From the IMT testimony of Hans Bernd Gisevius: I shall describe the course of the crisis as such; and it is correct that all my friends considered it the first decisive step toward the war. I shall assemble the facts one by one. I consider it advisable, in order not to confuse the picture, to leave Schacht out for the time being, because the facts as such are extensive enough. Furthermore, I will not indicate, in the beginning, the source of our information; or describe my own experiences; rather, I shall wait until I am questioned on those subjects.

On 12 January 1938, the German public was surprised by the report that Field Marshal von Blomberg, at that time Reich Minister for War, had married. No details about his wife, nor any photographs were published. A few days later one single picture appeared: a photograph of the Marshal and his new wife in front of the monkey cage at the Leipzig Zoo. Malicious rumors--about the past life of the Marshal’s wife--began to circulate in Berlin. A few days later, there appeared on the desk of the Police Commissioner in Berlin, a thick file that contained the following information: Marshal von Blomberg’s wife had been a previously convicted prostitute, who had been registered as a prostitute in the files of seven large German cities; she was in the Berlin criminal files. I myself have seen the fingerprints and the pictures. She had also been sentenced by the Berlin courts for distributing indecent pictures.

The Commissioner of the Police in Berlin was obliged to submit this file, by official channels, to the Chief of the Police, Himmler.

The Commissioner of the Police in Berlin was Count Helldorf. Count Helldorf realized that if that material were transmitted to the Reichsfuehrer SS, it would place the Wehrmacht in a very embarrassing position. Himmler would then have in his possession the material he needed to ruin Blomberg’s reputation and career, and strike a blow at the leadership of the Armed Forces. Helldorf took this file to the closest collaborator of Marshal Blomberg, the then Chief of the Armed Forces Department, Keitel, who, at that time, had just become related to Marshal Blomberg through the marriage of their respective children. Marshal Keitel--or Generaloberst Keitel as he was at that time--looked through the file carefully, and demanded that Police Commissioner Helldorf should hush up the entire scandal, and suppress the file. I got my information from Count Helldorf, who described the entire affair to me, and from Nebe, Oberregierungsrat of the police headquarters in Berlin at that time, and later Reich Criminal Director.

Keitel refused to let Blomberg bear any of the consequences. He refused to inform the Chief of the General Staff Beck; or the Chief of the Army, Generaloberst von Fritsch. He sent Count Helldorf to Goering with the file. Helldorf submitted the entire file to Defendant Goering. Goering asserted that he knew nothing about the various sections of the criminal records, and the previous sentences of von Blomberg’s wife. Nevertheless, in that first conversation, and in later discussions, he admitted that he already knew the following:

First, that Marshal Blomberg had already asked Goering, several months [previously] whether it was permissible to have an affair with a woman of low birth; and shortly thereafter, he had asked Goering whether he would help him to obtain a dispensation to marry this lady "with a past", as he put it. Later, Blomberg came again, and told Goering that this lady of his choice unfortunately had another lover, and he must ask Goering to help him, Blomberg, to get rid of that lover ... in the further course of the investigation, we learned of it from other sources too. Goering then got rid of that lover by giving him foreign currency, and sending him off to South America. In spite of that, Goering did not inform Hitler of this incident. He even went with Hitler, as a witness, to the wedding of Marshal Blomberg on 12 January.

I must add that Goering was the only head of the Investigation Department. That was the institution which took over all telephone control in the Third Reich. This Investigation Department was not satisfied, as has been described here, with merely tapping telephone conversations and decoding messages; but it had its own intelligence service, all the way down to its own employees, for obtaining information. It was, therefore, also quite possible to obtain confidential information about Marshal Von Blomberg’s wife. When Helldorf gave the file to Goering, Goering considered himself compelled to give that file to Hitler. Hitler had a nervous breakdown, and decided to dismiss Marshal Blomberg immediately. Hitler’s first thought, as he told the generals later at a public meeting, was to appoint Generaloberst von Fritsch as Blomberg’s successor. The moment he made his decision known, Goering and Himmler reminded him that it could not be done, as according to a file of the year 1935 Fritsch was badly incriminated.

From the IMT testimony of Hans Bernd Gisevius: Several generals who took part in that meeting told me about it, and I have said already that, in the course of events, which I have yet to describe, Hitler himself made many statements. We also had in our possession. until 20 July, the original documents of the Supreme Court-Martial, which convened later.

The file of 1935, which was submitted to Hitler in January 1938, referred to the fact that, in 1934, the Gestapo conceived the idea of prosecuting, among other enemies of the state, homosexuals as criminals. In the search for evidence, the Gestapo visited the penitentiaries, and asked convicted inmates who had blackmailed homosexuals, for evidence, and for the names of homosexuals. One of the inmates reported a terrible story, which was really so horrible that I will not repeat it here. It will suffice to say, that this prisoner believed [that] the man in question had been a certain Herr Von Fritsch or Frisch. The prisoner could not remember the correct name. The Gestapo then turned over these files to Hitler in 1935. Hitler was indignant about the contents. Talking to the generals, he said he did not want to know about such a disgusting affair. Hitler ordered the files to be burned immediately.

Now, in January 1938, Goering and Himmler reminded Hitler of these files; and it was left to Heydrich’s cleverness to submit to Hitler again these files, which had allegedly been burned in 1935, and which had been completed, in the meantime, by extensive investigations. Hitler believed, as he said to the generals at the time that, after having been so disappointed in Blomberg, many nasty things could be expected from Fritsch also. The Defendant Goering offered to bring the convict from the prison to Hitler and the Reich Chancellery. At Karinhall, Goering had previously threatened this convict with death, if he did not abide by his statements.

