A.In 1918 all plants passed into French ownership and then -
Q.State or private ownership?
A.As far as I know, first of all into State ownership, but I can only say so, from my own memory, but I don't think I am mistaken, and then the State passed them on to private industry.
This happened, as far as I know, because of long-term installment payments, and obviously under extremely favorable conditions for the private acquirers.
On this point there were major disputes because of an interpolation in the French Chamber of Deputies.
The public was able to continue to deal with this subject and did so.
After a French professor described these events in a book which he lublished, this transfer of property, -- the book was called " Le Pillage Le Plus Fructueu".
Q.I assume that the interpreter knows French, but to make sure that it gets into the record correctly, would you be kind enough to translate it into German?
A.Well, it means the most successful plundering.
Q.The most successful plundering. Nietsche's law about the eternal return of the same thing seems to apply here.
A.Well, "Le Pillage Le Plus Fructueu".
Q.Please continue.
A.Well, that's all I have to say about it at the moment.
Q.But I think it is necessary that you should say something else.
You have described how the property passed via the French State into the hands of French industrialists, but what about the Germans who used to be in these plants?
A.All the Germans were completely expropriated. I assume they got some sort of compensation later, but to my knowledge this was a matter of the German Government, and this compensation certainly amounted to only a modest fraction of what the plants were worth to the expropriated owners and had cost them, but the compensation was given by the German Government to the previous German owners.
All the plants in German ownership had been built by Germans with the exception of the plants of the firm De Wendel. The family of De Wendel had been in Lorraine for two hundred years. It was the oldest industrial family. They were the first to build plants in Lorraine even before 1870. But all the remaining plants, Rombach, Gleidingen, Hamendingen, and so on, had all been built by Germans in the time between 1871 and 1918. During this period the development of the Lorraine industrial district took place in general because of a technical discovery made during this time. This was the so-called Thomas Process or basic Bessemer steel process which was the prerequisite for the efficient smelting of the ores which are found in Lorraine. These were ores with a high percentage of phosphorus and these could only be exploited profitably after the invention of the two Englishmen, Gilcrest and Thomas, and this invention, I think, dates back to the end of the '70s, and only this is the explanation why all the works except De Wendel who used to work on a different basis were built during the German period.
QAnd Do Wendel, as a Lorraine family then, kept their French nationality or rather, regained it and kept their property?
AYes.
QThe only ones?
AYes.
QYou said the Germans; that is, in the sense the Germans from the Old Reich as one used to say in Lorraine, they were expropriated. Excuse me. Lawyers are sometimes a little pedantic. I would not like any misunderstanding to occur. Do you want to say that a formal act of expropriation went through the competent German government or do you only mean to say that by the annexaction of Lorraine by France, in practice the Germans lost their property?
AThe latter was certainly the case. How this took place formally I can't say for certain but probably it was also a consequence of the peace treaty, I don't know.
QCertainly. It was not only pedantry on my part but I had to attach value to this clarification because later on we will come to the question whether the French were expropriated by the Nazi Government; that is, whether at any time they over lost their property. Here at any rate it happened, here the Germans lost their property. That's true, isn't it?
AYes.
QIn fact, that is how things looked in 1918, 1919, 1920 and so on up to 1940. And now, would you please tell the Court what happened in Lorraine after France surrendered in 1940? I mean, what happened to the steel industry of course?
AAfter the armistice in July, 1940, the German government a*---* started from the standpoint -- and with it no doubt by far the largest part of the German people -- they started from the standpoint that the frontier of 1918 in the west would be restored. A document has been submitted here, according to which the government in June, in the summer of 1940, expected a peace treaty soon and via the Economic Group of the Iron Producing Industry the request was put to the steel industry asking then to make subbestions for the imminent peace treaty.
One must start out from this attitude which was current at the time.
QYou mean the peace treaty with France?
