Copy of document 3544-PS

        Testimony of Walter Funk, taken at Nurnberg,
                          Germany,
      22 October 1945, 1430-1645, Lt. Col. Murray Gur-
        fein, IGD, OUSCC.  Also present: Capt. H. W.
                           Frank,
      Interpreter and John Wm. Gunsser, Court Reporter.

COL. GURFEIN TO THE WITNESS:

Q.   Remember we talked yesterday about the period just
  before the outbreak of the war with Poland, that is, the
  several months preceding?

A.   Yes.

Q.   And I called your attention to the fact that you had
  some discussion with Goering in that period, do you
  remember?

A.   Yes.

Q.   Now, you said that you were going to think it over, and
  I want to ask you this afternoon what you thought about
  that.

A.   Yes.  I remember two things which are very important.
  First, that I wasn’t in Berlin at all during July.  In July
  I was undergoing treatment because of my diabetes in
  Kissingen.  And as far as I remember I came back from there
  at the beginning of August, so that all these discussions
  could only have taken place
as late as August.  Further, I remember the
following: some time about the middle of August I
lunched with the Fuehrer, together with al lot of
other people.  During the lunch, the tension with
Poland was discussed.  After the lunch the Fuehrer
told me that he had put proposals to Poland
regarding Danzig and the Corridor, and that he was
under the impression that the Poles would accept
these proposals.  But that it was also possible
that the Poles, under the protection of the
British guarantee, would become more hostile
towards us.

And during that discussion I briefly explained to
the Fuehrer that in the event of such a war it
would be important that prices and wages and
finances were controlled in such a manner that the
banks of issue would exert their influence by
means of war taxes and that it now became clear to
me what the passage in this letter refers to,
namely, that I had already talked with the Fuehrer
about that matter.  And that must have been before
my birthday, that is to say the 15th or 16th of
August, since he did not set forth congratulations
to my birthday in that letter.  My birthday is on
the  18th of August.  Therefore I can imagine that
I may have told the Fuehrer-although I cannot
remember exactly that I proposed t talk to Goering
about these matters, since he was responsible in
that respect.

Since furthermore Goering informed me or had me
informed that he discussed these matters with the
Fuehrer, probably via Neumann, and that the
Fuehrer was in agreement with my plans.  It is
probable, therefore, that the Fuehrer has
discussed, probably in the presence of Neumann,
these civil economic questions and particularly
the points referring to prices, wages, ect.  And
furthermore, Goering would have reported to the
Fuehrer on the subject and would have had me
informed probably through Neumann that I should
occupy myself with these questions.  Any
nomination for the plenipotentiary of economy did
not take place before the 28th of August,
something which I gathered from the indictment.
Subsequently it is probable, and I seem to
remember that I have had conversations with
Goering on the subjects, and I remember one
conversation during which Neumann, was also
present.  And on that occasion Goering gave me the
task to negotiate with my ministerial colleagues
in accordance with my own proposals.

Q.   So that just to clarify it, when you say Hitler, as you
  say, in the middle of August, Hitler told you if he could
  not succeed by negotiation with the Poles in effect that he
  would have to attack them; is that correct?

A.   I wouldn’t put it precisely like that, but in any case
  he must have expected the possibility of a war.

Q.   And that is what he told you in effect, that you were
  to take part in the preparation of this war?

A.   No, but that the proposals that I had mentioned to him
  referring to prices, wages, ect., should be discussed
  between Goering and myself.

Q.   But when the Fuehrer told you that war was likely to
  come you volunteered the suggestion that you ought to get up
  a plan for the control off wages and prices; is that that
  right?

A.   That is correct, yes, and that is the explanation for
  the wording of the letter referring to my proposals.  That
  refers to the conversation with the Fuehrer.  That has now
  come back to me.  That was about the middle of August, which
  was the last time I saw him before the actual outbreak of
  the war.

Q.   So that you were a man who always felt that you could
  not successfully prosecute a war without internal control of
  the economy by way of price and wage regulations?

A.   Yes, certainly.  If a war was to break out, price and
  wage control were necessary, and these things would have to
  be fixed to prevent the Reichsbank form having to meet
  considerable expenditure right away.  These war measures had
  been prepared by the Minister of Finance separately from me
  already.  He was proposing a simply colossal taxation for
  that event, which appeared quite unnecessary to me, and I
  said if he introduced it everybody would go bankrupt.

Q.   How long before that were these tax plans made before
  the contingencies of war?

A.   That was all around about the same time.

Q.   And that was part of the program that you were
  coordinating for Hitler?

A.   Yes, that was part of it; that was included in the
  points.  And subsequently from that the Minister of Finance
  had mad similar preparation, which in my opinion went much
  too far.

Q.   So that in effect you were urging upon the Fuehrer a
  total preparation for war, and you were in effect preparing
  for the war itself, within your own sphere?

A.   Well, I don’t know about total war; we are only
  concerned here with the war against Poland.

Q.   You don’t understand me.  When I say total war I mean
  the total regimentation of the economy for war.

A.   Yes; and the fact that I was against such far-reaching
  measure as proposed by the Minister of Finance can be
  explained from my conviction that I did not think that there
  would
be a war, but that I was thinking simply of a war
against Poland, because if one was of the opinion
that a world war was about tot break out the
preparation would have been quite different.

