Hjalmar Schacht The Financial Architect Behind Nazi Germany's War Economy

In March and April 1933, as the Nazis cemented their control over Germany, ministerial briefs and government positions were handed out by Adolf Hitler to some of his oldest allies. Yet one of the most senior economic posts, that of President of the Reichsbank, was given to a man who was not even a member of the Nazi Party, Hjalmar Schacht. In 1934 and 1935 he became the Reichsminister of Economics and head of the War Economy. How had this banker risen to such prominence within the Nazi regime without ever becoming a member of the party? This is the story of Hjalmar Schacht, the man who orchestrated the Nazi economic revival.

The man known to history as Hjalmar Schacht was born on the 22nd of January 1877 in the town of Tingleff in the Schleswig-Holstein region. Today this is in the far south of Denmark, but in 1877 it was part of the German Empire. Schacht was ethnically part Danish. Hjalmar's father was William Leonhard Schacht. He was a former schoolteacher turned merchant. He had married Baroness Constanze Justine von Eggers, the daughter of a civil servant from Holstein. The pair had migrated separately to the United States. William had done so in the

late 1860s in order to escape compulsory military conscription after Prussia took over Schleswig-Holstein, while Constanze decided to seek out a new life in the US in 1871. They quickly married there and their first child, a boy named Eddy, was born in Brooklyn in 1872. Beyond this, life in America did not really work out for the young couple and they returned to their native land in 1876, after hearing of the economic upsurge that was occurring in newly unified Germany. A curious development from their time in America is that they had

tried to name Hjalmar after the founder and editor of The New York Tribune, Horace Greeley. Following the objections of their parents they had relented and named their son Hjalmar instead, though with Horace Greeley kept as his middle names. He was their second child. Hjalmar's upbringing was nomadic to begin with. The family moved to the small market town of Heide when he was still an infant and moved on from there to Husum in 1883 after William Schacht's attempt to set up a newspaper in Heide failed. They did not last long in Husum before

they eventually moved to the city of Hamburg. Here William Schacht had some success working as a bookkeeper for American Equitable Life, a post where his ability to speak English was beneficial. The household here was multicultural. His mother spoke Danish frequently throughout her adult life. Hjalmar began attending the Gelehrtenschule des Johanneums in Hamburg for his secondary education. In the midst of this, William Schacht obtained a new post in Berlin and the rest of the family moved to the capital. Hjalmar remained behind on this occasion to complete his studies. Many of his

classmates immediately headed for America, however Schacht lacked the funds to buy a ticket. Hjalmar spent the next year in limbo. He visited his parents in Berlin and performed various odd jobs before commencing third-level studies at the University of Kiel. His university education was peculiar. He started out studying medicine and history before shifting to sociology and then economics. He also moved around a lot, spending semesters at universities in Berlin, Munich and Paris before returning to Kiel to finish his studies. There he completed a

doctoral thesis entitled 'The Theoretical Content of British Mercantilism'. Mercantilism was the economic orthodoxy that had prevailed in early modern Europe which held that there was a finite amount of trade in the world and that nations had to compete with each other to acquire a larger share of it. By the mid-nineteenth century it had been discredited in favour of the idea that capitalism could create endless market growth, a concept Schacht argued in favour of in his thesis, which was submitted to the University of Kiel in 1899. While he studied, he worked part time

as a journalist with Das Kleine Journal. It was also during his years as a student that he met his future wife, Luise Sowa, while playing tennis at a club in the suburbs of Berlin in 1896. After marrying, the couple had their first child, a daughter named Inge, in 1903. Several more would follow. It was also in 1903 that Hjalmar obtained a position with Dresdner Bank as head of the press department there. Schacht and his young family were upwardly mobile in the decade that followed. He earned a very good salary and became a well-regarded economist. In 1905, for example,

he was sent as part of a delegation to New York on behalf of Dresdner Bank, during this visit he met John Pierpont Morgan, the famous US banking titan. Schacht was a respected economist heading into his late thirties when the First World War broke out in 1914. He was therefore deferred from direct military service and sent to Brussels to serve as part of the military administration there, after Belgium had largely been conquered by the Germans in the first stages of the war. His role was to help in the process of making

the occupation of Belgium pay for itself. His time in the Belgian city caused a scandal, as Schacht was accused of corruptly arranging for contracts to be issued to Dresdner Bank. The peculiar element to this was that once Schacht was dismissed from his post in Brussels, he returned home to Berlin and resumed working for Dresdner Bank, only to leave the firm in 1916 when his loyalty to them, for over more than a decade, was not rewarded with a place on the board. Within weeks he had obtained a more senior position at Nationalbank. Meanwhile, despite acquiring vast territorial concessions from the

