Hjalmar Schacht

Hjalmar Schacht
Dr. phil. Hjalmar Schacht
Reich Minister of Economics
In office August 1934 – November 1937
President	Adolf Hitler
Chancellor	Adolf Hitler
Preceded by	Kurt Schmitt
Succeeded by	Hermann Göring
President of the Reichsbank
In office November 1923 – March 1930
Preceded by	Rudolf E. A. Havenstein
Succeeded by	Hans Luther
In office March 1933 – January 1939
Preceded by	Hans Luther
Succeeded by	Walther Funk
Born	22 January 1877 (1877-01-22) Tingleff, Province of Schleswig-Holstein, Kingdom of Prussia, German Empire
Died	3 June 1970 (aged 93) Munich, Bavaria, West Germany
Birth name	Horace Greeley Hjalmar Schacht
Political party	None (honorary member of NSDAP)
Profession	Banker, Economist

Horace Greeley Hjalmar Schacht (22 January 1877 – 3 June 1970) was a universally regarded brilliant German economist who served as President of the German Reichsbank and economic ambassador both for the Weimar Republic and National Socialist Germany.

Life

Schacht was born in Tingleff to Wilhelm Leonhard Ludwig Maximillian Schacht and Constanze Justine Sophie, née Freiin von Eggers. 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 his Danish maternal grandmother, who firmly believed the child's given name should be Hjalmar.

Schacht graduated with Abitur from the Johanneum School of Scholars in Hamburg in 1895 and first enrolled in medicine at the Christian Albrechts University in Kiel, but switched to German studies (Germanistik) in the next semester until he was now enrolled at the Ludwig Maximilians University in Munich – discovered his interest in economics in the third semester in the lectures of the most important economist at the time, Lujo Brentano. He subsequently studied at the universities in Leipzig, Berlin and Kiel as well as a semester abroad at the Sor in Paris, but returned to his “home university” in Kiel for the summer semester of 1898.

He earned a doctorate in economics under Professor Wilhelm Hasbach in 1899 – his dissertation was on mercantilism in England (Der theoretische Gehalt des englischen Merkantilismus). Since there was no separate political science faculty in Kiel, as in numerous other universities in the Empire, Schacht was awarded a Doctor of Philosophy (Dr. phil.), whereby he was referred to in the denazification files of the post-war period as “Dr. rer. pol.”

From 1900, he was an assistant at the “Central Office for the Preparation of Commercial Contracts” and from 1901 to 1903 he was managing director of the Commercial Contracts Association. From 1903 he took on tasks as head of the archives and the economic office of the Dresdner Bank, where he was employed as deputy director from 1908 to 1915. In the first years of the First World War, as head of the banking department of the General Government of Belgium in Brussels, he led the establishment of the central bank. For this, he received from Kaiser Wilhelm II the Iron Cross 2nd class on a black and white ribbon for non-combatants.

In November 1918, Schacht was one of the co-founders of the German Democratic Party, from which he resigned in May 1926. Afterwards, he turned more and more to right-wing conservative forces, mainly because of what he considered to be the excessively generous spending policies of the Weimar coalition parties SPD, DDP and Center. His criticism of the expropriation without compensation of the German royal houses supported by the SPD, DDP and KPD (which narrowly failed in a referendum in 1926) was the immediate reason for his resignation from the party.

From 15 November 1923 until his appointment as Reichsbank President on 22 December 1923, he was Reich Currency Commissioner. Schacht attributed his appointment as Reichsbank President, which was decided for him under pressure from the Left, with three votes for him and more than thirty against him, to his achievements as currency commissioner. However, his contribution to restoring currency stability through the introduction of the Neumark and Rentenmark was to a minimum. However, the introduction of the Neumark and the associated planning took place on 10 September 1923 through Rudolf Hilferding's suggestion to the Reich Cabinet and on 16 October 1923 the introduction of the Rentenmark. Schacht cannot therefore be credited with making a significant contribution to curbing inflation.

In addition, on 7 April 1924, he became chairman of the supervisory board of the German Gold Discount Bank, which was founded at his suggestion to support the convertibility of the Reichsmark. In the same year he took part in the consultations of the experts on reparations issues and in the London conference and was involved in the Dawes loan. In 1929, he was head of the delegation to the reparations expert conference in Paris.

