Hjalmar Schacht

Schacht was born in Tingleff, Schleswig (now in Denmark), and studied economics at Kiel, Munich, and Berlin, earning a doctorate in 1899. He worked as a journalist and banker before joining the Dresdner Bank in 1903, rising to become its deputy director by 1916. In 1923, as currency commissioner, he introduced the Rentenmark, a temporary currency backed by land and industry, which ended the hyperinflation that had devastated the German economy. His success earned him the presidency of the Reichsbank later that year, and he negotiated the Dawes Plan (1924) and Young Plan (1929) to restructure German war reparations, though he resigned in 1930 in protest over the latter's terms.

Schacht supported Hitler's rise, believing he could control him, and was reappointed Reichsbank president in 1933. He devised the 'Mefo bills' — a system of promissory notes backed by the state — to finance rearmament without visible inflation, and as Minister of Economics from 1934 he pursued autarky and trade agreements with South America and the Balkans. However, his insistence on orthodox fiscal discipline clashed with Hitler's spending demands, and he was dismissed as minister in 1937 and as Reichsbank president in 1939. He remained nominally a minister without portfolio but was increasingly sidelined.

Schacht was arrested in 1944 after the July Plot, though he had only loose contacts with the resistance. He was sent to Dachau and later to Flossenbürg, but survived the war. At the Nuremberg trials, he was charged with crimes against peace and conspiracy, but was acquitted in 1946, partly because the judges ruled that rearmament itself was not a crime under the charter. He was later denazified and released. In the 1950s, he advised developing countries on economic policy and wrote memoirs defending his actions, portraying himself as a reluctant collaborator. He died in Munich in 1970.

Schacht's early career included a stint as a German delegate to the Versailles peace negotiations, where he argued against reparations. He was also a co-founder of the German Democratic Party in 1918, but later moved rightward. During his second Reichsbank term, he secretly helped Jewish bankers transfer assets abroad, though his motives remain debated. After the war, he advised Indonesia and Egypt on monetary reform, and he was the subject of a 1967 biography by Edward N. Peterson. His legacy remains controversial: some view him as a technocrat who served the regime, others as a pragmatic opportunist who eventually resisted.

Rentenmark

A temporary currency introduced in 1923 to stabilize the German mark after hyperinflation.

Mefo bills

Promissory notes used by the Nazi regime to finance rearmament without immediate government spending.

Dawes Plan

A 1924 agreement that restructured German reparations payments and provided foreign loans.