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Dr. Horace Greeley Hjalmar Schacht (22 January 1877 – 3 June 1970) was a German economist, banker, liberal politician and co-founder of the German Democratic Party. He served as the Currency Commissioner and President of the Reichsbank under the Weimar Republicmarker, as President of the Reichsbank again between 1933 and 1939 and as Federal Minister of Economics between 1934 and 1937. Schacht was one of the primary drivers of Germanymarker's policy of redevelopment, reindustrialization and rearmament, and was a fierce critic of his country's post-World War I reparation obligations. He was eventually dismissed from the cabinet due to his differences with Hitler and other prominent Nazis and eventually dismissed as President of the Reichsbank in 1939. Subsequently involved in a number of anti-Nazi plots, Schacht was arrested in 1944 by the Nazis, accused of taking part in the 20 July plot against the Nazis, and ended World War II in a concentration camp. In 1953, he founded his own bank, Deutsche Außenhandelsbank Schacht, which he led until 1963, and was an advisor on economic development to developing countries. He co-founded one of the predecessor parties of the The Greens in 1965.

Education and rise to President of the Reichsbank

Schacht was born in Tingleffmarker, Schleswig-Holstein, Prussiamarker, German Empiremarker (now in Denmarkmarker) to William Leonhard Ludwig Maximillian Schacht and baroness Constanze Justine Sophie von Eggers, a native of Denmarkmarker. His parents, who had spent years in the United Statesmarker, originally decided on the name Horace Greeley Schacht, in honor of the American journalist Horace Greeley. However, they yielded to the insistence of the Schacht family grandmother, who firmly believed the child's given name should be Danish. Schacht studied medicine, philology and political science before earning a doctorate in economics in 1899 — his thesis was on mercantilism.

He joined the Dresdner Bank in 1903, where he became deputy director from 1908 to 1915. He was then a member of the committee of direction of the German National Bank for the next seven years, until 1922, and after its merger with the Darmstädter und Nationalbank (Danatbank), a member of the Danatbank's committee of direction. In 1905, while on a business trip to the United States with board members of the Dresdner Bank, Schacht met the famous American banker J. P. Morgan, as well as U.S. President Theodore Roosevelt.

During the First World War, Schacht was tasked to serve on the staff of General von Lumm, the Banking Commissioner for Occupied Belgium. Schacht was responsible for organizing the financing of Germany's purchasing policy within the country, and 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.

Subsequent to Schacht's dismissal from the public service, he resumed a brief stint at the Dresdner Bank, before moving on to various positions within rival establishments. In 1923, Schacht applied and was rejected for the position of head of the Reichsbank, largely as a result of his dismissal from von Lumm's service.

Despite the small blemish on his record, in November 1923, Schacht became currency commissioner for the Weimar Republicmarker and participated in the introduction of the Rentenmark, a new currency the value of which was based on a mortgage on all of the properties in Germany. After his economic policies helped reduce German inflation and stabilize the German mark (Helferich Plan), Schacht was appointed president of the Reichsbank at the requests of President Friedrich Ebert and Chancellor Gustav Stresemann. He collaborated with other prominent economists to form the 1929 Young Plan to modify the way that war reparations were paid after Germany's economy was destabilizing under the Dawes Plan. In December 1929, he caused the fall of the Finance Minister Rudolf Hilferding by imposing upon the government his conditions for the obtention of a loan. After modifications by Hermann Müller's government to the Young Plan during the Second Conference of The Hague (January 1930), he stepped down from the position of Reichsbank Chairman on 7 March 1930. During 1930, Schacht campaigned against the war reparations requirement in the United States.

Schacht became a freemason in 1906, and opposed nationalism.

Involvement with the Third Reich Government

Schacht at a meeting in the Reichsbank transfer commission in 1934

By 1926, Schacht had left the small German Democratic Party, which he had helped found, and was increasingly lending his support to the NSDAP, to which he became closer between 1930 and 1932 (although he never officially became a member of the party). Close for a short time to Heinrich Brüning's government, Schacht shifted to the right by entering the Harzburg Front in October 1931.

Schacht's disillusionment with the existing Weimar government did not indicate a particular shift in his overall philosophy, but rather arose primarily out two issues: first, out of his objection to the inclusion of Socialist Party elements in the government, and the effect of their various construction and make-work projects on public expenditures and borrowings (and the consequent undermining of the government's anti-inflation efforts); second, on his fundamentally unwavering desire to see Germany retake its place on the international stage, and his recognition that "as the powers became more involved in their own economic problems in 1931 and 1932 . . . a strong government based on a broad national movement could use the existing conditions to regain Germany's sovereignty and equality as a world power." Schacht was convinced that if the German government were ever to commence a wholesale reindustrialization and rearmament in spite the restrictions imposed by Germany's treaty obligations, it would have to be during a period lacking clear international consensus among the Great Powers.

After the July 1932 elections, which saw the NSDAP obtain more than a third of the seats, he helped Wilhelm Kepler to organize a petition of industrial leaders requesting that President Hindenburg nominate Adolf Hitler as Chancellor of Germany. He returned as Reichsbank Chairman on 17 March 1933 after Hitler's rise to power.

