The Holocaust Historiography Project

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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-

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.


The chronology of Schacht’s official positions is as

(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-

(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 19 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).


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 (725-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 proferred advice concerning electioneering
tactics. The letter includes the following statements, inter

     “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-

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'

     “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 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 ***.”

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; EC49).

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

     “The name of Dr. Schacht will remain linked with the
     transition of the German economy to the new National
     Socialist methods” (EC-499)


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.”

In a letter to General Thomas dated 29 December 1937,
Schacht stated:

     “I have always considered a rearmament of the German
     people as conditio 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. Sec-
ond, 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
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

     “It is possible that no bank of issue in peacetime
     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) .

(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 ) .

(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. 10).

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 Germanys
     foreign indebtedness, by freezing other claims of
     foreigners on 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

     “Schacht repeatedly requisitioned all existing foreign
     ex. change 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

     “*** 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.”

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 through 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 establishes 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)

Schacht’s clearing agreements were particularly effective in
Southeastern Europe, where agricultural exports had been
considerably curtailed by competition from the more
extensive and efficient overseas agriculture. The success of
Schacht’s ruthless use of Germany’s bargaining position is
indicated by the fact that by August 1937, there had been
imported into Germany approximately one half billion
Reichsmarks of goods in excess of the amount delivered under
the clearing arrangements. In his letter to Goering dated 5
August 1937, Schacht stated:

     “*** in clearing transactions with countries furnishing
     raw materials and food products we have bought in
     excess of the goods we were able to deliver to these
     countries (namely, Southeastern Europe and Turkey)
     roughly one half billion RM ***.” (EC-497)

Thus, through this device, Schacht was able to extract huge
loans from foreign countries which Germany could not have
obtained through ordinary channels. The device as developed
by Schacht was subsequently used during the war as a means
of systematically exploiting the occupied countries of
Western Europe.

                                                  [Page 747]

In addition to the clearing agreements, Schacht devised the
system which came to be known as the “aski” accounts. This
scheme likewise obviated the need for free currency (i.e.
Reichsmarks freely convertible into foreign currency at the
official rate-U.S. dollars, pounds sterling, etc). The
system worked as follows: The German foreign exchange
control administration would authorize imports of goods in
specified quantities and categories on the condition that
the foreign sellers agreed to accept -payment in the form of
Mark credits to accounts of a special type held in German
banks. These accounts were called “aski", an abbreviation of
Auslander Sonderkonten fuer Inlandszahlungen (foreigners'
special accounts for inland payments). The so-called “aski”
Marks in such an account could be used to purchase German
goods only for export to the country of the holder of the
account; they could not be converted into foreign currency
at the official rates of exchange. Each group of “aski”
accounts formed a separate “island of exchange” in which the
German authorities, under Schacht’s leadership, could apply
their control as the country’s bargaining position in each
case seemed to warrant.

Schacht’s ingenious devices were eminently successful. They
admirably served the conspirators' need of obtaining
materials which were necessary to create and maintain their
war machine. On this point, Schacht has stated:

     “The success of the New Plan can be proved by means of
     a few figures. Calculated according to quantity, the
     import of finished products was throttled by 63 percent
     between 1934 and 1937. On the other hand, the import of
     ores was increased by 132 percent, of petroleum by 116,
     of grain by 12 and of rubber by 71 percent.”

     “These figures show how much the New Plan contributed
     to the execution of the armament program as well as to
     the securing of our food.” (EC-611 )

 (3) Production Control. As an additional means of assuring
that the conspirators' military needs would be met, Schacht
adopted a host of controls over the productive mechanism of
Germany, extending, inter alia, to the allocation of raw
materials, regulation of productive capacity, use of
abundant or synthetic substitutes in place of declining
stocks of urgently needed materials, and the erection of new
capacity for the production of essential commodities. The
structure of regulation was built up out of thousands of
decrees in which governmental agencies under

                                                  [Page 748]

Schacht’s control issued permits, prohibitions, and
instructions These decrees were the outgrowth of carefully
laid plans of the Ministry of Economics, of which Schacht
was the head, concerning “economic preparation for the
conduct of war", and in accordance with its view that
"genuine positive economic mobilization” demanded that
"exact instructions for every individual commercial
undertaking are laid down by a central authority' (EC-128)

The plan to allocate raw materials was carried out through
myriad “orders to produce” specifying that certain
commodities must or must not be produced; “orders to process
or use” prescribing the type and quantity of raw material
which could or could not be used in the production of a
given commodity; orders specifying that scarce raw materials
could be used only as admixtures with more plentiful but
inferior products; and other like measures. The precise
details of these orders are unimportant for present
purposes. Their significance lies in the fact that they were
governed by a central purpose: preparation for war. In the
above mentioned secret report issued in September 1934 by
the Ministry of Economics it was said:

     “Rules are to be initiated for the allotment of scarce
     raw materials etc; and their use and processing for
     other than war, or otherwise absolutely vital, goods is
     prohibited.” (EC-128)

The military aspects of Schacht’s plans to increase the
production of scarce raw materials within Germany, and
thereby reduce Germany’s dependence upon foreign countries
for materials needed in the rearmament program, are likewise
revealed in the aforementioned report of the Ministry of
Economics of September 1934:

     “The investigations initiated by the Raw Materials
     Commission and the measures introduced for enlarging
     our raw materials basis through home production as well
     as for furthering the production of substitute
     materials will directly benefit war economy
     preparations.” (EC-128)

(4) Plans and Preparations for Economic Controls During War.
Pursuant to the unpublished Reich Defense Law secretly
enacted on 21 May 1935, Schacht was appointed General
Plenipotentiary for War Economy by Hitler. Under this law,
Schacht was placed in complete charge of economic planning
and preparation for war in peacetime, except for the direct
production of armaments which was entrusted to the Ministry
of War; and upon the outbreak of war, Schacht was to be the
virtual economic dictator of Germany. His task was “to put
all economic forces in

                                                  [Page 749]

the service of carrying on the war and to secure the life of
the German people economically". In order to facilitate his
task, the Ministers of Economy, Food and Agriculture, Labor,
and Forestry were subordinated to him, and he was authorized
"within realm of responsibility, to issue legal regulations
which may deviate from existing regulations". The necessity
for absolute secrecy was stressed (2261-PS).

Schacht appointed Wohlthat as his deputy General
Plenipotentiary for War Economy and organized a staff to
carry out his directives. Schacht has admitted that he must
accept full responsibility for the actions of these
subordinates (3729-PS).

