Background
Karl Helfferich was born in Neustadt/Haardt on July 22, 1872, the son of a textile factory owner.
Karl Helfferich was born in Neustadt/Haardt on July 22, 1872, the son of a textile factory owner.
Helfferich studied economics in Berlin, Munich, and Strassburg and in 1899 accepted a post at Berlin University; he lectured there for the next seven years, arguing for the need to adhere to the gold standard. Concurrently, beginning in 1901, Helfferich joined the Colonial Office, where by 1904 he helped to establish the German mark as the currency in Berlin's colonies (save East Africa, where the following year a reformed Indian rupee was introduced). In 1906 Helfferich quit government service and moved to Constantinople as director of the famous Baghdad Railroad; two years later he became director of the Deutsche Bank in Berlin. Helfferich thus closely personified the expansionist, exuberant Wilhelmian entrepreneur.
On January 31, 1915, Helfferich was appointed state secretary of the treasury. He rejected the British method of paying for the war by sharply increased taxation and instead opted to finance war production by floating mammoth loans, to be repaid either by the vanquished or by future German generations. This highly inflationary course was only partially offset in 1916 by new consumer, transport, and war profits taxes.
Helfferich on May 22, 1916, also assumed leadership of the Ministry of the Interior and became deputy chancellor to Theobald von Bethmann Hollweg. In this capacity he was largely responsible for carrying out the Hindenburg Program of increased armaments production as well as the Auxiliary Service Law both drafted by Colonel Max Bauer. When several left-wing leaders of the Social Democratic party opposed Helfferich's heavy-handed enforcement of the Service Law, the state secretary responded by jailing them. "It is better that one or another innocent person suffer than that a guilty one be left at large to create harm for the Fatherland."
Early in the war Helfferich opposed unrestricted submarine warfare fearing that it would lead to a clash with the United States. He was not present at the crown council at Pless on January 9, 1917, which adopted U-boat warfare a outrance regardless of the consequences; one month earlier Helfferich had convinced Bethmann Hollweg of the need to put out peace feelers after the disastrous Verdun campaign, but the combined army-navy submarine initiative easily carried the day instead.
In 1917 Helfferich gravitated toward the army's new commanders, Paul von Hindenburg and Erich Ludendorff; the deputy chancellor then endorsed the U-boat gamble, opposed the Reichstag's "peace resolution" calling for an end to the war without annexations or indemnities, and flatly came out against Bethmann Hollweg's promised reform of the antiquated Prussian three-class suffrage. Neither did the deputy chancellor attempt a major effort to support his chief against the vicious attacks of Bauer, Ludendorff, and Crown Prince Wilhelm in July 1917. Helfferich resigned as secretary of the interior after Bethmann's fall, but clung to his other two cabinet posts under the army's chancellor, Georg Michaelis, until the latter's dismissal in October 1917 over his inept handling in Parliament of the naval rebellions of that summer.
In July 1918, Helfferich succeeded the murdered Count Wilhelm von Mirbach-Harff as ambassador to Russia. In contrast to the state secretary for foreign affairs, Paul von Hintze, who favored cooperation with the Bolsheviks, Helfferich worked actively on behalf of the counterrevolution and in August had to be recalled.
Throughout the war, Helfferich had opposed the parties of the Reichstag majority, and in 1919 he joined the German National People's party as an avowed enemy of the Weimar Republic and the policy of fulfillment. Helfferich's caustic diatribes against the republic's supporters led Chancellor Joseph Wirth after the assassinations of Matthias Erzberger and Walther Rathenau to point to Helfferich in the Reichstag and to state, "The enemy stands on the right," thereby publicly associating Helfferich with the assassins. Although the directors of the Reichsbank unanimously endorsed Helfferich's candidacy for the presidency of the central bank, neither President Friedrich Ebert nor Chancellor Gustav Stresemann was willing to underwrite the reactionary former deputy chancellor; instead, the appointment went to Hjalmar Schacht. To the open relief of many, Helfferich was fatally injured in a train accident in Bellinzona, Switzerland, on April 23, 1924.
Ambitious, arrogant, a tenacious "dinger" to office, Helfferich had struggled for the greater glory of the German Empire, and when this creation died in 1918, he lashed out in blind fury at those he considered most responsible, particularly Erzberger. Perhaps because of his Calvinist temperament, Helfferich was always inclined to view himself as one of the elect and apt to confuse his own interests with those of the nation.