AYes, the peace treaty with France, and in this connection naturally the question of the Lorraine steel industry was discussed. The aim was to get the plants working again as seen as possible. The plants at that time were not working. The French officials had fled and there was no labor available in Lorraine to manage the works. In addition, there was a shortage of fuel, of gasoline. The first step of the German Government was that Roechling was appointed Commissioner General for Lorraine. Roechling was to be responsible for preparing the starting up of the work in Lorraine and in part also carried this out as in the case of Rombach, for instance. When we took over Rombach later for the trusteeship it wqs already working, but as I said it was the aim of the Government that all plants should start operating again as soon as possible, and this task was far beyond the powers of the individual first appointed; that is, Roechling.
Because it would have been too much for him, the idea arose that all the German concerns of the steel industry should be used in Lorraine, each concern being given a plant to supervise and to get operating it again as soon as possible, a general use of German industry to this end in Lorraine. In this way Lorraine six trusteeships were given because in Lorraine there were six large smelting works. Two trusteeships were issued in Luxembourg, one on the Saar, one for the coal mining industry so that on the whole, about ten trusteeships in Lorraine passed to leading German concerns.
Ore mining, which was the basis of the industry of Lorraine, was not handed over to the trustees concerned. It was entrusted to plenipotentiary general appointed by the German government. We, as trustees of Rombach, had nothing to do with mining. At that time;
that is, in the summer of 1940, the German government intended that also the large smelting works in France proper, that is, in Longwy and Brieux, should also be given to German concerns to administer it as trustees and a concern had already been selected for each plant. In practice, therefore, each large German steel company was intended to fulfill some task in Lorraine. In fact, the ten trusteeships I have mentioned were distributed in Lorraine and Luxembourg while trusteeships over the old French works which was originally also intended was discontinued by the German government later on. On One of the biggest steel concerns, such as our group was, in these circumstances considered it as a matter of course that we should be considered to participate in these tasks, but it was also in accordance with our own intentions.
QAt this point I would like to ask you to tell the Court what the decisive or the essential motive of your interest in Rombach in particular was?
AOne must differentiate between the official reasons which we gave for wanting the trusteeship and an essential, and perhaps the most essential, reason which we did not announce officially. Our official reasons for wanting the trusteeship of Rombach were firstly, historical connections between Harpen and Rombach; secondly, the fact that a German legal successor of the former Rombacher Huettenwerke no longer existed; thirdly -
QWould you elucidate that? I think that the legal successor -you mean the former owner or the Rombach company, but it's better if you explain that, why he no longer existed and who he as and so on.
AThe Rombacher Huettenwerke of 1918 to 1919 were owned in the majority by a family, Spaeter, in Coblenz and the Spaetor family, as a result of the huge financial loss they suffered and because of unfavorable later economic developments, had lost their importance to such an extent that they could no longer be considered for a task of this magnitude.
QBy financial losses you mean the loss of the Rombacher Huettenwerke shares in 1919?
AYes. And later in addition to that they had other losses that were not connected with Lorraine?
The former majority shareholder could not be considered for material reasons, nor was he suitable from the point of view of the experts, technicians at our disposal. He no longer had a plant of its own at his disposal, and therefore could not produce the suitable managers required so that for both these reasons the former group of majority shareholders could no longer be considered for the trusteeship. On our part there was the additional factor that in the smelting works which we supervised in the East in 1939 after the re-occupation of Upper Silesia we had been eliminated, and then a special reason was that that even after the well-known exchange of hard coal against brown coal, we had so much coal in the Ruhr available that we in contrast to the other Ruhr concerns still were in a position to supply the Rombacher Huetten Works with fuel through the Harpener Bergbau Gesellschaft, and in Lorraine with regard to raw materials the question was the reverse of that in the Ruhr. Ore and coke are the two bases as I mentioned before. The Ruhr had coke and had to buy the ore. Lorraine had ore and had to buy coke, and we were the only group in the Ruhr which still had the quantities of coke freely available which were required to run a smelting works of the importance of Rombacher. That was one essential factor, because in this we had a special position, and the internal documents which have been submitted here in the Rombach case show, and the other documents of the economic offices, and the official agencies also show even in the case of Hannecken's evidence I believe that these things from a purely objective point of view were decisive, in granting us the trusteeship.