Before his resignation in late 1937, Schacht had worked out
in amazing detail his plans and preparations for the German
economy in the forthcoming war. Recognizing that wartime
controls, to be effective, must be based on adequate
information, Schacht had directed the completion of
comprehensive surveys of 180,000 industrial plants in
Germany and had compiled statistics concerning

     ."*** the composition of the labor force as to sex,
     age, and training, the consumption of raw and auxiliary
     material, fuels, power, the productive capacity, the
     domestic and foreign trade as well as the supply of
     material and products in the beginning and at the end
     of the year.” (EC-258)

On the basis of the statistical data thus collected, plans
had been formulated by the end of 1937 wherein

     “*** the needs of the Armed Forces and the civilian
     minimum needs in wartime are compared with the covering
     thereof by supplies and production.” (EC-258)

The supervisory boards, which were briefly described above
in connection with the import and export controls, were
charged with “preparing their orders for the regulation of
war contracts and fees", and were instructed to coordinate
with various Reich manpower authorities to secure “their
indispensable personnel” (EC-258).

Special measures were taken under Schacht’s direction, to
maintain “mobilization stocks” of coal and to assure their
distribution in accordance with the wartime needs of
armament factories and large consumers. Large “gasoline
storage places” were constructed for use of the Wehrmacht
and “gasoline stations and gasoline stores” were designated
"for the first equipment of the troops in case of
mobilization". Careful plans were also made for the
allocation of power during war, and practice maneuvers were

                                                  [Page 750]

in order to determine “what measures have to be taken in
case places of power generation should be eliminated” (EC-

Evacuation plans for the removal of war materials,
agricultural products, skilled workers, and animals from
military zones were worked out by the Office of the
Plenipotentiary for War Economy with characteristic
thoroughness. Thus, “the supplies and skilled workers in the
evacuation zones” were “registered, earmarked for
transportation into certain salvage areas and registered
with the Wehrkreiskommandos by the field offices of
evacuation and salvaging plans” (EC-25) .

Detailed plans for a system of rationing to become effective
immediately upon mobilization had already been made by the
end of 1937:

     “The 80 million ration cards necessary for this purpose
     have already been printed and deposited with the
     Landrats, Chief Mayors, and corresponding authorities.
     The further distribution of the ration cards to the
     individual households is prepared by these authorities
     to take place within 24 hours after mobilization has
     been ordered.” (EC-258)

Trusted persons whose reliability had been attested to by
the Secret State Police were installed in important
enterprises and charged with the execution of “measures
which guarantee the maintenance of production of their
enterprises in the event of mobilization". Their functions
likewise extended, among other matters, to applying “for
exemptions from military service” of “employees who are
indispensable to their enterprise", and seeking immunity
from requisition by the Wehrmacht- of all motor trucks which
were needed in the enterprises to which they were assigned

Pursuant to directives issued by Schacht as Plenipotentiary,
labor authorities of the Government ascertained “the
available amount of manpower, the wartime requirements of
manpower and measures for the covering of the wartime
needs". The wartime needs were to be met in part “by using
reserve manpower (manpower theretofore used in non-essential
enterprises, women, etc.)", and by making “every change of
working place and every hiring of workers dependent upon the
consent of the Labor Office” (EC-258).,

The foregoing measures, it should be noted, are merely
representative; they are not exhaustive. But enough appears
to make it abundantly clear that Schacht’s contribution, by
any standard was an extraordinarily important one. Enough
appears, moreover, to give particular emphasis to the
following observations of

                                                  [Page 751]

the Honorable George S. Messersmith, United States Consul
General in Berlin from 1930 to 1934:

     “It was his [Schacht's] financial ability that enabled
     the Nazi regime in the early days to find the financial
     basis for the tremendous armament program and which
     made it possible to carry it through. If it had not
     been for his efforts, and this is not a personal
     observation of mine only but I believe was shared and
     is shared by every observer at the time, the Nazi
     regime would have been unable to maintain itself in
     power and to establish its control over Germany, much
     less to create the enormous war machine which was
     necessary for its objectives in Europe and later
     throughout the world.

     “The increased industrial activity in Germany incident
     to rearmament made great imports of raw materials
     necessary while at the same time exports were
     decreasing. Yet by Schacht’s resourcefulness, his
     complete financial ruthlessness, and his absolute
     cynicism, Schacht was able to maintain and to establish
     the situation for the Nazis. Unquestionably without
     this complete lending of his capacities to the Nazi
     Government and all of its ambitions, it would have been
     impossible for Hitler and the Nazis to develop an Armed
     Force sufficient to permit Germany to launch an
     aggressive war.” (EC-451).

                                                  [Page 751]


(1) He was a faithful adherent of Hitler. It has already
been demonstrated that even before Hitler’s accession to
power, Schacht aligned himself with Hitler and accepted his
program. Schacht’s utterances after Hitler had entrenched
himself in power clearly show that he remained a faithful
servant of Hitler despite the series of outrages committed
under Hitler’s direction.

At the opening of the Leipzig Fair on 4 March 1935, Schacht

     “My so-called foreign friends don’t render any services
     to me or the cause, which they don’t want anyway, of
     course, but not even to themselves, if they try to
     construe a contrast between me and the allegedly
     impossible economic theories of National Socialism and
     represent me as a sort of guardian of economic reason.
     I assure you that all that I am doing and saying
     enjoys the absolute approval of the Fuehrer and that I
     would never do or say anything that does not have

                                                  [Page 752]

     his approval. Not I but the Fuehrer is the guardian of
     economic reason.” (EC-503)

On the occasion of the unveiling of Hitler’s bust in the
vestibule of the Reichsbank on 31 July 1935, Schacht said:

     “Germany stays and falls with the success of the policy
     of Hitler.” (EC-415)

At a ceremony in connection with the creation of the
Economic Chamber for Pomerania in Stettin on 19 January
1936, Schacht denied that there was any disagreement between
Hitler and his collaborators, and went on to say:

     “In Germany there is fortunately only one policy and
     one economic policy, namely that of Adolf Hitler; to
     work with him and for his goals is the highest
     satisfaction for every member of the people's
     community.” (EC-502)

In May 1936,. Schacht was attacked by some of the more
radical elements of the Nazi Party because he had rejected
their “partially irrational ideas” concerning armament
financing. In repelling these attacks, Schacht emphasized at
a secret meeting of the Ministers on 12 May 1936, that his
program of financing armaments had meant “the commitment of
the last reserve from the very beginning"; and he announced
that despite the attacks, he would continue to work because

     “*** stands with unswerving loyalty to the Fuehrer,
     because he fully recognizes the basic idea of National
     Socialism and because at the end, the disturbances,
     compared to the great task, can be considered
     irrelevant.” (1301-PS).

So far as appears, Schacht did not become a member of the
Nazi Party until January 1937. Franz Reuter, whose biography
of Schacht was officially published in Germany in 1937, has
stated that Schacht’s becoming a regular Party member was
only a question of secondary importance, and even part of a
carefully planned policy, for,

     “By not doing so — at least until the final assertion
     and victory of the Party — he [Schacht] was able to
     assist it [the Party] much better than he would have
     been able to do had he become an official Party
     member.” (EC-460)

On 30 January 1937, Hitler bestowed the Golden Party Badge
upon Schacht, in recognition of his “special services to
Party and State.” Schacht accepted this hallmark of approval
by the Fuehrer with effusive thanks and a pledge of
continued support In his speech of acceptance, Schacht

     “The presentation of the Golden Badge of the Movement
     is the highest honor the Third Reich has to offer. In
     honoring me as the head of the Reichsbank and the Reich

                                                  [Page 753]

     Prussian Ministry of Economics, it honors at the same
     time the two agencies which I am directing as well as
     the work of all those officials, employees and workers
     functioning in these two agencies.”