Q.   Yes, but that means that you thought that you could
  have a war against Poland without the other powers
  interfering; is that right?

A.   Yes, certainly.  And that was my personal conviction
  and everyone else’s that England would not start a war for
  the sake of Danzig.

Q.   And also you did not consider it to be excluded that
  the Poles would resist any diplomatic attempt to get Danzig,
  and that it might be necessary to attack them?

A.   Yes, but the Fuehrer said during that lunch that he
  thought that the Poles would accept those proposals
  regarding Danzig, which in fact were eventually made to the
  Poles.

Q.   Yes, but also said that I the event he could not
  succeed diplomatically he would have to go into a war?

A.   Well, he himself didn’t say that, but it was my own
  personal opinion that in the event of failure of political
  efforts of war against Poland being inevitable; he himself
  never said that.

Q.   Why did you think that?

A.   Because the situation in Poland deteriorated from day
  to day, which was later on confirmed by people coming back
  from Poland.  I myself had relations there, and the conduct
  of the Poles was unforgivable.

Q.   So that you felt you would have to, if they did not
  agree peaceable, to force them by arms to get rid of this
  situation?

A.   Yes, because the Poles carried things so far that we in
  Germany no longer had any other possible way.  And after
  all, Germany at that time was already a very powerful
  country.  You can’t take just everything from the Poles.

Q.   You mean you could not take insult from the Poles?

A.   After all, Germany could only condone this sort of
  thing up to a point, and there were incidents at the
  frontier when Germans were massacred; they had their noses
  and ears cut off.

Q.   You knew at that time that German propaganda said for a
  long time that it had been going on all summer?

A.   Yes, but it was far later on confirmed by Germans, in
  fact by my own relatives who were living in Conetz in
  Poland, just how the Poles treated the Germans there and
  what dreadful things they committed against them.

Q.   So you agree with Hitler that the only think to do was
  liquidate the Polish problem, and if it could not be done by
  diplomacy it should be done by force of arms; is that right?

A.   Yes, but I didn’t actually make the statement on the
  subject because I didn’t have the authority to discuss that
  sort of thing with the Fuehrer.  But it was my own
  conviction that that was the action which events would have
  to take.

Q.   But the effect of the conversation that you yourself
  related with the Fuehrer, as you say, in the middle of
  August 1939 was to cause you immediately to tell the Fuehrer
  what economic preparations should be made for war?

A.   Yes, because that was my duty.  If war was about to
  break out then one had to make the necessary preparations.

Q.   Yes, but you wouldn’t have been afraid to tell the
  Fuehrer any such thing if the Fuehrer told you that he was
  going to get a peaceful settlement?  How could you suddenly
  tell him you were going to prepare for war?

A.   No, because one also had to tell him that certain
  preparations had to be made in the event of a war.

Q.   But you just told us you  couldn’t speak about such
  matters with the Fuehrer.

A.   No, but one had to tell the Fuehrer that in the event
  of an outbreak of war that these, that, and those measures
  had to be taken for such an emergency.

Q.   but that means you felt that you were the one that
  decided that war was likely to come, and that Hitler gave
  you no such intimation.  How could that be?

A.   Well, no, I personally, and everybody else I knew, was
  convinced that the solution to the problem could be found in
  the diplomatic field, but if this should fail it was our
  duty and my personal duty to see to this, that should war
  break out that necessary economic preparations were made.

Q.   But it wasn’t for you to suggest to the Fuehrer, was
  it?

A.   Well, no.  If one discusses that sort of think with the
  Fuehrer, and he suggests that  the diplomatic effort would
  succeed whilst on the other hand the possibility of a
  conflagration cannot altogether be excluded, then it was the
  duty of the Minister of Economy to put before the Fuehrer
  such economic measures as I considered necessary.

Q.   Only because you thought that war was imminent?

A.   Not because I thought so, but because I visualized that
  possibility.

Q.   And the possibility, as you said, was because the
  British might intervene?

A.   No; because the Poles, under protection of British
  guarantee, refused to be reasonable and forced us into war.

Q.   Now, in connection with the events I asked you about in
  1941, put your mind back on that for a moment, will you.  Do
  you remember you said that you knew about the likelihood of
  an attack upon Russia in June or July of 1941?

A.   Well, the fact that there was a threat of war against
  Russia was known to me in May and June 1941?

Q.   I want to ask you whether you didn’t know it as early
  as the 20th of April 1941, when there was a decree by the
  Fuehrer appointing Rosenberg to take charge of eastern
  territory?

A.   Well, that I don’t know.  I don’t know whether I have
  seen that decree.

Q.   Don’t you remember appointing Schlotterer to be your
  secretary?

A.   Yes, but I don’t remember whether that was on that
  date.

Q.   Don’t you remember that it was several months before
  the attack on Russia?

A.   That I don’t know.  I can’t remember exactly when I
  detached Schlotterer for duty with Rosenberg, but it must
  have been after the nomination of Rosenberg.  It also
  tallies with the date of my conversation with Hess towards
  the end of April.  It was during the last days of April in
  Munich.  It was then that Hess asked me whether I was aware
  of the fact that a war with Russia was threatening.

Q.   What did you say?

A.   I said, yes, that sort of thing is being talked about,
  naturally.  And then Hess asked me, as I have told you
  before, how things stood regarding the Russian deliveries,
  and whether the loss of such deliveries would not be
  serious.

