Memorandum on the need to increase the German armaments industry, including foreign sales as well as domestic production, and to be "technically well to the fore"

B.Nr. MI 376/33 Top secret. Berlin W, 31 January 1933
TOP SECRET
General directions for support given by the German Navy to the German Armament Industry.
The effects of the present economic depression have led here and there to the conclusion that there are no prospects of an active participation of the German Armament Industry abroad, even if the Versailles terms are no longer kept. There is no profit in it and it is therefore not worth promoting. Furthermore, the view has been taken that the increasing "self-sufficiency" would in any case make such participation superfluous.
However obvious these opinions may seem, formed because of the situation as it is today, I am nevertheless forced to make the following contradictory corrective points:
a. The economic crisis and its present effects must perforce be overcome sooner or later.
Though equality of rights in war politics is not fully recognized today, it will, by the assimilation of weapons, be achieved at some period, at least to a certain extent.
b. The consequent estimation of the duties of the German Armament Industry lies mainly in the Military-political sphere.
It is impossible for this industry to satisfy, militarily and economically, the growing demands made of it by limiting the deliveries to our own armed forces. Its capacity must therefore be increased by the delivery of supplies to foreign countries over and above our own requirements.
c. Almost every country is working to the same end today, even those which, unlike Germany, are not tied dowrn by restrictions. Britain, France, North America, Japan, and especially Italy are making supreme efforts to ensure markets for their armament industries. The use of their diplomatic representations, of the propaganda voyages of their most modern ships and vessels, of sending missions and also of the guaranteeing of loans and insurance against deficits are not merely to gain commercially advantageous orders for their armament industries, but first and foremost to expand their output from the point of view of military policy.
d. It is just when the efforts to do away with the restrictions imposed on us have succeeded, that the German Navy has an ever increasing and really vital interest in furthering the German Armament Industry and preparing the way for it in every direction in the competitive battle against the rest of the world.
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e. If, however, the German Armament Industry is to be able to compete in foreign countries, it must inspire the confidence of its purchasers. The condition for this is that secrecy for our own ends be not carried too far.. The amount of material to be kept secret, under all circumstances, in the interest of the defense of the country is comparatively small. I would like to issue a warning against the assumption that, at the present stage of technical development in foreign industrial states, a problem of vital military importance which we perhaps have solved, has not been solved there. Solutions arrived at today, which may become known, if divulged to a third person by naturally always possible indiscretion, have often been already superseded by new and better solutions on our part, even at that time, or at any rate after the copy has been made. It is of greater importance that we should be technically well to the fore in any really fundamental matters, than that less important points should be kept secret unnecessarily and excessively.
/. To conclude: I attach particular importance to guaranteeing the continuous Support of the Industry concerned by the navy, even after the present restrictions have been relaxed. If the purchasers are not made confident that something special is being offered them, the industry will not be able to stand up to the competitive battle and therefore will not be able to supply the requirements of the German Navy in case of need.
Sgn. Raeder.
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