Hjalmar Schacht
Encyclopedia
Dr. Hjalmar Horace Greeley Schacht (22 January 1877 – 3 June 1970) was a German
economist
, banker, liberal politician, and co-founder of the German Democratic Party. He served as the Currency Commissioner and President of the Reichsbank
under the Weimar Republic
. He was a fierce critic of his country's post-World War I
reparation obligations.
He became a supporter of Adolf Hitler
and the Nazi Party, and served in Hitler's government as President of the Reichsbank and Minister of Economics. As such, Schacht helped implement Hitler's policies of redevelopment, reindustrialization, and rearmament
.
He was forced out of the government by disagreements with Hitler and other prominent Nazis in December 1937, and had no role during World War II
. He became a fringe member of the German Resistance to Hitler
and was imprisoned by the Nazis after the 20 July plot. After the war, he was tried at Nuremberg
and acquitted.
In 1953, he founded his own bank, and advised developing countries on economic development.
, Schleswig-Holstein
, Prussia
, German Empire
(now in Denmark
) to William Leonhard Ludwig Maximillian Schacht and baroness Constanze Justine Sophie von Eggers, a native of Denmark. His parents, who had spent years in the United States
, originally decided on the name Horace Greeley Schacht, in honor of the American journalist Horace Greeley
. However, they yielded to the insistence of the Schacht family grandmother, who firmly believed the child's given name should be Danish. Schacht studied medicine
, philology
and political science
before earning a doctorate in economics in 1899 — his thesis was on mercantilism
.
He joined the Dresdner Bank
in 1903, where he became deputy director from 1908 to 1915. He was then a member of the committee of direction of the German National Bank for the next seven years, until 1922, and after its merger with the Darmstädter und Nationalbank (Danatbank), a member of the Danatbank's committee of direction. In 1905, while on a business trip to the United States with board members of the Dresdner Bank, Schacht met the famous American banker J. P. Morgan
, as well as U.S. President Theodore Roosevelt
.
Schacht was a freemason, having joined the lodge Urania zur Unsterblichkeit in 1908.
During World War I
, Schacht was assigned to the staff of General von Lumm, the Banking Commissioner for Occupied Belgium
, to organize the financing of Germany's purchases in Belgium. He was summarily dismissed by General von Lumm when it was discovered that he had used his previous employer, the Dresdner Bank, to channel the note remittances for nearly 500 million francs of Belgian national bonds destined to pay for the requisitions.
After Schacht's dismissal from the public service, he had a brief stint at the Dresdner Bank, and then various positions at other banks. In 1923, Schacht applied and was rejected for the position of head of the Reichsbank
, largely as a result of his dismissal from von Lumm's service.
Despite the small blemish on his record, in November 1923, Schacht became currency commissioner for the Weimar Republic
and participated in the introduction of the Rentenmark, a new currency the value of which was based on a mortgage on all of the properties in Germany. After his economic policies helped reduce German inflation
and stabilize the German mark (Helferich Plan), Schacht was appointed president of the Reichsbank at the requests of President Friedrich Ebert
and Chancellor Gustav Stresemann
.
In 1926, Schacht provided funds for the formation of IG Farben
. He collaborated with other prominent economists to form the 1929 Young Plan
to modify the way that war reparations
were paid after Germany's economy was destabilizing under the Dawes Plan
. In December 1929, he caused the fall of the Finance Minister Rudolf Hilferding
by imposing upon the government his conditions for obtaining a loan. After modifications by Hermann Müller
's government to the Young Plan during the Second Conference of The Hague (January 1930), he resigned as Reichsbank President on 7 March 1930. During 1930, Schacht campaigned against the war reparations requirement in the United States.
(NSDAP), to which he became closer between 1930 and 1932.
Though never a member of the NSDAP, Schacht helped to raise funds for the party after meeting with Adolf Hitler. Close for a short time to Heinrich Brüning
's government, Schacht shifted to the right by entering the Harzburg Front
in October 1931.
Schacht's disillusionment with the existing Weimar government did not indicate a particular shift in his overall philosophy, but rather arose primarily out of two issues: first, his objection to the inclusion of Socialist Party elements in the government, and the effect of their various construction and make-work projects on public expenditures and borrowings (and the consequent undermining of the government's anti-inflation efforts); second, on his fundamentally unwavering desire to see Germany retake its place on the international stage, and his recognition that "as the powers became more involved in their own economic problems in 1931 and 1932 ... a strong government based on a broad national movement could use the existing conditions to regain Germany's sovereignty and equality as a world power." Schacht was convinced that if the German government were ever to commence a wholesale reindustrialization and rearmament in spite of the restrictions imposed by Germany's treaty obligations, it would have to be during a period lacking clear international consensus among the Great Powers.