Russians through the Treaty of Brest-Litovsk early in 1918, the entry of the United States into the war in April 1917 doomed the Germans and in November 1918 an armistice was announced before the Entente Powers invaded Germany. The First World War was over. Germany went directly from the war into the German Revolution as the empire collapsed and groups of communists and socialists tried to emulate the Russian Revolution and establish communist governments in Berlin and Munich. This led to a backlash whereby paramilitary groups known as the Freikorps were used to crush the communist revolutionaries.

Out of the Freikorps and other reactionary groups, radical right-wing political parties, including the National Socialist German Workers' Party, or Nazis, emerged in the early 1920s. At the same time, peace terms were negotiated at the Paris Peace Conference in 1919 and 1920. The resulting Treaty of Versailles blamed Germany for starting the war, stripped it of large amounts of territory, and imposed crippling war reparations payments on the country. In the midst of these events in the late 1910s and into the early 1920s, Schacht began to renew his interest in public life. Back in 1905, he had flirted with entering politics after he

became interested in the platform of Friedrich Naumann, the head of the National Social Union, who argued for a new social contract between the upper classes and the working classes to offset the growing popularity of communism within the German Empire. Now, in the turbulent political environment of post-war Germany, Schacht entered the political fold. Schacht found a way into German politics because economics was at the very heart of the country's post-war crisis. On top of the crippling war reparations payments, the government of the new

Weimar Republic was facing escalating levels of inflation. Germany had left the gold standard in 1914, in order to finance the war. This, combined with the broader political crisis after the war, eventually led to hyperinflation between 1921 and 1923. By then, Schacht had already been one of the leading individuals in the establishment of the liberal German Democratic Party, although he soon grew disillusioned with their politics and drifted to the German People's Party headed by Gustav Stresemann. Eventually Schacht was appointed as part of a new currency commission in

1923 that was tasked with curbing hyperinflation and reforming the Germany monetary system. In this capacity he played a very senior role in the introduction of the Rentenmark, a new currency that was briefly introduced to stabilise the currency situation by allowing for the conversion of literally millions of old Papiermarks into a handful of Rentenmarks. With some confidence in Germany's currency consequently established, the Reichsmark was then introduced in 1924. These measures ended the hyperinflation crisis and by the end of 1924, Germany was entering its first

period of political stability since the war had broken out a decade earlier. For his role in ending the hyperinflation crisis Schacht was appointed as President of the Reichsbank in December 1923. His role as President of Germany's central bank was made immensely easier in 1924 when the American-led Dawes Plan was agreed to by Germany, Britain and France, which lightened the burden of the war reparations payments. In the years that followed, as head of the Reichsbank, Schacht continued to press for further alleviation of the payments, resulting in 1929 in the Young Plan, which contained proposals for a considerable

reduction of the overall reparations, but which was ultimately scuppered by the onset of the Great Depression. The Nazis unilaterally stopped the war reparations payments altogether in 1933. Beyond his work on renegotiating the war reparations, Schacht is notable in the second half of the 1920s for his cautious advocacy in favour of a pan-European union led by France and Germany. He also wrote a lot. In 1927, for instance, he published a book entitled The Stabilisation of the Mark. It explored the causes of the hyperinflation crisis of the early 1920s

and how it had been stabilised by introducing the Rentenmark. His second book on the topic was published in English translation in 1931 as The End of Reparations: The Economic Consequences of the World War. It was a polemical book in which he argued that the war reparations were sucking the life out of Germany and placing it in financial purgatory. More broadly, he offered his views on many things, including Pan-Europeanism and his belief that Germany should have its colonies in Africa and Asia restored, in chapters towards the end of the book, as part of the end of the punishment of the country for the war.

