World of Criminal Justice on Hjalmar Schacht

Hjalmar Schact was a German banker and fiscal expert who rescued Germany from runaway inflation in the 1920s and later served as the minister of economic for Adolph Hitler's Nazi government. During the 1930s he helped the government rearm its military force but later fell out of favor. Though charged with war crimes by the International Military Tribunal after World War II, he was one of only three defendants to be acquitted of the charges.

Schact was born on January 22, 1877 in Tinglev, Germany. He was educated in Hamburg and several universities in Germany and Paris. In 1908 he entered banking, working as a vice director of the Dresdener Bank. During World War I he acted as a consultant for the German occupational government in Belgium, and in 1916 he was named a director of the German National Bank.

After Germany surrendered in 1918, the Allies forced it to pay reparations for wartime losses. These reparations, along with a devastated economy, led to steadily increasing inflation of the German mark. In 1923 Schact accepted an appointment as the special currency commissioner to address inflation. That same year he became the president of the German National Bank, the leading financial institution in Germany. During this decade Schact was able to stabilize the currency, but he was not successful in renegotiating reparation payments to a level he considered fair.

In 1930 he resigned the presidency of the German National Bank after a disagreement with the government. After leaving his post he became acquainted with Hitler and the Nazi Party. He agreed with Hitler that all reparations payments should stop immediately and that German military power should be restored. Hitler began to consult Schact on fiscal policy and even used him to raise money for him in the 1932 and 1933 elections.

Hitler persuaded President von Hindenburg to reappoint Schact the head of the German National Bank in 1933. After Hitler became chancellor in 1933 he named Schact his minister of economics. In 1934 Hitler made Schact the commissioner for war economy, which required him to work with the German high command on implementing rearmament. However, Schact soon lost a power struggle with Herman Goering over control of the economic policy. By 1937 Schact had had enough and resigned. Hitler waited for one year before announcing the resignation.

Schact remained president of the German National Bank for a time, but his disagreements with Hitler over armament expenditures led to his removal from the presidency in 1939.During most of World War II the Nazi leadership ignored him. However, after a failed 1944 military coup, Schact became a suspect. He was arrested and kept in a series of concentration camps until U.S troops liberated the camps in 1945.

In August of 1945 the IMT indicted Schact on war crimes charges. It was alleged that he had promoted the preparation of war and had participated in the military and economic planning for wars of aggression. Although it was clear he had assisted the Nazis, in the end the tribunal acquitted him of the charges because violating the terms of treaties was not a war crime. Schact went on to found his own bank in Dusseldorf. He died on June 4, 1970, in Munich.