     “I think all my colleagues among the ranks of
     officials, employees, and workers for their
     faithfulness in the performance of their work, and
     appeal to all of them further to devote, with all their
     hearts, their entire strength to the Fuehrer and the
     Reich. The German future lies in the hands of our
     Fuehrer.” (EC-500)

The depths of adulation were reached in a speech which
Schacht delivered on the occasion of Hitler’s 48th birthday
in April 1937. Schacht spoke as one of Hitler’s “closest
collaborators,” who had seen at first hand the difficulties
which beset the Fuehrer in the relentless march toward his
goals. In his speech, Schacht stated:

     “With the limitless passion of a burning heart and the
     infallible instinct of the born statesman, Adolf Hitler
     has won for himself the soul of the German people in a
     battle fought for 14 years with unswerving


     “Only the closest collaborators of the Fuehrer know how
     difficult is the burden of this responsibility; how
     sorrowful are the hours during which decisions must be
     made which bear upon the well being and the fate of all
     of Germany.” (EC- 501 )

In November 1938, at a time Schacht now asserts he was
plotting against Hitler, he stated in a speech:

     “Instead of a weak and vacillating Government, a
     single, purposeful, energetic personality is ruling
     today. That is the great miracle which has actually
     happened in Germany and which has had its effects in
     all fields of life and not least in that of economy and
     finance. There is no German financial miracle. There is
     only the miracle of the reawakening of German national
     consciousness and German discipline, and we owe this
     miracle to our Fuehrer Adolf Hitler.” (EC-611)

2) Schacht favored the acquisition of additional territory
for Germany-peacefully if possible, but by aggressive war,
if necessary. Schacht had long been a German nationalist and

                                                  [Page 754]

expansionist. As early as 1927, he spoke against the
Versailles Treaty:

     “The Versailles Dictate cannot be an eternal document,
     because not only its economic, but also its spiritual
     and moral premises are wrong.” (EC-415)

He strongly favored the acquisition by Germany of both
colonial territory and contiguous territory in Europe. At
the Paris conference on 16 April 1929, he said:

     “Germany can generally only pay if the Corridor and
     Upper Silesia will be handed back to Germany from
     Polish possession, and if besides somewhere on the
     earth colonial territory will be made available to
     Germany.” (3726-PS)

In a speech in Danzig in June 1935, Schacht ascribed the
economic difficulties which confronted Danzig to “historical
errors of the greatest extent which were beyond the control
of the German people". He sought to comfort his listeners
with the assurance that

     “We Germans in the Reich today are looking with fullest
     confidence upon our comrades in the Danzig Free State,
     and maintain our people’s fellowship with the
     interests, wishes and hopes of this territory which has
     unfortunately been separated from us.” (EC-498)

In January 1936, Schacht again publicly spoke against the
Versailles Treaty, and impliedly threatened war unless its
terms were revised in Germany’s favor. At that time, he

     “But the memory of war weighs undiminished upon the
     people’s minds. That is because deeper than material
     wounds, moral wounds are smarting, inflicted by the so-
     called peace treaties. Material loss can be made up
     through renewed labor, but the moral wrong which has
     been inflicted upon the conquered peoples, in the peace
     dictates, leaves a burning scar on the people's
     conscience. The spirit of the Versailles has
     perpetuated the fury of war, and there will not be a
     true peace, progress or reconstruction until the world
     desists from this spirit. The German people will not
     tire of pronouncing this warning.”

Later in the same year, Schacht again publicly advocated
"Lebensraum” for the German people in terms not unlike those
employed by Hitler. In his speech at Frankfurt on 9 December
1936, Schacht said:

     “Germany has too little living space for her
     population. She has made every effort, and certainly
     greater efforts than any other nation, to extract from
     her own existing small space, whatever is necessary for
     the securing of her liveli-

                                                  [Page 755]

     hood. However, in spite of all these efforts the space
     does not suffice.” (EC-415)

Schacht had hoped, it is believed, that his desire for
additional space for Germany would be realized without
resort to war. In Austria, for example, he had authorized
200,000 Marks a month to be set aside for the National
Socialists in Austria, hoping thereby to facilitate the
absorption of Austria into Germany without war. But if
Germany’s neighbors would not accede to the conspirators'
demands for additional space, Schacht was willing to go to
war to fulfill those demands.

Thus, on 23 September 1935, Schacht told S. R. Fuller, Jr.
at the American Embassy in Berlin:

     “Colonies are necessary to Germany. We shall get them
     through negotiation if possible; but if not, we shall
     take them.”

In January 1937, Schacht, in a conversation with Ambassador
Davies, impliedly threatened a breach of the peace unless
Germany’s demands for colonies were met. The conversation is
related as follows in a report under date of 20 January
1937, by Ambassador Davies to the Secretary of

     “He [Schacht] stated the following: that the present
     condition of the Germany people was intolerable,
     desperate and unendurable; that he had been authorized
     by his Government to submit proposals to France and
     England which would (1) guarantee European peace; (2)
     secure present European international boundaries; (3)
     reduce armaments; (4) establish a new form of a
     workable League of Nations; (5) abolish sanctions with
     new machinery for joint administration; all based upon
     a colonial cession that would provide for Germany an
     outlet for population, source for food stuffs, fats and
     raw material. ***” (L-111)

The inference was clear: without a colonial cession, peace
could not be guaranteed. Equally clear was the inference
that it would be Germany in its search for “Lebensraum” that
would disturb the peace.

On 21 December 1937, Schacht indicated to Ambassador Dodd
that he desired the annexation of neighboring countries,
without war if possible, but with war, if necessary. The
pertinent portion of Ambassador Dodd’s notes on this
conversation are as follows:

     “Schacht meant what the Army chiefs of 1914 meant when
     they invaded Belgium, expecting to conquer France in
     six weeks; i.e., domination and annexation of
     neighboring little countries, especially north and
     east. Much as he dislikes

                                                  [Page 756]

     Hitler’s dictatorship, he, as most other eminent
     Germans, wishes annexation — without war if possible,
     with war, if the United States will keep hands off.”

 (3) Schacht knew of Hitler’s plans to wage aggressive war
and willfully provided the means whereby such a war might
successfully be waged. Whether or not Schacht personally
favored war it is clear that he at least knew that Hitler
planned military aggression and that he was providing Hitler
with the instrument by which those plans could be executed.
Even before Hitler’s accession to power, Schacht knew from a
reading of Mein Kampf that Hitler was bent upon expansion to
the East by force of arms (5727-PS).