Schacht's tenure as President of the Reichsbank was successful. The German economy rebounded sharply between 1924 and 1929, with GDP increasing by approximately 17% in 1924 alone, a huge resurgence in industrial and economic activity. The pattern continued, albeit at a slower rate for the remainder of the 1920s, a period known as the Golden Twenties in Germany. Schacht could claim some credit for this turnaround, but it was all undone in the space of a few weeks in October 1929, as the Wall Street Crash ushered in the Great Depression. In Germany, life savings

were wiped out and unemployment lines grew and grew. Soon the National Socialists or Nazis, led by Adolf Hitler were surging in popularity. From an obscure Bavarian outfit in the 1920s, they rose to become the second largest party in the country in elections in 1930 and then the largest in fresh federal elections in 1932. Schacht was amongst those who viewed them as a plausible party of government. He had connections with the Nazis as early as 1926 and liked some of their policies when it came to overturning the punitive terms of the Treaty of Versailles. However,

it is important to note that Schacht, for all the positions he held in the 1930s, was never an official member of the Nazi Party. By 1932 the economic crisis in Germany was very grave. Unemployment peaked that year at six million people, upwards of one out of every four German workers. By then, Schacht was no longer President of the Reichsbank. He had resigned in 1930 in exasperation over the economic policies being pursued by the coalition led by the Social Democratic Party. Now, in 1932, he began liaising with leading German bankers, economists

and industrialists concerning the possibility of bringing the Nazis into government. Two elections in 1932 had seen them become the largest party in the Reichstag, but without a majority, leading to gridlock in the country's parliamentary politics. All the while, the German communists were gaining in popularity, much to the concern of the business community. In an attempt to end the impasse and ensure a united centre-right response to the crisis, Schacht devised the Industrielleneingabe or 'Industrialists' Petition' in November 1932. This was signed by him and eighteen other leading

members of the German banking and business community. In it, they petitioned the German President, Paul von Hindenburg, to appoint Hitler as Chancellor of Germany and head of the government. Hindenburg remained reticent and the impasse dragged on into 1933. Schacht's leading role in the Industrielleneingabe is reflective of his position within the Freundeskreis der Wirtschaft, the 'Circle of Friends of the Economy', a group of dozens of German economists and businesspeople who were actively promoting the entry of the Nazis into government, to end the political deadlock and curb the economic crisis. The 'Circle' members were

trying to convince the most substantial men in the German economy to bring the Nazis into government, individuals like Gustav Krupp, head of Krupp AG, a leading German industrial conglomerate, and Georg von Schnitzler, a leading board member and eventual commercial chair of the chemical and pharmaceutical conglomerate, IG Farben. Throughout the final weeks of 1932 and into January 1933, Schacht and others were promoting the idea that Hitler needed to be made Chancellor of Germany to figures like Krupp, von Schnitzler and President von Hindenburg. Eventually the centre-right

establishment capitulated, believing that there was no other way to try to function with a technocratic government at a time when stability was needed. Hence, on the 30th of January 1933, Hitler was appointed as Chancellor. Within days the Nazis were moving to dissolve the German parliament, the Reichstag, and call fresh elections which would be manipulated to ensure a larger share of the vote for the Nazis and like-minded parties. Schacht was also central to a meeting that was held at the residence of the leading Nazi official, Hermann Goring, in Berlin on the 20th of February 1933. With fresh Reichstag elections

about to be held, Schacht helped to organise a meeting of around two dozen of Germany's leading industrialists and businessmen, where they were addressed by both Goring and Hitler. The message from the Nazi leader was clear. The Nazis intended to crush the communists and save the German economy by securing complete control over the state in the forthcoming elections. Democracy would be brought to an end in Germany and strong government would follow, in which businesses who sided with the Nazis would be favoured. To achieve this, the Nazis needed money immediately. Around

two million Reichsmarks were quickly contributed to the party by the industrial leaders. A week later a fire at the Reichstag, the origins of which remain highly debated, was used as an excuse to crush the communists before the elections that were held on the 5th of March. This was enough to ensure the Nazis increased their vote share to 44%, then an Enabling Act was rammed through, with support from several smaller centre-right parties, on the 23rd of March. This allowed Hitler and the party to rule by decree. Schacht had played a substantial role in the swift shift from political

gridlock in 1932 to the Nazis turning Germany into a one-party dictatorship in 1933. Although he was not a member of the Nazis, Schacht was promoted within the new government for his role in bringing Hitler to power. He was reappointed as President of the Reichsbank in March 1933, three years after he had left the position. In 1934 he became the Reichsminister of Economics, while he also held the office of General Plenipotentiary for the War Economy from 1935 onwards. In these positions, he engineered Germany's economic revival in the mid-1930s.

