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Copy of document 3731-PS
EXCERPTS STATEMENT OF SCHWERIN VON KROSIGK, at OBERURSEL, 24 SEPTEMBER 1945 Interrogated by Lt. Col. M. I. GURFEIN, Office of U.S. Chief of Counsel, Report by Miss Evelyn Low, Office of U.S. Chief of Counsel. [Pages 2-6] Q. Well, we will leave that for the moment. In any event, you began to have meetings with Blomberg and Schacht concerning the financing of the armaments program, beginning, I believe, you said, in 1935? A. Yes. Q. Now, please tell us the discussions that took place the first time that you had this meeting. A. These discussions during the years always took place in about the same way. The Field Marshal von Blomberg and later on the Field Marshal Keitel, told us the sums which for the following budget year the Minister of War thought to be necessary and then we discussed how these sums eventually could be financed. I made a statement on the probable inco ' me of taxes, Schacht said that he thought that probably we would be able to get a certain sum of treasury bills taken by the banks and that he could be able to finance a certain sum with the aid of the Reichsbank and if these two sums, the one sum which the Army wanted to have and the sums which we thought we could get, didn’t suit, then, of course, there was a long discussion with the aim to come together and the result was in most cases that the Minister of War said “Well, I put down the amount I wanted to have and I will try to get through with the lower amount” and we said “Well, we will try to finance this sum, if it should prove not to be possible during the year, then we will meet again during the year and discuss what is going to happen.” I think it was in 1936 that according to Motion made by Mr. Schacht we found the way of the Mefo bills and also according to Motion of Mr. Schacht we thought that we could go to the amount of 12 billion Mefo bills. Q. Now, that sum of 12 billion marks of Mefo bills, how was that limit fixed? Was it based on the technical estimate of the capacity of the Reichsbank to finance or was it based on some other ground? A. No, it was merely based on the technical capacity of the Reichsbank and Schacht said that he merely could estimate or could feel the possible height of this figure. [Page 536] Q. Was there any discussion as to what alternative methods of financing should be employed when the ceiling of 12 billion marks through Mefo bill financing had been reached? A. Not in the beginning because we then didn’t know how long this amount of 12 billions would reach. In the moment as we saw that it would come to an end in a certain time we discussed the new methods of financing and we came to the result that in the first place we would have to increase the revenue of taxes and so Nve came to a resolution of increasing the corporation taxes. Q. Was Dr. Schacht a party to this discussion about increasing the corporation taxes as a means, of financing re-armament? A. Yes. Q. Would you say that a time came when it was clear that you were going to reach shortly the 12 billion figure? Can you recall how much had already been financed through Mefo bills at that point? A. As far as I remember, it was at the time when the expenditures had reached the sum of 9 billions. Q. Now, that coincided with the ending of the 4 year term of Dr. Schacht as President of the Reichsbank-he was appointed in 1933 for 4 years, ending ill 1937. Now, did Schacht discuss with you at that time whether or not he should assume again the presidency of the Reiehsbank? A. I don’t think that he discussed it with me but as far as I remember I have heard from Dr. Berger who always was on good terms with Dr. Schacht and with the other gentlemen of the Reichsbank that he was doubtful whether he should again take the duty for four years or whether he should take it only for one year to see what would happen in this year. Q. What reasons were given to you by Dr. Berger and others as to why Schacht said that he was debating whether or not to take a 4 year term or a one year term as President of the Reichsbank? A. As far as I remember the reason was the conflicts which had arisen between Schacht and Goering and between Schacht and Daipre. This conflict was due to various technical differences. But these differences led also to a personal difference, especially between Schacht and Goering. Q. And I believe you told me that there was resentment on the part of Schacht over the economic powers that Goering had been given by Hitler? [Page 537] A. By Hitler because Schacht thought that these powers of Goering led to conflicts with powers as Minister of Economy or as President of the Reichsbank. Q. In your discussions with Berger, was anything said about Schacht's attempt to regain the power over the Economy that he had lost to Goering? A. I am not quite sure whether it was in conversations with Dr. Berger but I remember that in conversations with him or with other persons this reason then was discussed. Q. Let me ask you, did you ever discuss it with Keppler? A. I don’t think I did. It’s possible but I don’t think I did. Q. Who were these other persons, as you can remember? A. Well, it is possible that I spoke