Then Fritsch was summoned to the Reich Chancellery, and Hitler told him of the accusations that had been made against him. Fritsch, a gentleman through and through, had received a confidential warning from Hitler’s adjutant; but it had been so vague that Fritsch came to the Reich Chancellery extremely alarmed. He had no idea of what Hitler was accusing him. Indignantly, he denied the crime he had allegedly committed. In the presence of Goering, he gave Hitler his word of honor that all the accusations were false. But Hitler went to the nearest door, opened it, and the convict entered, raised his arm, pointed to Fritsch and said, "That is he."

Fritsch was speechless. He was only able to ask that a judicial investigation should be made. Hitler demanded his immediate resignation; and on condition that Fritsch left in silence, he agreed to allow the matter to rest where it was. Fritsch appealed to Beck, the Chief of the General Staff. Chief of the General Staff; Beck intervened with Hitler. A hard struggle ensued for a judicial investigation of these terrible accusations against Fritsch. That struggle lasted about a week. There were dramatic disputes in the Reich Chancellery. At the end, came the famous 4 February when the generals, who until that day, that is to say 10 days after the dismissal of Blomberg, and the relief of Fritsch, were completely unaware of the fact that both their superiors were no longer in office, were ordered to come to Berlin. Hitler personally presented the files to the generals in such a way, that they also were completely confused, and said they were satisfied that the affair should be investigated by the courts.

At the same time, Hitler surprised the generals with the announcement that they had a new Commander-in-Chief, Generaloberst von Brauchitsch. Some of the generals had, in the meantime, been relieved of their posts; and also on the evening previous to that announcement, a report appeared in the newspapers according to which, Hitler, under the pretense of drawing together the reins of government, had dismissed the Foreign Minister, von Neurath, effected a change in the Ministry of Economics, relieved a number of diplomats of their posts; and then, as an appendix to that report, announced a change in the War Ministry, and in the leadership of the Army.

Then a new struggle arose, which lasted several weeks, regarding the convening of the court-martial [that] should decide as to the reinstatement of Generaloberst von Fritsch. This was, for all of us, the moment when we believed we would be able to prove, before a German supreme court, the methods the Gestapo used to rid themselves of their political adversaries. This was a unique opportunity of being able to question witnesses under oath, regarding the manner in which the entire intrigue had been contrived. Therefore we set to work to prepare for our parts in this trial.

From Schacht’s IMT testimony: I only started to deceive him [Hitler] in 1938. Until then, I always told him my honest opinion. I did not cheat him at all . . . . Oh, no. I should hardly have done that or he would never have admitted me into the government. But I did not deceive him about it . . . . I did not say that I wanted to defeat his program. I said that I wanted to direct it into orderly channels. It was not necessary to tell him what I was thinking. I did not deceive him. I made no false statements, but I would hardly tell him what I actually thought and wanted. He did not tell me his innermost thoughts either, and you do not tell them to your political opponents, either. I never deceived Hitler except after 1938. I have already told you that the word defeat is incorrect. I did not intend to defeat him. I intended to slow him down; and that is indeed the custom, for that is how every coalition government is constructed. If you enter into a coalition government, you must discuss certain matters with your neighboring parties. and come to an agreement about them; and you must use your influence to check certain projects of the other party. That is not a deception; it is an attempt at a compromise solution.

From the IMT testimony of Hans Bernd Gisevius: One of the greatest disasters was the fact that so many people in Germany imagined that Fritsch was a strong man. I remember that not only high-ranking officers, but also high ministerial officials, told me over and over again that there was no need to worry: Fritsch was on the march; Fritsch was only waiting for the right moment; Fritsch would one fine day bring about a revolt, and end the terror. General von Kluge, for instance, told me this as a fact; and he was a close friend of Fritsch. And so, we all lived in the completely mistaken belief--as I can now say—that, one day, the great revolt would come, of the Armed Forces against the SS. But, instead of this, the exact opposite occurred, namely, the bloodless revolt of the SS, the famous Fritsch crisis, the result of which was that, not only Fritsch was relieved of his post, but that the entire Armed Forces leadership was beheaded, politically speaking, which meant that now all our hope [was lost].

From Schacht’s IMT testimony: Well, the decisive change in my attitude came about by reason of the Fritsch incident, at the very moment when I had to recognize and, of course, that did not come with lightning speed, but in the course of weeks and months it crystallized, that Hitler aimed at war, or at least was not prepared to do everything to avoid a war. At that moment, I told myself that this was a tremendous [danger raising] its head and, that violence could be crushed only by violence.

Any opportunity of political propaganda within the German people was, of course, out of the question. There was no freedom of assembly. There was no freedom of speech. There was no freedom of writing. There was no possibility of discussing things, even in a small group. From beginning to end, one was spied upon, and every word which was said among more than two persons was spoken at the peril of one’s life. There was only one possibility in the face of that terror, which was beyond democratic reform and, which barred every national criticism. That was to meet this situation with violence. Then I came to the conclusion that, in the face of Hitler’s terror, only a coup d’etat, a Putsch and, finally, an attempt at assassination was possible . . . .

Aside from the inherent falsehood [that] appeared in all actions and measures of the Party men, the Fritsch crisis provided the absolute assurance that a basic change was occurring in the conduct of political affairs for, within about 10 days, Blomberg was removed, Fritsch was removed, Neurath was removed, and Hitler not only appointed so unsuitable a person as Ribbentrop to be Foreign Minister, but also, in his speech in the Reichstag, soon afterwards announced that from now on rearmament had to be increased even more. Consequently, the Fritsch crisis was the decisive turning point in my attitude and, from then on, I knew that every further peaceful attempt at controlling the torrent would fail and, that only violent means could meet it . . . .

I have never felt disappointed by Hitler, because I had not expected more of him than my appraisal of his personality allowed me. But, I certainly consider myself deceived, swindled, and cheated by him, to the highest degree because, whatever he had previously promised to the German people, and thereby to me, he did not keep afterwards.

