Hjalmar Schacht | |
|---|---|
 | |
| Reichsminister of Economics | |
| In office 3 August 1934 – 26 November 1937 | |
| Führer | Adolf Hitler |
| Chancellor | Adolf Hitler |
| Preceded by | Kurt Schmitt |
| Succeeded by | Hermann Göring |
| GeneralPlenipotentiary for War Economy | |
| In office 21 May 1935 – 26 November 1937 | |
| Preceded by | Office established |
| Succeeded by | Walther Funk |
| President of the Reichsbank | |
| In office 22 December 1923 – 7 March 1930 | |
| Preceded by | Rudolf E. A. Havenstein |
| Succeeded by | Hans Luther |
| In office 17 March 1933 – 20 January 1939 | |
| Preceded by | Hans Luther |
| Succeeded by | Walther Funk |
| Reichsministerwithout Portfolio | |
| In office 26 November 1937 – 22 January 1943 | |
| Personal details | |
| Born | Horace Greeley Hjalmar Schacht (1877-01-22)22 January 1877 |
| Died | 3 June 1970(1970-06-03) (aged 93) |
| Resting place | MunichOstfriedhof |
| Party |
|
| Spouses | |
| Children | Cordula Schacht[1] |
| Education | University of Munich University of Leipzig University of Berlin University of Paris Kiel University (PhD) |
| Profession | Banker, economist |
| Awards | Golden Party Badge |
| Signature |  |
| Nickname | The Dark Wizard of International Finance[2] |
Horace Greeley Hjalmar Schacht (German:[ˈjalmaʁˈʃaxt]; 22 January 1877 – 3 June 1970) was a German economist, banker, politician, and co-founder of theGerman Democratic Party. He served as the Currency Commissioner and President of theReichsbank during theWeimar Republic. He was a fierce critic of his country's post-World War I reparations obligations. He was also central in helping create thegroup of German industrialists and landowners thatpushed Hindenburg to appoint the first Nazi-led government.
Schacht served inAdolf Hitler's government as President of the Central Bank (Reichsbank) 1933–1939 and as Minister of Economics (August 1934 – November 1937).
While Schacht was for a time feted for his role in the German "economic miracle", he opposed elements of Hitler's policy ofGerman re-armament insofar as it violated theTreaty of Versailles and (in his view) disrupted the German economy. His views in this regard led Schacht to clash with Hitler andHermann Göring.[citation needed] He resigned as President of the Reichsbank in January 1939. He remained as a minister without portfolio and received the same salary until he left the government in January 1943.[3]
In 1944, Schacht was arrested by theGestapo following theassassination attempt on Hitler on 20 July 1944 because he allegedly had contact with the assassins. Subsequently, he was interned in the Ravensbrück, Flossenbürg, and Dachau concentration camps. In the final days of the war, he was one of the 139 special and clan prisoners[a] who weretransported by the SS fromDachau toSouth Tyrol. This location is within the area named by Himmler the "Alpine Fortress", and it is speculated that the purpose of the prisoner transport was the intent of holding hostages. They were freed inNiederdorf, South Tyrol on 30 April 1945.[5]
Schacht wastried at Nuremberg, but was acquitted despite Soviet objections. Later, a Germandenazification tribunal sentenced him to eight years of hard labour, which was also overturned on appeal.
Schacht was born inTingleff,Schleswig-Holstein (now inDenmark) to William Leonhard Ludwig Maximillian Schacht and Baroness Constanze Justine Sophie von Eggers, a native of Denmark and a granddaughter of the Danish-Holsteinian civil servantChristian von Eggers [de].[6] His parents, who had spent years in the United States, originally decided on the name Horace Greeley Schacht, in honor of the American journalistHorace Greeley. However, they yielded to the insistence of the Schacht family grandmother, who firmly believed the child's given name should be Danish. After completing hisAbitur at theGelehrtenschule des Johanneums, Schacht studied medicine,philology,political science, andfinance at the Universities ofMunich,Leipzig,Berlin,Paris andKiel[7] before earning a doctorate at Kiel in 1899 – his thesis was onmercantilism.[8][9]
He joined theDresdner Bank in 1903. In 1905, while on a business trip to the United States with board members of the Dresdner Bank, Schacht met the famous American bankerJ. P. Morgan, as well as U.S. presidentTheodore Roosevelt. He became deputy director of the Dresdner Bank from 1908 to 1915. He was then a board member of theGerman National Bank [de] for the next seven years, until 1922, and after its merger with theDarmstädter und Nationalbank (Danatbank), a board member of the Danatbank.