In the course of his frequent contacts with Mr. Messersmith,
United States Consul General in Berlin from 1930 to 1934,
Schacht emphasized that the “Nazis were inevitably going to
plunge Europe into war' (EC-451).

In September of 1934, Ambassador Dodd recorded in his diary
a conversation with Sir Eric Phipps at the British Embassy
in Berlin, wherein he stated that “Schacht had acknowledged
to me the war purposes of the Nazi Party” (EC-461).

Schacht has admitted that in the course of his numerous talk
with Hitler from 1933 to 1937, he formed the impression that
"in order to make his hold on the Government secure, the
Fuehrer felt that he must present the German people with a
military victory” (EC-458).

These admissions by Schacht are fortified by other evidence
which shows that Schacht knew that Hitler planned military
aggression. After his appointment as Minister of Economics,
Schacht became a permanent member of the secret Reich
Defense Council. The function of that Council, as shown in
other connections, was secretly to mobilize all of the human
and material resources of Germany for war (EC-177).

Shortly after his appointment as the Plenipotentiary General
for the War Economy in May 193, Schacht was entrusted by the
Reich Defense Council with the “preparation of economic
mobilization” in connection with the proposed re-occupation
of the Rhineland. Schacht and those officials who were
charged with the purely military aspects of the re-
occupation were enjoined to proceed with the utmost secrecy
because of assurances given by Hitler to the French that no
military action was contemplated in the de-militarized zone
of the Rhineland

At the 11th meeting of the Reich Defense Council, on 6
December 1935, which was attended by a number of

                                                  [Page 757]

from Schacht’s office of Plenipotentiary of the War Economy,
Keitel pointed out that

     “According to the will of the Fuehrer, the economic
     leadership puts the increase of our armed might
     knowingly ahead of other requirements of the state. It
     is the task of all members of the Reich Defense Council
     to utilize the national property, made available,
     primarily for this purpose and economically in the
     framework of the entire situation, and request only
     such funds and raw materials which serve absolutely and
     exclusively the Reich Defense. ***” (EC-406)

The singleness of purpose with which Schacht and the other
conspirators were gearing the German economy for war is
strikingly shown by the Top Secret minutes of the meeting of
ministers dated 30 May 1936. This, it will be recalled, was
little more than 10 weeks after German troops had occupied
the Rhineland. At this meeting, Schacht pointed out that “it
must be attempted to produce those raw materials within
Germany which are economically favorable; for other raw
materials ready reserves for the case of mobilization"; and
also that “certain raw materials for war must be stocked.”
Continuing the discussion, Goering emphasized that “all
measures are to be considered from the standpoint of an
assured waging of war.” Thereafter, Schacht advocated the
introduction of price supervision and agreed that first
priority should be given to the “specially urgent petroleum
question” (1301-PS) .

By Top Secret letter dated 31 August 1936, Schacht was
advised by General von Blomberg that Hitler had ordered that
"the setting up of all air force units has to be completed
on 1 April 1937". This accelerated program entailed the
expenditure of large additional funds which Schacht and the
Minister of Finance were called upon to supply. The sense of
urgency with which Hitler pressed the completion of the
German air force patently signified that the waging of war
was a certainty (1301-PS).

Shortly after the receipt of this letter, and on 4 September
1936, Schacht attended a secret cabinet meeting where
Goering stated:

     “The Fuehrer and Reichskanzler has given a memorandum
     to the Col. General and the Reich War Minister which
     represents a general instruction for the execution

     “It starts from the basic thought that the showdown
     with Russia is inevitable.”


                                                  [Page 758]

     “The Colonel General reads the memorandum of the


     “If war should break out tomorrow we would be forced to
     take measures from which we might possibly still shy
     away at the present moment. They are, therefore, to be


     “All measures have to be taken just as if we were
     actually in the stage of imminent danger of war.” (EC-

There was no room for surmise in these utterances; Hitler
was definitely and irrevocably committed to waging
aggressive war If Schacht ever had any doubts concerning
Hitler’s firm resolve to carry out the program of-aggressive
war outlined in Mein Kampf; if, contrary to his statements
to Mr. Messersmith and Ambassador Dodd, Schacht actually
doubted in 1934 that the Nazis, whom he was faithfully
serving, would inevitably plunge Europe into war; and if,
despite the pressing sense of immediacy that had pervaded
the Nazi war economy from the very outset, he had
entertained lingering doubts concerning Hitler’s plans for
armed aggression, all such doubts must have been removed by
the clear and unequivocal pronouncements in the above-
mentioned eventful meetings of 1936 in which he

Yet, despite his knowledge of Hitler’s plans to wage
aggressive war, despite the fact that he had grave technical
doubts about the ability of the Reichsbank to finance
further armaments through additional short term credits, and
despite the fact that some directors of the Reichsbank had
opposed further “mefo” financing, Schacht pledged another 3
billion Reichsmarks by the “mefo” bill method for further
financing of armaments in March 1937 (EC-438).

The Hossbach notes, dated 10 November 1937, on the important
conference of 5 November 1937 in the Reichskanzlei, reveal a
further crystallization of Hitler’s program of absorption
and conquest in Europe (86-PS). Definite plans were laid for
the early acquisition of Austria and Czechoslovakia, and for
their exploitation in preparation for further military
operations. So far as appears, Schacht was not present at
this particular meeting. But his awareness of what occurred
at the meeting is shown by the fact that he told Ambassador
Bullitt on 23 November 1937,

     “Hitler was determined to have Austria eventually
     attached to Germany and to obtain at least autonomy for
     the Germans of Bohemia. At the Present moment he was
     not vitally con-

                                                  [Page 759]

     cerned about the Polish Corridor, and in his
     [Schacht's] opinion it might be possible to maintain
     the Corridor provided Danzig were permitted to join
     East Prussia, and provided some sort of a bridge could
     be built across the Corridor uniting Danzig and East
     Prussia with Germany.” (L-151) .

Although Schacht apparently sought to convey the impression
to Ambassador Bullitt that he desired to stay Hitler’s hand
but was powerless to do so, it is clear that he was actually
in complete sympathy with Hitler’s objectives. Despite the
mounting tension which followed his conversation with
Ambassador Bullitt, Schacht remained as President of the
Reichsbank, and in that capacity established, in advance of
the invasion of Austria, the rate of exchange between Marks
and Austrian Schillings which was to prevail after the
absorption of Austria (EC-421).

Moreover, under his direction, the Austrian National Bank
was merged into the Reichsbank (Reichsgesetzblatt, 1938, I,
254). His speech of 21 March 1938, to the employees of the
former Austrian National Bank on the occasion of its
obliteration as an independent institution, betrayed his
true feelings. After inveighing against “the dictates of
Versailles and St. Germain", -Schacht stated:

     “Thank God, these things could after all not hinder the
     great German people on their way, for Adolf Hitler has
     created a communion of German will and German thought,
     he bolstered it up with the newly strengthened
     Wehrmacht and he then finally gave the external form to
     the inner union between Germany and Austria.”


