support to Hitler after the latter's poor showing in the July 1932 elections and preferred advice concerning electioneering tactics. The letter includes the following statements, inter alia:
"But what you could perhaps do with in these days is a word of most sincere sympathy. Your movement is carried internally by so strong a truth and necessity that victory in one form or another cannot elude you for long.   *   *   *"
"Wherever my work may take me in the near future even if you should see me one day within the fortress-you can always count on me as your reliable assistant." (EC-457).
Subsequently, on 12 November 1932, he again wrote to Hitler, congratulating him upon his firm attitude and stating:
"I have no doubt that the present development of things can only lead to your becoming chancellor.   *   *   *   I am quite confident that the present system is certainly doomed to disintegration." (EC-456).
The fact that Schacht was in complete accord with Hitler's program is further shown by the following entry of 21 November 1932, in Goebbels' diary:
"In a conversation with Dr. Schacht, I assured myself that he absolutely represents our point of view. He is one of the few who accepts the Fuehrer's position entirely." (2409-PS).
Schacht has himself confirmed the correctness of Goebbels' statement (3729-PS).
But Schacht's contribution to Hitler before his accession to power did not consist merely of comforting him, giving advice, and expressing agreement with the Nazi program. He was an active participant in Hitler's vigorous campaign to take over the German state. Thus, he openly lent the prestige of his name, which was widely known in banking, financial, and business circles, to Hitler's cause (3729-PS). He actively undertook to induce business leaders to support Hitler. In his letter to Hitler of 12 November 1932, he wrote that:
campaign to take over the German state. Thus, he openly lent the prestige of his name, which was widely known in banking, financial, and business circles, to Hitler's cause (3729-PS). He actively undertook to induce business leaders to support Hitler. In his letter to Hitler of 12 November 1932, he wrote that:
"It seems as if our attempt to collect a number of signatures from business circles for this purpose (your becoming Chancellor) was not altogether in vain   *   *   *." (EC-456)
He organized the financial means for the decisive March 1933 election, at a meeting of Hitler with a group of German industrialists in Berlin. At this meeting, Hitler bluntly announced his plans to destroy the parliamentary system in Germany, to crush all internal opposition by force, to restore the power of the Wehrmacht, and to gain his objectives outside of Germany by the use of force. On this occasion, Schacht collected a campaign fund of several million Marks for Hitler's use (D-203; EC-439).
In an eulogy of Schacht on the occasion of his sixtieth birthday, the Voelkischer Beobachter, Hitler's official organ, aptly described Schacht's activity in the period before the 1933 election as follows:
"In this critical period, Schacht never failed to point at Adolf Hitler as the only possible leader of the Reich."
"The name of Dr. Schacht will remain linked with the transition of the German economy to the new National Socialist methods" (EC-499).
C. SCHACHT PLAYED A DOMINANT ROLE IN THE CONSPIRATORS' PROGRAM OF REARMAMENT AND ECONOMIC PLANNING AND PREPARATION FOR WAR.
Adolf Hitler as the only possible leader of the Reich." "The name of Dr. Schacht will remain linked with the transition of the German economy to the new National Socialist methods" (EC-499). C. SCHACHT PLAYED A DOMINANT ROLE IN THE CONSPIRATORS' PROGRAM OF REARMAMENT AND ECONOMIC PLANNING AND PREPARATION FOR WAR.
Germany was virtually prostrate in the early part of 1933; she was faced with dwindling revenues from taxation and seemingly unable to raise money either through external or internal loans. Hitler entrusted to Schacht the task of wringing from the depressed German economy the tremendous material requirements of armed aggression, and endowed him with vast powers over every sector of German industry, commerce, and finance to carry out that task. Some of the devices which Schacht employed to fulfill his mission will now be examined.
Schacht's program, as hereinafter outlined, was, by his own admissions, dedicated to the accomplishment of Hitler's armament program. In a memorandum to Hitler dated 3 May 1935 concerning the financing of armament, Schacht wrote:
"The following comments are based on the assumption that the accomplishment of the armament program in regard to speed and extent, is the task of German policy, and that therefore everything else must be subordinated to this aim, although the reaching of this main goal must not be imperiled by neglecting other questions.   *   *   *"
"*   *   *   all expenditures which are not urgently needed in other matters, must stop and the entire, in itself small, financial power of Germany must be concentrated toward the one goal: to arm." (1168-PS).
In a letter to General Thomas dated 29 December 1937, Schacht stated:
"I have always considered a rearmament of the German people as condition sine qua non of the establishment of a new German nation." (EC-257).
itself small, financial power of Germany must be concentrated toward the one goal: to arm." (1168-PS). In a letter to General Thomas dated 29 December 1937, Schacht stated: "I have always considered a rearmament of the German people as condition sine qua non of the establishment of a new German nation." (EC-257).