On 7 March 1930, he resigned from the office of Reichsbank President after the Reichstag rejected the Young Plan, which was opposed by the right-wing organizations DNVP, NSDAP and Stahlhelmbund as well as the KPD, but also by Schacht (which, however, he had signed at the head of the delegation to sign the Young Plan) for the new regulation of the reparations to be paid by the German Reich. Before his resignation as Reichsbank President, which was compensated with a severance payment of three annual salaries of 360,000 marks each.

As Finance Minister Rudolf Hilferding Hilferding wanted to negotiate a loan with the American bank Dillon Read & Co., Schacht refused to let this be charged through the Reichsbank. He instead offered Hilferding a loan in Reichsmark - on certain conditions, which should be enshrined in an appropriate law. Hilferding and his state secretary considered “such interference by the Reichsbank president in Reich politics to be intolerable” and resigned in protest. The result was the dissolution of the Müller II cabinet and the financial policy disempowerment of the SPD. The new law enforced by Schacht received the ironic name “Lex Schaft». Hilferding, who was Jewish, would commit suicide years later in a Paris prison after Marshal Pétain's Vichy French handed him over to the Gestapo.

After his resignation, Schacht went on lecture tours to North America. On 24 November 1930, he told 600 American industrial leaders in Baltimore that Germany's payments under the Young Plan could be expected to cease in less than three years and that the reparations issue could not be resolved by returning troops to the Rhineland.

National Socialism

On 5 January 1931 during a dinner, he met Hermann Göring, Joseph Goebbels and Adolf Hitler. In October 1931, Schacht gave a speech at the “Harzburger Front” meeting of the NSDAP, the DNVP and the Stahlhelm in Bad Harzburg, in which he attacked the Reichsbank's monetary policy. The year 1931 ended very unpleasantly for Schacht. On a trip from the Baltic Sea to Berlin with his son Jens he had an accident in which he was seriously injured. Near the Mecklenburg town of Waren, the car hit black ice at full speed and overturned. The driver and Jens remained uninjured, but the unconscious Dr. Schacht had to be carried to a blacksmith shop where a local doctor bandaged his wounds before he was taken to the small Waren hospital. He suffered a severe concussion, a brain hemorrhage and a few broken ribs and was unable to move his legs properly for almost three weeks. So at Christmas 1931, he hobbled around on crutches and stayed in Gühlen for the time being.

In 1932, Schacht began to support the NSDAP, but without joining the party. He was one of the signatories of the petition by twenty farmers, bankers and industrialists to Paul von Hindenburg demanding that Hitler be appointed Reich Chancellor. This petition was initially not successful because the Reich President appointed Kurt von Schleicher as Reich Chancellor instead of Hitler. After its failure and after Adolf Hitler's appointment as Chancellor, Schacht became President of the Reichsbank again on 17 March 1933. By introducing the Mefo bill (Mefo-Wechsel), government spending could be temporarily financed.

Schacht visited the Reichsparteitag in Nuremberg several times at the invitation of the NSDAP and donated significant amounts of money to the Sturmabteilung. In 1937, he and the other Reich ministers were awarded the NSDAP's Golden Party Badge. However, he never joined the NSDAP himself, as Hitler did not make this a condition for the transfer of ministerial office. He was also Minister of Economics from 1934 to 26 November 1937, when he resigned. He was replaced by Walther Funk. Dr. Schacht was dismissed as President of the Reichsbank in January 1939.

“Schacht's greatest achievement was that he boosted our exports. When it came to cheating, Schacht was priceless! Only when it came to showing an inner composure, he couldn't do that. One Freemason deceived the other. Schacht came into opposition to how I dissolved Freemasonry in Germany.” — Adolf Hitler on 28 August 1942

After the attempt on Hitler's life on 20 July 1944, Schacht fell under suspicion due to his wide range of contacts, was arrested and sent to different concentration camps (Ravensbrück and Flossenbürg). In the end, many special prisoners, including Schacht, were sent to the Dachau concentration camp. During the transfer via Tyrol towards the Alpine fortress, special prisoner Dr. Schaft was liberated by Wehrmacht units on 30 April 1945. This happened after Oberst i. G. Bogislaw von Bonin, who was staying in a hotel with others, was able to reach General der Panzertruppe Hans Röttiger (High Command of Army Group C) by telephone on 30 April 1945, who in turn ordered Captain Wichard von Alvensleben to drive from Moos near Sexten to Niederdorf to get an unobtrusive picture of the situation. Together with his cousin Captain Gebhard von Alvensleben, he decided to act the next day.