He promised equal rights for all citizens, but his adherents, regardless of their capabilities, enjoyed privileges before all other citizens. He promised to put the Jews under the same protection [that] foreigners enjoyed, yet he deprived them of every legal protection. He had promised to fight against political lies but, together with his Minister Goebbels, he cultivated nothing but political lies and political fraud. He promised the German people to maintain the principles of positive Christianity, yet he tolerated and sponsored measures, by which institutions of the Church were abused, reviled, and damaged. Also, in the foreign political field, he always spoke against a war on two fronts; and then later undertook it himself. He despised and disregarded all laws of the Weimar Republic, to which he had taken the oath when he became Chancellor. He mobilized the Gestapo against personal liberty. He gagged and bound all free exchange of ideas and information. He pardoned criminals, and enlisted them in his service. He did everything to break his promises. He lied to, and deceived the world, Germany, and me.

From Schacht’s IMT testimony: I can merely add that, on the whole, the Reich Cabinet did not have the slightest influence on Hitler, and that, from November 1937 on--this has been stated repeatedly--there were no more meetings or consultations of the Cabinet. The Reich Cabinet was an uncorrelated group of politically powerless departmental ministers, without the proper professional qualifications.

From the IMT testimony of Dr Hans Heinrich Lammers, Chief of the Reich Chancellery: I can confirm ... that, during the period when Herr Schacht was President of the Reichsbank, he must have made certain difficulties for the Fuehrer, with reference to the granting of these credits. I was not present at the discussions’ between the Fuehrer and Schacht, but I know from statements made by the Fuehrer that, regarding those credits, he met with considerable difficulties and restraints on Schacht’s part: restraints [that] finally brought about Schacht’s resignation from his position as President of the Reichsbank. On the other hand, I know that, at the moment when Funk became President of the Reichsbank, these difficulties ceased to exist. [They] were obviously removed by legal regulations, and also by orders which the Fuehrer had given; for when Funk became President of the Reichsbank, these credits were simply handled in the [way I ] described yesterday, when I described the technical procedure; in the main, orders for credits and Reich loans from the Reichsbank were merely a simple matter of signature for the Fuehrer . . . . I also recollect that certain legal alterations were made, but I cannot remember just when. Without seeing the law books, I cannot tell you exactly the contents of these legal regulations, just what the limitations were in terms of figures. All I do know is that the position of the President of the Reichsbank was later reduced considerably, according to orders coming from the Fuehrer.

From Schacht’s IMT testimony: I should like to divide the question into two parts: The first question is whether I tried to rid myself of my office as President of the Reichsbank. My answer to that question is a most emphatic "yes." Since the middle of 1938, we in the Reichsbank always considered that, if there were no change in policy, we in no event wanted to continue in office, because--and that brings me to the second part of the question--we did not want to assume the responsibility [that] we were then expected to bear.

For [everything we] did previously, and for a defensive rearmament in order to achieve equal rights for Germany in international politics, we gladly assumed responsibility, and we assume it before history and this Tribunal. But the responsibility for continuing rearmament, which possibly in itself constituted a serious potential danger of war, or which would ever aim at war intentionally: that responsibility none of us wanted to assume. Consequently, when it became clear that Hitler was working toward a further increase in rearmament (and I spoke about that yesterday in connection with the conversation of 2 January 1939), when we became aware of that, we wrote the memorandum [that] was openly quoted, and is in the hands of this Tribunal as an exhibit. It indicates clearly, that we opposed every further increase of state expenditure, and would not assume responsibility for it. From that, Hitler gathered that he would in no event be able to use the Reichsbank with its present Directorate and President, for any future financial purposes.

Therefore, there remained only one alternative; to change the Directorate, because, without the Reichsbank, he could not go on. And he had to take a second step; he had to change the Reichsbank Law. That is to say, an end had to be put to the independence of the Reichsbank from government decrees. At first, he did that in a secret law--we had such things--of 19 or 20 January 1939. That law was published only about 6 months later. That law abolished the independence of the Reichsbank, and the President of the Reichsbank became a mere cashier for the credit demands of the Reich, that is to say, of Hitler.

The Reichsbank Directorate did not want to continue along this line of development. Therefore, on 20 January, the President of the Reichsbank, the Vice President, and the main financial expert, Reichsbank Director Huelse, were dismissed; three other members of the Directorate of the Reichsbank, Geheimrat Vocke, Director Erhard, and Director Blessing pressed insistently for their resignation from the Reichsbank, until it was also granted. Two other members of the Reichsbank Directorate, Director Puhl, whose name has been mentioned here already, and an eighth director, Director Poetschmann, remained in the Directorate, even under the new conditions. They were both Party members, the only ones in the Directorate, and therefore they could not easily withdraw.

From the affidavit of Reichsbank Directorate Huelse: The foreign press drew [the correct conclusions from the dismissal] 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.

From the Huelse affidavit : I recall several chance talks with Dr. Schacht during the years 1935 to 1939, about war and rearmament. In these talks, he always expressed his aversion to any war, and any warlike conduct. He held the firm opinion that, even to the conqueror, war brings only disadvantages and, that a new European war would, on the whole, be a crime against culture and humanity. He hoped for a long period of peace for Germany, as she needed it more than other countries, in order to improve and stabilize her unstable economic situation.

To my knowledge, until the beginning of 1938, at meetings of the Reichsbank Board of Directors, and in private conversations on the subject of armament, [Dr. Schacht] always spoke only of defense measures. I believe I can recall that he told me in the middle of 1938 that Hitler’s provocative action against Austria and the Sudeten country was worse than thoughtless, from the military point of view.