QThose were then the actual and officially given reasons, and now you have got to the point where you can tell the court about your private reasons which you had no reason to state publicly?
AOne further essential factor, not to say the most essential factor was due to the facts connected with the Reichswerke. The Reichswerke had the only big smelting works in Bavaria, the Luidpoldhuette which was a rather large enterprise. In the East, that is in Linz, they had started to build large smelting works near Maxhuette which belonged to us, and were now about to take the authoritative position and gain a firm foothold in the west too, and particularly in Lorraine. Maxhuette which was closely connected with us would in view of these facts have run the danger of getting between the upper and the lower millstones of the Reichswerke, threatened from the East by Linz and from the West by the Lorraine works, of which one had to assume that for the larger part, at any rate, they would come under the management of the Reichswerke. It seemed best to us therefore from our point of view that we should gain a foothold in Lorraine ourselves, and from there compete with the Reichswerke about questions of sales, production and so on. You must not forget that the Lorraine plants concerned before 1918 sold a part of their production in Southern Germany, and now we had once more to expect that this state of affairs would come into existence again. After 1918 the import of Lorraine steel products to Germany had a quota.
QIf the Reichswerke had further increased their power in this way would there not have been a danger that Harpen would once again have to give away some hard coal?
AThis possibility vaguely existed, and my ideas on this subject are shown by the letter, which in July 1940 I wrote from Marienbad to the then general manager of Harpen, Herr Buskuehl, which letter has been read here. I said here that if the Reichswerke, apart from the extension in Salzgitter, central Germany, and in Linz, in Austria, also have a large part of the Lorraine industry under their wing, then there will be an increased demand for coal and coke by the Reichswerke and then we must expect that the problem will once again be discussed to the effect that the Reichswerke have not enoughtcoal available.
Means and ways must again be found to remove this situation, and we had to fear that we would once more he faced by this issue. That was one of the reasons why we took the standpoint that it would be better for us to find a consumer of our own, a new large scale coal consumer, and so we would be in a similar position to the other big Ruhr concerns which are in a position by pointing out the large amounts of coal required by their own smelting works to refuse the demands of the Reichswerke for coal more easily, to refuse them with better reason than was the case with us.
QDid you in addition have an interest in the acquisition of the industrial works, steel works from French ownership? Were you, apart from the Rombach affair, offered any such enterprises?
AYes.
QThe latter, they were offered to you?
A:Yes. Even before the war we negotiated with the firm of De Wendel mentioned here for some time with the idea of taking over a mine which the firm of DeWindel owned in Westphalia. The firm De Wendel had ore and smelting works in Lorrraine. They had coal in Holland and in the Ruhr. They possessed two mines in the Ruhr. They wanted to sell one of these two mines in the Ruhr. Since 1938 we had continuous negotiations with them. I, myself, even as late as 1939 negotiated with the De Wendel family, in particular, with Humbert De Wendel in Paris. There were also negotiations in Amsterdam. In August of 1939, the negotiations were intended to be continued in Lorraine. They could no longer take place because of the danger of war. During the war, Herr De Wendel had me informed through a director of the Dresdner Bank whom I knew, Dr. Bilder, that he was still willing to sell this mine to us. He wanted to know my opinion on this new offer. I had Herr Do Wendel informed that I did not intend to carry on with this project during the war although, as I said, in peacetime, we had discussions repeatedly. Even as late as August of 1939, a week before war broke out, we intended to carry on.
Q:One Interpolation. The family of De Wendel and this Monsieur Humbert De Wendel surely were in the German occupied zone of France, were they not?
A:They had their castles in Lorraine, but they also had an appartment in Paris. Sometimes they lived here, sometimes there; but their main residence was in Lorraine.
Q:Excuse me, but Paris was also occupied?
A:Yes, yes.
Q:Excuse me, I interupted you, but it did not seem without importance.
Will you tell the Tribunal the reasons why you did not do something in wartime that you might have done in peacetime at a time when German troops occupied Paris?