Schacht was afreemason, having joined the lodgeUrania zur Unsterblichkeit in 1908.[10]
During theFirst World War, Schacht was assigned to the staff of General Karl von Lumm (1864–1930), the Banking Commissioner forGerman-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.[11]
After Schacht's dismissal from public service, he had another 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 theReichsbank, largely as a result of his dismissal from Lumm's service.[11]
During theGerman Revolution of 1918–1919, Schacht became aVernunftrepublikaner (a supporter of the Republic by reason rather than conviction) who had reservations over theparliamentary democratic system of the newWeimar Republic but supported it anyway for pragmatic reasons. He helped found theleft-liberalGerman Democratic Party (DDP), which took a leading role in the governingWeimar Coalition. However, Schacht later became an ally ofGustav Stresemann, the leader of the center-rightGerman People's Party (DVP).[12]
Despite the blemish on his record from his service with von Lumm, on 12 November 1923,[13] Schacht became currency commissioner for theWeimar Republic and participated in the introduction of theRentenmark, a new currency the value of which was based on a mortgage on all of the properties in Germany.[14] Germany entered into a brief period where it had two separate currencies: theReichsmark managed byRudolf Havenstein, President of theReichsbank, and the newly created Rentenmark managed by Schacht. Havenstein died on 20 November 1923.
On 22 December 1923, after Schacht's economic policies had helped battleGerman hyperinflation and stabilize the GermanReichsmark (Helfferich Plan), he was appointed President of the Reichsbank at the requests of presidentFriedrich Ebert and ChancellorGustav Stresemann.[15]
In 1926, Schacht provided funds for the formation ofIG Farben. He collaborated with other prominent economists to form the 1929Young Plan to modify the way thatwar reparations were paid after Germany incurred large foreign debts under theDawes Plan.[16] In December 1929, he caused the fall of theFinance MinisterRudolf Hilferding by imposing upon the government his conditions for obtaining a loan.[8] After modifications byHermann 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.[8]
Schacht became a friend of the Governor of the Bank of England,Montagu Norman, both men belonging to theAnglo-German Fellowship and theBank for International Settlements. Norman was so close to the Schacht family that he was godfather to one of Schacht's grandchildren.[17]
By 1926, Schacht had left the shrinking DDP and began increasingly lending his support to theNazi Party (NSDAP). He became disillusioned with Stresemann's policies after he believed that closer relations with the United States were failing to provide economic benefits, and after his efforts to negotiate a rapprochement with the United Kingdom by pegging the Reichsmark to thepound sterling failed. Beginning in 1929, he increasingly criticized German foreign and financial policy since 1924 and demanded the restoration of Germany'sformer eastern territories andoverseas colonies.[12] Schacht became closer to the Nazis between 1930 and 1932.Though never a member of the NSDAP, Schacht helped to raise funds for the party after meeting withAdolf Hitler. Close for a short time toHeinrich Brüning's government, Schacht shifted to the right by entering theHarzburg Front in October 1931.[8]
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:
Schacht believed that if the German government was ever to commence a wholesale reindustrialization and rearmament despite the restrictions imposed by Germany's treaty obligations, it would have to be during a period lacking clear international consensus among theGreat Powers.
