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Following the outbreak ofWorld War I in 1914, Funk enlisted in theImperial German Army and joined theinfantry. He waswounded in action and subsequentlydischarged as medically unfit for service in 1916. Following the end of the war in 1918, he worked as a journalist, and in 1924 he became the editor of thecentre-right financial newspaper theBerliner Börsenzeitung. In 1920, Funk married Luise Schmidt-Sieben.
Funk, who was anationalist andanti-Marxist, resigned from theBerliner Börsenzeitung in the summer of 1931 and joined theNazi Party, becoming close toGregor Strasser, who arranged his first meeting withAdolf Hitler. Partially because of his interest ineconomic policy, he was elected aReichstag deputy in July 1932 and made chairman of the party's Committee on Economic Policy in December 1932, a post that he did not hold for long. After the Nazi Party came to power in 1933, he stepped down from hisReichstag position and was madeReich ChiefPress Officer underJoseph Goebbels. The post involvedcensorship of anything deemed critical of Nazi policies.
In March 1933, Funk was appointed as aState Secretary (Staatssekretär) at theReich Ministry of Public Enlightenment and Propaganda.[4] In the summer of 1936, when Hitler commissionedAlbert Speer for the rebuilding of central Berlin, it was Funk who proposed his new title of "Inspector-General of Buildings for the Renovation of the Reich Capital".[5]
On 5 February 1938, Funk became General Plenipotentiary for Economics (Generalbevollmächtigter für die Wirtschaft), as well asReichsminister for the Economy to permanently replaceHjalmar Schacht who had resigned on 26 November 1937. Funk also succeeded Schacht as Minister of Economics and Labor ofPrussia (Preußischer Minister für Wirtschaft und Arbeit) and as anex officio member of thePrussian State Council. He would hold all these posts until the fall of the Nazi regime.[6] Schacht had been engaged in a power struggle withReichsmarschallHermann Göring, who wanted to tie the economics ministry more closely to hisFour Year Plan Office. Göring briefly served as Schacht's immediate successor between November 1937 and January 1938 until Funk's appointment.[7] Schacht, who knew Funk well, said he was "extraordinarily musical" being "a first-rate connoisseur of music whose personal preferences in life were decidedly for the artistic and literary." At a dinner when he sat next to Funk, the orchestra played a melody byFranz Lehár. Funk remarked "Ah! Lehár – the Fuhrer is particularly fond of his music." Schacht replied, jokingly, "It's a pity that Lehár is married to a Jewess", to which Funk immediately responded, "That's something the Fuhrer must not know on any account!"[8] Speer relates how Hitler played for him a record ofFranz Liszt'sLes Préludes and said "This is going to be our victory fanfare for the Russian campaign. Funk chose it!"[9]
Funk (right) in August 1944 when his State Secretary,Franz Hayler, was awarded the Knight's Cross for theWar Merit Cross.
Between April 1938 and March 1939, Funk was also a Director of theSwitzerland-based multi-nationalBank of International Settlements.[10] In January 1939,Adolf Hitler appointed Funk as President of theReichsbank. Funk recorded that by 1938 the German state had confiscatedJewish property worth two millionReichsmarks, using decrees from Hitler and other top Nazis to forceGerman Jews to leave their property and assets to the state if they emigrated, such as theReich Flight Tax.
On 30 August 1939, immediately prior to the outbreak of theSecond World War, Funk was appointed by Hitler to the six-personCouncil of Ministers for Defense of the Reich which was set up to operate as a "war cabinet".[11] Throughout the war years, Funk was present at a great many important meetings, including one about the Four Year Plan held in the Great Hall of theAir Ministry Building on 13 February 1942. The meeting included 30 crucial people in the Nazi government and was chaired by Field-MarshalErhard Milch. Funk sat to the right of Milch, at his request. After much debate,Albert Vogler said "there must be one man able to make decisions. Industry did not care who it was." After further discussion, Funk stood up and nominated Milch as that man, though Speer whispered to Milch this was not a good idea. Milch declined the position, and five days later Hitler conferred the role on Speer. As he and Funk walked Hitler back to his apartment in the Chancery, Funk promised Speer that he would place everything at his disposal and do all in his power to help him. Speer relates that Funk "kept the promise, with minor exceptions."[12] In September 1943, Funk was appointed as a fourth member of theCentral Planning Board, which was charged with managing theraw materials and manpower for Germany's entirewar economy.[13] He subsequently joinedRobert Ley, Speer and Goebbels in the struggle against the influence on Hitler byMartin Bormann.[14] Funk and Milch were again together for Göring's birthday party on 12 January 1944 when Funk, as he did every year, delivered the birthday speech at the banquet.[15]
Funk stayed in office until nearly the end of the Nazi regime, and was named by Hitler in hislast will and testament to continue asReichsminister for the Economy in the cabinet of Goebbels after hissuicide on 30 April 1945. However, after Goebbels' own suicide the next day, Funk was not named to theFlensburg Government formed byLutz Graf Schwerin von Krosigk, effectively ending his tenure as economics minister on 5 May.[16] Schwerin von Krosigk, theMinister of Finance, did not include an economics minister in his new cabinet. On 11 May, Funk was arrested byAllied forces and sent toCamp Ashcan inLuxembourg to await trial.
Funk was tried with other Nazi leaders at theNuremberg trials. He was accused by Allied prosecutors of having been closely involved in the state confiscation and disposal of the property of German Jews, of conspiracy to commitcrimes against peace, the planning, initiating and wagingwars of aggression,war crimes, andcrimes against humanity. Funk argued that, despite his employment titles, he had very little power in the Nazi regime. He did however, admit to signing the laws that "Aryanized" Jewish property and in that respect claimed to be "morally guilty". At the Nuremberg trials, American Chief ProsecutorRobert H. Jackson labeled Funk as "The Banker of Gold Teeth", referring to the practice of extractinggold teeth fromNazi concentration camp victims, and forwarding the teeth to theReichsbank for melting down to yieldbullion. Many other gold items were stolen from victims, such asjewellery,eyeglasses andfinger rings. Other items stolen from the victims included theirclothing,furniture,artwork, as well as any wealth instocks,shares,businesses andcompanies. Such business assets were taken byaryanization with often large and profitable businesses sold for less than their true worth. The monetary proceeds ofauctions of such assets as furniture were passed to theReichsbank inMax Heiliger accounts for use by the Nazi state or theSS. Even the hair of the victims was taken by shaving either just before or just after their murder. When clothing was distributed after the victims were shot by theEinsatzgruppen, blood stains were often visible at and near the bullet holes.[citation needed]
Funk was clearly distressed during the proceedings and cried during presentation of evidence, such as the murders carried out in the concentration camps, requiringsleeping pills at night. Schacht relates that he, Funk andFranz von Papen formed a close intimate circle at Nuremberg, and that he felt Funk was unable to comprehend the serious nature of the duties which he had undertaken. Schacht believed that there were many matters of which Funk had no knowledge whatsoever and that he gave a poor performance in thewitness box.[17] However, Speer gave a different version of events. He said that when he first came into contact with Funk at Nuremberg "he looked extremely worn and downcast." But "Funk reasoned skillfully and in a way that stirred my pity" in the witness box.[18]
Göring meanwhile described Funk as "an insignificant subordinate", but documentary evidence and his wartimebiographyWalther Funk, A Life for the Economy were used against him during the trial, leading to his conviction on counts 2, 3 and 4 of theindictment and his sentence oflife imprisonment. Funk was held atSpandau Prison along with othersenior Nazis.