A:During the war we did not carry out incorporations outside the frontiers of Germany in any case. Inside Germany as I said yesterday, we did. But to get back to the offers from French owners in autumn of 1940 -
Q:Excuse me, Herr Flick. You have not answered my question. Perhaps you did not answer it on purpose. Perhaps you did not answer it on purpose. Perhaps you do not intend to answer it because you are of the opinion that the motive is obvious and you do not particularly want to put yourself in a too moral light. What I asked was why did you fail to do something in wartime when the position was far more satisfactory from a military and general point of view, something that you were wellprepared to do in peacetime? As I say, I won't take it amiss if you do not want to reply, if you just like to reply: "The reasons are obvious."
A:I have already said we did not want to do it as a matter of principle. The reason is obvious. You asked me about the further offers from French sources. We were offered the majority of the BergHuette in Teschen. This was a very important plant having its own furnaces, steel works, and rolling mills. The majority was still in the hands of the well-known family of Schneider-Creuzot. It was offered to us by the trusteeship office East (Treuhandstelle Ost). This was suggested by the Ministry of Economy too. It was situated in a territory that the Germans occupied next to Upper Silesia. It was administrated by German hands. We were also offered in 1941 and 1942 the Bismarck Huette and the Laurahuette in former Upper-Silesia.
In all these eases, we did not follow up the the offer.
THE PRESIDENT:Dr. Dix, can you not present these business plans more briefly? Are all these details really necessary?
DR. DIX:I think they are, Mr. President. The defendant is accused of spoliation.
THE PRESIDENT:Yes.
DR. DIX:It seems relevant to me for him to explain that he avoided all opportunities to take over valuable works from enemy propery while these plants stood under the German bayonet.
THE PRESIDENT:I was not questioning the relevancy, but merely the detail with which this is gone into.
DR. DIX:The question is finished in any case and I will take note of the President's suggestion.
Q:We now come to the course of the conclusion of the trusteeship agreement itself. You know the affidavit of General von-Hannecken who quite unequivocally states his opinion to the effect that you wanted this trusteeship of Rombach, and that you were granted it more or less, and that you managed to charm Hermann Goering while he was tipsy in the course of his birthday celebration. Would you, therefore, with reference to the course of these discussions with government agencies tell us whether and on what condition you were to obtain the trusteeship of Rombach?
A:The negotiations concerning the trusteeship were in the first place conducted with the Reich Ministry of Economy, and essentially with General von Hannecken himself.
Burkhart repeatedly, perhaps six or seven or eight times negotiated with him, and I took part at a few of these discussions too.
The Ministry of Economy on its part demanded expert statements from the economic group from the Office for Iron and Steel. We have seen that the Office for Iron and Steel was responsible for granting trust trusteeship to our group. It had expressed itself in favor of it. This, incidentally, is a document which we saw here for the first time. I also assume that the economic group expressed itself similarly. One day Funk asked men when I happened to meet him, in what plant in Lorraine we were interested. The fact that we were to get the trusteeship of one was settled from the outset. General von Hannecken's statement which has just been mentioned by Dr. Dix is all the more interesting to me since the Ministry of Economy at the beginning of October 1940 made a suggestion about the Lorrain trusteeships to Goering in which we, our group were suggested to take over Rombach. The expert of the Economy Ministry who made the suggestion was General von Hannecken. And at that stage in my opinion, we scarcely had a competitor. The firm of Spaeter could not be considered and Roechling, at this stage, had quite different plans. He was aiming at De Wendel and Havendingen, and when both of these failed, he too began to feel the power of the Reichswerke because these two enterprises were given to the Reichswerke. He, at thelast stage of these developments, when in principle the Rombach case had already beendecided in favor of Mittelstahl, started to interest himself in Rombach on his own behalf. At the first stage, in my opinion, this was not the case at all, but be it as it may, it is not connectednwith any conversation on the occasion of Goering's birthday. In December, I talked to Goering about the Rombach Case. At that time, the matter of Roechling's interest was already in the air.