After the July 1932 elections
, in which the NSDAP got more than a third of the seats, Schacht and Wilhelm Kepler organized a petition of industrial leaders requesting that President Hindenburg
appoint Hitler as Chancellor. After Hitler took power in January 1933, Schacht was re-appointed Reichsbank President on 17 March.
In August 1934 Hitler appointed Schacht as his Minister of Economics. Schacht supported public works
programs, most notably the construction of autobahnen (highways) to attempt to alleviate unemployment
– policies which had been instituted in Germany by von Schleicher
's government in late 1932, and had in turn influenced Roosevelt's policies
. He also introduced the 'New Plan', Germany's attempt to achieve economic "autarky
", in September 1934. Germany had accrued a massive foreign currency deficit during the Great Depression
, which continued into the early years of the Third Reich. Schacht negotiated several trade agreements with countries in South America and southeastern Europe, under which Germany would continue to receive raw materials, but would pay in Reichsmarks. This ensured that the deficit would not get any worse, while allowing the German government to deal with the gap which had already developed. Schacht also found an innovative solution to the problem of the government deficit by using mefo bills
. He was appointed General Plenipotentiary
for the War Economy in May 1934 and was awarded honorary membership in the NSDAP and the Golden Swastika in January 1937.
Schacht disagreed with what he called "unlawful activities" against Germany's Jewish minority and in August 1935 made a speech denouncing Julius Streicher
and Streicher's writing in Der Stürmer
.
During the economic crisis of 1935-36, Schacht, together with the Price Commissioner Dr. Carl Friedrich Goerdeler
, helped lead the "free-market" faction in the German government. They urged Hitler to reduce military spending, turn away from autarkic and protectionist policies, and reduce state control in the economy. Schacht and Goerdeler were opposed by a faction centering around Hermann Göring
.
Göring was appointed "Plenipotentiary for the Four Year Plan
" in 1936, with broad powers that conflicted with Schacht's authority. Schacht objected to continued high military spending, which he believed would cause inflation, thus coming into conflict with Hitler and Göring.
In 1937 Schacht met with Chinese Finance Minister Dr. H. H. Kung
. Schacht told him that "German-Chinese friendship stemmed in good part from the hard struggle of both for independence." Kung said, "China considers Germany its best friend... I hope and wish that Germany will participate in supporting the further development of China, the opening up of its sources of raw materials, the upbuilding of its industries and means of transportation."
In November 1937 he resigned as Minister of Economics and General Plenipotentiary at Göring's request. He remained President of the Reichsbank until Hitler dismissed him in January 1939. After this Schacht held the empty title of Minister without Portfolio
, and received the same salary, until he was fully dismissed in January 1943.
against Hitler if he started a war against Czechoslovakia
. Goerdeler, his colleague in 1935-36, was the civilian leader of the Resistance. Schacht talked frequently with Hans Gisevius
, another Resistance figure; when Resistance organizer Theodor Strünck
's house (a frequent meeting place) was bombed out, Schacht allowed Strünck and his wife to live in a villa he owned. However, after 1941, Schacht took no active part in the Resistance.
Still, at Schacht’s denazification trial (subsequent to his acquittal at Nuremberg) it was declared by a judge that “None of the civilians in the resistance did more or could have done more than Schacht actually did.”
After the attempt on Hitler's life on 20 July 1944, Schacht was arrested on 23 July. He was sent to Ravensbrück, then to Flossenbürg
, and finally to Dachau. In late April 1945 he and about 140 other prominent inmates of Dachau were transferred to Tyrol
by the SS
, which left them there. They were liberated by the Fifth U.S. Army on 5 May 1945 in Niederdorf, Dolomites
.
for "crimes against peace" (planning and waging wars of aggression), but not war crimes or crimes against humanity.
Schacht pled not guilty to these charges. He cited in his defense that he had lost all official power before the war even began, that he had been in contact with Resistance leaders like Hans Gisevius
throughout the war, and that he had been arrested and imprisoned in a concentration camp himself.
His defenders argued that he was just a patriot, trying to make the German economy strong. Furthermore, Schacht was not a member of the NSDAP and shared very little of their ideology. The British judges favored acquittal, while the Soviet
judges wanted to convict. The British got their way and Schacht was acquitted.
