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THE PRESIDENT: Yes, General Alexandrov.

GEN. 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.

Defendant Schacht, on 21 May 1935 the Reich Government made a decision with regard to the Reich Defense Council. The decision was as follows, citing Point 1:

“It is the will of the Führer 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 Führer 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 wars?

SCHACHT: No, Mr. Prosecutor, I definitely do not admit that.

GEN. ALEXANDROV: On the 4th of March 1935, in your speech at the Spring Fair in Leipzig, you said the following, citing Exhibit Number USA-627 (Document Number EC-415):

“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 economic 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 Führer, and I shall neither do nor say anything which he has not approved. Therefore, the guardian of economic reason is not I but the Führer.”

Do you confirm this speech you made at the Spring Fair in Leipzig?

SCHACHT: 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 as long as his policies agreed with mine; afterwards I was not, and left.

GEN. ALEXANDROV: I have no more questions, Your Honor.

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.

During the cross-examination, the New Plan was again dealt with without Dr. Schacht’s 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?

SCHACHT: 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 exports.

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 on 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 German 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 to state here briefly that Germany, against my advice, had within five years contracted as large a foreign debt as the United States had throughout the 40 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.

We now hit the bottom. 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 this 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 creditors.

To meet this development, I looked for a way out 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.

DR. DIX: 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.

SCHACHT: Absolutely nothing.

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

SCHACHT: 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, 1934-35, 1935-36, 1936-37 and so on, amounted respectively to 5,000 million Reichsmark, 7,000 million Reichsmark and 9,000 million Reichsmark; that is the estimate of experts. The production of the entire German economy during these years could be estimated approximately at 50-60,000 million 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 10 to 15 percent of the entire German economy during the years when I had anything to do with it.

DR. DIX: Then, in the course of the cross-examination, there came up the question of your willingness or unwillingness to give up the office of Plenipotentiary for War Economy, and in order to prove your statement that General Von Blomberg did not wish you to give up that office, you referred to a document which has been submitted by the Prosecution. I am referring to Document EC-244, and it is a letter from the Reichswehr Minister, Von Blomberg, to Hitler, of 22 February 1937. It has already been read, so there is no need to do so now. May I only point out that in the last paragraph Blomberg expressed the desire that the Führer would direct or get the Reichsbank president to remain in office, so that covers the statement made by Schacht. Furthermore, in the course of cross-examination by Mr. Justice Jackson, mention was made of your credibility concerning the statement on your colonial aspirations; and from the point of view of colonial policy without mastery of the sea—Germany had not the mastery of the sea—can Germany have any colonial problems? That was the question and answer; and in that connection I would like to ask you: Did Germany have colonies before 1914?

SCHACHT: Yes.

DR. DIX: Before 1914, or let us say between 1884 and 1914, that is, the time when Germany had colonial possessions, did Germany have mastery of the sea, especially as compared with Great Britain?

SCHACHT: No, in no way.

DR. DIX: That covers it. Then there is another problem from the point of view of the credibility of your statements: Mention has been made of the ethical conflicts concerning your oath to Hitler, as head of the State, as you say, and the intentions which you have revealed to overthrow Hitler, even to kill him. Do you not know of many cases in history where persons holding high office in a state attempted to overthrow the head of the state to whom they had sworn allegiance?

SCHACHT: I believe you find these examples in the history of all nations.

THE PRESIDENT: Dr. Dix, we are not concerned with past history, are we? You do not think the question of whether there are historical instances is a legitimate question to put to this witness?

DR. DIX: Then I will not pursue that point any further; it is argumentation and maybe I can use it later in my final pleadings.

Now, returning to the question of colonies, is it not correct that, apart from your personal colonial aspirations, Germany, the Reich Government, had prepared officially for the acquisition of her colonies and later their administration; and was not there a colonial policy department until 1942 or 1943 or thereabouts?

SCHACHT: Well, it is set out explicitly in the Party program that the colonial demands are part of the Party program. Of course, the Foreign Office also concerned itself with it and I believe also in the Party there was a colonial policy department.

DR. DIX: Under Ritter Von Epp?

SCHACHT: Yes, under Ritter Von Epp.

DR. DIX: Then concerning the question of the mefo bills, I only want to summarize: Did you mean to imply that the mefo bills were to serve as a brake on rearmament, because the signature of the Reich to these bills, that is of the Reich Government, was binding for their repayment?

