"(a) The inter-allied Control Commissions

"(b) Defense measures against the fulfillment of the Versailles Treaty and independent arming behind the back of the Reich Government and the legislative bodies.

"1. Dispersal of artillery gear and munitions, of hand and automatic weapons.

"2. Limitation of demolition work in Heligoland.

"3. Attempt to strengthen personnel of the navy, from 1923. "4. The activities of Captain Lohmann (founding of numerous associations at home and abroad, participations, formation of "sports" unions and clubs, interesting the film industry in naval recruitment).

"5. Preparation for re-establishing the German U-boat arm since 1920. (Projects and deliveries for Japan, Holland, Turkey, Argentine and Finland. Torpedo testing.)

"6. Participation in the preparation for building of the Luftwaffe (preservation of aerodromes, aircraft construction, teaching of courses, instruction of midshipmen in anti-air raid defense, training of pilots).

"7. Attempt to strengthen the mining branch.

Part C (1925-1932. Replacement of Tonnage) Chapter IV. "The Navy, The Versailles Treaty, Foreign Countries. "(a) The activities of the Inter-allied Control Commissions (up to 31.1.27; discontinuance of the activity of the Naval Peace Commission)

"Independent armament measures behind the back of the Reich Government and legislative bodies up to the Lohmann

case.

"1. The activities of Captain Lohmann (continuation), their significance as a foundation for the rapid reconstruction work from 1935.

"2. Preparation for the re-strengthening of the German Uboat arm from 1925 (continuation), the merit of Lohmann in connection with the preparation for rapid construction in 1925, relationship to Spain, Argentine, Turkey: the first post war U-boat construction of the German Navy in Spain since 1927; 250 ton specimen in Finland, preparation for rapid assembly; electric torpedo; training of U-boat personnel abroad in Spain and Finland. Formation of U-boat school in 1932 disguised as an anti-U-boat school.

"3. Participation in the preparation for the reconstruction of the Luftwaffe (continuation). Preparations for a Naval Air Arm, Finance Aircraft Company Sevra, later Luftdienst

CMRH; Naval Flying School Warnemunde; Air Station List, training of sea cadet candidates, Military tactical questions "Air Defense Journeys", technical development, experimental station planning, trials, flying boat development DOX etc., catapult aircraft, arming, engines ground organization, aircraft torpedoes, the Deutschland Flight 1925 and the Seaplane Race 1926.

"4. Economic re-armament ("the Tebeg"-Technical Advice and Supply Company as a disguished Naval Office abroad for investigating the position of raw materials for industrial capacity and other War economic questions.)

"5. Various measures.
secret investigations.)

(The NV Aerogeodetic Company

"(c) Planned armament work with the tacit approval of the Reich government, but behind the backs of the legislative bodies (1928 to the taking over of power.)

"1. The effect of the Lohmann case on the secret preparations; winding up of works which could not be advocated; resumption and carrying on of other work.

"2. Finance question. ("Black Funds" and the Special Budget).

"3. The Labor Committee and its objectives

"(d) The Question of Marine Attaches (The continuation under disguise; open re-appointment 1932-1933).

"(e) The question of Disarmament of the Fleet abroad and in Germany (The Geneva Disarmament Conference 1927; the London Naval Treaty of 1930; the Anglo-French-Italian Agreement 1931. The League of Nations Disarmament Conference 1932).

"Part D (1933-1939. The Germany Navy during the Military Freedom Period)

"I. National Socialism and the question of the Fleet and of prestige at sea.

"II. Incorporation of the navy in the National Socialist State."

"III. The Re-armament of the Navy under the Direction of the Reich Government in a Disguised Way." (C-17)

The policy development of the navy is also reflected from the financial side. The planned organization of the navy budget for armament measures was based on a co-ordination of military developments and political objectives. Military political development was accelerated after the withdrawal from the League of Nations.

(C-17)

A captured document, entitled "Chef der Marineleitung, Berlin, 12 May 1934," and marked "Secret Commando Matter," discusses the "Armament Plan (A.P.) for the 3rd Armament Phase." (C-153). This document, which bears the facsimile signature of Raeder at the end, speaks of war tasks, war and operational plans, armament target, etc., and shows that it was distributed to many of the High Command of the Navy. Dated 12 May 1934, it shows that a primary objective was readiness for a war without any alert period. The following are pertinent extracts:

* "The planned organization of armament measures is necessary for the realization of the target; this again requires a coordinated and planned expenditure in peace time. This organization of financial measures over a number of years according to the military viewpoint is found in the armament program and provides

"a. for the military leaders a sound basis for their operational considerations and

"b. for the political leaders a clear picture of what may be achieved with the military means available at a given time."