     “One person says he would have done it maybe in one
     way, but the remarkable thing is that they did not do
     it (hilarity), that IT WAS ONLY DONE BY OUR ADOLF
     HITLER (Long continued applause) and if there is still
     something left to be improved, then those grumblers
     should try to bring about those improvements from the
     German Reich and within the German community, but not
     to disturb it from without. (Lively agreement) “.


     “I ask you to raise your hands and to repeat after me:

     I swear that: I will be faithful, and obedient to the
     Fuehrer of the
     German Reich and the German people, Adolf Hitler, and
     will perform my
     duties conscientiously and selflessly. (The audience
     takes the pledge
     with uplifted hands).

                                                  [Page 760]

     You have taken this pledge. A scoundrel he who breaks
     it. To our Fuehrer a triple 'Sieg heil'.” (EC-297-A)

Schacht was likewise enthusiastic about the acquisition of
the Sudetenland, and filled with pride over the contribution
his credit policy as head of the Reichsbank had made thereto

In January 1939, when Hitler was ruthlessly exploiting his
successes in Austria and the Sudetenland in preparation for
his next aggressive move, Schacht again referred, with
pride, to the fact that the Wehrmacht which he had helped
create by his ingenious and risky methods had made possible
Hitler’s successes. Thus, he said:

     “From the beginning the Reichsbank has been aware of
     the fact that a successful foreign policy can be
     attained only by the reconstruction of the German armed
     forces. It [the Reichsbank] therefore assumed to a very
     great extent the responsibility to finance the
     rearmament in spite of the inherent dangers to the
     currency. The justification thereof was the necessity -
     — which pushed all other considerations in the
     background — to carry through the armament at once,
     out of nothing and furthermore under camouflage, which
     made a respect-commanding foreign policy possible.” (EC-

The foregoing proof establishes, it seems clear, that
Schacht knew of Hitler’s plans for aggressive war, and
willfully created the means whereby those plans could be
executed. But apart from this direct proof, it is submitted
hat to a man in Schacht’s position, the events of the period
clearly bespoke Hitler’s intentions. Schacht was a key
figure in the Nazi Government during the period of the Nazi
agitation in Austria, the introduction of conscription, the
march into the Rhineland, the conquest of Austria, and the
acquisition of the Sudetenland by a show of force.

During this period, the Reich debt trebled under the stress
of mounting armaments (EC-419), and all the resources of
Germany were being strained to the very limit for armament.
It was a period in which the burning European foreign policy
issue was the satisfaction of Germany’s repeated demands for
additional territory. Hitler, committed to a policy of
expansion, was laying the greatest stress upon utmost speed
in preparation for war.

Certainly in this setting, Schacht did not proceed in
ignorance of the fact that he was assisting Hitler and Nazi
Germany along the road towards armed aggression.

                                                  [Page 761]


(1) His resignation as Minister of Economics and General
Plenipotentiary for War Economy. In November 1937, Schacht
resigned his offices as Minister of Economics and General
Plenipotentiary for War Economy. At the same time, he
accepted appointment as Minister without Portfolio, and
continued as President of the Reichsbank. It is submitted
that the evidence shows at Schacht’s resignations were
merely the outgrowth of a clash between two power-seeking
individuals, Goering and Schacht, over methods of creating a
war economy. and over who should have final authority to
direct the completion of the task. So far as appears,
Schacht was in full accord with the other conspirators upon
the desirability of providing Hitler with the means by which
he eventually could carry out his planned aggressions.

The basic differences between Schacht and Goering date from
a period shortly after Goering became head of the Four-Year
Plan Office. The latter office was created by Hitler in
September 1936, and in connection therewith, Goering was
"given far reaching powers to issue directives to all the
highest offices of the State Party". Goering conceived of
his function as head of the Four-Year Plan Office “within
four years to put the entire economy in a state of readiness
for war” (EC-408).

Schacht was in agreement with the “aim and idea” of the Four
Year Plan. He promised Goering his complete support and
cooperation, and urged that Goering draw upon Schacht’s long
experience in economic affairs. Thus, in Schacht’s letter of
5 August 1937, to Goering, he said:

     “The aim and the idea of the Four Year Plan were and
     remain entirely correct and necessary! It stands,
     essentially, for the application of increased energy to
     the efforts already undertaken by my ministry since
     1934 with the results shown in the above statistics. As
     you will remember, I welcomed it when your energy, my
     dear Prime Minister, was recruited by the Fuehrer for
     these tasks, and from the very beginning I gave you my
     most loyal support and cooperation, with the particular
     plea that I be given a hearing from time to time, since
     I believed that my more than thirty years of experience
     in economic life, half of them in public service, could
     be of value to you.” (EC-497)

Goering, however, failed to avail himself of Schacht’s offer
of services. “I can only regret,” said Schacht in the

                                                  [Page 762]

tioned letter, “that you have made so little use of my
offer” (EC-497). Instead, Goering began to encroach upon
powers which had been delegated to Schacht, and they became
embroiled in a bitter jurisdictional conflict. On 26
November 1936, Goering issued a directive regarding raw and
synthetic material production, where by he undertook to
assume control over large economic areas previously within
Schacht’s province

Schacht did not supinely accept Goering’s intrusions upon
his powers. Goering’s directive was countered by an abrupt
order from Schacht to all supervisory offices to accept
orders from him alone

The conflict reached such dimensions that it threatened to
retard the pace of the conspirators' armament program. The
military sided with Schacht, who had provided the means for
their rapid rearmament. They submitted proposals which would
have assured to Schacht as Plenipotentiary General for the
War Economy the responsibility for “unified preparation of
the war economy as heretofore” (EC-408;

In January 1937, the German Military Weekly Gazette
published an article warmly praising Schacht’s achievements
in rearmament. The timing of the article indicates that it
was a further attempt by the military to tip the scales in
Schacht’s favor. The article

     “The German Defense Force commemorates D. Schacht today
     as one of the men who have done imperishable things for
     it and its development in accordance with directions
     from the Fuehrer and Reich Chancellor. The Defense
     Force owes it to Schacht’s skill and great ability
     that, in defiance of all currency difficulties, it,
     according to plan, has been able to grow up to its
     present strength from an army of 100,000 men.” (EC-383)

Shortly thereafter, Schacht attempted to force a showdown
with Goering by temporarily refusing to act in his capacity
as Plenipotentiary. Schacht plainly was using his prime
importance in the conspirators' program of economic planning
and preparation for war as a lever. In a letter to Hitler
dated 22 February 1937, General von Blomberg, the Minister
of War, suggested a settlement of the jurisdictional fight
under which Schacht would fully retain his powers as General
Plenipotentiary of War Economy, and concluded by stating:

     “If you, my Fuehrer, agree with my view regarding these
     jurisdictional questions, it may be possible to induce
     Reichsbank President Dr. Schacht, whose cooperation as

                                                  [Page 763]

     potentiary for preparation of war is of great
     significance, to resume his former activity.” (EC-244)

As a further demonstration of the community of interest
between Schacht and the top German military authorities,
Schacht attended the secret “War Economy” games at Godesberg
in the latter part of May 1937. The purpose of the games was
to demonstrate “how the action of the soldiers in total war
is influenced by economy and how on the other hand, economy
is completely dependent on military operations". Schacht's
attendance was acclaimed at the games as

     “renewed proof that you are willing to facilitate for
     us soldiers the difficult war-economic preparations and
     to strengthen the harmonious cooperation with your
     offices.” (EC-174) .