SCHACHT: You see, I said very clearly that the limitation of the mefo bills to 5 years, and making them mature in 5 years, would automatically put a brake on armament.

DR. DIX: Furthermore, Mr. Justice Jackson dealt with the point that the name of Schacht, when he retained office as Minister without Portfolio, had a propaganda value in favor of the Nazi regime abroad and therefore served the aggressive intentions and their execution. In this connection and in order to shorten the presentation of my documents, may I read from my document book, Exhibit 37(a), Document Schacht-37(a); that is, the English text is on Page 157 and the German on Page 149. On Page 5 of that long affidavit Huelse states:

“The foreign press drew from the dismissal”—that is, the dismissal as Reichsbank President in 1939—“the correct conclusions and interpreted it as a warning signal. In this connection in repeated conversations, even at the end of 1938, and in agreement with Dr. Schacht, I spoke with representatives of foreign issuing banks, whom I had met at board meetings of the Bank for International Settlement, and I informed them that the resignation of Schacht and individual members of the Reichsbank Directorate meant that things in Germany were following a dangerous path.”

Furthermore, the Prosecutor for the Soviet Union has accused Dr. Schacht, because in the biography of Reuter it is stated expressly that Schacht assisted the regime during the stage of the struggle for power. At any rate, that is the substance. That is correct as a quotation from Reuter’s book, but there is something else. I believe we still have to submit Exhibit 35 (Document Schacht-35), Page 133 of the English text and 125 of the German, and there we find on the second page of that long affidavit the following sentences, which limit the authenticity of that biography and prove it to be a biased piece of writing. Reuter says in this affidavit, and I quote:

“I had a biography of Dr. Schacht published twice, first at the end of 1933 by the Publishing House R. Kittler in Berlin, and at the end of 1936 by the German Publishing Institute in Stuttgart. Besides its being a factual presentation of his life and his work, it also served the purpose of shielding him from his attackers. Therefore the principles of purely objective historical research are not applicable to this publication, because defensive views required by the situation at the time has to be taken into consideration.”

This must be known and read before one can estimate the evidential value of that biography.

And that concludes my questions.

THE PRESIDENT: The defendant can then retire.

DR. DIX: I now call the witness Vocke with Your Lordship’s permission.

[The witness Vocke took the stand.]

THE PRESIDENT: Will you state your full name?

WILHELM VOCKE (Witness): Wilhelm Vocke.

THE PRESIDENT: Will you repeat this oath after me: I swear by God—the Almighty and Omniscient—that I will speak the pure truth—and will withhold and add nothing.

[The witness repeated the oath in German.]

THE PRESIDENT: You may sit down.

DR. DIX: Herr Vocke, you were a member of the Directorate of the Reichsbank. When did you enter the Reichsbank Directorate, and when did you resign from it?

VOCKE: Reich President Ebert appointed me a member of the Reichsbank Directorate in 1919, and Hitler dismissed me from office on 1 February 1939. Therefore, I was for about 20 years a member of the Reichsbank Directorate, and for 10 of these years I was under Schacht.

DR. DIX: Excuse me, but I must ask you, were you a member of the Party?

VOCKE: No.

DR. DIX: Were you a member of the SA?

VOCKE: No.

DR. DIX: Were you a member of the SS?

VOCKE: No.

DR. DIX: Were you a sponsoring member of the SA or SS?

VOCKE: No.

DR. DIX: You had no connection with the Party?

VOCKE: No.

DR. DIX: When did you meet Schacht?

VOCKE: In 1915. I merely made his acquaintance then, but it was not until he became Reichsbank Kommissar and Reichsbank President, that I came to know him better.

DR. DIX: I come now to the period of the first Reichsbank presidency of Schacht, that is, the year 1923. At that time what was the attitude of the Reichsbank Directorate to the candidature of Schacht as Reichsbank President?

VOCKE: A disapproving attitude.

DR. DIX: And for what reason?

VOCKE: We wanted Helferich as candidate for the presidency of the Reichsbank, because Helferich, in close co-operation with the Reichsbank, had created the Rentenmark and stabilization of currency.

But as reason for our disapproval of Schacht, we mentioned an incident contained in Schacht’s dossier which referred to his activity under Herr Von Jung in 1915. According to this, Schacht, who had come from the Dresdner Bank, had rendered assistance to the Dresdner Bank which Von Jung did not consider quite correct, and that was the reason for Schacht’s dismissal at that time.