Q.   I want to refresh your recollection.  You make it very
  difficult sometimes.  The Fuehrer issued an order on the
  20th of April 1941 appointing Rosenberg as a deputy for a
  centralized treatment of problems concerning the eastern
  territories?

A.   I don’t know whether I saw that.  Well, I don’t know.
  I can’t say that.  You would have to ascertain whether this
  decree was passed on the department.  That wasn’t so easy in
  our case.

Q.   Isn’t it a fact that this decree of the 20th of April
  1941 by the Fuehrer was a very secret decree which was
  shown only to Goering, Funk and Keitel?

A.   I don’t  know that.  If you say so it must be correct.
  But I don’t remember it; I don’t know.

Q.   Look, you keep saying that you knew nothing about high
  policy and that you were only a small man in effect.

A.   Yes, I was.

Q.   Now here we have a decree which is the first step
  towards the preparation of the war against Russia, and the
  only people in the Reich who were permitted to see it were
  Hitler, Lammers, that is the State Secretary, Keitel, Chief
  of the OKW, Goering, the delegate for the Four Year Plan,
  and yourself.

A.   In that case it must have been that this decree was
  only sent to the ministers who were members of the Defense
  Council of the Reich, and I was one of them, and that is
  possible.

Q.   But regardless of that, I want to ask you now whether
  you don’t remember seeing the decree as early as two months
  before the attack on Russia?

A.   Well, yes, if it has been ascertained that it has been
  sent to me I must have seen it, but I cannot now remember
  that.  It is possible, but I cannot deny it; it is so long
  ago.

Q.   In any event, based on this decree or based on this
  conference with Hess, and the other knowledge you had before
  that conversation, it is clear that in April 1941, you knew
  that a war with Russia was in contemplation?

A.   That a conflict with Russia was threatening.

Q.   And you knew that you had to mobilize your resources
  for an attack on Russia within a reasonable period of time?

A.   Well, I didn’t have any mobilizing to do in that
  connection.  All I had to do was to place at Rosenberg's
  disposal Schlotterer and various other people when his
  ministry opened.  I wouldn’t introduce any measures in
  economy in this particular case.  All this could concern was
  the strengthening of armament, which was not under my
  jurisdiction; but it was Goering’s and the OKW’s  concern.

Q.   But it also had to do with the exploitation of the
  eastern territory after it was occupied?

A.   Yes, but that was a task for the Four Year Plan.

Q.   In which you appointed Schlotterer to cooperate with
  Rosenberg?

A.   Yes.  I delegated him to Rosenberg, and Rosenberg, as
  far as these parts were concerned, was also subordinate to
  the Four Year Plan; because the only department which could
  give orders in that connection on economic subjects was the
  Four Year Plan.

Q.   But Schlotterer was put in there to be an economic
  adviser to the whole problem of the taking of properties out
  of the eastern countries, was he not?

A.   Yes, but only so far as the east.  And as far as
  Rosenberg was concerned, I tried to avoid that Rosenberg
  should open a new organization, which is what he was
  proposing to do.

Q.   Why were you against that?

A.   Because this would have created another ministerial
  competitor on economic questions.  We had enough
  competitors.  We had the Four Year Plan, and this would have
  introduced another one.

Q.   So that you didn’t want to give up the jurisdiction
  over economic matters in the eastern territories to
  Rosenberg; is that it?

A.   Well, jurisdiction isn’t right.  I wanted to avoid yet
  a new organization, and the handling of the matter was
  Rosenberg’s concern.  Therefore I detached Schlotterer and
  various other people to Rosenberg’s office, and they did of
  course retain their connections with my office.

Q.   What kind of connections did they continue to have with
  you?

A.   They concerned mainly the collecting of consumer goods,
  because the raw material questions and some such business
  was handled by the Four Year Plan,  in particular Pleiger.
  It was together with Rosenberg that we created those firms
  in the east, that is to say, we took firms in the Reich who
  has to carry out business in the occupied eastern
  territories.  They had to buy out of their won funds.  But
  nothing much materialized because the Army had already
  collected a very considerable amount of things.  And as far
  as the important materials were concerned, such as coal,
  oil, ect., that was already being handled by the Four Year
  Plan and taken out.  And the only subject on which I
  cooperated with Rosenberg, as far as the eastern territories
  were concerned, was that of these firms.  But matters of an
  important nature, such as the collection of factories,
  smelting works, electric works, ect., that was dealt with
  outside the Ministry of Economics and I believe also outside
  of Rosenberg’s organization.

Q.   But there is evidence, Funk that every firm that got
  anything in the east had to go to you and Goering and get
  the agreement of both of you before they could do anything.

A.  No.

Q.   Now, in connection with consumer goods that you
  controlled, were coal mines included in that?

A.   No.  Raw materials from occupied territories came under
  the Four Year Plan.

Q.   I am not talking about the occupied territory; I am
  talking about in general.

A.   Oh, I see.  In 1941, coal mines in Germany still came
  under the Ministry of Economics.

Q.   When did you lose jurisdiction over coal?

A.   It was the middle of 1943.

Q.   That was at the time when you became a member of the
  Central Planning Board, was it not?

A.   That was the compensation which I was given for taking
  away from me the production questions.

Q.   But up to the end of 1943, when you say you were in
  charge of consumer industries, you were in charge of coal as
  well?