In 1953, Schacht started a bank, Deutsche Außenhandelsbank Schacht & Co., which he led until 1963. He also gave advice on economics and finance to heads of state of developing countries, in particular the Non-Aligned
countries.
Indirectly resulting from his founding of the bank, Schacht was the plaintiff in a foundational case in German law on the "general right of personality". A magazine published an article criticizing Schacht, containing several incorrect statements. Schacht first requested that the magazine publish a correction, and when the magazine refused, sued the publisher for violation of his personality rights. The district court found the publisher both civilly and criminally liable; on appeal, the appellate court reversed the criminal conviction, but found that the publisher had violated Schecht's general right of personality.
Schacht died in Munich
, Germany, on 3 June 1970.
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
economist
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, banker, liberal politician, and co-founder of the German Democratic Party. He served as the Currency Commissioner and President of the Reichsbank
Reichsbank
The Reichsbank was the central bank of Germany from 1876 until 1945. It was founded on 1 January 1876 . The Reichsbank was a privately owned central bank of Prussia, under close control by the Reich government. Its first president was Hermann von Dechend...
under the Weimar Republic
Weimar Republic
The Weimar Republic is the name given by historians to the parliamentary republic established in 1919 in Germany to replace the imperial form of government...
. He was a fierce critic of his country's post-World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
reparation obligations.
He became a supporter of Adolf Hitler
Adolf Hitler
Adolf Hitler was an Austrian-born German politician and the leader of the National Socialist German Workers Party , commonly referred to as the Nazi Party). He was Chancellor of Germany from 1933 to 1945, and head of state from 1934 to 1945...
and the Nazi Party, and served in Hitler's government as President of the Reichsbank and Minister of Economics. As such, Schacht helped implement Hitler's policies of redevelopment, reindustrialization, and rearmament
German re-armament
The German re-armament was a massive effort led by the NSDAP in the early 1930s in violation of the Treaty of Versailles.During its struggle for power the National Socialist party promised to recover Germany's lost national pride...
.
He was forced out of the government by disagreements with Hitler and other prominent Nazis in December 1937, and had no role during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. He became a fringe member of the German Resistance to Hitler
German Resistance
The German resistance was the opposition by individuals and groups in Germany to Adolf Hitler or the National Socialist regime between 1933 and 1945. Some of these engaged in active plans to remove Adolf Hitler from power and overthrow his regime...
and was imprisoned by the Nazis after the 20 July plot. After the war, he was tried at Nuremberg
Nuremberg Trials
The Nuremberg Trials were a series of military tribunals, held by the victorious Allied forces of World War II, most notable for the prosecution of prominent members of the political, military, and economic leadership of the defeated Nazi Germany....
and acquitted.
In 1953, he founded his own bank, and advised developing countries on economic development.
Education and rise to President of the Reichsbank
Schacht was born in TingleffTinglev
Tinglev is a town with a population of 2,816 in Aabenraa municipality in Region of Southern Denmark on the Jutland peninsula in south Denmark....
, Schleswig-Holstein
Province of Schleswig-Holstein
The Province of Schleswig-Holstein was a province of the Kingdom of Prussia and the Free State of Prussia from 1868 to 1946. It was created from the Duchies of Schleswig and Holstein, which had been conquered by Prussia and the Austrian Empire from Denmark in the Second War of Schleswig in 1864...
, Prussia
Kingdom of Prussia
The Kingdom of Prussia was a German kingdom from 1701 to 1918. Until the defeat of Germany in World War I, it comprised almost two-thirds of the area of the German Empire...
, German Empire
German Empire
The German Empire refers to Germany during the "Second Reich" period from the unification of Germany and proclamation of Wilhelm I as German Emperor on 18 January 1871, to 1918, when it became a federal republic after defeat in World War I and the abdication of the Emperor, Wilhelm II.The German...
(now in Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
) to William Leonhard Ludwig Maximillian Schacht and baroness Constanze Justine Sophie von Eggers, a native of Denmark. His parents, who had spent years in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, originally decided on the name Horace Greeley Schacht, in honor of the American journalist Horace Greeley
Horace Greeley
Horace Greeley was an American newspaper editor, a founder of the Liberal Republican Party, a reformer, a politician, and an outspoken opponent of slavery...
. However, they yielded to the insistence of the Schacht family grandmother, who firmly believed the child's given name should be Danish. Schacht studied medicine
Medicine
Medicine is the science and art of healing. It encompasses a variety of health care practices evolved to maintain and restore health by the prevention and treatment of illness....