The Reich Government, however, did not heed the criticism which we made against Schacht, and as Minister Severing told me recently, he followed the proverb, “It is not the worst fruit which is eaten by worms,” and Schacht was appointed President.

DR. DIX: So that Schacht came to you as President, and he must have known that the Directorate did not want him, or at any rate wanted somebody else. Therefore, I assume the question is in order as to what the relations were among that group, that is, the Reichsbank Directorate and the new President.

VOCKE: Schacht took up his office in January 1924. He called us all to a meeting in which he spoke very frankly about the situation, and this was the substance of what he said: Well, you disapproved of me for President because I stole silver spoons; but now I am your President, and I hope that we will work together, and we will get to see eye to eye—that was the expression used by Schacht—however, if one or another of you feels that he cannot work with me, well, then he will have to take the consequences, and I will gladly assist him to find another position.

Our relations with Schacht soon became good and we worked together successfully. It was very good to work with Schacht. We quickly recognized that he was an unrivalled expert in his and our branch, and also in other respects his conduct was beyond reproach. He was clean in his dealings and there was no nepotism. Neither did he bring with him any men whom he wanted to push. Also he was a man who at all times tolerated controversy and differing opinions—he even welcomed them. He had no use for colleagues who were “yes men.”

THE PRESIDENT: There is neither any charge nor any issue about this.

DR. DIX: That is quite correct, Your Lordship, but I thought it would be helpful to touch upon these things. But we are now at the end, and will come to the Reichsbank presidency from 1933 on.

[Turning to the witness.] After his short period of retirement Schacht again became President of the Reichsbank in 1933. Did you have any conversations with him about his relations to Hitler and to the Party?

VOCKE: Yes.

DR. DIX: Would you like to describe to the Tribunal the kind of statements Schacht made to you?

VOCKE: First, I would like to mention two conversations which I remember almost word for word. During the period when Schacht was not in office, that is about three years, I hardly ever saw him, maybe three or four times at occasions at the Wilhelmstift. He never visited me, nor did I visit him, except once, when Schacht came into the bank—maybe he had some business there—and visited me in my office. We at once...

DR. DIX: When was that?

VOCKE: That must have been in 1932, a comparatively short time before the seizure of power. We immediately began to speak about political questions, about Hitler and Schacht’s relations to Hitler. I used that opportunity to warn Schacht seriously against Hitler and the Nazis. Schacht said to me: “Herr Vocke, one must give this man or these people a chance. If they do no good, they will disappear. They will be cleared out in the same way as their predecessors.”

I told Schacht: “Yes, but it may be that the harm done to the German people in the meantime will be so great that it can never be repaired.”

Schacht did not take that very seriously, and with some light remark, such as: You are an old pessimist, or something like that, he left.

The second conversation about which I want to report took place shortly after Schacht’s re-entry into the bank. It was probably in March 1933, or the beginning of April. Schacht at that time showed a kind of ostentatious enthusiasm, and I talked to him about his relation to the Party. I assumed that Schacht was a member of the Party. I told him that I had no intention of becoming a member of the Party, and Schacht said to me: “You do not have to. You are not supposed to. What do you think? I would not even dream of becoming a member of the Party. Can you imagine me bending under the Party yoke, accepting the Party discipline? And then, think of it, when I speak to Hitler I should click my heels and say, ‘Mein Führer,’ or when I write to him address him as ‘Mein Führer.’ That is quite out of the question for me. I am and remain a free man.”

That conversation took place and those words were spoken by Schacht at a time when he was at the apex of a rapprochement with Hitler, and many a time I have thought about it, whether it was true, and remained true, that Schacht was a free man.

As things turned out, after a few years Schacht was forced to realize to his sorrow that he had lost a great deal of his freedom, that he could not change the course of the armaments financing scheme, upon which he had embarked, when he wished to do so; that it had become a chain in the hands of Hitler and that it would take years of filing and tugging for it to break.

But, in spite of that, his words were true inasmuch as they reflected the inner attitude of Schacht towards Hitler. Schacht never was a blind follower. It was incompatible with his character, to sign himself away to somebody, to sell himself and follow with blind devotion.