After theNovember 1932 elections, in which the NSDAP saw its vote share fall by four percentage points, Schacht andWilhelm Keppler organized a petition of industrial and financial leaders, theIndustrielleneingabe (Industrial petition), requesting presidentPaul von Hindenburg to appoint Adolf Hitler asChancellor. After Hitler took power in January 1933, Schacht won re-appointment as Reichsbank president on 17 March.[20]
On 2 August 1934, when Reich and Prussian Minister of EconomicsKurt Schmitt went on an extended medical leave of absence, Hitler provisionally appointed Schacht to take over the running of the ministries. The appointment was made permanent on 31 January 1935, after Schmitt formally resigned.[21] Schacht supportedpublic-works programs, most notably the construction ofautobahnen (highways) to attempt to alleviate unemployment – policies which had been instituted in Germany byKurt von Schleicher's government in late 1932, and had in turn influencedFranklin D. Roosevelt'sNew Deal in the United States. But years later, Roosevelt seemed to "enjoy" recalling how Dr. Schacht was "weeping on his [FDR's] desk about his poor country."[22] 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 theGreat Depression, which continued into the early years of Nazi rule. Schacht negotiated several trade agreements with countries inSouth America andsoutheastern 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 that had already developed. Schacht also found an innovative solution to the problem of the government deficit by usingmefo bills.
Schacht was also made a member of theAcademy for German Law.[23] He was appointed GeneralPlenipotentiary for the War Economy in May 1935 by provision of the Reich Defense Law of 21 May 1935[24] and was awarded honorary membership in the NSDAP and theGolden Party Badge in January 1937.
Schacht disagreed with what he called "unlawful activities" againstGermany's Jewish minority and in August 1935 made a speech denouncingJulius Streicher and Streicher's writing in the Nazi newspaperDer Stürmer.[25]
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 fromautarkic and protectionist policies, and reduce state control in the economy. Schacht and Goerdeler were opposed by a faction centering onHermann Göring.[26] Göring was appointed "Plenipotentiary for theFour Year Plan" on 18 October 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."[27]
On 26 November 1937, Schacht resigned as Reich and Prussian Minister of Economics and as General Plenipotentiary at both his and Göring's request. He had grown increasingly dissatisfied with Göring's near-total ignorance of economics, and was also concerned that Germany was coming close to bankruptcy. His replacement was to beWalther Funk, who would take over in February 1938, with Göring serving as acting minister in the interim. Hitler, however, knew that Schacht's departure would raise eyebrows outside Germany, and insisted that he remain in the cabinet asminister without portfolio and as President of theReichsbank.[28] Göring also appointed him to thePrussian State Council.[29]
Following theKristallnacht of November 1938, Schacht publicly declared his repugnance at the events and suggested to Hitler that he should use other means if he wanted to be rid of the Jews.[30] He put forward a plan in which Jewish property in Germany would be held in trust, and used as security for loans raised abroad, which would also be guaranteed by the German government. Funds would be made available forJewish emigrants, to overcome the objections of countries that were hesitant to accept penniless Jews. Hitler accepted the suggestion and authorised him to negotiate with his London contacts. Schacht, in his bookThe Magic of Money (1967), wrote that Montagu Norman andLord Bearstead, a prominent Jew, had reacted favourably, butChaim Weizmann, leading spokesman for theBritish Zionist Federation, opposed the plan.[31] A component of the plan was that emigrating Jews would have taken items such as machinery with them on leaving the country, as a means of boosting German exports.[32] The similarHaavara Agreement allowing German Jews to emigrate toMandatory Palestine under similar terms had been signed in 1933.