about it with other Ministers, with Neurath, or Seldte, or Gertner, but I don’t know Q. Well, in any event, is it clear that prior to the time when the last three billion financing by the Reichsbank of the Mefo bills were started, that everybody concerned knew that this was to be the last financing of Mefo bills. Did you understand that? A. Yes. Well, I will put it in that way. I think that certainly Mr. Schacht said that it was his intention not to go beyond the sum of 12 billion Mefo bills. Q. What I mean is, there,s,as no new crisis so fat. as you recall in the 1937/1938 period because as you explained it, it was already understood before that, that the sum of 12 billion would be the limit? A. Yes. Q. Now, do you know anything of the circumstances under which Schacht finally resigned or was put out as President of the Reichsbank in January 1939? A. Yes. Of course I am not quite sure whether the incident which I am going to tell was the real reason that Schacht resigned, but it certainly was a ground that gave the start. I asked Mr. Schacht to finance for the Reich for the ultimo of the month the sum of 100 or 200 millions. It was this quite usual procedure which we had used for years and years and we used to give back this money after a couple of days. Schacht this time refused and said that he was not willing to finance a penny because he wanted that, as he said, it should be made clear to Hitler that the Reich was bankrupt. I tried to explain that this was not the proper ground to discuss the whole question. of financing because the question of financing very small sums for a few days during ultimo never would bring Hitler to the conviction that the whole financing was impossible. As far as I remember now it was Funk [Page538] who told Hitler something about this conversation, then Hitler asked Schacht to call upon him. I don’t know what they said but the result certainly was the dismissal of Schacht. Q. Now, did Schacht ever say anything to you to the effect that he wanted to resign because he was in opposition to the continuance of the rearmament program? A. No, he never said it in this specific form but in some conversations he certainly said several times in his own way when he had conflict with Goering and anger with Darre, so that I didn’t take these things very seriously. Q. Well, let me put it this way and please think carefully about this. Did Schacht ever say that he wanted to resign because he realized that the extent of the rearmament program was such as to lead him to the conclusion that it was in preparation for war rather than for defense? A. No, he never did. Q. Was Schacht ever quoted to you to this effect by any of your colleagues or by anybody else? A. No. Q. Now after Keitel took over the position of Chief of the Wehrmacht, there were still meetings between Schacht and yourself, with Keitel in place of Blomberg? A. Yes. Q. Did Schacht ever say anything at these meetings to indicate that except for the technical question of the financing through the Reichsbank directly he was opposed to a further program of rearmament or opposed to the budget of the Wehrmacht? A. No, I don’t think he ever did. Q. Is that your best recollection? A. It may have been that he explained to Keitel that in his opinion the amount of rearmament could lead to economic difficulties especially as regards the level of prices. Q. You mean that the pressure of armaments purchasing and the shortage of goods created thereby might cause a rise in prices? A. Yes but I only stress this, that all the reasons I heard from Schacht as regards rearmament always were technical or economic reasons. Q. Let me ask you one other thing. At the first meetings in 1935 between Blomberg, Schacht and yourself, Schacht has stated that at those meetings no fixed amounts were discussed in any form and that he was asked whether the Reichsbank would participate in the financing of rearmaments without discussion as to the amount involved. Is that also your recollection? [Page 539] A. Yes, because that leads to the certain differences of opinion I had in the beginning. Q. Please explain that. A. I had the opinion that we should try to come to fix a certain sum for rearmament, if possible for some years. Schacht as well as Blomberg had the opinion that that was not possible and Schacht always thought that the natural limit for rearmarnent was the capacity of labor and the capacity of industry to produce. I always thought that the limit by fixing a certain sum would be more effective as it would lead the Minister of War to more careful thrift. So we then came to the arrangement to fix a sum not for several years but always for one year. Now, I am not quite sure for which year we fixed the sum in this way. Q. The net result of that was, however, that it enabled you to make larger expenditures in the event that the capacity of industry and labor and resources increased. In other words, that you did not have a definite limit set in advance from the financing point of view, which would have restricted the possibilities. A. Well, for one year, yes. s/Graf Schwerin von Krosigk 29.9.45. Sworn to me before this twenty-ninth day of September, 1945. Murray I. Gurfein, Lt. Col. AUS.