A.   Yes, until 1943 the coal came under the Minister of
  Economics.

Q.   SO that requirements for coal miners, for example, were
  part of your responsibility?

A.   No, I had nothing to do with miners; that was the
  concern of the Ministry of Work.

Q.   Didn’t you have to ask for enough miners to keep up the
  coal production?

A.   Well, of course, if the mines were short of workers or
  had difficulty with the miners they could come to the
  Minister of Economy and tell him that they were in
  difficulty and the Minister of Economy then consulted with
  the Four Year Plan which is turn would settle the matter
  with the Minister of Labor.

Q.   But you had the responsibility then to insure through
  the Four Year Plan and Ministry of Labor a steady flow of
  laborers to work the coal mines that were under your
  jurisdiction?

A.   It wasn’t my responsibility, but I had to intervene
  when the coal industry came to me and complained about the
  shortage of workers.  In that connection I would have to
  take action.

Q.   And what kind of workers did you get for this?  Were
  they all German workers or foreign workers or were some
  prisoners of war or what?

A.   What sort of workers eventually arrived in the mines
  was no concern of mine.  That was decided by the Ministry of
  Labor and later on by Sauckel, and later on Speer claimed
  additional authority, but I was in no way connected.

Q.   When did you first find out that foreign workers were
  being brought to Germany to work in the coal mines?

A.   That is another very difficult question.  I assume that
  when workers became available in Russia some of them were
  transferred to the German coal industry.

Q.   I want to ask you:  when did you first find out that
  the involuntary-that is, that foreign workers who came
  against their will were first brought to Germany to work in
  the coal mines?

A.   I can’t say that at all, because I have never concerned
  myself with that question.

Q.   When did you first find out that foreign workers were
  being brought t Germany against their will in any industry?

A.   I don’t know at all that foreign workers were brought
  to Germany against their will.  That wasn’t a task for the
  Minister of Economy.

Q.   I didn’t ask you whether it was a task for the Minister
  of Economy; I asked you when you first knew about it.  Do
  you want the record to stand as it is, that you were
  probably the only man in Germany that didn’t know that
  workers were brought to Germany against their will?

A.   That could have only been after Sauckel was nominated.
  It was his task.  Before that I never heard that workers in
  large numbers were forcibly transferred to Germany.

Q.   Were you ever present in any meeting where the task of
  Sauckel was defined?

A.   No, not which were concerned with the nomination of
  Sauckel.

Q.   I don’t mean the nomination of Sauckel; I mean the
  discussions concerning Sauckel’s functions and what the
  general program was going to be about labor.

A.   I believe that the first time that I was present at
  such discussion was when Speer was already in office.

Q.   What discussion are you referring to now?

A.   Such as referred to the transfer of foreign workers on
  a large scale to Germany by Sauckel.

Q.   You mean against their will?

A.   Well that I don’t know.  Sauckel never said during such
  conferences that they were brought in against their will.

Q.   But you know?  I just want to ask you.  This is the
  first question: we will come to something important later.
  Certainly you knew that such a large number of
  people-millions-couldn’t be brought to Germany voluntarily?

A.   Certainly.  Well yes, but you are referring to the
  statement by Sauckel that they were transferred against
  their will.  That they did not come voluntarily was
  something, certainly, on would have to assume.

Q.   When you were asking for labor on behalf of the coal
  industry for the Four Year Plan form the Minister of Labor,
  you knew that among those who would be recruited for those
  mines would be many who were foreign workers brought
  involuntarily to Germany?

A.   That’s right; yes.  But there is something else I must
  say n the connection, that is, that such questions on behalf
  of the coal mines were made directly by Pleiger to Sauckel
  and had nothing to do with the Minister of Economy.

Q.   But you said a little while ago, did you not-I listened
  to you very carefully, and it is perfectly clear that you
  said-that first you had jurisdiction over the mines until
  late in 1943; second, that the coal mine owners came to you
  for a labor supply which you in turn would have to request
  from the Four Year Plan and the Ministry of Labor; is that
  correct?

A.   Yes, until Sauckel arrived and until Pleiger became the
  chief of coal questions.  After that it was done by Pleiger
  independently.

Q.   Leave out the coal situation for the moment.  You also
  required workers for the consumer industries which were
  under your jurisdiction; did you not?

A.   The consumer goods industries were restricted more and
  more every year.  In fact, it has to concede workers to more
  important industries.

Q.   AS a matter of fact, you were using German workers for
  security reasons in war production industries and therefore
  required a substitution of foreign workers n the consumer
  industries?

A.   Yes; but certainly no foreign workers on a large scale
  were used in the consumer goods industry at the beginning.

Q.   But later?  What happened later?  Didn’t you finally
  use foreign workers in the consumer industry?

A.   Yes, but the consumer goods industry was deprived of
  every worker they could spare.  They were deprived of more
  workers than any other industry.  I fought continually
  against having to lose these workers from the consumer goods
  industry.

Q.   Wait a minute.  When you went on to this Central
  Planning Board in the Fall of 1943 did you receive copies if
  the minutes after that?

A.   Yes.

Q.   As a matter of fact, you were present at many of the
  meetings, were you not?

A.   I only joined the meeting of the Central Planning Board
  when I required something for my own small sector, that is
  to say, something to do with sport and consumer goods
  industries, for example, iron, and I had to fight on each
  occasion to get just a few thousand tons for my consumer
  goods industry.