Schacht's vast achievements in furtherance of the conspirators' program may conveniently be considered under four headings: (a) armament financing; (b) the "New Plan"; (c) control of production; and (d) plans and preparations for economic controls during war.
(1) Armament Financing.
(a) Mefo bills. The financing of the conspirators' huge rearmament program presented a twofold problem to  Schacht. First, was the need of obtaining funds over and above the amount which could be obtained through taxation and public loans. Second, was the conspirators' desire, in the early stages of rearmament, to conceal the extent of their feverish armament activities. Schacht's answer to the problem was the "mefo" bills, a scheme which he devised for the exclusive use of armament financing (EC-436).
which could be obtained through taxation and public loans. Second, was the conspirators' desire, in the early stages of rearmament, to conceal the extent of their feverish armament activities. Schacht's answer to the problem was the "mefo" bills, a scheme which he devised for the exclusive use of armament financing (EC-436).
Transactions in "mefo" bills worked as follows: "mefo" bills were drawn by armament contractors and accepted by a limited liability company called the Metallurgische Forschungsgesellschaft, m.b.H. (MEFO). This company was merely a dummy organization; it had a nominal capital of only one million Reichsmarks. "Mefo" bills ran for six months, but provision was made for extensions running consecutively for three months each. The drawer could present his "mefo" bills to any German bank for discount at any time, and these banks, in turn, could rediscount the bills at the Reichsbank at any time within the last three months of their earliest maturity. The amount of "mefo" bills outstanding was a guarded state secret (EC-436). The "mefo" bill system continued to be used until 1 April 1938, when 12 billion Reichsmarks of "mefo" bills were outstanding (EC-436). This method of financing enabled the Reich to obtain credit from the Reichsbank which, under existing statutes, it could not directly have obtained. Direct lending to the Government by the Reichsbank had been limited by statute to 100 million Reichsmarks (Reichsgesetzblatt, 1924, II, p. 241). Schacht has conceded that his "mefo" bill device "enabled the Reichsbank to lend by a subterfuge to the Government what it normally or legally could not do" (3728-PS).
In a speech delivered on 29 November 1938, Schacht glowingly described the credit policy of the Reichsbank of which he was the author as follows:
conceded that his "mefo" bill device "enabled the Reichsbank to lend by a subterfuge to the Government what it normally or legally could not do" (3728-PS). In a speech delivered on 29 November 1938, Schacht glowingly described the credit policy of the Reichsbank of which he was the author as follows:
"It is possible that no bank of issue in peacetimes carried on such a daring credit policy at the Reichsbank since the seizure of power by National Socialism. With the aid of this credit policy, however, Germany created an armament second to none, and this armament in turn made possible the results of our policy." (EC-611).
The "daring credit policy," which made possible the creation of "an armament second to none," obviously embraced the "mefo" bill financing which he had contrived.
(b) Use of funds of opponents of Nazi regime. In his efforts to draw upon every possible source of funds for the conspirators' rearmament program, Schacht even used the blocked funds of foreigners' deposits in the Reichsbank. In his memorandum to Hitler of 3 May 1935, Schacht boasted:
"The Reichsbank invested the major part of Reichsbank accounts owned by foreigners, and which were accessible to the Reichsbank, in armament drafts. Our armaments are, therefore, being financed partially with the assets of our political opponents." (1168-PS).
his memorandum to Hitler of 3 May 1935, Schacht boasted: "The Reichsbank invested the major part of Reichsbank accounts owned by foreigners, and which were accessible to the Reichsbank, in armament drafts. Our armaments are, therefore, being financed partially with the assets of our political opponents." (1168-PS).
(c) Taxation and long term indebtedness. "Mefo" bills and the funds of political opponents of the conspirators were, of course, not the only sources from which Schacht drew to finance the armament program. Funds for rearmament were likewise derived from taxation and an increase in public debt-channels through which part of national income is ordinarily diverted to public authorities. But what distinguished the conspirators' program of public indebtedness was the fact that the German capital market was completely harnessed to the expanding needs of the Nazi war machine. By a series of controls, they reduced to the minimum consistent with their rearmament program, all private issues which might have competed with Government issues for the limited funds in the capital market. Thus, the capital market was, in effect, pre-empted for Government issues (EC-497; EC-611).
During the period from 31 December 1932 to 30 June 1938, the funded debt of the Reich rose from 10.4 billion Marks to 19 billion Marks (EC-419).