In June 1937, Keitel implored Hitler to accelerate a final
agreement between Schacht and Goering. Speaking of
arrangements concerning cooperation of these two key
figures, Keitel said:

     “I know that a necessary practical basis for it [the
     arrangement for cooperation between Schacht and
     Goering] has already been found, and only a formal
     agreement is needed in order to carry on the common


     “*** to waste time in our situation would be the
     greatest reproach that history could make upon us.

     “May I beg, therefore, once more that the arrangement
     mentioned be expedited, and that I be notified
     accordingly.” (EC-248)

Finally, on 7 July 1937, Schacht and Goering signed an
agreement of reconciliation in Berlin, wherein it was said
that the tasks of Goering and Schacht “are being solved in
closest mutual cooperation,” and that “no doubt exists about
the fact that the Commissioner General for War Economy has
the position of a supreme authority of the Reich”

Schacht resumed his duties as General Plenipotentiary with
renewed vigor. On the day following his formal agreement
with Goering, he wrote to General von Blomberg on “Measures
for the preparation of the conduct of war,” pledging
continued cooperation in their mutual

     “*** by the direction of the supreme authority for the
     conduct of war, the coordination of the conduct of war
     will be assured in its execution through mutual
     agreement between you and me, which I look upon as a
     matter of course

                                                  [Page 764]

     in the Central Authority and without which I cannot
     envisage any conduct of war. The direction of the
     economy by the plenipotentiary would in that event
     never take place entirely independent from the rest of
     the war mechanism but would be aimed at the
     accomplishment of the political war purpose with the
     mustering of all economic forces. I am entirely
     willing, therefore, to participate in this way in the
     preparation of the forthcoming order giving effect to
     the Reich Defense Act [Reichsverteidgungsgesetz].” (EC-

However, Schacht and Goering were soon again in
disagreement. After a sharp exchange of letters in which
each sought to justify his particular economic program as
the best means of making possible the attainment of Hitler's
objectives (EC-497; EC-493) Schacht suggested to Goering in
a curt letter dated 26 August 1937, that he (Goering) assume
sole charge of economic policies. In this letter, Schacht
rationalized his precipitate action as follows:

     “To me it does not seem to be of decisive importance to
     raise questions of competence and initiative, but it is
     of decisive importance that the Fuehrer’s economic
     policy should be carried out in a coherent manner, and
     with the least amount of friction.” (EC-283)

Despite the uncompromising tenor of the latter
communication, Schacht was still amenable to an arrangement
with Goering which would have permitted him a measure of
autonomy in economic planning and preparation for war. On 1
November 1937, he attended a conference with

     “*** which led in an entirely friendly manner to the
     working out of a series of proposals, which *** Goering
     promised to have presented to me [Schacht] in writing
     on the following day *** so that, after having reached
     an agreement we could present a mutually approved text
     to you, my Fuehrer.” (EC-495)

But the written agreement was not forthcoming as Goering had
promised, and Schacht repeated his request to be relieved
from the Ministry of Economics, “in the interest of a
uniform government management” (EC-495). Hitler finally
accepted Schacht’s resignation as Minister of Economics on
26 November 1937, simultaneously appointing him Minister
Without Portfolio. Schacht’s resignation was also extended
to his position as Plenipotentiary for War Economy (EC-494).

In subsequent interrogations, both Schacht and Goering have
confirmed the fact that Schacht’s withdrawal was simply the

                                                  [Page 765]

sult of a losing struggle with Goering to retain personal
power (3730-PS;

There is nothing to indicate that Schacht’s withdrawal from
the Ministry of Economics and the Office of Plenipotentiary
for War Economy in any sense represented a break with Hitler
on the ground of contemplated military aggression. He
consented to retain his position as President of the
Reichsbank, where he remained undisputed master, and
accepted the post of Minister of Portfolio, in order to be
Hitler’s “personal adviser.” In the letter accepting
Schacht’s resignation as Minister of Economics, Hitler said:

     “If I accede to your wish it is with the expression of
     deepest gratitude for your so excellent achievements
     and in the happy consciousness that, as President of
     the Reichsbank Directorium, you will make available for
     the German people and me for many years more your
     outstanding knowledge and ability and your untiring
     working strength. Delighted at the fact that in the
     future, also, you are willing to be my personal
     adviser, I appoint you as of today a Reich Minister.”

As President of the Reichsbank, Schacht continued to carry
out Hitler’s policies. As previously shown, he participated
in the planning of the invasion of Austria by fixing the
conversion rate the Austrian Schilling in advance of the
invasion; and under direction, the Austrian National Bank
was merged into the Reichsbank. He publicly approved the
absorption of Austria and acquisition of the Sudetenland. He
continued to finance armaments by “mefo” bill credits until
April 1938, and thereafter, until his resignation in January
1939, authorized an increase of approximately 2.6 billion
Reichsmarks in bank notes in order to discount commercial
paper which was used in connection with the armament
program. (EC-438)

 (2) Schacht’s dismissal from, the Presidency of the
Reichsbank. Schacht was dismissed from the Presidency of the
Reichsbank in January 1939. The evidence indicates that
Schacht engineered his dismissal in order to escape personal
responsibility for what he believed to be an impending
financial crisis; he was not dismissed because of
disagreement with the ultimate objectives of the conspiracy
or common plan.

Schacht had always feared an inflation in Germany. As early
as 8 May 1936, he emphatically stated that he would “never
be party to an inflation” (1301-PS). In January 1939,
Schacht was convinced that ruinous inflation was, in fact,
imminent (EC-369). There was, it appears, ample basis for
his fear. The Finance

                                                  [Page 766]

Minister, von Krosigk, had already recognized the situation
in September 1938, and had written to Hitler warning that we
are steering towards a serious financial crisis, the
forebodings of which have led already abroad to detailed
discussions of this weak side in our economic preparations
and to an apprehensive loss of confidence domestically. (EC-

Schacht was not only afraid of a financial crisis; he was
even more fearful that he personally would be held
responsible for it and his prestige would suffer a crushing
blow. One of his associates at the Reichsbank has stated:

     “When Schacht saw that the risky situation which he had
     sponsored was becoming insoluble, he was more and more
     anxious to get out. This desire to get out of a bad
     situation was for a long time the 'leitmotif' of
     Schacht’s conversations with the directors of the
     bank.” (EC-348)

In the end, Schacht deliberately stimulated his dismissal
from the Presidency of the Reichsbank by arbitrarily
refusing an end-of-the-month loan in a relatively small
amount to the Reich, contrary to well established practice
(3730-PS; 3731-PS).