Q.   Yes, but during these meetings you attended you heard,
  did you not, discussions concerning foreign labor?

A.   Oh, yes I did.

Q.   And you knew from those meeting that the policy was to
  bring in more and more foreign workers to the Reich against
  their will?

A.   Yes, certainly.

Q.   And you never objected to that, I take it?

A.   No.  Why should I have objected?  It was somebody
  else’s task to bring those foreign workers in.

Q.   Did you believe it was legal to take people against
  their will from their home and bring them to Germany?

A.   Well, many things happen in wartime which aren’t
  strictly legal.  I have never racked my brains about hat.
  But there is another thing, and that is, that I tried my
  best to prevent the importation of too many workers from
  France, for instance, to see their industry at home kept
  going.

Q.   Yes, but what about workers from the East, from the
  Ukraine, for example; you were interested in getting them
  into Germany to work, were you not?

A.   I personally, no.

Q.   But you were in agreement with the general policy?

A.   Well that foreign workers should be brought into
  Germany from foreign countries, that I considered perfectly
  proper so that war production could continue and increase.
  But it was never aware that this was illegal.

Q.   Do you remember that in France there were collected
  properties held by enemy property custodians?

A.   That a custodian for enemy property existed, that is
  something I know, but I never concerned myself with the
  questions themselves.

Q.   Do you remember hat there was a decision made in 1943
  to utilize the funds in French banks by taking the deposits
  and putting them into the Aero Bank?

A.   Yes.  Lange made a report on that to me.  The vice-
  president of the Reichsbank, Lange, made a long report to me
  in which he explained to me that funds which were held under
  the jurisdiction of the custodian for enemy property were to
  be transferred to the Aero Bank so as to create liquid funds
  for war production.

Q.   That is to say, these deposits stood in French francs,
  and the deposits were transferred to the Aero Bank, putting
  at the disposal of the German armament people French francs;
  is that right?

A.   No, that is not how I understood it to be.  The way I
  understood it was that these liquid funds which were under
  the supervision of the custodian for enemy property were to
  be loosened so that they would be at the disposal of the
  entire French economic system.  In fact, Lange, who was
  working in France-I myself never went to France, in fact I
  have never been to any occupied territory-reported to me
  that the French were extremely please with this suggestion.

Q.   Don’t you remember that the purpose was to obtain
  French francs which would be used to finance the armament
  industry in France?

A.   That has never been reported to me in that way.

Q.   Well, we have a letter from the military administration
  in France protesting against this transaction; and the
  Ministry of Economics that you were in favor of it.

A.   Well, I didn’t write that letter.  The way it was
  described to me was that this concerned a transaction in the
  money market such as did not exist in France, and that the
  French were extremely pleased to see that such a transaction
  was being carried out, and nobody mentioned the armament
  industry in that connection, and  protest was not mentioned
  to me.

Q.   You were buying a lot of goods in France at that time,
  were you not?

A.   We?  Who?

Q.   You.

A.   As far as I was concerned I was only interested in
  consumer goods.

Q.   But you were also interested in money and exchange,
  because you were the president of the Reichsbank?

A.   But that was done on the spot, and in conjunction with
  the Bank of France they had an official there whose name was
  Schaefer.

Q.   But you also had something to do with the
  Reichsverechnungskassen as well?

A.   Yes, but I don’t know how they came into that
  transaction.  That I didn’t know.

Q.   But the fact is that you were in general charge of the
  following:  the Reichsbank, the Reichskreditkassen, and the
  Reichsverechnungskassen?

A.   Well, I wasn’t chief of the Reichskreditkassen, but it
  is part of the money system.

Q.   Well, the whole clearing arrangement, for example, was
  under your general policy supervision; was it not?

A.   Yes, but I have never concerned myself with these
  matters in detail.

Q.   But now, basically, you were in charge, were you not,
  of the whole execution from a policy point of view of the
  clearing arrangements?

A.   Yes.

Q.   And such you had a general policy control over the
  Reichsverechnungskassen, which were the banks for the
  clearing?

A.   Together with the Minister of Finance.

Q.   So that the question of how much should be exported and
  how much should be imported was partly within your
  jurisdiction?

A.   Yes, with reference to Verrechnungskassen.  The
  jurisdiction of money matters was with the Minister of
  Finance and not me.

Q.   But with respect to the amounts of the clearings you
  had something to do with that; did you not?

A.   Yes, all this belongs into the problems of foreign
  trade, which now is handled by me alone, but was centralized
  and part of the foreign Office.  All departments which were
  interested in foreign trade were represented in the HPA,
  which is the trade political board.  The chairmanship was
  held by the Foreign Office, and to his department the
  Armament Minister and the Minister of Food reported their
  claims; and the Minister of Finance was concerned with the
  execution of the program while the Minister of Economy and
  the Reichsbank were concerned with the technical execution
  of those matters.

Q.   So that the question of how much Germany was indebted
  or should be indebted to these countries was a problem that
  came within your jurisdiction?

A.   Not only my responsibility, but all those people
  concerned, including mine; but particularly the Minister of
  Finance.

Q.   But in any event, during these years of the war the
  amount of debts owed by Germany to these occupied and
  satellite countries increased greatly; did it not?