He said that Germany had undertaken only a defensive armament, which would prove absolutely inadequate as a defense, in case of attack by one of the big powers, a possibility with which Hitler had to reckon. He said that he had never heard that the Wehrmacht was in any way designed or armed for an aggressive war.

When the war did break out, and spread more and more, he said repeatedly that he had greatly erred in his judgment of Hitler’s personality; he had hoped for a long time that Hitler would develop into a real statesman who, after the experience of the World War I, would avoid any war.

From Schacht’s IMT testimony: That this Anschluss would come at some time, we Germans all knew. As for the various political negotiations [that] took place between Hitler, Schuschnigg, and others, I [was] naturally as little informed as were the other Cabinet Ministers, with the probable exception of Goering and Ribbentrop, and perhaps one or two more. The actual Anschluss in March was a complete surprise to us: not the fact, but the date. A great surprise, and we, at any rate my acquaintances and I myself, were completely surprised.

I believe that much can be said about the manner [that the Anschluss was achieved]. What we heard subsequently, and what I have learned in these proceedings is certainly not very gratifying, but I believe that it would have had very little practical influence on the Anschluss itself, and the course of events. The whole thing was more of a demonstration to the outside world, similar perhaps to the marching into the Rhineland; but it had no great effect in my opinion on the course of the negotiations. I am speaking now of the marching in of the troops. This march was more or less a festive reception . . . .

The fact to which the Prosecution refer is a communication from a Lieutenant Colonel Wiedemann. March 11, at about 3 o’clock in the afternoon: I believe I remember that, but I cannot say whether it was by telephone, or in person; someone, it may have been Lieutenant Colonel Wiedemann, inquired of me how the purchasing power for the troops in Austria was to be regulated, if German troops should march into Austria, purely as a matter of currency policy, and whether it was necessary to have any regulation prescribed. I told him that, of course, everything had to be paid for, everything that the troops might buy there, and that the rate of exchange, if they paid in schillings, and not in marks, would be one mark to two schillings. That was the rate which obtained at the time, which remained fairly steady, and was the recognized ratio of the schilling to the mark. The fact that, in the afternoon of the 11th, I was approached about this matter, is the best proof that I had no previous knowledge of these matters.

Lieutenant Colonel Huenerm reads directive of the Fuehrer of 11 March, concerning the ’Action Otto’ and informs us that ’The Economy War Service Law’ has been put in force. He then reads Directives 1 and 2, and gives special orders to troops, for crossing the Austrian borders. According to that, at Schacht’s suggestion, no requisitions should be made, but everything ought to be paid for at the rate of 2 schillings to one Reichsmark.

From Schacht’s pre-trial interrogation:

Q: Actually Hitler did not use the precise method that you say you favored?

A: Not at all.

Q: Did you favor the method that he did employ?

A: Not at all, Sir.

Q: What was there in his method that you did not like?

A: Oh, it was simply overrunning, just taking the Austrians over the head, or what do you call it? It was force, and I have never been in favor of such force.

From the IMT testimony of Hans Bernd Gisevius: There was, above all, one man who, as an honest lawyer and judge, was himself a participator of this Supreme Court-Martial. This was the Judge Advocate General at that time, and later Chief Judge of the Army: Ministerial Director Dr. Sack. This man believed that he owed it to the spirit of law to contribute, in every possible way, toward exposing these matters. This he did, but he also paid with his life after 20 July.

In the course of this investigation, the judges of this Supreme Court Martial questioned the Gestapo witnesses. They investigated the records of the Gestapo; they made local investigations; and, with the aid of the criminologist Nebe, it was not long before they discovered definitely that the entire affair had concerned a double; it was not Generaloberst von Fritsch, but a retired Captain von Frisch who had been pensioned long before.

In the course of that investigation, the judges established another fact; they were able to prove that the Gestapo had been in the residence of this double, von Frisch, as early as 15 January, and had questioned his housekeeper. May I compare the two dates once more. On 15 January, the Gestapo had proof that Fritsch was not guilty. On 24 January, the Defendant Goering brings the convict, and [the] witness for the prosecution into the Reich Chancellery, in order to incriminate Fritsch, the Generaloberst. We believed that, here indeed, we were confronted with a plot of incredible proportions, and we believed that, now, even the skeptical general must see that, it was not only in the lower ranks of the Gestapo that there was scheming and contriving, invisible and secret, without the knowledge of any of the ministers or of the Reich Chancellery, and which would compel any man of honor and justice to intervene.

This was the reason why we now formed into a larger group and why we saw that we now no longer needed to collect material about the Gestapo in secret. That, precisely, was the great difficulty we had had to deal with. We heard a great deal; but if we had passed on that evidence, we would, in every case, have exposed to the terror of the Gestapo those men who had given us the evidence. Now we could proceed legally, and so we started our efforts to persuade Generaloberst von Brauchitsch to submit the necessary evidence to the Supreme Court-Martial.

At that time, there was a group, among whom I must mention Dr. Schacht, who was then extremely active and who went to Admiral Raeder, to Brauchitsch, to Rundstedt, and to Guertner, and tried to explain everywhere: that the great crisis had now arisen; that we now had to act; that it was now the task of the generals to rid us of this regime of terror.

But I must mention one more name in that connection. In 1936 Schacht had already introduced me to Dr. Goerdeler. I had the honor of traveling the same road with that brave man from then on until 20 July. And now I have mentioned here for the first time, in this room where so many terrible things are made known, the name of a German who was a brave and fearless fighter for freedom, justice, and decency and who, I believe, will one day be an example, and not only to Germany, to prove that one can also do one’s duty faithfully until death, even under the terror of the Gestapo.