Despite differences of opinion concerning the limits to
which the German economy might be pushed without plunging
the country into inflation, Schacht continued to enjoy
Hitler’s confidence. In his letter to Schacht dated 19
January  1939, Hitler stated:

     “On the occasion of your recall from Office as
     President of the Reichsbank Directory, I take the
     opportunity to express to you my most sincere and
     warmest gratitude for the services which you rendered
     repeatedly to Germany and to me personally in this
     capacity during long and difficult years. Your name,
     above all, will always be connected with the first
     epoch of the national rearmament. I am happy to be able
     to avail myself of your services for the solution of
     new tasks in your position as Reich Minister.” (EC-

On his side, Schacht evidenced his abiding faith in Hitler
and his continued agreement with his aggressive policies, by
remaining as Minister without Portfolio until January 1943.
As such he received a large salary from the Nazi Government
and enjoyed the emoluments of public office (3724-PS).

(3) Conclusion. Schacht’s assistance in the earlier phase of
the conspiracy was an important factor in enabling the
conspirators to seize the German state and thus pave the way
for their later crimes. His 'work was indispensable to the

                                                  [Page 767]

ment of Germany and to the economic planning and preparation
required to launch the German wars of aggression. As long as
he remained in power, he worked as eagerly for the
preparation of aggressive war as any of his co-conspirators.
He personally was favorably disposed towards aggression, if
"Lebensraum” for Germany could not otherwise be attained. He
knew that Hitler intended to and would break the peace, and
with this knowledge, he willingly and purposely contributed
his efforts. His withdrawal from three of his four posts
reflected no moral feeling against the use of aggressive
warfare as an instrument of national policy; he withdrew for
reasons wholly unrelated to Hitler’s program of illegal
aggression. By the time of his withdrawal from these three
positions, he had already provided his co-conspirators with
the physical means and economic planning necessary to launch
and maintain their wars of aggression; and he continued in
his lucrative fourth position (Minister without Portfolio)
until January 1943-until, in short, it became doubtful ether
the conspirators could maintain the successes which they had
gained in the wars they had illegally launched and were

                                                  [Page 767]


Charter of the International Military Tribunal, Article 6.
Vol. I, Pg. 5

International Military Tribunal, Indictment Number 1,
Section IV (H); Appendix A. Vol. I, Pg. 29, 63

[Note: A single asterisk (*) before a document indicates
that the document was received in evidence at the Nurnberg
trial. A double asterisk (*) before a document number
indicates that the document was referred to during the trial
but was not formally received in evidence, for the reason
given in parentheses following the description of the
document. he USA series number, given in parentheses
following the description of the document, is the official
exhibit number assigned by the court.]

                                                  [Page 768]

*386-PS;  Notes on a conference with Hitler in the Reich
Chancellery, Berlin, 5 November 1937, signed by Hitler's
adjutant, Hossbach, and dated 10 November 1937. (USA 25).
Vol. III, Pg. 295

*1168-PS;  Unsigned Schacht memorandum to Hitler, 3 May
1935, concerning the financing of the armament program. (USA
37). Vol. III, Pg. 827

*1301-PS;  File relating to financing of armament, including
minutes of conference with Goering at the Air Ministry, 14
October 1938,. concerning acceleration of rearmament. (USA
123. Vol. III, Pg. 868

*2261-PS;  Directive from Blomberg to Supreme Commanders of
Army, Navy and Air Forces, 24 June 1935; accompanied by copy
of Reich Defense Law of 21 May 1935 and copy of Decision of
Reich Cabinet of 12 May 1935 on the Council for defense of
the Reich. (USA 24). Vol. IV, Pg. 934

*2409-PS;  Extracts from The Imperial House to the Reich
Chancellery by Dr. Joseph Goebbels. (USA 262). Vol. V, Pg.

                                                  [Page 769]

*3021-PS;  Statement of governmental-positions held by Dr.
Hjalmar Schacht. (USA 11). Vol. V, Pg. 737

*3700-PS;  Letter from Schacht to Reich Marshal, 11 March,
concerning conscription of 15-year-olds. (USA 780) . Vol.
VI, Pg. 404

*3724-PS;  Testimony of Hjalmar Schacht, 11 July 1945. (USA
776) . Vol. VI, Pg. 463

*3725;  Testimony of Hjalmar Schacht, 20 July 1945. (USA
615) . Vol. VI, Pg. 464

*3726-PS;  Testimony of Hjalmar Schacht, 24 August 1945.
(USA 628) . Vol. VI, Pg. 465

*3727-PS;  Testimony of Hjalmar Schacht, 13 October 1945.
(USA 633) . Vol. VI, Pg. 478

*3728-PS;  Testimony of Hjalmar Schacht, 16 October 1945.
(USA 636) . Vol. VI, Pg. 485

*3729-PS;  Testimony of Hjalmar Schacht, 17 October 1945.
(USA 616) . Vol. VI, Pg. 501

*3730-PS;  Testimony of Hermann Goering, 17 October 1945.
(USA 648) . Vol. VI, Pg. 530

*3731-PS;  Testimony of von Krosigk, 24 September 1945. (USA
647) . Vol. VI, Pg. 535

*3901-PS;  Letter written November 1932 by Schacht, Krupp
and others to the Reich President. (USA 837) . Vol. VI, Pg.

*D-203;  Speech of Hitler to leading members of industry
before the election of March 1933. (USA 767) . Vol. VI, Pg.

*EC-128;  Report on state of preparations for war economic
mobilization as of 30 September 1934. (USA 623) . Vol. VII,
Pg. 306

*EC-174;  Summary “war economy” trip to Godesberg undertaken
by General Staff between 25 May 1937 and 2 June 1937. (USA
761) . Vol. VII, Pg. 326

*EC-177;  Minutes of second session of Working Committee of
the Reich Defense held on 26 April 1933. (USA 390) . Vol.
VII, Pg. 328

                                                  [Page 770]

*EC-243;  Memorandum 26 November 1936, containing Goering's
Order regarding jurisdiction and development of raw and
synthetic materials. (USA 637). Vol. VII, Pg. 338

*EC-244;  Letter from Blomberg to Hitler, 22 February 1937.
(USA 641) . Vol. VII, Pg. 342

EC-248;  Letter from Keitel to Koerner, 14 June 1937,
concerning cooperation of Plenipotentiary General and Four
Year Plan for War Economy. Vol. VII, Pg. 343

EC-251;  Letter from Wohlthat to various officials, 21 July
1937. Vol. VII, Pg. 344