A.   Yes, the responsible person for this debt of the Reich
  was in the first place the Minister of Finance.

Q.   Did you intend to pay back any of these credits after
  the war if Germany won?

A.   Yes, certainly.  I have always emphasized that.  I have
  always stated that publicly.

Q.   Don’t you remember a meeting in 1944 in which you
  stated that it was unnecessary to consider that these debts
  would have to be repaid in the even of a German victory?

A.   I don’t know what that conference was, but it was my
  point of view that these clearing debts were genuine debts,
  and that Germany in the event of a victory would certainly
  be in a position to repay these debts by supplying goods.
  But that whenever foreign countries were concerned-and this
  is probably what you are talking about now-the question of
  reparations should have to be taken into consideration in
  this connection.  But it was my idea that this whole problem
  of clearing debts would have to be included in the large
  construction program in Europe.

Q.   Didn’t you tell Hitler in 1944 that there was no
  intention to pay back these debts in the event that Germany
  won the war?

A.   No.  How can Hettlager say things like that.  Well, if
  for instance, these countries were to make reparations they
  could have been used to cancel these clearing debts.

Q.   That means that you had a clear idea that if Germany
  won the war you were going to impose reparations on the
  defeated countries?

A.   Yes; that they would have to pay some compensation.

Q.   Do you remember how much you figured out these
  countries should pay in the event of a German victory?

A.   I have never imagined any figures; that is quite
  impossible.

Q.   Well, don’t you remember, for example, that you put
  forward that England should pay a billion in gold?

A.   No, I don’t know about that.

Q.   Well now, don’t you remember having a meeting on the
  22nd of July 1940 at which time you made that suggestion?

A.   Well, I may have said something like that jokingly, but
  no reasonable person could imagine that I could have said a
  thing like that as early as 1940 and be serious about it.

Q.   As a matter of fact, you stated what you were going to
  do with this billion in gold, did you not?

A.   Well, I don’t know about that.

Q.   Well, as a matter of fact you said that you would use
  it as a manipulation fund for the first imports, and that
  you would be able to discontinue rationing?

A.   Whoever said that must have had a vivid imagination.  I
  can’t remember this.  It is quite unthinkable that one would
  think anything like that as early as 1940.

Q.   Don’t forget that this was after the victory over
  France.

A.   Yes, but this is certainly wrongly represented.

Q.   Let me see.  Weren’t you told by Goering on the 22nd of
  June 1940 that you should do research on the problem of
  including into the greater German economy all annexed and
  occupied territory?

A.   Yes, that is quite right.

Q.   And immediately after that-

A.   Yes, Goering gave me a task in that connection.

Q.   Let me refresh your recollection further then.  A month
  after this commission, you received from Goering, didn’t you
  call a meeting of the ministers to discuss these questions?

A.   Yes, that is possible.  That I imagine.

Q.   Do you remember Ley, Darre and Gross?

A.   I don’t know about Ley.

Q.   And Wagner, Popitz and Lammers?

A.   Yes.

Q.   You do remember the meeting, don’t you?

A.   Yes.

Q.   And in that meeting, I ask you, didn’t you make the
  statement that you mentioned before, that in the event of a
  German victory, a billion dollars in gold was to be paid to
  Germany by England?

A.   Well, now, I don’t recollect that at all.  I can’t
  remember what I said.

Q.   Do you deny that you said it?

A.   No, but I can’t confirm it either.

Q.   But if the minutes show it you are ready to accept that
  as true?

A.   Yes, certainly, if the minutes say so.

Q.   Let me ask you further.  Didn’t you also say this, that
  the solution of the foreign indebtedness question is
  necessary to regain freedom of currency?

A.   Yes, that is quite probable, and it would be right too.

Q.   And didn’t you also say that upon termination of the
  war there will not be any indebtedness to England, France,
  Holland or Switzerland?

A.   That I don’t know any more.

Q.   Yes, but that is what I asked you before Funk.

A.   Well, that I do not know any longer.  I do not remember
  these details.

Q.   These are not details.  I asked you before whether in
  connection with the clearing of debts you had not made the
  suggestion that it would be unnecessary to pay them in the
  event of a German victory?

A.   What I did say was that after a German victory, after
  the war, Germany would produce so many goods that they could
  be used to pay off these debts.  After all, we couldn’t ask
  Switzerland for reparations.

Q.   That is exactly the point; you included Switzerland.

A.   In that case this is being wrongly represented.  That
  would mean that I was crazy.  That is quite out of the
  question, and in that case I deny this because it is wrongly
  represented.

Q.   Let me ask you something else:  do you remember the
  gold that the SS was collecting from the concentration
  camps?

A.   I have never concerned myself with that gold.

Q.   Do you remember receiving gold into the Reichsbank form
  the SS?

A.   Vice-President Puhl once reported to me that an account
  for the SS did exist in the Reichsbank, but I never assumed
  that the Reichsbank could make use of this deposit since it
  was an account established for the SS.

Q.   Well, you know, Funk, that as a matter of fact, the
  Reichsbank sold that gold and converted it into money for
  the SS?

A.   I do not know that.

Q.   You know that at the beginning of the whole transaction
  you had a conversation with Himmler about it?

A.   About these questions?  No, I never discussed them with
  Himmler.

Q.   The testimony is clear that you came back and reported
  to the Reichsbank directors of a conference that you had
  with Himmler before the gold was received.