This Dr. Goerdeler, who had always been a fearless and untiring fighter, had in those days unequaled courage. Like Dr. Schacht he went from one ministry to another, from one general to the next, and he also believed that now the hour had come when we could achieve a united front of decent people led by the generals. Brauchitsch did not refuse then. He did not refuse to act at Goerdeler’s request. In fact he assured Goerdeler of his co-operation in a revolt with almost religious fervor.

And as a witness I may mention that Brauchitsch also solemnly assured me that he would now use this opportunity to fight against the Gestapo. However, Brauchitsch made one condition, and the generals as a whole accepted that condition. Brauchitsch said, "Hitler is still such a popular man; we are afraid of the Hitler myth. We want to give to the German people and to the world the final proof by means of the Supreme Court-Martial and its verdict." Therefore Brauchitsch postponed his action until the day when the verdict of the Supreme Court-Martial should be given.

The Supreme Court-Martial met. It began its session. The session was suddenly interrupted under dramatic circumstances. I must add that Hitler appointed the Defendant Goering as president of that Supreme Court-Martial. And now the Supreme Court-Martial, under the chairmanship of Goering, convened. I know from Nebe that Goering during the preceding days had had consultations with Himmler and Heydrich. I know that Heydrich said to Nebe, "this Supreme Court-Martial will be the end of my career."

The Supreme Court-Martial would be the great danger for the Gestapo. And now the Supreme Court-Martial sat for several hours and was adjourned under dramatic circumstances, for that was the day chosen for the German armies to march into Austria. Even at that time we knew without any doubt why the chairman of that court-martial was so unusually interested in having the troops on that day receive the order to march, not to a goal within but outside the Reich. Not until one week later could the Supreme Court-Martial reconvene, and then Hitler was triumphant. The generals had their first "campaign of flowers" behind them, a plebiscite had been proclaimed, the jubilation was great, and the confusion among the generals was still greater. So that court-martial was dissolved. Fritsch’s innocence was definitely established, but Brauchitsch said that as a result of the changed psychological atmosphere created by the annexation of Austria, he could no longer take the responsibility for a revolt.

That is roughly the story of how the War Ministry was practically denuded of its leading men, and how the generals were thrown into unequaled confusion. From that time on we took the steep downward path to radicalism.

From the IMT testimony of Hans Bernd Gisevius: I read the minutes of that session, for it is one of those documents which we thought we would one day submit to the public. This, too, I hope we will find again. From the minutes it can be seen that the Defendant Goering, as president, determined the tenor of the entire proceedings and of the questions. He questioned the witnesses for the prosecution, and he took care that no other questions were put which might have proved embarrassing. I must say, from these voluminous minutes, that Goering knew how to cloak the true facts by the manner in which he led the proceedings.

I must point out again that until this Fritsch crisis it had been difficult in the ranks of the German opposition to consider even the possibility of war. That was due to the fact that in Germany the opposition groups were so sure of the strength of the Army, and of the leading men, that they believed it sufficed to have a man of honor, like Fritsch, at the head of the German Army. It seemed inconceivable that Fritsch would tolerate a sliding into terror or into war.

Only a few persons had pointed out that it was in the nature of every revolution some day to go beyond the frontiers of a nation. We believed from history that this theory should be pointed out as a danger threatening the National Socialist revolution, and therefore we repeatedly warned those who were convinced that they were faced with a revolution, not only with a dictatorship, that one day those revolutionaries would resort to war as a last recourse. As it became more evident in the course of the Fritsch crisis that radicalism was predominant, a large circle became aware that the danger of war could no longer be ignored. During those days of the Fritsch crisis, Schacht said, as did many others: "That means war," and that was also said plainly to the then Commander-in-Chief of the Army, General von Brauchitsch.

From Schacht’s IMT testimony: I told Major Tilly during the preliminary interrogation that in 1938, during the events of the Fritsch affair and afterwards, I had become convinced that Hitler at any rate would not avoid a war at all costs and that possibly he even sought to bring about a war. Looking back I pondered over a number of statements by Hitler and asked myself the reason why Hitler, in the course of the years, had reached the point where he might not avoid a war. And I told Major Tilly that the only reason which I could think of was that looking back I had the impression that Hitler had fallen into the role which necessarily falls to each and every dictator who does not want to relinquish his power in time, namely, that of having to supply his people with some sort of victor’s glory--that that was probably the development of Hitler’s thought.

The account given by Gisevius of the development of the Fritsch affair is, according to my knowledge and my own experience, completely correct in every detail. I have nothing to add to that. I can only confirm it. On the other hand, I should like to refer to a speech of Hitler’s on 20 February 1938 in the Reichstag which contains a remark which even at that time aroused my attention. He said--and I quote this speech from Die Dokumente der Deutschen Politik, of which all copies were available here:

"The changes in the Reich Cabinet and in the military administration on 4 February"--that is, changes which were made following the Fritsch and Blomberg affair--"were for the purpose of achieving within the shortest time that intensification of our military means of power, which the general conditions of the present time indicate as advisable."

This remark also confirmed my opinion that the change from a peaceful to a military policy on Hitler’s part was becoming obvious; I did not wish to omit reference to this remark which completes the account given by Gisevius.

I think it is quite useful if we recall these things to our mind in order to expose all the sanctimonious hypocrisy exuding from the foreign press. 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 has bolstered it up with the newly strengthened Wehrmacht, and he has thereby given the external aspect to the inner union between Germany and Austria. I am known for sometimes expressing thoughts which give offense; nor would I care to depart from this custom today. . . . .

I know that there are even here in this country a few people--I believe they are not too numerous--who find fault with the events of the last few days. But nobody, I believe, doubts the goal; and it should be said to all hecklers that you cannot satisfy everybody. There are those who say they would have done it in some other way, perhaps, but strange to say they did not do it (hilarity) it was done by our Adolf Hitler (Long, continued applause); and if there is still something left to be improved, then those hecklers should try to bring about these improvements from within the German Reich and the German community and not disturb it from without. . . . . The Reichsbank will always be nothing but National Socialist, or I shall cease to be its manager. (Heavy, protracted applause) . . . .