On 20 January 1939, Hitler dismissed Schacht from his post as President of theReichsbank and replaced him with Funk. Schacht remained aReichsminister without portfolio, receiving the same salary, but was excluded from participation in the government. He retired to his house in the country, but continued to occasionally voice private criticisms, culminating in a letter to Göring in November 1942. In it, he assailed the government's decision to begin calling up 15-year-olds for service in the airfield defense forces, and cited this as one more item in a litany of factors that he concluded would strengthen the public's "misgivings as to how this war will actually end". The response to the letter was that Hitler dismissed him as aReichsminister without portfolio on 22 January 1943, and he was also dismissed from the Prussian State Council by Göring, who cited his "defeatist letter, calculated to undermine the German people's powers of resistance". Another letter fromMartin Bormann demanded that Schacht return the Golden Party Badge that he had received in 1937. When Schacht returned to his Berlin home, he found that it was being watched by theGestapo.[33]
Schacht was said to be in contact with theGerman resistance to Nazism 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 acoup d'état against Hitler if he started a war againstCzechoslovakia.[34] Goerdeler, his colleague in 1935–36, was the civilian leader of resistance to Hitler. Schacht talked frequently withHans Gisevius, another resistance figure; when resistance organizerTheodor Strünck's house (a frequent meeting place) was bombed out, Schacht allowed Strünck and his wife to live in a villa he owned. However, Schacht had remained in the government and, after 1941, Schacht took no active part in any resistance.
Still, at Schacht'sdenazification trial (after his acquittal at theNuremberg trials), 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."[35]
After theattempt on Hitler's life on 20 July 1944, Schacht was arrested on 23 July.[8] He was sent toRavensbrück, then toFlossenbürg,[8] and finally toDachau. In late April 1945, he and about 140 other prominent inmates of Dachau weretransferred to Tyrol by theSS, which left them there. They were liberated by theFifth U.S. Army on 5 May 1945 inNiederdorf, South Tyrol,Dolomites,Italy.[36]
Schacht had supported Hitler's gaining power and had been an important official of the Nazi regime. Thus, he was arrested by theAllies in 1945. He was put on trial atNuremberg for "conspiracy" and "crimes against peace" (planning and waging wars of aggression), but not war crimes or crimes against humanity.[37]
Schacht pleaded 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 likeHans Gisevius throughout the war, and that he had been arrested and imprisoned in a concentration camp himself.[38]
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 theSoviet judges wanted to convict and execute.[39] The British prevailed, and Schacht was acquitted on 1 October 1946.[40] However, at a West Germandenazification trial, Schacht was sentenced to eight years of hard labor. He was freed on appeal in 1948.
In 1950,Juan Yarur Lolas, the Bethlehem-born founder of theBanco de Crédito e Inversiones and president of the Arab colony inSantiago, Chile, tried to hire Schacht as a "financial adviser" in conjunction with theGerman-Chilean community.[41] However, the plan fell through when it became news.[41] He served as a hired consultant forAristotle Onassis, a Greek businessman, during the 1950s.[42] He also advised theIndonesian government in 1951 following the invitation of economic ministerSumitro Djojohadikusumo.[43]
In 1953, Schacht started a bank,Deutsche Außenhandelsbank Schacht & Co., which he led until 1963. He also advised on economics and finance to heads of state of developing countries, in particular theNon-Aligned countries; however, some of his suggestions were opposed, one of which was in the Philippines by the formerBangko Sentral ng Pilipinas headMiguel Cuaderno, who firmly rebuffed Schacht, stating that his monetary schemes were hardly appropriate for an economy needing capital investment in basic industry and infrastructure.
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, he 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 Schacht's general right of personality.[44]
Schacht died inMunich, West Germany, on 3 June 1970.
Schacht wrote numerous works[45] during his lifetime, of which at least six books have been translated into English:
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.
Hjalmar Schacht has been portrayed by the following actors in film, television, and theater productions:[51]
Hjalmar Schacht appears in the following works of fiction:
Hjalmar Schacht appears in the following works of nonfiction:
Hjalmar Schacht appears in the following video games:
An effort to secure the immigration of Dr. Schacht, the former Minister of Economy, was made by the Santiago German colony. They worked in league with the local Arab colony, whose President, Juan Yarur, one of the wealthiest industrialists in Chile, was to have engaged the doctor as "financial adviser." Timely publicity helped to frustrate the clever design.
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