A.   That is a point which I would certainly remember if I
  had talked to Himmler about this sort of thing, and I have
  never talked to him about it.

Q.   As a matter of fact, you came to people in the
  Reichsbank, Funk — see if you can remember this now — you came
  to people in the Reichsbank and you told them that you had a
  conversation with Himmler in which he told you that there
  was certain gold of the SS that they wanted to put into the
  Reichsbank, and you instructed that that SS gold be
  received?

A.   No, that is not right.  That is a wrong statement.  I
  must deny that.  I have no recollection of ever having
  discussed this matter with Himmler.

Q.   With whom in the SS did you discuss it?

A.   I have not discussed any such matter with anybody in
  the SS.  Puhl merely made a report to me that such an
  account for the SS existed.

Q.   What was the reason for such a report?  What was
  strange about this account?

A.   Puhl made that report to me together with other current
  reports, and I now remember exactly what he said.  He said,
  we have also got a deposit from the SS, but I don’t know
  what is in it.

It never occurred to me, however, that any such
deposit could possibly         be used by the
Reichsbank.

Q.   But how many deposits do you have in the Reichsbank?
  You must have had thousands.

A.   Yes, certainly, but such deposits as this there was
  only one like that.

Q.   Like what?

A.   Well, a deposit which contained gold and foreign
  currency, although I don’t know what was in them, really.
  The same questions arose, for instance, when the problem
  arose where we have to take in gold from Holland.  Once more
  my attitude was that this would have to be made a deposit
  which was no tot get mixed up with the current accounts of
  the Reichsbank.  And Puhl and Wilhelm will be able to
  confirm that.

Q.   Yes, but the fact is this, that you knew there was gold
  in those accounts, didn’t you-the SS accounts?

A.   Yes, that was reported to my by Puhl.

Q.   Puhl also told you, didn’t he, that that gold consisted
  of gold teeth and other kinds of gold articles,--gold
  watches and all the gold that was taken from the people in
  concentration camps?

A.   I don’t recollect that Puhl told me anything like that.
  Puhl even told me, if I remember rightly, I don’t want to
  know what is in that deposit.

Q.   And were you in agreement that you didn’t want to know
  what was in that?

A.   We didn’t generally look into the deposits, and that
  was a deposit of the SS.  And that these things came form
  concentration camps Puhl certainly did not tell me.

Q.   Why didn’t you want to look into it?

A.   Me?

Q.   Yes.

A.   I have never concerned myself with these matters in
  detail.

Q.   What did you understand from Puhl when he said he
  didn’t want to know what was in there?

A.   Well, probably that he was of the opinion that as this
  came from the SS this was a matter we had better not concern
  ourselves with, and it remained in the possession of the SS
  and was not transferred to the Reichsbank; it was a deposit;
  it did not become the property of the Reichsbank.

Q.   But Puhl came to you and asked your permission to
  retain this deposit; is that right?

A.   No.  He only told me that the SS was opening such a
  deposit in the Reichsbank.  The question of retaining it or
  not retaining it never cropped up; he simply reported to me
  together with other current affairs that a deposit was being
  opened by the SS.

Q.   But you knew that the account did not stand in the name
  of the SS, didn’t you?

A.   No; to the contrary, I understood that was in the name
  of the SS.

Q.   You knew it was in the name of a person and not n the
  name of the SS?

A.   No, I did not know that.

Q.   That is what he was telling you, Puhl, didn’t he?

A.   No, he did not mention the name to me; all he told me
  was, this is a deposit from the SS.

Q.   Why wouldn’t it interest you?

A.   Well, because it is not a common occurrence that a
  political organization opened a deposit in the Reichsbank,
  and Puhl must have considered that this was something he
  ought to inform me about.

Q.   Returning for a moment to this question of the fine
  against the Jews that we discussed in 1938, Funk, you were a
  party to all the laws that were put into effect in November
  o 1938 after the Cristar Week?

A.   I was only participating so far as the legal rulings of
  the Jewish property was concerned.  So far as the fine was
  concerned I had not participated in that.  This was a matter
  for the minister of finance.

Q.   All the decrees excluding the Jews from industry were
  yours, were they not?

A.   Yes.  We had to do this because otherwise Jewish
  property would have been free for everybody to loot, and we
  had to do something to protect it.  And it was my proposal
  that the property which they had to give over to other
  people would receive an interest from the recipient.  And
  their retaining their shareholdings, their retention of
  their shareholdings, was refused by Goering during a
  meeting, and so far as the interests on their property was
  concerned that was later refused by the minister of finance.
  I must explain something to you in this connection.  So far
  as my participation in this Jewish affair is concerned, that
  was my responsibility and I have regretted it later on that
  I ever did participate.  The Party had always brought
  pressure to bear on me previously to make me agree to the
  confiscation of Jewish property, and I had refused
  repeatedly.  But later on, when the anti-Jewish measures and
  the force used against the Jews came into force, something
  legal had to be done to prevent the looting and confiscation
  of all Jewish property.

Q.   You know that the looting and all that was done at the
  instigation of the Party, don’t you?

      (Here witness weeps)

A.   Yes, most certainly.  That is when I should have left
  in 1938.  Of that I am guilty.  I am guilty.  I admit that I
  am a guilty party here.