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 . . . . You have taken this pledge. A scoundrel, he who breaks it. To our Fuehrer a triple Sieg heil.

From Schacht’s IMT testimony: If I did [adopt a tone that exuded National Socialist ideas] in the first years, I did so only in order to remind Party circles and the people of the original program of the National Socialist Party, to which the actual attitude of the Party members and functionaries stood in direct contrast. I always tried to show that the principles which I upheld in many political matters agreed completely with the principles of the National Socialist program as they were stated in the Party program, namely, equal rights for all, the dignity of the individual, esteem for the church, and so forth.

In the later years I also repeatedly used National Socialist phraseology, because from the time of my speech at Koenigsberg, the contrast between my views and Hitler’s views regarding the Party was entirely clear. And gradually within the Party I got the reputation of being an enemy of the Party, a man whose views were contrary to those of the Party. From that moment on not only the possibility of my co-operation, but also my very existence was endangered; and in such moments, when I saw my activity, my freedom, and my life seriously threatened by the Party I utilized these moments to show by means of an emphatically National Socialist phraseology that I was working entirely within the framework of the traditional policies and that my activity was in agreement with these policies--in order to protect myself against these attacks . . . .

That [taking over the Austrian National Bank] was my duty. I merged it, amalgamated it. The oath is the prescribed civil service oath and it is quite in accordance with what I said here yesterday, that the oath is made to the head of the state just as I have stated before too: "We stand united before the German people"--I do not know exactly what the German expression is. I hear your English version here. That oath is exactly the same. One obviously cannot take an oath to an idea. Therefore, one has to use a person. But I said yesterday that I did not take an oath to Herr Ebert or to Herr Hindenburg or to the Kaiser, but to the head of State as representative of the people. If you read it again, it does not say to the man but to the leader as the head of State. There is a very great difference. I never broke the oath to this man as representative of the German people, but I broke my oath when I found out that that man was a criminal . . . .

Certainly I did not keep the oath which I took to Hitler because Hitler unfortunately was a criminal, a perjurer, and there was no true head of State. I do not know what you mean by "breaking the oath," but I did not keep my oath to him and I am proud of it. That was in March 1938 when as you have heard me say before, I still was in doubt, and therefore it was not clear to me yet what kind of a man Hitler was. Only when in the course of 1938 I observed that Hitler was possibly walking into a war, did I break the oath. In the course of 1938 when, judging from the events, I gradually became convinced that Hitler might steer into a war, that is to say, intentionally. Then only did I break my oath.

From Schacht’s pre-trial interrogation:

Q: But you make this statement at the end of the oath, after everybody has raised his hand and made his oath. Did you say the following, "You have taken this pledge. A bad fellow he who breaks it"?’

A: Yes, I agree to that and I must say that I myself broke it.

Q: Do you also say that at the time that you urged this upon the audience, that you already were breaking it?

A: I am sorry to say that within my soul I felt very shaken in my loyalty already at that time, but I hoped that things would turn out well at the end.

From Schacht’s IMT testimony: I am glad that you quote this because it confirms exactly what I have just said; that I was in a state of doubt and that I still had hope that everything would come out all right; that is to say, that Hitler would develop in the right direction. So it confirms exactly what I have just said.

From an affidavit made out by Admiral Otto Schniewind: Dr. Schacht, even in the years 1935-36, as may have been seen from numerous statements, had fallen into the role of a man, who in good faith had put his strength and ability at Hitler’s disposal but who now felt himself betrayed. Of the many statements made by Schacht, I quote only one which Schacht made at the occasion of a supper with my wife and myself in the summer of 1938. When Dr. Schacht made his appearance, it was evident that he was in a state of inner excitement and during the supper, he suddenly gave vent to his feelings, when, in deep agitation he almost shouted at my wife, "My dear lady, we have fallen into the hands of criminals--how could I ever have suspected that?" . . . .

If Schacht on the other hand occasionally made statements, oral or written, which could be construed as signifying that he went a long way in identifying himself with the Hitler regime, these statements were naturally known to us; but what Schacht thought in reality was known to almost every official in the Reichsbank and in the Reich Ministry of Economics, above all, of course, to his closest colleagues. On many occasions we asked Dr. Schacht if he had not gone too far in these statements. He always replied that he was under such heavy fire from the Party and the SS that he could camouflage himself only with strong slogans and sly statements.

From the IMT testimony of Hans Bernd Gisevius: In all these preliminary discussions there were dozens of drafts of the communications Schacht wrote. They were discussed in friendly circles. To mention but one example, Schacht repeatedly discussed these drafts also with Goerdeler. It was always one question that was concerned: What could one say, so that such a letter should not be considered a provocation but would serve rather to draw the other non-Party ministers, and particularly the War Minister Blomberg, to Schacht’s side? That was just the difficulty, for how could such ministers as Blomberg, Neurath, or Schwerin-Krosigk, who were much more loyal to Hitler, be persuaded to join Schacht rather than to say that Schacht had once again provoked Hitler and Goering with his notoriously sharp tongue. All these letters can only be understood by their tactical reasons which, as I have said, had been discussed in detail with the leading men of the opposition.

I want to deal with that word "conspiracy." While up to that moment our activity could only be called more or less oppositional, now a conspiracy did indeed begin; and there appeared in the foreground a man who was later to play an important part as head of that conspiracy. The Chief of the General Staff at that time, Generaloberst Beck, believed that the time had come for a German general to give the alarm both inside and outside the country. I believe it is important for the Tribunal to know also the ultimate reason which prompted Beck to take that step.