, philology
Philology
Philology is the study of language in written historical sources; it is a combination of literary studies, history and linguistics.Classical philology is the philology of Greek and Classical Latin...
and political science
Political science
Political Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...
before earning a doctorate in economics in 1899 — his thesis was on mercantilism
Mercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...
.
He joined the Dresdner Bank
Dresdner Bank
Dresdner Bank AG was one of Germany's largest banking corporations and was based in Frankfurt. It was acquired by competitor Commerzbank in December 2009.- 19th century :...
in 1903, where he became deputy director from 1908 to 1915. He was then a member of the committee of direction of the German National Bank for the next seven years, until 1922, and after its merger with the Darmstädter und Nationalbank (Danatbank), a member of the Danatbank's committee of direction. In 1905, while on a business trip to the United States with board members of the Dresdner Bank, Schacht met the famous American banker J. P. Morgan
J. P. Morgan
John Pierpont Morgan was an American financier, banker and art collector who dominated corporate finance and industrial consolidation during his time. In 1892 Morgan arranged the merger of Edison General Electric and Thomson-Houston Electric Company to form General Electric...
, as well as U.S. President Theodore Roosevelt
Theodore Roosevelt
Theodore "Teddy" Roosevelt was the 26th President of the United States . He is noted for his exuberant personality, range of interests and achievements, and his leadership of the Progressive Movement, as well as his "cowboy" persona and robust masculinity...
.
Schacht was a freemason, having joined the lodge Urania zur Unsterblichkeit in 1908.
During World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, Schacht was assigned to the staff of General von Lumm, the Banking Commissioner for Occupied Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
, to organize the financing of Germany's purchases in Belgium. He was summarily dismissed by General von Lumm when it was discovered that he had used his previous employer, the Dresdner Bank, to channel the note remittances for nearly 500 million francs of Belgian national bonds destined to pay for the requisitions.
After Schacht's dismissal from the public service, he had a brief stint at the Dresdner Bank, and then various positions at other banks. In 1923, Schacht applied and was rejected for the position of head of the Reichsbank
Reichsbank
The Reichsbank was the central bank of Germany from 1876 until 1945. It was founded on 1 January 1876 . The Reichsbank was a privately owned central bank of Prussia, under close control by the Reich government. Its first president was Hermann von Dechend...
, largely as a result of his dismissal from von Lumm's service.
Despite the small blemish on his record, in November 1923, Schacht became currency commissioner for the Weimar Republic
Weimar Republic
The Weimar Republic is the name given by historians to the parliamentary republic established in 1919 in Germany to replace the imperial form of government...
and participated in the introduction of the Rentenmark, a new currency the value of which was based on a mortgage on all of the properties in Germany. After his economic policies helped reduce German inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
and stabilize the German mark (Helferich Plan), Schacht was appointed president of the Reichsbank at the requests of President Friedrich Ebert
Friedrich Ebert
Friedrich Ebert was a German politician of the Social Democratic Party of Germany .When Ebert was elected as the leader of the SPD after the death of August Bebel, the party members of the SPD were deeply divided because of the party's support for World War I. Ebert supported the Burgfrieden and...
and Chancellor Gustav Stresemann
Gustav Stresemann
was a German politician and statesman who served as Chancellor and Foreign Minister during the Weimar Republic. He was co-laureate of the Nobel Peace Prize in 1926.Stresemann's politics defy easy categorization...
.
In 1926, Schacht provided funds for the formation of IG Farben
IG Farben
I.G. Farbenindustrie AG was a German chemical industry conglomerate. Its name is taken from Interessen-Gemeinschaft Farbenindustrie AG . The company was formed in 1925 from a number of major companies that had been working together closely since World War I...
. He collaborated with other prominent economists to form the 1929 Young Plan
Young Plan
The Young Plan was a program for settlement of German reparations debts after World War I written in 1929 and formally adopted in 1930. It was presented by the committee headed by American Owen D. Young. After the Dawes Plan was put into operation , it became apparent that Germany could not meet...
to modify the way that war reparations
World War I reparations
World War I reparations refers to the payments and transfers of property and equipment that Germany was forced to make under the Treaty of Versailles following its defeat during World War I...
were paid after Germany's economy was destabilizing under the Dawes Plan
Dawes Plan
The Dawes Plan was an attempt in 1924, following World War I for the Triple Entente to collect war reparations debt from Germany...