After a tense confrontation with the SS guards, SS-Obergruppenführer and General der Waffen-SS Karl Wolff ordered them by telephone to withdraw, hand the prisoners over to the Wehrmacht and drive to Bolzano. The Wehrmacht now had to protect the prisoners: the murderous Italian partisans, who were trying to take control of the country after the German surrender, intended to transport the prominent prisoners to their headquarters in Cortina d'Ampezzo, forty kilometers south.

On 4 May 1945, two days after the German partial surrender, around 170 US soldiers from an infantry regiment of the 85th Division of the 5th US Army under the command of Captain John Atwell arrived at Lake Pragser Wild. The German Wehrmacht members in the “Pragser Wildsee” hotel were disarmed and, together with the two captains from Alvensleben, transported to a prisoner of war camp.

Numerous journalists and press photographers appeared on 5 May 1945, trailing the US Army. Headlines about the sensational events in South Tyrol soon went around the world. On this day, the fairy tale of the "liberation of the special and family prisoners by American troops" was born, which is still rumored to this day, although in reality the prisoners had already regained their freedom on 30 April, when their SS guards retreated under pressure from the Wehrmacht under Captain von Alvensleben. Quite the opposite: the arrival of the US Americans resulted in another imprisonment for some of the ex-prisoners, this time by the Allies.

“It was a liberation for everyone, and I believe that no one realized that for many this was to be the threshold of a new and painfully long imprisonment.” — Sigismund Payne Best, British secret agent and one of the 98 special and 37 RSHA clan prisoners (according to list of names) from sixteen nations

Post-WWII

Schacht was one of the defendants at the Nuremberg Show Trials but, along with Franz von Papen, was acquitted. Von Papen relates that they had visits from insulting American psychologists (especially Gustave Mark Gilbert) who "saw it their duty to determine our sanity". Schacht took part in their "silly tests" (e.g. IQ) and von Papen relates that

"these investigations did provide one lighter moment when the marks were added up and announced. Top of the class was Dr. Schacht – a result that surprised none of us."

Another day during luncheon in the prison, an American photographer came into the room and tried to photograph defendants. Schacht was furious and picked up his cup of coffee and threw it in the photographer's face. For soiling a United States uniform he was forbidden his exercise period for four weeks, during which period he was also refused coffee. After his acquittal he was re-arrested and sentenced by an Allied "denazification" court to eight years in a work camp. However, Schacht was released in 1948.

Family

After Schacht had gained a foothold in the private sector and was earning well, he married Bertha Emma Clara Luise Sowa (1874–1940), the daughter of a detective inspector, in 1903. In 1903, their daughter Inge was born (she married Dr. jur. Hilger van Scherpenberg), and in 1910 their son Jens Hjalmar (infantry officer of the Wehrmacht, died in June 1945 as a POW of the Soviets). Shortly afterwards, they built a small villa in the Berlin suburb of Zehlendorf. In 1940, the seriously ill Luise, an ardent National Socialist, died. On 6 March 1941, Schacht married Mauzika “Manci” Vogler (1907–1999), who was 30 years younger and with whom he had daughters Cordula and Konstanze. Lawyer Cordula Schacht has considered herself the executor of Joseph Goebbels' estate since she received the rights to Goebbels' estate from François Genoud.

Memberships (selection)

• 1906 Member of the Freemason Lodge Urania zur Unsterblichkeit
  • In 1914, he published in the newspaper of the lodge Zur Freundschaft der Großen Loge von Preußen
• 1915 to 1922 Board member of the National Bank for Germany
  • after its merger with the Darmstädter Bank, a board member of the Darmstädter and Nationalbank KG until 1923
• Board member of the German Colonial Society
• Member of the Berlin Press Association
• 1926 Honorary member of the Archaeological Institute of the German Reich
• 1949 Member of the Freemason Lodge Zur Brudertreue an der Elbe

Publications (excerpt)

Schacht wrote 26 books during his lifetime, of which at least four have been translated into English:

• The End of Reparations, New York, 1931.
• The International Debt and Credit Problem, Bad Eilsen, 30 August 1934, Reichsbank publication.
• Account Settled, Hamburg 1948, English language edition London, 1949.
• My First Seventy-Six Years, London, 1955.

External links

• NOT GUILTY AT NUREMBERG: The German Defense Case - detailed descriptions and criticisms of the alleged evidence against each of the accused and witnesses at the IMT