If one should seek to characterize Schacht’s attitude to Hitler thus: My Führer, you command, I follow; and if the Führer ordered him to prepare an armament program: I will finance an armament program, and it is for the Führer to decide to what use it shall be put, whether for war or peace—that would be incompatible with Schacht’s attitude and character. He was not a man who thought along subaltern lines or who would throw away his liberty; in that Schacht differed fundamentally from a great many men in leading political and military positions in Germany.

Schacht’s attitude, as I came to know it from his character and from his statements, could be explained somewhat as follows: Schacht admired this man’s tremendous dynamic force directed towards national aims, and he took account of this man, hoping to use him as a tool for his own plans, for Schacht’s plans towards a peaceful political and economic reconstruction and strengthening of Germany. That is what Schacht thought and believed, and I take that from many statements made by Schacht...

DR. DIX: That, I think, answers the question fully. Now the Prosecution accuses Schacht and alleges that Hitler picked out Schacht to finance armament for an aggressive war. You, Herr Vocke, were a member of the Reichsbank Directorate and you worked with him during all those years. Therefore, I ask you to tell the Tribunal whether anything transpired in the course of conversations, or whether you noticed anything about Schacht’s activities and work which would justify such a reproach.

VOCKE: No. Schacht often expressed the view that only a peaceful development could restore Germany and not once did I hear him say anything which might suggest that he knew anything about the warlike intentions of Hitler. I have searched my memory and I recall three or four incidents which answer that question quite clearly. I should like to mention them in this connection.

The first was the 420 million gold mark credit which was repaid in 1933. Luther, when the Reichsbank cover disintegrated in the crisis...

DR. DIX: May I interrupt for the information of the Tribunal: Luther was Schacht’s predecessor.

VOCKE: ...in 1931 when the cover for the issue of notes had to be cut down, Luther in his despair sent me to England in order to acquire a large credit in gold from the Bank of England which would restore confidence in the Reichsbank. Governor Norman was quite prepared to help me, but he said that it would be necessary for that purpose to approach also the Federal Reserve Bank of New York, the Bank of France, and the International Bank in Basel. That was done and the credit amounted to 420 million gold marks, but the inclusion of the Bank of France created political difficulties which delayed the credit for about 10 or 12 days.

When I returned to Berlin I was shocked to hear that the greater part of the credit had already been used up. The gold was torn from our hands, and I told Luther: The credit has lost its usefulness and we must repay it immediately. Our honor is our last asset. The banks which have helped us shall not lose a single pfennig.

Luther did not have sufficient understanding for that, and he said in so many words: What one has, one holds. We do not know for what purpose we may still have urgent need of the gold. And so the credit was extended and dragged out over years.

When Schacht came to the bank in 1933, I told myself that Schacht would understand me, and he did understand me immediately. He agreed with me and repaid that credit without hesitation. It never entered his head for what other purpose one might use that enormous sum of gold, and I say here that if Schacht had known of any plans for a war, he would have been a fool to pay back 420 million gold marks.

As to the second incident, I cannot give the exact date, but I believe it was in 1936. The Reichsbank received a letter from the Army Command or the General Staff marked “Top Secret,” with the request to remove the gold reserves of the Reichsbank, the securities and bank note reserves from the frontier regions of Germany to a zone in the interior. The reasons given were the following: In the event of a threat to attack Germany on two fronts, the Army Command had decided to evacuate the frontier areas and to confine itself to a central zone which could be defended under all circumstances. I still remember from the map which was attached to the letter that the line of defense in the East...

THE PRESIDENT: It seems to the Tribunal that this is very remote from any question we have to decide.

DR. DIX: Your Lordship, that map which the witness wants to describe shows clearly and beyond doubt that the attitude of the German High Command in 1936 was a defensive attitude and one which accepted the greatest strategic disadvantages, and this was communicated to the Reichsbank under the presidency of Schacht. We can see from that communication that nobody at that time even thought of aggressive intentions of the Army Command.

THE PRESIDENT: At what time?

DR. DIX: 1936, I understood him to say that. Perhaps it is better that he should give you the date.

VOCKE: I cannot say exactly what the date was, but it must have been about 1936, in my estimation.

DR. DIX: I believe that it is rather relevant. May the witness continue?

THE PRESIDENT: Yes.

VOCKE: The line of defense in the East went from Hof straight up to Stettin; I cannot remember so well where the western line was drawn, but Baden and the Rhineland were outside of it.