. In December 1929, he caused the fall of the Finance Minister Rudolf Hilferding
Rudolf Hilferding
Rudolf Hilferding was an Austrian-born Marxist economist, leading socialist theorist, politician and chief theoretician for the Social Democratic Party of Germany during the Weimar Republic, almost universally recognized as the SPD's foremost theoretician of his century, and a...
by imposing upon the government his conditions for obtaining a loan. After modifications by Hermann Müller
Hermann Müller (politician)
' , born in Mannheim, was a German Social Democratic politician who served as Foreign Minister , and twice as Chancellor of Germany under the Weimar Republic...
's government to the Young Plan during the Second Conference of The Hague (January 1930), he resigned as Reichsbank President on 7 March 1930. During 1930, Schacht campaigned against the war reparations requirement in the United States.
Involvement with the Third Reich Government
By 1926, Schacht had left the small German Democratic Party, which he had helped found, and was increasingly lending his support to the Nazi PartyNational Socialist German Workers Party
The National Socialist German Workers' Party , commonly known in English as the Nazi Party, was a political party in Germany between 1920 and 1945. Its predecessor, the German Workers' Party , existed from 1919 to 1920...
(NSDAP), to which he became closer between 1930 and 1932.
Though never a member of the NSDAP, Schacht helped to raise funds for the party after meeting with Adolf Hitler. Close for a short time to Heinrich Brüning
Heinrich Brüning
Heinrich Brüning was Chancellor of Germany from 1930 to 1932, during the Weimar Republic. He was the longest serving Chancellor of the Weimar Republic, and remains a controversial figure in German politics....
's government, Schacht shifted to the right by entering the Harzburg Front
Harzburg Front
The Harzburg Front was a short-lived right-wing political alliance in Weimar Germany, formed in 1931 as an attempt to present a unified opposition to the government of Chancellor Heinrich Brüning...
in October 1931.
Schacht's disillusionment with the existing Weimar government did not indicate a particular shift in his overall philosophy, but rather arose primarily out of two issues: first, his objection to the inclusion of Socialist Party elements in the government, and the effect of their various construction and make-work projects on public expenditures and borrowings (and the consequent undermining of the government's anti-inflation efforts); second, on his fundamentally unwavering desire to see Germany retake its place on the international stage, and his recognition that "as the powers became more involved in their own economic problems in 1931 and 1932 ... a strong government based on a broad national movement could use the existing conditions to regain Germany's sovereignty and equality as a world power." Schacht was convinced that if the German government were ever to commence a wholesale reindustrialization and rearmament in spite of the restrictions imposed by Germany's treaty obligations, it would have to be during a period lacking clear international consensus among the Great Powers.
After the July 1932 elections
German election, July 1932
The German parliamentary election of 31 July 1932, held after the premature dissolution of the Reichstag, saw great gains by the Nazi Party, which for the first time became the largest party in parliament, though without winning a majority...
, in which the NSDAP got more than a third of the seats, Schacht and Wilhelm Kepler organized a petition of industrial leaders requesting that President Hindenburg
Paul von Hindenburg
Paul Ludwig Hans Anton von Beneckendorff und von Hindenburg , known universally as Paul von Hindenburg was a Prussian-German field marshal, statesman, and politician, and served as the second President of Germany from 1925 to 1934....
appoint Hitler as Chancellor. After Hitler took power in January 1933, Schacht was re-appointed Reichsbank President on 17 March.
In August 1934 Hitler appointed Schacht as his Minister of Economics. Schacht supported public works
Public works
Public works are a broad category of projects, financed and constructed by the government, for recreational, employment, and health and safety uses in the greater community...
programs, most notably the construction of autobahnen (highways) to attempt to alleviate unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
– policies which had been instituted in Germany by von Schleicher
Kurt von Schleicher
Kurt von Schleicher was a German general and the last Chancellor of Germany during the era of the Weimar Republic. Seventeen months after his resignation, he was assassinated by order of his successor, Adolf Hitler, in the Night of the Long Knives....
's government in late 1932, and had in turn influenced Roosevelt's policies
New Deal
The New Deal was a series of economic programs implemented in the United States between 1933 and 1936. They were passed by the U.S. Congress during the first term of President Franklin D. Roosevelt. The programs were Roosevelt's responses to the Great Depression, and focused on what historians call...