It was briefly discussed. On that day, I also discussed other questions with him as Gritzbach, I believe, stated here because I wanted to talk to him about the expansion policy of the Reichswerke in general. But on this day, we or that is I, did not get any decision from Goering, neither positive nor negative. In February, 1941, or March, the general decision about the Lorraine trusteeship and the concerns in question was settled in a circular of the Economic Group which said that the Economic Group had received information to this effect from the Ministry of Economy. That is all, after this December conversation with Goering, I heard about this matter. I did not talk any more to Goering. I had no direct reply from Goering and no further information.
DR. DIX:Mr. President; I think this is the right moment to stop with Hermann Goering's birthday celebration.
THE PRESIDENT:Recess for 15 minutes.
1o July-A-GJ-20-1-Murtha-(Hilsdesheimer) THE MARSHAL:
The Tribunal is again in session.
BY DR. DIX:
Q We arrived at the negotiations which led to the conclus ions of the trustee contract, and you said, Herr Flick, that during the latter part of these negotiations Roechling came in as a competi tor with a not to friendly letter you read.
I don't want to cause you to trouble the Tribunal with any unnecessary discussions between you and Herr Roechling, and I would ask you to disregard these personal matters as far as possible.
But I would like you to explain the factual importance and to stress that you and not Roechling received the trusteeship of Rombach.
A. The firm Roechling had its own steel production of 600,000 tons per year.
Our group disposed of steel production of approximately 2,000,000 tons annually. During the time of the pending decision about the question, whether Rombach should go to Roechling or to Flick, the firm of Roechling had already received trusteeships of Laurahuette in the East with 400,000 tons of steel per year; secondly, it had received the former Karlshuette in the West, a former Roechling enterprise which had come to France in 1918, with 300,000 tons of steel per year.
The firm Roechling had therefore trusteeships of 700,000 tons. The plants of which they had trusteeships contained more than the firm of Roechling itself, and if the firm Roechling had received Rombach and if I estimate Rombach at 600,000 tons per a year, Herr Laurent estimated 1,000,000 tons, I say only 600,000, through a decision Rombach would have come to Roechling as a third trusteeship and the situation that the firm of Roechling would have received the trusteeship of 300 plus 400, plus 600 thousand tons, that is 1.3 million tons of steel a year, its own production being 600,000 tons.
And we as the alleged second largest enterprise with 2,000,000 tons per year would have had no trusteeship whatsoever, and the 600,000 tons of Rombach's would have made a difference of 20 per cent of our production to us, that is 600,000 to 2 million, whereas with Roechling it was more than 200 per cent.
I believe to have dealt with the factual view of the decision. I repeat: All authorities who dealt with it before Goering that is the Office for Iron and Steel, the Economic Group, the Ministry of Economics had all voted that Rombach should go to the Flick trusteeship and not to Roechling.
Q.Was the management of the plant, in the interest of the French owners or was it contrary to their interests?
A.One has to imagine that a smelting plant consisting of steel only, a smelting plant which does not produce and is in an open position, exposed to climatic influence goes through a process of deteriorating and arrives at a much worse condition than when the work actually produces and is maintained. It is as if a house is empty; there are no windows and no doors, no heating. If this is so, it is in a very much worse condition after two years than if it were lived in and would be kept by its inhabitants. That I have to say. A smelting plant which does not produce and which is exposed to all kinds of climatic conditions and which is exposed to wind and weather, as every expert will say, that a plant after a few years of non-production is in a very much worse condition, and it is difficult to start production with it, than if it had been producing all the time; there can be no differences of opinion between experts.
JUDGE RICHMAN:Did you want this plant because you wanted to help the French owners or did you want it because you wanted to help yourself?
THE WITNESS:The point of view I have explained. We did not take over the trusteeship in order to help and support the French owners. I didn't want to say that, but the fact that we actually started producing was very much better for the French owners than if it had not been producing. They could not manage it at all because no French staff was there any longer and because the coal supply from the French side was impossible. We supplied half of the coke from our Westphalian mines.
Q. (By Dr. Dix) And what was your attitude towards the substance and the profits which came from the capital stock? Did you invest; did you use the profits; did you turn over the profits; or did you put them back into the plant? I think you understand what I mean.