Though never a member of the NSDAP, Schacht helped to raise funds for the party after meeting with Adolf Hitler; he was also a main figure in the formation of IG Farben through the funds provided in part by him. In August 1934 Hitler appointed Schacht as his Minister of Economics. Schacht supported public works programs, most notably the construction of autobahns (highways) to attempt to alleviate unemployment - policies which had been instituted in Germany under legislation drawn up by Kurt von Schleicher's government in late 1932, and had in turn influenced Roosevelt's policies. He also introduced the 'New Plan', Germany's autarkic attempt to distance itself from foreign entanglements in its economy, in September 1934. Germany had accrued a massive foreign currency deficit during the Great Depression, and it continued into the early years of the Third Reich. Schacht negotiated several trade agreements with countries in South America, and South-East Europe, ensuring that Germany would continue to receive raw materials from those countries, but that they would be paid in Reichsmarks; thus ensuring that the deficit would not get any worse; whilst allowing the German government to deal with the gap which had already developed. Schacht also found an innovative solution to the problem of the government deficit by using mefo bills. He was appointed General Plenipotentiary for the War Economy in May 1934 and was awarded honorary membership of the NSDAP and the Golden Swastika in January 1937.

Schacht disagreed with what he called "unlawful activities" against Germany's Jewish minority and in August 1935 made a speech denouncing Julius Streicher and the articles he had been writing in Der Stürmer.

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 who urged Hitler to reduce military spending, turn away from autarkic and protectionist policies, and reduce statism in the economy. Schacht and Goerdeler were opposed by another fraction centering around Hermann Göring calling for the opposite policies. Schacht began to lose power after the implementation of the Four Year Plan in 1936 by Hermann Göring. He resigned as Minister of Economics and General Plenipotentiary in November 1937 at the request of the Minister of Economics, Göring, due to disagreements with Hitler and Göring over military spending, which he believed would cause inflation. He was re-appointed President of the Reichsbank until Hitler dismissed him from his position in January 1939. After this Schacht held the title of Minister without Portfolio, mainly an honorific title, and received the same salary that he did as President of the Reichsbank until he was fully dismissed in January 1943.

Imprisonment by Nazis and Allies

To greater and lesser degrees, Schacht was involved in numerous attempted coups in the years between his dismissal from the Reichsbank and his imprisonment. Indeed, Schacht was one of the main driving forces behind the 1938 planned coup. At Schacht’s denazification trial (subsequent to his acquittal at Nuremberg) 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.”

As a result of the various putsch attempts between 1938 and 1941, Schacht was arrested on 23 July 1944, accused of having participated in the July 20 Plot to assassinate Hitler. He was sent to Ravensbrückmarker and Flossenbürgmarker and finally to Dachau. In late April 1945 he was transferred to Tyrol together with about 140 other prominent inmates of the Dachau concentration campmarker, where the SSmarker left the prisoners behind. They were liberated by the Fifth U.S. Army on May 5, 1945 in Niederdorfmarker, Dolomitesmarker.

Immediately after the war, the former concentration camp inmate was arrested by the Allies and accused of alleged war crimes at the Nuremberg Trialsmarker, but was acquitted and released in 1946. Significant factors in establishing Schacht's innocence included the fact that he had lost all of his important posts before the war, had kept in close contact with dissidents such as Hans Bernd Gisevius throughout the war, and had spent most of the last year of the war as a concentration camp prisoner himself. His defenders argued that he was just a patriot, who was trying to make the German economy great. Furthermore, it was pointed out that Schacht, a liberal, was not a member of the NSDAP and shared very little of their ideology. The British judges favored acquittal, while the Sovietmarker judges representing Joseph Stalin's regime opposed. Eventually, the British had it their way.

Economic advisor for developing countries

He formed the Düsseldorfer Außenhandelsbank Schacht & Co. in 1953 and became an economic and financial advisor for developing countries, in particular Non-Aligned heads of state. Schacht died in Munich, Germanymarker on 3 June 1970.


Schacht wrote 26 books during his lifetime, of which at least four have been translated in English:
  • The End of Reparations, published in 1931
  • Account Settled, published in 1949 after his acquittal at the Nuremberg Trials
  • Confessions of the Old Wizard, an autobiography published in 1953
  • The Magic Of Money, published in 1967


  • Gustave Gilbert, an American Army psychologist, was allowed to examine the Nazi leaders who were tried at Nuremberg for war crimes. Among other tests, a German version of the Wechsler-Bellevue IQ test was administered. Hjalmar Schacht scored 143, the highest among the Nazi leaders tested, albeit adjusted upwards to take account of his age.

  • When he stabilized the mark in 1923 Schacht's office was a former charwoman's cupboard. When his secretary, Fraulein Steffeck, was later asked about his work there she described it:

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.

Portrayal in popular culture

Hjalmar Schacht has been portrayed by the following actors in film, television and theater productions;


Further reading

External links

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