. He also introduced the 'New Plan', Germany's attempt to achieve economic "autarky
Autarky
Autarky is the quality of being self-sufficient. Usually the term is applied to political states or their economic policies. Autarky exists whenever an entity can survive or continue its activities without external assistance. Autarky is not necessarily economic. For example, a military autarky...
", in September 1934. Germany had accrued a massive foreign currency deficit during the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, which continued into the early years of the Third Reich. Schacht negotiated several trade agreements with countries in South America and southeastern Europe, under which Germany would continue to receive raw materials, but would pay in Reichsmarks. This ensured that the deficit would not get any worse, while allowing the German government to deal with the gap which had already developed. Schacht also found an innovative solution to the problem of the government deficit by using mefo bills
Mefo bills
A Mefo bill , named after the company Metallurgische Forschungsgesellschaft, was a promissory note used for a system of deferred payment to finance the German rearmament, devised by the German Minister of Finance, Hjalmar Schacht, in 1934...
. He was appointed General Plenipotentiary
Plenipotentiary
The word plenipotentiary has two meanings. As a noun, it refers to a person who has "full powers." In particular, the term commonly refers to a diplomat fully authorized to represent his government as a prerogative...
for the War Economy in May 1934 and was awarded honorary membership in the NSDAP and the Golden Swastika in January 1937.
Schacht disagreed with what he called "unlawful activities" against Germany's Jewish minority and in August 1935 made a speech denouncing Julius Streicher
Julius Streicher
Julius Streicher was a prominent Nazi prior to World War II. He was the founder and publisher of Der Stürmer newspaper, which became a central element of the Nazi propaganda machine...
and Streicher's writing in Der Stürmer
Der Stürmer
Der Stürmer was a weekly tabloid-format Nazi newspaper published by Julius Streicher from 1923 to the end of World War II in 1945, with brief suspensions in publication due to legal difficulties. It was a significant part of the Nazi propaganda machinery and was vehemently anti-Semitic...
.
During the economic crisis of 1935-36, Schacht, together with the Price Commissioner Dr. Carl Friedrich Goerdeler
Carl Friedrich Goerdeler
Carl Friedrich Goerdeler was a monarchist conservative German politician, executive, economist, civil servant and opponent of the Nazi regime...
, helped lead the "free-market" faction in the German government. They urged Hitler to reduce military spending, turn away from autarkic and protectionist policies, and reduce state control in the economy. Schacht and Goerdeler were opposed by a faction centering around Hermann Göring
Hermann Göring
Hermann Wilhelm Göring, was a German politician, military leader, and a leading member of the Nazi Party. He was a veteran of World War I as an ace fighter pilot, and a recipient of the coveted Pour le Mérite, also known as "The Blue Max"...
.
Göring was appointed "Plenipotentiary for the Four Year Plan
Four year plan
The Four Year Plan was a series of economic reforms created by the Nazi Party. The main aim of the four year plan was to prepare Germany for war in four years...
" in 1936, with broad powers that conflicted with Schacht's authority. Schacht objected to continued high military spending, which he believed would cause inflation, thus coming into conflict with Hitler and Göring.
In 1937 Schacht met with Chinese Finance Minister Dr. H. H. Kung
H. H. Kung
K'ung Hsiang-hsi , often known as Dr. H. H. Kung, was a wealthy Chinese banker and politician in the early 20th century. He was highly influential in determining the economic policies of the KMT government in the 1930s and 1940s...
. Schacht told him that "German-Chinese friendship stemmed in good part from the hard struggle of both for independence." Kung said, "China considers Germany its best friend... I hope and wish that Germany will participate in supporting the further development of China, the opening up of its sources of raw materials, the upbuilding of its industries and means of transportation."
In November 1937 he resigned as Minister of Economics and General Plenipotentiary at Göring's request. He remained President of the Reichsbank until Hitler dismissed him in January 1939. After this Schacht held the empty title of Minister without Portfolio
Minister without Portfolio
A minister without portfolio is either a government minister with no specific responsibilities or a minister that does not head a particular ministry...
, and received the same salary, until he was fully dismissed in January 1943.
Resistance activities
Schacht was in contact with the German Resistance as early as 1934, though at that time he still believed the Nazi regime would follow his policies. By 1938, he was disillusioned, and was an active participant in the plans for a coup d'étatCoup d'état
A coup d'état state, literally: strike/blow of state)—also known as a coup, putsch, and overthrow—is the sudden, extrajudicial deposition of a government, usually by a small group of the existing state establishment—typically the military—to replace the deposed government with another body; either...
against Hitler if he started a war against Czechoslovakia
Czechoslovakia
Czechoslovakia or Czecho-Slovakia was a sovereign state in Central Europe which existed from October 1918, when it declared its independence from the Austro-Hungarian Empire, until 1992...