Q.   Well, now, just to make the record clear, this law
  which prohibited Jews from operation retail stores and
  wholesale establishments and other  things was a law that
  you drafted yourself, was it not?

A.   Yes, because we had to make such legislation simply
  because if we hadn’t done it the Jews would have been
  subjected to uncontrolled looting as had already been done.
  All that was a point as the result of which I should have
  resigned.

Q.   As a matter of fact, you predicted as the result of
  these decrees and other things that the Reich would become
  the possessor of a half billion shares of capital stock?

A.   Yes, that was my estimation of the Jewish property.
  But to start with-and this must be in the document-I
  demanded
at the beginning of this affair that the shares
should not be taken away from them.

Q.   Tell me, Funk, these measures against the Jews, weren’t
  they taken at the time in 1938 partly as a preparation for
  the war, because you didn’t want any important parts of the
  German industry to be under the control of Jews when the war
  came?

A.   I had never thought at that time that a war could
  happen.  After all, that was in 1938.

Q.   In any event, with respect to the fine of a billion
  marks, you were present at the meeting where that was
  discussed, weren’t you?

A.   Yes.  It came from Goering or the minister of finance,
  and the minister of finance carried it out.

Q.   Well, now, just to come back to something that I was
  asking you about before, when you put Schlotterer into
  Rosenberg’s ministry, how often did you see him after that?

A.   Very rarely.

Q.   But he was to report to you generally as your deputy,
  wasn’t he?

A.   But that was generally done by my state secretary,
  Landfriede.  I personally received Schlotterer very rarely
  to make reports.

Q.   In connection with the fixing of the occupation costs,
  you were concerned, were you not, as the president of the
  Reichsbank?

A.   Yes.  They were fixed by the minister of finance and
  the OKW.  And this is another point:  I have always
  advocated a reasonable figure for these occupation costs so
  as to prevent the overdrawing of the French, overburdening
  of the French currency.  And these monies were used to buy
  in France.

Q.   What do you mean by that, Funk that the occupation
  monies were used?  Levies were used to purchase goods in
  France; is that what you mean?

A.   Yes, certainly.  The army must have used it for that
  purpose.  Where would they have gotten the money otherwise?
  How was it possible otherwise that the army formations and
  Luftwaffe could make these purchases whilst I was fighting a
  continuous fight against the arrangements?

Q.   As a matter of fact, the plan was to buy goods on the
  black market in France, wasn’t it?

A.   Yes, and where would they have had the money form
  otherwise?  It must have come form the occupation costs in
  France.

Q.   That means then, that if they had no other money
  available, when they needed goods to bring into Germany they
  would have to use occupation money for the purchases?

A.   Well, it wasn’t as clear as that, but the separate army
  formations must have been in the position of financial means
  not controlled by us which they must have used for these
  purposes.  My state secretary, Hiller, Puhl, and Landfriede,
  if you are interrogate them, will back me up and confirm
  that I have always fought against exploitation and against
  the fact that these means would be used to buy out these
  foreign countries.

Q.   Do you consider these men to be truthful men, Hiller,
  Puhl, and Landfriede?

A.   Yes, I would.  They will confirm that, and I sent
  dozens of letters on that subject to Goering, the Minister
  of Finance, Lammers, Bormann, and all these people, asking
  them not to break the financial system in these countries.

Q.   Yes, but you know that purchases were being made
  through these various corporations, including the Roges
  Corporation, with monies obtained from occupation levies?

A.   Yes, but Roges was a controlled affair.  That I believe
  was controlled, and these were regular business matters.

Q.   But where did Roges get the money to make his
  purchases?

A.   They must have received these monies from the ministry
  of economy.  That was a matter which was controlled.  These
  monies must have been allotted to them for the purpose of
  making regular purchases.

Q.   But I want to ask you, wasn’t part of the money that
  they used monies which were obtained from occupation levies
  against the French?

A.   So far as these normal purchases were concerned,
  certainly not; they were done via clearing.  These were
  controlled purchases controlled by the Ministry of Economy.

Q.   Well, the amount of the clearing purchases though was
  dictated by the Reich, were they not?

A.   You can’t say dictated; you can say granted.

Q.   But the point is that the German Reich owed three
  accounts already, and weren’t you in effect making these
  people give further credit to Germany?

A.   Yes, but these purchases were part of normal business
  and something was supplied in exchange.

Q.   But that is silly, because the net balance was always
  in favor of Germany?

A.   Yes always passive.  But what I want to say is that any
  part of the occupation costs which were expended were used
  for the army formations and used by the buyers and crooks
  ect.  We were always wondering where the financial means for
  these giant purchases were coming from.

Q.   Well, did you ask anybody about them?

A.   We always tried to find out where they came from, but
  in vain.  We didn’t know who was using them.. It must have
  been the Minister of Finance.

Q.   We will come back to this some other time, Funk.  I
  want to ask you one thing.  Do you remember that in your
  discussion in the spring of 1941 with respect to the war
  against Russia that there was a date fixed of the 15th of
  May as the date on which all preparations had been
  finished-as early as the time you were discussing it in
  April?

A.   No, I have never seen such an order from Hitler.

Q.   You still say that the first time you heard about the
  proposed war with the Russians was in April 1941?

A.   Yes, approximately April 1941.

Approved:

                                     /s/  W. Frack
                                     (Interpreter)

                           /s/    John Wm. Gunsser
                                        (Reporter)