27 Nov. 45

ical situation in the first quarter of 1935,"--that's the following year, foreseeing--"he stated that he would keep this point in mind, and tell me when the situation demanded that the assembling should commence."

Then, there is an apostrophe 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."

The development of the armament industry by the use of foreign markets was a program encouraged by the Navy, so that this industry would be able to supply the requirements of the Navy in case of need.

We have an original German document, again headed "Geheime Kommandosache" (secret commando matter)--a directive of 31 January 1933 by the Defendant Raeder for the German industry to support the armament of the Navy.

It is identified in our series as C-29. I offer it in evidence as Exhibit USA-46:

"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 Armed Forces. Its capacity must therefore be increased by the delivery of supplies to foreign countries over and above our own requirements.