. Goerdeler, his colleague in 1935-36, was the civilian leader of the Resistance. Schacht talked frequently with Hans Gisevius
Hans Bernd Gisevius
Hans Bernd Gisevius was a German diplomat and intelligence officer during World War II. A strong opponent of the Nazi regime, he served as a liaison in Zürich between Allen Dulles, station chief for the American OSS and the German Resistance forces in Germany.-Pre World War II:Gisevius was born...
, another Resistance figure; when Resistance organizer Theodor Strünck
Theodor Strünck
Theodor Strünck was a German lawyer and resistance worker, involved in the July 20 plot.-Life:...
's house (a frequent meeting place) was bombed out, Schacht allowed Strünck and his wife to live in a villa he owned. However, after 1941, Schacht took no active part in the Resistance.
Still, at Schacht’s denazification trial (subsequent to his acquittal at Nuremberg) it was declared by a judge that “None of the civilians in the resistance did more or could have done more than Schacht actually did.”
After the attempt on Hitler's life on 20 July 1944, Schacht was arrested on 23 July. He was sent to Ravensbrück, then to Flossenbürg
Flossenbürg concentration camp
Konzentrationslager Flossenbürg was a Nazi concentration camp built in May 1938 by the Schutzstaffel Economic-Administrative Main Office at Flossenbürg, in the Oberpfalz region of Bavaria, Germany, near the border with Czechoslovakia. Until its liberation in April 1945, more than 96,000 prisoners...
, and finally to Dachau. In late April 1945 he and about 140 other prominent inmates of Dachau were transferred to Tyrol
Transport of concentration camp inmates to Tyrol
The Transport of Inmates of German Concentration Camps to Tyrol happened in late April 1945 and led to the only time such prisoners were liberated by German troops.- Transfer and liberation:...
by the SS
Schutzstaffel
The Schutzstaffel |Sig runes]]) was a major paramilitary organization under Adolf Hitler and the Nazi Party. Built upon the Nazi ideology, the SS under Heinrich Himmler's command was responsible for many of the crimes against humanity during World War II...
, which left them there. They were liberated by the Fifth U.S. Army on 5 May 1945 in Niederdorf, Dolomites
Dolomites
The Dolomites are a mountain range located in north-eastern Italy. It is a part of Southern Limestone Alps and extends from the River Adige in the west to the Piave Valley in the east. The northern and southern borders are defined by the Puster Valley and the Sugana Valley...
.
After the war
Schacht had supported Hitler's gaining power, and had been an important official of the Nazi regime. Thus he was arrested by the Allies in 1945. He was put on trial at NurembergNuremberg Trials
The Nuremberg Trials were a series of military tribunals, held by the victorious Allied forces of World War II, most notable for the prosecution of prominent members of the political, military, and economic leadership of the defeated Nazi Germany....
for "crimes against peace" (planning and waging wars of aggression), but not war crimes or crimes against humanity.
Schacht pled not guilty to these charges. He cited in his defense that he had lost all official power before the war even began, that he had been in contact with Resistance leaders like Hans Gisevius
Hans Bernd Gisevius
Hans Bernd Gisevius was a German diplomat and intelligence officer during World War II. A strong opponent of the Nazi regime, he served as a liaison in Zürich between Allen Dulles, station chief for the American OSS and the German Resistance forces in Germany.-Pre World War II:Gisevius was born...
throughout the war, and that he had been arrested and imprisoned in a concentration camp himself.
His defenders argued that he was just a patriot, trying to make the German economy strong. Furthermore, Schacht was not a member of the NSDAP and shared very little of their ideology. The British judges favored acquittal, while the Soviet
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
judges wanted to convict. The British got their way and Schacht was acquitted.
In 1953, Schacht started a bank, Deutsche Außenhandelsbank Schacht & Co., which he led until 1963. He also gave advice on economics and finance to heads of state of developing countries, in particular the Non-Aligned
Non-Aligned Movement
The Non-Aligned Movement is a group of states considering themselves not aligned formally with or against any major power bloc. As of 2011, the movement had 120 members and 17 observer countries...
countries.