The Chief of the General Staff was present when Hitler, in May 1938, made a speech to the generals at Jueterbog. That speech was intended to reinstate Fritsch. A few words were said about Fritsch, but more was said-and for the first time quite openly before a large group of German generals-about Hitler’s intention to engulf Czechoslovakia in a war. Beck heard that speech; and he was indignant that he, as Chief of the General Staff, should hear of such an intention for the first time in such an assembly without having been informed or consulted previously. During that same meeting, Beck sent a letter to Brauchitsch asking him for an immediate interview. Brauchitsch refused and deliberately kept Beck waiting for several weeks. Beck became impatient and wrote a comprehensive memorandum in which as Chief of the General Staff he protested against the fact that the German people were being drawn into war. At the end of that memorandum Beck announced his resignation, and here I believe is the opportunity to say a word about this Chief of the General Staff.

From Schacht’s IMT testimony: After the Reichsbank had discontinued giving credits, on 31 March 1938, the Reich Minister of Finance of course received more urgent demands for money and toward the end of that year he found himself in the awkward situation of not being able to pay even the salaries of the civil servants from the treasury. He came to me and asked me to grant him a special credit. According to its charter and laws the Reichsbank was entitled and to a certain extent obliged, but actually only entitled, to advance to the Reich up to 400 million marks per annum. The Reich Minister of Finance had received these 400 million marks and he was asking, over and above that, for further credits; the Reichsbank refused to give him these credits. The Reich Minister of Finance had to go to the private banks and all the large banks together gave him a credit of a few hundred million marks. However, the Reichsbank did not participate in this credit.

From Wilhelm Vocke’s IMT testimony: In 1938 he [Schacht] 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 that 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.

From Schacht’s IMT testimony: The maturity date of the first mefo bills must have been at the earliest in the spring of 1939. They had all been issued for 5 years and I assume that the first mefo bills were issued in the spring of 1934, so that the first mefo bills became due in the spring of 1939. I said that throughout our financial dealings we became somewhat worried as to whether we would get our bills paid back or not. I have already explained to the Tribunal that in the second half of 1938 the Finance Minister got into difficulties and he came to me in order again to borrow money. Thereupon I said to him, "Listen, in what kind of a situation are you anyway for you will soon have to repay the first mefo bills to us. Are you not prepared for that?" And now it turned out, that was in the fall of 1938, that the Reich Finance Minister had done nothing whatever to fulfill his obligation to meet payment of the mefo bills; and that, of course, in the fall of 1938, made for exceedingly strained relations with the Reich Finance Minister, that is, between the Reichsbank and the Reich Finance Minister. I explained already yesterday that the risk which was taken in the mefo bills, which I have admitted from the very beginning, was not really a risk if a reasonable financial policy were followed; that is, if from 1938 on, further armament had not continued and additional foolish expenditures not been made, but if instead, the money accruing from taxes and bonds had been used for meeting the payment of the mefo bills. Of course [they could have been repaid], but that was the surprising thing, they were not repaid; the money was used to continue rearming.

From the IMT testimony of Hans Bernd Gisevius: Beck confided in me, and during the latter years I worked in very close collaboration with him, and I was by his side until the last hour of his life on 20 July. I can testify here--and it is important for the Tribunal to know this--that Beck struggled again and again with the problem as to what a chief of the General Staff should do when he realized that events were driving toward a war. Therefore I owe to his memory, and to my oath here, not to conceal the fact that Beck took the consequences of being the only German general to relinquish his post voluntarily, in order to show that there is a limit beyond which even generals in leading positions may not go; but at the sacrifice of their position and their life, must resign and accept no further orders. Beck was of the opinion that the General Staff was not only an organization of war technicians; he saw in the German General Staff the conscience of the German Army, and he trained his staff accordingly. He suffered immensely during the later years of his life because men whom he had trained in that spirit did not follow the dictates of their conscience. I owe it to this man to say that he was a man of inflexible character.

Hitler and Brauchitsch urgently pressed him to remain in office, but Beck refused and insisted upon resigning. Thereupon Hitler and Brauchitsch urged Beck at least not to make his resignation public, and they asked him if he would not formally defer his resignation for a few months. Beck, who had not yet gone the way of high treason, thought that he should comply with this request. Later he most deeply regretted this loyal attitude. The fact is that as early as the end of May or the beginning of June his successor, General Halder, took over the office of Chief of General Staff; and from that moment Beck was actually no longer in charge ... the question why Beck did not make his retirement public depressed him to such an extent that it was a continual subject of discussions between him and me up to the end.

It was Beck’s opinion that his resignation alone might not be sufficiently effective. He approached Schacht therefore and asked him whether he would not join him, Beck, and resign also. This subject was discussed in great detail, on the one hand between Beck and Schacht personally, and on the other between Oster and myself, who were the two intermediaries. During these conferences, I must confess that I, too, was of the opinion that Schacht should resign under all circumstances; and I also advised him to that effect. It was Oster’s opinion, however, that Schacht must definitely remain in office and he asked him to do so; in order to influence the generals Schacht was needed as an official with a ministerial title. In retrospect I must say here that my advice to Schacht was wrong. The events which I have yet to describe have proved how important it was to Oster and others that Schacht should remain in office . . . .

Schacht meant at the time the first revolutionary situation that had arisen in Germany, during the months of May to September 1938, when we drifted into the Czechoslovakia war crisis. Beck had assured us at the time of his resignation--by us I mean Goerdeler, Schacht and other politicians--that he would leave to us a successor who was more energetic than himself, and who was firmly determined to precipitate a revolt if Hitler should decide upon war. That man whom Beck trusted, and to whom he introduced us, was General Halder. As a matter of fact, on taking office, General Halder immediately took steps to start discussions on the subject with Schacht, Goerdeler, Oster, and our entire group. A few days after he took over his office he sent for Oster and informed him that he considered that things were drifting toward war, and that he would then undertake an overthrow of the Government. He asked Oster what he, for his part, intended to do to bring civilians into the plot.