The Reichsbank was shocked to hear that and about the threat of a two-front attack on Germany and the tremendous sacrifice of German territory. It was also shocked at the idea that the Reichsbank, in the event of an occupation of these regions by the enemy, would have to leave these occupied territories without any financial support. Therefore we refused the last-mentioned request, but, as far as the gold was concerned, we placed it in Berlin, Munich, Nuremberg, and so on.

We could no longer have any doubt, however, after this top secret document, about the defensive character of our armaments and preparations.

I come to a third incident. That was in 1937. At that time, when the economy was already racing ahead and more and more money was being put up, Schacht asked for the support of the German professors of economy and called them together to persuade them to work along his lines, that is, to try to check this trend. At that meeting one of those present asked Schacht the question: “What will happen if war breaks out?” Schacht got up and said: “Gentlemen, then we are lost. Then everything is over with us. I ask you to drop this subject. We cannot worry about it now.”

Now I come to the fourth incident, which also leaves no doubt about Schacht’s attitude or the completeness of his information. That was a conversation immediately after the outbreak of the war. In the first few days Schacht, Huelse, Dreyse, Schniewind and I met for a confidential talk. The first thing Schacht said was: “Gentlemen, this is a fraud such as the world has never seen. The Poles have never received the German offer. The newspapers are lying in order to lull the German people to sleep. The Poles have been attacked. Henderson did not even receive the offer, but only a short excerpt from the note was given to him verbally. If at any time at the outbreak of a war, the question of guilt was clear, then it is so in this case. That is a crime the like of which cannot be imagined.”

Then Schacht continued: “What madness to start a war with a military power like Poland, which is led by the best French general staff officers. Our armament is no good. It has been made by quacks. The money has been wasted without point or plan.”

To the retort: “But we have an air force which can make itself felt,” Schacht said: “The air force does not decide the outcome of a war, the ground forces do. We have no heavy guns, no tanks; in three weeks the German armies in Poland will break down, and then think of the coalition which still faces us.”

Those were Schacht’s words and they made a deep impression on me; for me they are a definite and clear answer to the question which Dr. Dix put to me.

DR. DIX: Now, in the course of those years from 1933 to 1939 did Schacht ever speak to you about alleged or surmised war plans of Hitler?

VOCKE: No, never.

DR. DIX: What was Schacht’s basic attitude to the idea of a war; did he ever mention that to you?

VOCKE: Yes, of course, fairly often. Schacht always emphasized that war destroys and ruins both the victor and the vanquished, and, in his and our field, he pointed to the example of the victorious powers whose economy and currency had been devaluated and partly even crippled. England had to devaluate her currency; in France there was a complete breakdown of the financial system, not to speak of other powers such as Belgium, Poland, Romania, and Czechoslovakia.

DR. DIX: Schacht made these statements?

VOCKE: Yes, he did, and quite frequently. Schacht went into detail and was very definite about the situation in neutral countries. Schacht said again and again: There will be conflicts and war again, but for Germany there is only one policy, absolute neutrality. And he quoted the examples of Switzerland, Sweden, and so on, who by their neutral attitude had grown rich and more powerful and become creditor nations. Schacht again and again emphasized that very strongly.

DR. DIX: In that connection you will understand my question. How can you explain then, or rather, how did Schacht explain to you the fact that he was financing armament at all?

VOCKE: Schacht believed at that time that a certain quantity of armaments, such as every country in the world possessed, was also necessary for Germany for political...

DR. DIX: May I interrupt you. I want you to state only the things which Schacht told you; not your opinions about what Schacht may have thought, but only what Schacht actually said to you.

VOCKE: Yes. Schacht said a foreign policy without armament was impossible in the long run. Schacht also said that neutrality, which he demanded for Germany in case of conflict between the big powers, must be an armed neutrality. Schacht considered armaments necessary, because otherwise Germany would always be defenseless in the midst of armed nations. He was not thinking of definite attack from any side, but he said that in every country there was a militarist party which might come to power today or tomorrow, and a completely helpless Germany, surrounded by other nations, was unthinkable. It was even a danger to peace because it was an incentive to attack her one day. Finally, however, and principally Schacht saw in armaments the only means of revitalizing and starting up German economy as a whole. Barracks would have to be built; the building industry, which is the backbone of economy, must be revitalized. Only in that way, he hoped, could unemployment be tackled.

