Translation of document C-29

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 down 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.

                                                              [Page 831]

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.

f. 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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