Background
Hjalmar Schacht was born to a family of Danish origin in Tingleff, Schleswig-Holstein, on 22 January 1877. Brought up in the United States where his parents had emigrated (his father became an American citizen).
Hjalmar Schacht was born to a family of Danish origin in Tingleff, Schleswig-Holstein, on 22 January 1877. Brought up in the United States where his parents had emigrated (his father became an American citizen).
He returned to Germany to complete his studies in Kiel, Munich and Berlin, where he received a doctorate in economics.
Head of the economic archives of the Dresdner Bank in 1903, he became Deputy Director of the same bank five years later and in 1916 took over the private Nationalbank fur Deutschland (National Bank for Germany), merging it in 1922 with the Darmstadt Bank.
In November 1923 Schacht was made Reich Currency Commissioner with the task of halting the astronomic German inflation and stabilizing the currency, in which he was largely successful, establishing the Rentenmark as the basis of a new currency backed by foreign loans.
In December 1923 he was appointed head of Germany’s leading financial institution, the Reichsbank, remaining at this post until 1930. He participated in the negotiations for the Dawes loan (1924) and had originally agreed to the Young Plan (1929) as head of the German delegation at the reparations conference.
The following year he resigned as President of the Reichsbank in protest at the new reparations regulations embodied in the Young Plan and the increasing foreign debt of the government, steps which drew him closer to Hitler and the National Socialists.
Already in November 1932. he sought to pressure von Hindenburg to appoint Hitler as Chancellor, and it was on his recommendation that the big guns of German heavy industry - Krupp. United Steel and I.G. Farben - supported the Nazis as well as the German Nationalists in the electoral campaigns of 1932-3. For these crucial services in paving the way for the Third Reich, Hitler reappointed Schacht as Reichsbank President in March 1933 and then as Minister of Economics, a position he held from 1934 to 1937.
As the financial architect of Nazi Germany, Schacht was able to make economic policy without hindrance in the early years of the régime and exploited his intimate contacts with banks, large firms and economic organizations to remarkable effect. A believer in the economics of free marketing, Schacht eased big business out of the clutches of direct Party control, reinforcing the structure of private enterprise and corporate profit margins during his tenure of office. He created the Reichsw’irtschaftskammer, a comprehensive ‘Organization of Industry' formed out of former employers' organizations, chambers of commerce and industrial groups. He negotiated highly profitable barter deals with dozens of countries and succeeded in creating credit in a country with little liquid capital and almost no financial reserves. Appointed Plenipotentiary-General for the War Economy on 21 May 1935, it was Schacht who directed the economic preparations for war, making the reconstruction of the Wehrmacht financially possible. For this task he was given almost unlimited powers, and his skill in financing German re¬armament made him indispensable to Hitler and the Nazi Party though he never enjoyed their complete confidence. Respected but distrusted, Schacht w'as the only representative of the old German bourgeoisie still left in the government by 1935.
The first Commissioner of the Four Year Plan, Schacht’s policy of financing rearmament and unemployment programmes by greatly expanding public works and stimulating private enterprise, while at the same time seeking to halt devaluation and inflation, soon ran into difficulties with the Nazi Party leadership. In November 1937 he resigned his posts as Minister for Economics and Plenipotentiary-General for the War Economy, being replaced by Funk and Goenngas economic overseers. From 1937 until January 1943, he nonetheless remained in the cabinet as Minister without Portfolio, and Hitler reappointed him President of the Reichsbank in March 1938. With the latter's permission, he began to negotiate in London in January 1939 a plan for the emigration of 150,000 German Jews in the next three to five years. The Schacht Plan was linked to the promotion of German exports - 25 per cent of Jewish assets would be put in a cash fund and transferred by increased exports, while 75 per cent would accrue to Germany, in so far as it was not needed for the support of Jews until they emigrated or ‘died'. Schacht’s dismissal from the Reichsbank Presidency on 20 January 1939, following a new policy disagreement and the outbreak of World War II, put an end to the Plan. Schacht, who did not believe that Germany could economically stand a long war and opposed the escalating arms drive which had subordinated industry to the autarchic needs of the State, renewed his contacts with the restorationist circles of the Resistance around Goerdeler. His private doubts about the Nazi régime which had increased with the years - he had been especially disturbed by the removal of the top generals and the anti-Jewish pogrom of 1938 - did not, however, lead him to a wholehearted commitment to the Resistance.
He was nonetheless arrested on 29 July 1944 after the failure of the anti-Hitler conspiracy and sent to Ravensbrück and then Flossenbürg concentration camps, even though his direct implication in the plot could not be established. He was released from captivity by American troops in April 1945, but appeared before the Nuremberg Tribunal, charged and found guilty of organizing Germany for war. Since the rearmament programme was not considered criminal in itself, Schacht was acquitted in 1946 in spite of the protests of the Soviet judge. A de-Nazification court in Stuttgart subsequently sentenced him, however, to eight years’ labour camp as a Major Offender'. Shortly afterwards, on 2 September 1948, following an appeal, Schacht was acquitted by a Ludwigsburg court and released. He was definitively cleared in November 1950 of all charges connected with his involvement in the Third Reich. Schacht now began a highly successful second career in the 1950s as a financial adviser to developing countries such as Brazil, Ethiopia, Indonesia, Iran, Egypt, Syria and Libya. He also made a second personal fortune, founding his own foreign trade bank ‘Messrs Schacht and Co.’ in Düsseldorf in 1953. In the 1960s he continued to be involved in problems of development aid, maintaining close ties with government and business circles in Indonesia and West Africa. Schacht’s settling of accounts with his past appeared under the title Abrechnung mit Hitler (1949) and his autobiography, 76 Jahre meines Lebens was published in 1953.
He died in Munich on 3 June 1970.
Schacht, who in 1918 had been one of the founders of the German Democratic Party but had left in 1926 after turning away from its left-liberal policies, now discovered in Hitler the embodiment of his own ardent nationalism. Impressed by his reading of Mein Kampf and by the Nazi success in the 1930 Reichstag elections, Schacht, together with other conservative nationalists, joined the Harzburg Front in October 1931, hoping to use the Nazis in a common alliance to bring dowm the Weimar Republic. To this end he played a decisive part in bringing Hitler closer to his own banker and industrialist friends.
Quotations: I desire a great and strong Germany and to achieve it I would enter an alliance with the Devil.