A.We did everything in our power to start the plant. We managed it as our own enterprise. I think that during the time of our trusteeship, on investment account, in the shape of supplies and machines which we supplied, we spent amounts which I estimate about five millions, it could have been even seven or eight millions. Apart from that we repaired the plant. We did everything that was possible. We repaired the buildings. We maintained the flood control. In the steel industry an amount of about five marks per ton of finished product is estimated which is necessary for general current upkeep and maintenance of the plant, repairs and so on. That would have been for the whole time of our trusteeship six to seven million marks. We transplanted a rolling mill in one of our own plants in Germany, which was dispensable to Rombach and we established a new plate iron rolling mill in Rombach. Everybody who saw the changes in Rombach, will have to admit that we did not only maintain the plant but enlarged it in an exemplary manner. I think we can prove it by statistics that within the three and a half years of our trusteeship we invested more in the plant than their owners ever did within ten years.
I don't think that I am saying too much if I say that this can be proved by looking into the books and we did not draw a penny from the plant. We did not even pay dividends and no screw and no nail was taken out, but twelve, perhaps fifteen million marks were spent by us for the upkeep and for building up the plant. We took care of it and we maintained it as if it had been our own enterprise.
THE PRESIDENT:Witness, the trustee, however, would have a better chance, or at least it would seem so, to ultimately acquire the property than if the company was not the trustee?
THE WITNESS:Do you mean to say that -
THE PRESIDENT:Yes, the fact that you were a trustee, you had a better chance to have the ultimate ownership given to you than if you were not a trustee?
THE WITNESS:Yes, we had no legal claims but a moral claim we had. There is no doubt about this, and as a trustee you could say here, "You can convince yourself, I have kept and maintained the plant in a very good manner. I have proved that I am able to manage a plant." Such a man in general would have been the first to be considered, if there was not a special reason against it. That is he would first be taken into donsideration from a moral aspect.
THE PRESIDENT:That you had in your mind probably in wishing to get the trusteeship?
WITNESS:You mean the idea of taking it over eventually, yes, the intention of acquiring it basically did exist, assuming the constellation of the Reichs Works, the Reichswerke, providing that Lorraine would become German territory, the idea of acquisition only concerned us during the first stage. That was in the summer of 1940 when the government told us via the economic group that a peace treaty between France and Germany was imminent and industry should make suggestions for the coming peace treaty, and assuming and providing for the peace treaty and the constellation with the Reichswerke which I have mentioned; we would have been interested in the acquisition after the peace was concluded. During the war we would not have purchased it.
Q. (By Dr. Dix) Now we have this affidavit by the general manager Laurent. If we read it without paying any particular attention to it it creates quite a different impression from the impression that you are giving the Tribunal just now, referring to the maintenance and improving of the substance which you were talking about; Laurent was asked for by me for possible cross examination, but I believe that it will be just as difficult for us to have him here as Lord Strath Allan, Murnane and so on, Rudolf Hahn, and I think that I cannot possibly force him to explain his attitude as to his own affidavit, but perhaps we -
THE PRESIDENT:Where is he?
DR. DIX:He is in France, surely.
THE PRESIDENT:Well, you could at least ask him to come.
DR. DIX:Well -
THE PRESIDENT:Whether he will or not is another question.
DR. DIX:At his own expense? I beg your pardon, my esteemed colleague, Dr. Kranzbuehler, tells me just now that he wrote a letter to Mr. Laurent through the Secretary General and asked him to come here. Perhaps he is coming. But for my following question we do not need his presence.
Q. (By Dr. Dix) It does not become clear from the affidavit of Herr Laurent what he calls the damage which he estimates, the damage through the German occupation. If you say, Herr Flick, that you improved the plant then you have -- or at least let me ask you directly, could you also improve the mining part, that is the iron ore plant?
A.No, as I have already mentioned with the mining we had nothing to do. The mining of the whole of Lorraine during the whole time of the German occupation was separated from the proper plants and it came under a German general commissar, and as far as that goes the damages which Laurent talks about, are not only questions of mines but also loss of substance which are matters which concern us. That is also a question whether it was before our trusteeship and also a matter of war damages through bombing, et cetera.