DR. DIX: Now, events led to the militarization of the Rhineland, the reintroduction of compulsory military service. Did you have conversations with Schacht in which he said that if this policy of Hitler was pursued it might lead to a war, at least to an armed intervention by other nations which did not approve of such policies? Were there any such conversations between you and Schacht?

VOCKE: Not in the sense of your question. Schacht did speak to me about the incidents when the Rhineland was reoccupied, that is to say, he explained to me how at that time Hitler, as soon as France adopted a somewhat menacing attitude, was resolved to withdraw his occupation forces—Hitler had climbed down—and how he was only prevented in this by Herr Von Neurath, who said to him: “I was against that step, but now that you have done it, it will have to stand.” What Schacht told me at that time about Hitler’s attitude was that Hitler would do anything rather than have a war. Schacht also felt this, as he told me, when he mentioned the friendship with Poland, the renunciation of his claim to Alsace-Lorraine, and, in particular, Hitler’s policy during the first years, all of which was a peaceful policy. Only later did he begin to have misgivings as regards foreign policy.

DR. DIX: What were Schacht’s principles and ideas in foreign policy and how did these line up with his attitude to Hitler’s foreign policy?

VOCKE: He definitely disapproved, especially, of course, since Ribbentrop had gained influence in foreign politics; Schacht saw in him the most incapable and irresponsible of Hitler’s advisers. But already before that there were serious differences of opinion between Schacht and Hitler on foreign policy.

For instance, as regards Russia: Already from 1928-29 onwards Schacht had built up a large trade with Russia by long term credits which helped the economy of both countries. He has often been attacked on account of that, but he said: “I know what I am doing. I also know that the Russians will pay punctually and without bargaining. They have always done it.” Schacht was very angry and unhappy when Hitler’s tirades of abuse spoiled the relations with Russia and brought this extensive trade to an end.

Also, with regard to China, Schacht was convinced of the importance of trade with China and was just about to develop it on a large scale, when Hitler, by showing preference to Japan and recalling the German advisers to Chiang Kai-Shek, again destroyed all Schacht’s plans. Schacht saw that this was a fatal mistake and said that Japan would never be able nor willing to compensate us for the loss of trade with China.

Also Schacht always advocated close co-operation with the United States, with England, and with France. Schacht admired Roosevelt and was proud of the fact that Roosevelt, through the diplomat Cockerill, kept in constant touch with him. Schacht was convinced of the necessity of remaining on the best terms with England and France and for that very reason he disapproved of Ribbentrop being sent to London and actively opposed this plan.

Schacht was against Hitler’s policy towards Italy. He knew that Mussolini did not want to have anything to do with us, and he considered him the most unreliable and the weakest partner.

With regard to Austria, I know only that Schacht thought highly of Dollfuss and was horrified and shocked when he heard of his murder. Also after the occupation of Austria, he disapproved of much that happened there.

May I, in this connection, say a word about Schacht’s colonial policy, which was a sort of hobby of Schacht’s, and about which he once gave a lecture? I can best illustrate Schacht’s views by telling you about the orders which he gave me. Schacht’s idea was to make an arrangement with England, France, et cetera, whereby these powers should purchase part of the Portuguese colony of Angola and transfer it to Germany, who would not exercise any sovereign rights, but would exploit it economically; and he had experts’ opinions...

THE PRESIDENT: Dr. Dix, the Tribunal thinks that this is being given in far too great length.

DR. DIX: Well, we can leave out the individual examples. The late Field Marshal Von Blomberg made a statement to the effect that the Reichsbank received every year from the Reichswehr Ministry a written communication about the state of the armaments. Do you, who were a member of the Directorate, know anything about this communication?

VOCKE: No, I have never heard anything about it.

DR. DIX: From the whole of your experience in the Reichsbank and your experience with Schacht’s attitude to his colleagues, do you consider it possible that Schacht personally received that information, but did not pass it on to any of his colleagues in the Reichsbank Directorate?

VOCKE: It may be, but I consider it highly improbable.

DR. DIX: Now, when did Schacht start to try to stop the financing of armaments and thereby check rearmament; and, if he did try, and if you can affirm it, what were his reasons?