*EC-252;  Letter from Schacht to Blomberg, 8 July 1937. (USA
762) . Vol. VII, Pg. 346

*EC-257;  Personal letter from Schacht to Thomas, 29
December 1937. (USA 768) . Vol. VII, Pg. 347

*EC-258;  Report on Preparation of the Economic Mobilization
by the Plenipotentiary for War Economy as of 31 December
1937. (USA 625) . Vol. VII, Pg. 347

EC-283;  Letter from Schacht to Goering, 26 August 1937.
Vol. VII, Pg. 379

*EC-297-A;  Address in Vienna of the Reichsbank President,
Dr. Schacht, 21 March 1938. (USA 632) . Vol. VII, Pg. 394

*EC-369;  Correspondence between Schacht and Hitler, January
1939. (USA 631) . Vol. VII, Pg. 426

*EC-376;  Letter from Schacht to supervisory officers, 11
December 1936. (USA 638) . Vol. VII, Pg. 436

*EC-383;  Letter 16 January 1987 with enclosure-article
about Schacht appearing in the Military weekly Gazette. (USA
640) . Vol. VII, Pg. 436

                                                  [Page 771]

*EC-384;  Agreement between Schacht and Goering, 7 July
1937. (USA 771) . Vol. VII, Pg. 438

*EC-397;  Letter from Hitler to Schacht, 19 January  1939.
(USA 650) . Vol. VII, Pg. 438

*EC-398;  Dismissal of Schacht as President of the
Reichsbank, 20 January  1939. (USA 649) . Vol. VII, Pg. 438

*EC-405;  Minutes of Tenth Meeting of Working Committee of
Reichs Defense Council, 26 June 1935. (GB 160) . Vol. VII,
Pg. 450

*EC-406;  Minutes of Eleventh Meeting of Reichs Defense
Council, 6 January 1935. (USA 772) . Vol. VII, Pg. 455

*EC-408;  Memorandum report about the Four Year Plan and
preparation of the war economy, 30 December 1936. (USA 579)
. Vol. VII, Pg. 465

*EC-415;  Extracts from “Schacht in His Statements", Berlin,
1937. (USA 627) . Vol. VII, Pg. 469

*EC-416;  Minutes of Cabinet Meeting, 4 September 1936. (USA
635) . Vol. VII, Pg. 471

*EC-419;  Letter from Schwerin-Krosigk to Hitler, 1
September 1938. (USA 621) . Vol. VII, Pg. 474

*EC-420;  Draft of letter prepared by Military Economic
Staff, 19 December 1936. (USA 639) . Vol. VII, Pg. 479

*EC-421;  Minutes taken by member of General Thomas' staff
of meeting held on 11 March 1938. (USA 645) . Vol. VII, Pg.

EC-432;  Extracts from Annual Economic Review for Germany,
1935, prepared by Douglas Miller. Vol. VII, Pg. 484

*EC-433;  Koenigsberg speech of Schacht at German Eastern
Fair. (USA 832) . Vol. VII, Pg. 486

*EC-436;  Affidavit of Puhl, 2 November 1945. (USA 620) .
Vol. VII, Pg. 494

                                                  [Page 772]

*EC-437;  Affidavit of Puhl, 7 November 1945. (USA 624) .
Vol. VII, Pg. 495

*EC-438;  Affidavit of Puhl, 8 November 1945. (USA 646) .
Vol. VII, Pg. 499

*EC-439;  Affidavit of Schnitzler, 10 November 1945. (USA
618) . Vol. VII, Pg. 501

*EC-450;  Affidavit of S. R. Fuller, 18 October 1945. (USA
629) . Vol. VII, Pg. 502

*EC-451;  Affidavit of Messersmith, 15 November 1945. (USA
626) . Vol. VII, Pg. 509

*EC-456;  Letter from Schacht to Hitler, 12 November 1932.
(USA 773) . Vol. VII, Pg. 512

*EC-457;  Letter from Schacht to Hitler, 29 August 1932.
(USA 619) . Vol. VII, Pg. 513

*EC-458;  Affidavit of Major Tilley, 21 November 1945. (USA
634) . Vol. VII, Pg. 514

*EC-460;  Franz Reuter “Schacht", from German Publishing
Establishment, 1937, pp. 113-114. (USA 617) . Vol. VII, Pg.

*EC-461;  Extracts from Ambassador Dodd’s Diary, 1933-38.
(USA 58) . Vol. VII, Pg. 515

EC-492;  Letter from Schacht to Goering, 17 April 1937. Vol.
VII, Pg. 550

*EC-493;  Letter from Goering to Schacht, 22 August 1937.
(USA 642) . Vol. VII, Pg. 552

*EC-494;  Letter from Lammers to Goering, presenting copy of
letter from Lammers to Schacht, 8 December 1937. (USA 643) .
Vol. VII, Pg. 565

*EC-495;  Letter from Schacht to Hitler, 16 November 1937,
requesting release. (USA 774) . Vol. VII, Pg. 566

*EC-497;  Letter from Schacht to Goering, 5 August 1937.
(USA 775) . Vol. VII, Pg. 567

EC-498;  “Schacht in Danzig", excerpt of 16 June 1935 from
Frankfurter Zeitung. Vol. VII, Pg. 576

EC-499;  Dr. Schacht 60 Years Old, from Description
Voelkischer Beobachter, 21 January 1937. Vol. VII, Pg. 576

EC-500;  A Proclamation by Dr. Schacht on occasion of
presentation of Golden Party Badge, from Frankfurter
Zeitung, 9 February 1937. Vol. VII, Pg. 578

EC-501;  The Economic Development, and Inaugural speech by
Dr. Schacht, from Berliner Tageblatt, 21 April 1937. Vol.
VII, Pg. 579

EC-502;  “In Germany There is only One Economic Policy",
from Frankfurter Zeitung, 19 January  1936. Vol. VII, Pg.

EC-503;  Schacht Speech at Leipzig Fair, from Frankfurter
Zeitung, 5 March 1935. Vol. VII, Pg. 583

*EC-611;  Speech by Schacht, 29 November 1938, entitled
"Miracle of Finance” and “The New Plan". (USA 622) . Vol.
VII, Pg. 589

*L-104;  Report Ambassador Dodd to State Department, 29
November 1937, concerning Hitler’s letter to Schacht
accepting resignation as Minister of Economics and Schacht's
circular communication to officials of Ministry. (USA 644) .
Vol. VII, Pg. 879

*L-111;  Telegraphic report from Ambassador Davies to State
Department, 20 January  1937. (USA 630) . Vol. VII, Pg. 881

*L-151;  Report from Ambassador Bullitt to State Department,
23 November 1937, regarding his visit to Warsaw. (USA 70) .
Vol. VII, Pg. 894

*Chart No. 1;  National Socialist German Workers' Party.
(2903-PS; USA 2) . Vol. VIII, Pg. 770