"All theoretical and practical A-preparations are to be drawn up with a primary view to readiness for a war without any alert period." (C-153)

The conspiratorial nature of these Nazi plans and preparations long before the outbreak of hostilities is illustrated in many other ways. Thus, in 1934, Hitler instructed Raeder to keep secret the U-Boat construction program; also the actual displacement and speed of certain ships. Work on U-Boats had been going on, as already indicated, in Holland and Spain. The Nazi theory was ingenious in that respect. The Versailles Treaty forbade re-arming by the Germans in Germany, but the Nazis said it did not forbid them to re-arm in Holland, Spain, and Finland.

Secrecy was equally important then because of the pending naval negotiations with England. The subject was discussed in a conversation between Raeder and Adolf Hitler in June 1934. The record of that conversation (C-189) is not signed by Raeder, but in an interrogation on 8 November 1945, Raeder admitted that (C-189) was a record of this conversation, and that it was in his handwriting, though he did not sign his name at the end. The report is headed, "Conversation with the Fuehrer in June 1934 on the occasion of the resignation of the Commanding Officer of the Karlsruhe." It reads:

"1. Report by the C-in-C Navy concerning displacement of D. and E. (defensive weapons).

"Fuehrer's instructions: No mention must be made of a displacement of 25-26,000 tons, but only of improved 10,000-ton (ships). Also, the speed over 26 nautical miles may be stated. "2. C-in-C Navy expresses the opinion that later on the Fleet must anyhow be developed to oppose England, that therefore from 1936 onwards, the large ships must be armed with 35 c.m. guns (Like the King George Class).

"3. The Fuehrer demands to keep the construction of the U-Boats completely secret. Plebiscite also in consideration of the Saar." (C-189)

In order to continue the increase in navy strength, as planned, more funds were needed than the navy had available. Hitler therefore proposed to put funds of the Labor Front at the disposal of the navy. This appears from another Raeder memorandum of a conversation between Raeder with Hitler, on 2 November 1934 (C-190). This report, again, is not signed, but it was found in Raeder's personal file and seems clearly his memorandum. It is headed: "Conversation with the Fuehrer on 2.11.34 at the time of the announcement by the Commanding Officer of the "Emden". It reads:

"1. When I mentioned that the total funds to be made available for the armed forces for 1935 would presumably represent only a fraction of the required sum, and that therefore it was possible that the navy might be hindered in its plans, he replied that he did not think the funds would be greatly decreased. He considered it necessary that the navy be speedily increased by 1938 with the deadlines mentioned. In case of need, he will get Dr. Ley to put 120-150 million from the Labor Front at the disposal of the navy, as the money would still benefit the workers. Later in a conversation with Minister Goering and myself, he went on to say that he considered it vital that the navy be increased as planned, as no war could be carried on if the navy was not able to safeguard the ore imports from Scandinavia.

"2. Then, when I mentioned that it would be desirable to have six U-Boats assembled at the time of the critical situation in the first quarter of 1935, he stated that he would keep this point in mind, and tell me when the situation demanded that the assembling should commence." (C-190)

Then there is an asterisk and a note at the bottom:

"The order was not sent out. The first boats were launched in the middle of June 35 according to plan." (C-190) The development of the armament industry by the use of foreign markets was a program encouraged by the navy, so that this

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industry would be able to supply the requirements of the navy in case of need. A directive of Raeder, dated 31 January 1933, and classified "Secret Commando Matter," requires German industry to support the armament of the navy (C-29). It provides:

"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 as-
similation 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, mili-
tarily and economically, the growing demands made of it by
limiting the deliveries to our own armed forces. Its capac-
ity 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 down by
restrictions. Britain, France, North America, Japan, and
especially Italy are making supreme efforts to ensure mar-
kets for their armament industries. The use of their diplo-
matic 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 restric-
tions imposed on us have succeeded, that the German Navy