SCHACHT, HJALMAR HORACE GREELEY

(1877-1970)

Reichsbank President; with Hans Luther,* largely responsible for ending the runaway infla-tion* of 1923. He was born in the town of Tinglev (now in Denmark); his businessman father went to America in the early 1870s, but returned to Germany before Hjalmar's birth. After studying economics, sociology, and philology, Schacht chose a career in banking in 1908. In 1916 he became director of the Nationalbank, a post he retained in 1922 upon formation of the United Darm-stadter and Nationalbank (Danatbank). During World War I he was a financial advisor to the occupation authorities in Belgium. A member of the prewarReichsverband der nationalliberalen Jugend(Reich Association of National Lib-eral Youth), he helped found and finance the DDP in 1918.After failing to gain election to the National Assembly,* he joined Carl Friedrich von Siemens* in creating an organization aimed at augmenting business influence in the Party.

On 12 November 1923, at the nadir of the hyperinflation, Schacht became Currency Commissioner. He was asked to oversee a currency reform animated by Karl Helfferich* and Luther; his introduction of theRentenmarkinduced the epithet "savior of the mark." On 22 December 1923, after the death of Rudolf Havenstein,* he was appointed Reichsbank President, a post he held until March 1930. His priorities included tight fiscal policies and reduced dependency on foreign loans. But he was prone to a high personal appraisal and was increas-ingly given to arrogant denunciations of cabinet members who failed to bend to his counsel.

In June 1926, angered by the DDP's failure to champion the property rights of Germany's former princes, Schacht left the Party. He was never a committed democrat, and his nationalism was affronted by Germany's treatment after World War I. By the late 1920s his ambitions far exceeded the simple control of fiscal policy (he may have aspired to succeed Hindenburg* as President). After 1924, when he participated in the Dawes Plan* talks, he was at the center of discussions concerned with reparations.* In early 1929 he led the German delegation to the Conference of Experts in Paris. His disenchantment with the meeting's subsequent Young Plan,* already evident in Paris, led to his sensa-tional proposal at the second Hague Conference* to embed political issues within negotiations over the plan's payment schedule. In March 1930, repudi-ating his links with Germany's reparations obligations, he resigned from the conference and quit his post as Reichsbank President. His ensuing denunciations of the Young Plan were calculated to appeal to the radical Right.

Schacht is alleged to have said that to achieve a great and powerful Germany, he was prepared to form an alliance with the devil. By the end of 1930 he was promoting the NSDAP. In October 1931 this erstwhile democrat attached him-self to the Harzburg Front.* Advising Hindenburg in November 1932 to make Hitler* Chancellor, he returned to the Reichsbank in March 1933 (he was Reichsbank President until 1939). Serving also as Economics Minister during 1934-1937, he was Hitler's leading financial architect. He finally broke with the Nazis when it became clear that their policies were inflationary. Although he was acquitted at Nuremberg of war crimes, the German courts kept him incar-cerated until 1948. He thereafter returned to banking and financial counseling.