This large increase in funded debt was dedicated "as far as possible" to "the financing of armament and the Four-Year Plan" (EC-611).
issues (EC-497; EC-611). During the period from 31 December 1932 to 30 June 1938, the funded debt of the Reich rose from 10.4 billion Marks to 19 billion Marks (EC-419). This large increase in funded debt was dedicated "as far as possible" to "the financing of armament and the Four-Year Plan" (EC-611).
(2) The New Plan. The conspirators' grandiose armament plans obviously required huge quantities of raw materials. Schacht was a proponent of the view that as much of the requisite raw materials as possible should be produced within Germany. At the same time, however, he recognized that large imports of raw materials were indispensable to the success of the conspirators' gigantic armament program. To that end, he fashioned an intricate system of controls and devices which he called the "New Plan" (Reichsgesetzblatt, 1934, I, pp. 816, 829, 864; Reichsgesetzblatt, 1935, I, p. 105).
There were three main features of the "New Plan" as devised by Schacht: (1) restriction of the demand for such foreign exchange as would be used for purposes unrelated to the conspirators' rearmament program; (2) increase of the supply of foreign exchange, as a means of paying for essential imports which could not otherwise be acquired; and (3) clearing agreements and other devices obviating the need for foreign exchange. Under the "New Plan", economic transactions between Germany and the outside world were no longer governed by the autonomous price mechanism; they were determined by a number of Government agencies whose primary aim was to satisfy the needs of the conspirators' military economy (EC-437).
Schacht accomplished the negative task of restricting the demand for foreign exchange
"by various measures suspending the service on Germany's foreign indebtedness, by freezing other claims of foreigners of Germany, by a stringent system of export controls and by eliminating foreign travel and other unessential foreign expenditures." (EC-437).
In order to increase the available supply of foreign exchange
"by various measures suspending the service on Germany's foreign indebtedness, by freezing other claims of foreigners of Germany, by a stringent system of export controls and by eliminating foreign travel and other unessential foreign expenditures." (EC-437). In order to increase the available supply of foreign exchange
"Schacht repeatedly requisitioned all existing foreign exchange reserves of German residents, required all foreign exchange arising out of current exports and other transactions to be sold to the Reichsbank, and by developing new export markets. Exports were encouraged by direct subsidies and by accepting partial payment in German foreign bonds or in restricted Marks which could be acquired by foreign importers at a substantial discount." (EC-437).
A vast network of organizations was erected to effectuate these various measures. Suffice it for the present purposes to mention merely one of these organizations: the supervisory agencies (Ueberwachungsstellen). These agencies, which were under Schacht's control as Minister of Economics, decided whether given imports and exports were desirable; whether the quantities, prices, credit terms, and countries involved were satisfactory; and, in short, whether any particular transaction advanced the conspirators' armament program. The overriding military purpose of the series of controls instituted under the "New Plan" is plainly shown in Schacht's letter of 5 August 1937 to Goering, wherein he said:
"*   *   *   The very necessity of bringing our armament up to a certain level as rapidly as possible must place in the foreground the idea of as large returns as possible in foreign exchange and therewith the greatest possible assurance of raw material supplies, through exporting." (EC-497).
said: "* * * The very necessity of bringing our armament up to a certain level as rapidly as possible must place in the foreground the idea of as large returns as possible in foreign exchange and therewith the greatest possible assurance of raw material supplies, through exporting." (EC-497).
There remains for consideration that aspect of the "New Plan" which involved extensive use of clearing agreements and other arrangements made by Schacht to obtain materials from abroad without the expenditure of foreign exchange. The principle of the clearing system is as follows: The importer makes a deposit of the purchase price in his own currency at the national clearing agency of his country, which places the same amount to the credit of the clearing agency of the exporting country. The latter institution then pays the exporter in his own currency. Thus, if trade between two countries is unequal, the clearing agency of one acquires a claim against the agency of the other. That claim, however, is satisfied only when a shift in the balance of trade gives rise to an offsetting claim.
This device was used by Schacht as a means of exploiting Germany's position as Europe's largest consumer in order to acquire essential raw materials from countries which, because of the world wide economic depression, were dependent upon the German market as an outlet for their surplus products. Speaking of his system of obtaining materials abroad without the use of foreign exchange, Schacht has stated:
"It has been shown that, in contrast to everything which classical national economy has hitherto taught, not the producer but the consumer is the ruling factor in economic life. And this thesis is somewhat connected with general social and political observations, because it established the fact that the number of consumers is considerably larger than the number of producers, a fact which exercises a not inconsiderable social and political pressure." (EC-611).