Halder put that question to Oster, and under the circumstances at that time, when we were still a very small circle, Oster replied that to the best of his knowledge there were only two civilians with whom Halder could have preliminary political conversations; one was Goerdeler, the other, Schacht.

Halder refused to speak personally to a man as suspect as Goerdeler. He gave as his reason the fact that it was too dangerous for him to receive now a man whom he did not yet know, whereas he could find some official reason for having a conference with Schacht. Halder asked Oster to act as intermediary for such a conference with Schacht.

Oster approached Schacht through me. Schacht was willing. A meeting was to be arranged at a third person’s place. I warned Schacht and said to him, "Have Halder come to your house, so that you are quite sure of the matter."

Halder then visited Schacht personally at the end of July 1938 at his residence; and he informed him that matters had reached a stage where war was imminent and that he, Halder, would then bring about a revolt, and he asked Schacht whether he was prepared to aid him politically in a leading position.

That is what Schacht told me at the time, and Halder told it to Oster.

From Schacht’s IMT testimony: No, he [beck] did not say that. It was a mistake on the part of Gisevius. He [Beck] paid me a visit and told me about it a few days before his retirement. I assume that was about the end of August or the beginning of September of 1938. Beck saw me in my room; he did not mention anything of this sort [that I should resign], and it was not discussed by us . . . .

I do not at all believe that a resignation would have been the means to achieve that which had to be done, and I also regretted it very much that Beck retired. That which happened ... was caused by an entirely false policy-a policy that partly was forced upon us, and partly, I am sorry to say, was not handled properly by us. In February, Neurath was dismissed. In the fall Beck stepped out; in January 1939 I was dismissed. One after the other was gotten rid of. If it had been possible for our group--if I too may now speak of a group--to carry out a common action, as we hoped for and expected, then that would have been an excellent thing. However, these individual retirements served no purpose whatsoever; at least, they had no success . . . .

I never considered myself a part of the regime exactly, because I was against it. But, of course, ever since the fall of 1938 I worked towards my own retirement, as soon as I saw that Hitler did not stop the rearmament but continued it, and when I became aware that I was powerless to act against it. After Munich and after we realized that we could no longer expect disarmament or a stopping of rearmament by Hitler and that we could not prevent a continuation of the rearmament; so, within the circles of the Reichsbank Directorate, we began to discuss this question and to realize that we could not follow the further course of rearmament. That was the last quarter of 1938. Until then I had still hoped that I could bring about a change for the better; consequently I accepted all the disadvantages entailed with my remaining in office, even facing the danger that some day I might be judged, as I am today . . . .

As I have stated repeatedly yesterday and also during my direct examination, I was always referred to in foreign broadcasts as a man who was an opponent of this system, and all my numerous friends and acquaintances in foreign countries knew that I was against this system and worked against it. And if any journalist can be mentioned to me today who did not know this, then he does not know his business.

The Reich debt accumulated as follows:

As of 31 December 1932: Funded debt, 10,400 millions of Reichsmarks; short-term debt, 2,100 millions of Reichsmarks; debt not published in the budget (trade and mefo bills of exchange), 0.

As of 30 June 1938: Funded debt, 19,000 million Reichsmarks; short-term debt, 3,500 million Reichsmarks; and debt not published in the budget (trade and mefo bills of exchange), 13,300 million Reichsmarks.

Total: as of 31 December 1932, 12,500 million Reichsmarks; as of 30 June 1938, 35,800 million Reichsmarks. The Reich debt thus tripled . . . . Five thousand millions from the budget, that is, taxes; 4,000 millions from loans; 2,000 millions from 6-month treasury notes, which means postponement of payment until 1939; total: 11,000 millions . . . .

These mefo bills were used exclusively for financing rearmament; and when in March 1938 a new finance program discontinuing the use of mefo bills was announced by Dr. Schacht, there was a total volume outstanding of 12,000 million marks of mefo bills which had been issued to finance rearmament.

From Schacht’s IMT testimony: [Starting in 1938] I refused to do anything else for the financing of rearmament; the finance program was drafted by a state secretary in the Reich Finance Ministry, and it looked like it. In my opinion, there were no means other than peaceful ones. The desire to modify the Versailles Treaty by means of a new war was a crime . . . .

Even at an earlier time I said here that every objection which I made and had to make to Hitler--and that applies not only to myself but to all ministers--could only be made with arguments arising out of the particular department administered. Had I said to Hitler, "I shall not give you any more money because you intend to wage war," I should not have the pleasure of conducting this animated conversation here with you. I could then have consulted a priest, and it would have been a very one sided affair because I would have lain silently in my tomb, and the priest would have delivered a monologue.

From the IMT testimony of Hans Bernd Gisevius: We [the anti-Hitler conspirators] were extremely depressed [after Munich]. We were convinced that now Hitler would soon go to the utmost lengths. We did not doubt that Munich was the signal for a world war. Some of our friends wondered if we should emigrate, and that was discussed with Goerdeler and Schacht. Goerdeler, with this idea in mind, wrote a letter to a political friend in America and asked particularly whether the opposition people should now emigrate. Goerdeler said, "Otherwise to be able to continue our political work at all in Germany in the future there is only one other possibility, and that is to employ the methods of Talleyrand." We decided to persevere, and then events followed in quick succession from the Jewish pogroms to the conquest of Prague. Schacht was indignant about the Jewish pogroms, and he said so in a public speech before the personnel of the Reichsbank.