Hjalmar Schacht

Hjalmar Horace Greeley Schacht, the son of a salesman, was born in Tinglev, Germany, on 22nd January, 1877. His father had lived in the United States and named his son after the radical journalist, Horace Greeley and a prominent campaigner in America against slavery.

Schacht studied medicine in Kiel, philology in Munich and political science Berlin before taking a degree in economics in 1899.

He joined the Dresdner Bank and during the First World War was financial consultant for the German occupation government in Belgium. In 1916 he became a director of the German National Bank.

In 1923 he became Reich currency commissioner and was praised for bringing Germany's inflation under control. Schacht was rewarded by being appointed president of the Reichsbank. In 1929 he headed the German delegation that negotiated the Young Plan.

Schacht developed right-wing political ideas and in 1930 was converted to fascism after reading Mein Kampf. In January, 1931 Hermann Goering arranged a meeting with Adolf Hitler. Schacht agreed to raise funds for the Nazi Party. Schacht, who had good contacts with Germany's industrialists persuaded Albert Voegler (United Steel Works) Gustav Krupp and Alfried Krupp to join people such as Fritz Thyssen, Emile Kirdorf, Carl Bechstein and Hugo Bruckmann in providing money for the party.

In November, 1932, Schacht organized the letter signed by Germany's leading industrialists that urged Paul von Hindenburg to appoint Adolf Hitler as chancellor. This was successful and on 20th February, 1933, Schacht arranged a meeting of the Association of German Industrialists that raised 3 million marks for the Nazi Party in the forthcoming election.

After Adolf Hitler passed his Enabling Bill Schacht toured the United States where he made forty speeches, appeared on radio and wrote several articles for American newsletters where he claimed that Hitler would soon return Germany to democracy. He met Franklin D. Roosevelt but made a bad impression on the president who later described him as "extremely arrogant".

In August, 1934, Hitler appointed Schacht as his minister of economics. Deeply influenced by the economic ideas of John Maynard Keynes and Roosevelt's New Deal, Schacht encouraged Hitler to introduce a programme of public works, including the building of the Autobahnen.

Schacht also introduced the New Plan which rigorously controlled everything that was imported into Germany. This involved negotiating a series of bilateral trade agreements including one with the Soviet Union in 1935.

Like other Nazis Schacht was extremely hostile to Germany's Jewish population. In one speech he argued that "the Jews must realize that their influence in Germany has disappeared for all time." In 1934 he arranged with the World Zionist Organization, a deal where German Jews could pay 15,000 reichmarks to emigrate to Palestine. It is estimated that over the next four years over 170,000 reached Palestine under this agreement.

Schacht disagreed with what he called "unlawful activities" against Jews and in August, 1935 made a speech denouncing Julius Streicher and the articles he had been writing in Der Stuermer. He pointed out that Jews had fought bravely in the German Army in the First World War and deserved to be treated fairly.

Schacht also had doubts about the large amounts of money being spent on armaments. He warned Hitler that he was building armed forces far beyond the country's economic capacity. He found it increasingly difficult working under Hermann Goering who fully supported the government's policy on military spending. As Goering told Schacht "If the Fuehrer wishes it then two times two are five."

In November, 1937, Schacht resigned as minister of economics. However, he remained as President of the Reichsbank where he continued to oppose excessive expenditures for armaments. Hitler eventually removed Schacht from power in January, 1939.

During the Second World War he was approached by Hans Dohnanyi and Erwin von Witzleben to become involved in plots against Hitler. Schacht refused but in 1944 he was arrested and charged with being involved in the July Plot. He was sent to Dachau Concentration Camp but was still alive at the end of the war.

Arrested by the Allies he was accused of crimes against humanity at the Nuremberg War Crimes Trial. He was found not guilty but the German government had him re-arrested and charged him with other offences. He was sentenced to eight years imprisonment but he was freed on 2nd September, 1948.

On his release he formed his own bank in Dusseldorf. He also advised several foreign governments including Gamal Nasser in Egypt. Hjalmar Schacht died in Munich on 4th June, 1970.

Primary Sources

(1) Hjalmar Schacht wrote about meeting Adolf Hitler for the first time in his autobiography Confessions of an Old Wizard (1956)

After the many rumours that we had heard about Hitler and the published criticisms we had read about him, we were pleasantly impressed. His appearance was neither pretentious nor affected.

Our talk quickly turned to political and economic problems. His skill in exposition was most striking. Everything he said he stated as incontrovertible truth; nevertheless, his ideas were not unreasonable.

(2) Hjalmar Schacht, speech in Leipzig (4th March, 1935)

My so-called foreign friends do neither me nor the situation nor themselves any good when they try to bring me into opposition to the allegedly impossible National Socialist economic theories and declare me to some extent the protector of economic reason. I can assure you that everything I say and do has the complete approval of the Fuehrer and that I would not say or do anything that does not have his approval.

(3) Hjalmar Schacht, speech in Koenigsberg (18th August, 1935)

The Jews must realize that their influence in Germany has disappeared for all time. We wish to keep our people and our culture pure and distinctive, just as the Jews have always demanded this of themselves. But the solution of these problems must be brought about under state leadership, and cannot be left to unregulated individual actions, which have a disturbing influence on the national economy, and which have therefore been repeatedly forbidden by governmental as well as Party agencies.

The economy is a very sensitive organism. Every disturbance, from whatever direction it may come, acts as sand in the machine. Since our economy is closely allied with that of foreign countries, not one of us can be indifferent to what consequences these disturbances can have at home and abroad.

(4) Hjalmar Schacht, letter to Hermann Goering (November, 1942)

The repeated announcements that the Russian resistance was definitely broken have been proved to be untrue. Allied supplies of arms to Russia, and the manpower reserves of Russia have been sufficient to bring continuous counter-attacks against our Eastern Front.

(5) Hermann Goering letter to Hjalmar Schacht (21st January, 1943)

My answer to your defeatist letter, that undermines the powers of resistance of the German people, is that I expel you herewith from the Prussian State Council.

(6) Edward Heath, The Course of My Life (1988)

I looked towards the dock. In two rows often they sat: Goring, reduced to wearing a plain, ill-fitting grey uniform - no medals now - alert and attentive, vigorously nodding his head in agreement or shaking it in denial; Hess, with his pale pinched face; von Ribbentrop, always busy writing notes; Keitel and Jodi, the soldiers, staring silently and sullenly ahead; Schacht, the businessman, whose relationship with the Nazis had been more turbulent, and who had distaste etched into his face at having to sit in public with such unpleasant people; von Papen and von Neurath, politicians both but still the diplomats, polished and immaculate. These all stood out. But how unimpressive were Seyss-Inquart, who had betrayed Austria and ruled occupied Holland; Rosenberg and Fritsche, the propagandists; and von Schirach, formerly a fanatical and dangerous young zealot, but now a visibly broken man. For a time, the whole free world had quaked before these men. Ultimately, however, they had brought not glory, but ruin and misery, to their own land and its people. We had lived in their shadow for a decade, but now history was free to deliver a final verdict upon them.

When the court adjourned for a quarter of an hour, I saw the Nazi leaders arguing heatedly among themselves about the evidence they had heard: evidence which had been gathered from every corner of Europe, from the Chancelleries and concentration camps, from the occupied countries and from Germany itself, of how the Nazis plunged the world into war, led Germany to its undoing and brought themselves, at last, into the dock in that Court House in Nuremberg.