VOCKE: Schacht made the first attempts to limit armaments, I believe, about 1936, when economy was running at top speed and further armament seemed an endless spiral. The Reichsbank was blocked and, I believe, in 1936, Schacht himself started making serious attempts to put an end to armaments.

DR. DIX: And do you know from your own experience what these attempts were?

VOCKE: These attempts continued throughout the following years: First, Schacht tried to influence Hitler and that proved to be in vain. His influence decreased as soon as he made any such attempt. He tried to find allies in the civic ministries, and also among the generals. He also tried to win over Göring, and he thought he had won him over, but it did not work. Schacht then put up a fight and at last he succeeded in stopping the Reichsbank credits for armaments. That was achieved at the beginning of March 1938. But that did not mean that he discontinued his efforts to stop rearmament itself, and he continued to use every means, even sabotage.

In 1938 he issued a loan at a time when he knew that the previous loan had not yet been absorbed—when the banks were still full of it; and he made the amount of the new loan so big that it was doomed to failure. We waited eagerly to see whether our calculations were correct. We were happy when the failure became obvious and Schacht informed Hitler.

Another way in which he tried to sabotage armaments was when the industries which applied for loans to expand their factories were prohibited from doing so by Schacht, and thus were prevented from expanding. The termination of the Reichsbank credit did not only mean that the Reichsbank could no longer finance armaments, but it dealt a serious blow to armament itself. This was shown in 1938, when financing became extremely difficult in all fields and, upon Schacht’s resignation, immediately reverted to the direct credits of the issuing bank, which was the only means of maintaining elastic credit, perpetual credit, so to speak, which Hitler needed and could never have received from Schacht.

I know that from my personal recollection, because I protested against that law which was put to me and which Hitler issued after Schacht’s dismissal. I said to the Vice President: I am not going to have anything to do with it.

Thereupon, I was immediately dismissed ten days after the dismissal of Schacht.

DR. DIX: Well, Herr Vocke, for an outsider the motive for stopping the financing of armaments might have been purely economic. Have you any grounds, have you any experience which shows that Schacht was now also afraid of war, and wanted to prevent a war by this stoppage of credit?

VOCKE: Yes. At any rate, in 1938 the feeling that this tremendous armaments program which had no limits would lead to war became stronger and stronger, especially after the Munich Agreement. In the meantime Schacht had realized, and I think the Fritsch affair had made it very clear to him, that Hitler was the enemy, and that there was only one thing to do; that was to fight against Hitler’s armament program and warmongering by every possible means. These means, of course, were only financial, such as the sabotage, et cetera, as I have already described. The final resort was the memorandum by which Schacht forced his resignation.

DR. DIX: We will speak later about that. May I ask you another question? The Tribunal knows about the method of financing this credit, namely, by mefo bills, so you need not say anything about that. What I want to ask you is now, in your opinion as a lawyer, could the financing of armaments by these mefo bills be reconciled with banking law?

VOCKE: The mefo bills and the construction of that transaction had, of course, been legally examined beforehand; and the point of their legality had been raised with us, and the question as to whether these bills could be brought under banking law had been answered in the affirmative. The more serious question, however, was whether these bills fulfilled the normal requirements which an issuing bank should demand of its reserves. To that question, of course, the answer is definitely “no.”

If one asks, why did not the bank buy good commercial bills instead of mefo bills, the answer is that at that time there had been no good commercial bills on the market for years—that is, since the collapse due to the economic crisis. Already under Brüning schemes for assisting and restoring economy and credit had been drawn up, all of which followed similar lines, that is, they were sanctioned according to their nature as normal credits along the lines of a semipublic loan; for the Bank was faced with the alternative of standing by helplessly and seeing what would happen to the economy or of helping the Government as best it could to restore and support the economy. All issuing banks in other countries were faced with the same alternative and reacted in the same manner. Thus the armaments bills, which, economically speaking, were nothing more than the former unemployment bills, had to serve the same purpose. From the point of view of currency policy the Reichsbank’s reserves of old bills, which had been frozen by the depression, were again made good.

All the regulations under banking law, the traditional regulations concerning banking and bills policy, had only one aim, namely, to avoid losses.

DR. DIX: I believe, Herr Vocke, it will be sufficient for the Tribunal if you could confirm that in the end the legal experts of the Reichsbank pronounced the mefo bills to be legal. The reasons for this, if Your Lordship agrees, we can omit.