Indirectly resulting from his founding of the bank, Schacht was the plaintiff in a foundational case in German law on the "general right of personality". A magazine published an article criticizing Schacht, containing several incorrect statements. Schacht first requested that the magazine publish a correction, and when the magazine refused, sued the publisher for violation of his personality rights. The district court found the publisher both civilly and criminally liable; on appeal, the appellate court reversed the criminal conviction, but found that the publisher had violated Schecht's general right of personality.
Schacht died in Munich
Munich
Munich The city's motto is "" . Before 2006, it was "Weltstadt mit Herz" . Its native name, , is derived from the Old High German Munichen, meaning "by the monks' place". The city's name derives from the monks of the Benedictine order who founded the city; hence the monk depicted on the city's coat...
, Germany, on 3 June 1970.
Works
Schacht wrote 26 books during his lifetime, of which at least four have been translated into English:- The End of Reparations (1931)
- Account Settled (1949) after his acquittal at the Nuremberg Trials
- Confessions of the Old Wizard (1953)
- The Magic Of Money (1967)
Miscellany
- Gustave GilbertGustave GilbertGustave Mark Gilbert was an American psychologist best known for his writings containing observations of high ranking Nazi leaders during the Nuremberg Trials. His Psychology of Dictatorship was an attempt to profile Adolf Hitler using as reference the testimonials of Hitler’s closest generals and...
, an American Army psychologist, examined the Nazi leaders who were tried at Nuremberg. He administered a German version of the Wechsler-BellevueWechsler Adult Intelligence ScaleThe Wechsler Adult Intelligence Scale intelligence quotient tests are the primary clinical instruments used to measure adult and adolescent intelligence. The original WAIS was published in February 1955 by David Wechsler, as a revision of the Wechsler-Bellevue Intelligence Scale...
IQ test. Schacht scored 143, the highest among the leaders tested, after adjustment upwards to take account of his age.
- When he stabilized the mark in 1923, Schacht's office was a former charwoman's cupboard. When his secretary, Fraulein Steffeck, was later asked about his work there she described it:
-
- What did he do? He sat on his chair and smoked in his little dark room which still smelled of old floor cloths. Did he read letters? No, he read no letters. Did he write letters? No, he wrote no letters. He telephoned a great deal – he telephoned in every direction and to every German or foreign place that had anything to do with money and foreign exchange as well as with the Reichsbank and the Finance Minister. And he smoked. We did not eat much during that time. We usually went home late, often by the last suburban train, travelling third class. Apart from that he did nothing.
Portrayal in popular culture
Hjalmar Schacht has been portrayed by the following actors in film, television and theater productions;- Felix Basch in the 1943 United States propaganda film Mission to MoscowMission to MoscowMission to Moscow is a book by the former U.S. Ambassador to the Soviet Union Joseph E. Davies published by Simon and Schuster in 1941. It was adapted into a film directed by Michael Curtiz in 1943....
- Wladyslaw HanczaWladyslaw HanczaWładysław Hańcza was a Polish actor and film director. During World War II he joined an underground theater. After the war he was a lecturer at the Theater Academy in Warsaw.-External links:...
in the 1971 Polish film Epilogue at Nurnberg - James BradfordJames BradfordJames Bradford may refer to:* James Bradford , American weightlifter and Olympic medalist* James C. Bradford , professor of history at Texas A&M University* Jim Bradford, politician...
in the 2000 Canadian/U.S. TV production Nuremberg - Stoyan Aleksiev in the 2006 British television docudrama Nuremberg: Nazis on TrialNuremberg: Nazis on TrialNuremberg: Nazis on Trial, is a BBC documentary film series consisting of three one-hour films that re-enact the Nuremberg War Trials of Albert Speer, Hermann Göring and Rudolf Hess...
Further reading
- Ahamed, LiaquatLiaquat AhamedLiaquat Ahamed is a Pulitzer-prize winning author and investment manager. He has worked at the World Bank in Washington D.C. and the New York-based partnership of Fischer, Francis, Trees and Watts, where he served as Chief Executive....
. Lords of Finance: The Bankers Who Broke the World, Penguin BooksPenguin BooksPenguin Books is a publisher founded in 1935 by Sir Allen Lane and V.K. Krishna Menon. Penguin revolutionised publishing in the 1930s through its high quality, inexpensive paperbacks, sold through Woolworths and other high street stores for sixpence. Penguin's success demonstrated that large...
, 2009 ISBN 978-1-59420-182-0 - Weitz, John. Hitler's Banker: Hjalmar Horace Greeley Schacht. Boston: Little, Brown and Co. 1997. ISBN 0-316-92916-6.