This was largely through the instrument of the Mefo Bills. These were promissory notes that the German Central Bank began issuing from 1934 onwards at Schacht's direction. They were issued through a dummy company called the Metallurgische Forschungsgesellschaft or Metallurgical Research Corporation, known in abbreviated form as Mefo. The bills were used to provide highly liquid funding for six months on future payments. It meant the Nazi government could issue bonds for money it didn't have on the basis it would repay it in six months, but in reality the Mefo Bills

were passed on endlessly by Germany companies and banks with the promise that one day they would be repaid once the economy recovered. They had the additional benefit that they were heavily disguised through the dummy company, so the Mefo Bills became a critical part of the way in which the Nazis secretly financed the re-militarisation of Germany from 1934 onwards. The idea for the Mefo Bills was not entirely novel. Similar promissory notes known as Öffa Bills had been created in 1932 before the Nazis came to power to try to tackle the economic

crisis. The Mefo Bills were Schacht's version with several important additions. For instance, they could not be swapped for Reichsmarks. In this way he avoided triggering renewed inflation in the Germany economy. He also ensured that no one actually knew how many Mefo Bills were in circulation. This created confidence in the system that would have collapsed if holders of Mefo Bills had been aware that over $100 billion dollars in modern money had been issued through the Mefo Bill system. He also used the Bills very effectively to begin German rearmament,

in ways which stimulated the German economy in the mid-1930s. Holders of the Bills were told that if they simply passed them on or renewed them on expiration every ninety days, they could rest assured that they were making money from holding the Bills. This money would then be repaid in full in years to come, meaning that, at least on paper, major banks and industrialists in Germany who held large amounts of Mefo Bills were getting richer and richer from the high interest rates. Whether they would ever be paid their imaginary money if they tried to claim it, would depend on

whether Germany was able to reassert its power in future years. Nevertheless, in the mid-1930s, the issuance of the Mefo Bills was a major factor in the resurgence of the German economy, one which is frequently overlooked in histories of the Nazi regime and the drift to war in 1939. Schacht's stewardship of the economy was not confined to devising secretive ways of increasing Germany's debt pile and rearming. He also played a major role in the initiation of a huge public works programme including the construction of a new road system,

the Autobahns. The economy rebounded sharply as a result. Indeed, one of the reasons why the Nazis were able to tighten their grip on Germany to the extent that they did, was because of their popularity in resolving the economic crisis. Yet, Germany was already primed for a rebound in the mid-1930s as the worst of the Great Depression had passed by then, albeit Schacht's stimulus plan did play a role too. German GDP averaged 11% a year between 1933 and 1936. This means that the economy grew by nearly 50% by 1937 on what it had been when the Nazis entered government at the start

of 1933. Thereafter growth slowed to average out at nearly 8% a year between 1937 and 1939. There is no doubt that the Nazis' first half decade in power was a period of economic transformation and soon politicians from Britain and other countries were visiting Germany to tour factories there and see how Schacht and his fellow ministers had turned the country around. A lot of this however, was built on a shaky foundation at the same time. While unemployment fell dramatically, real wages actually fell slightly for many workers during the years Schacht was in charge of the economy. Schacht did not see eye-to-eye with a large

number of the senior Nazis who he served with in government, and his unwillingness to ever become a member of the party continued to mark him out as different in government. Nevertheless, as bad as his relations with some ministers were, it was the deterioration of his relationship with Hermann Goring that marked the beginning of the end for Schacht in government. In October 1936, Goring was named as the Plenipotentiary of the Four-Year Plan that was intended as the precursor to the launching of a new European war. Goring's duties primarily lay in accelerating the

pace of rearmament. From the beginning, Goring acted without consulting Schacht on a huge range of matters. He ran the Four-Year Plan like an economically illiterate bulldozer, regularly telling those who worked under him, to simply take any measure necessary to achieve his targets. Schacht soon formed the view that Goring knew absolutely nothing about economic affairs and on the 26th of November 1937, a year after Goring's appointment as Plenipotentiary, he resigned as head of the War Economy in protest. If the action was intended

to pressure Hitler into rethinking Goring's position it didn't work. Goring was kept in place. Schacht was retained in the cabinet as a minister without portfolio, but his influence was clearly declining rapidly. It was not simply the case that Schacht was disillusioned over Goring's intrusion into economic policy. He was upset by the regime's anti-Jewish policies. In his youth, Schacht's father had briefly worked for a Jewish soap-maker and Hjalmar's own career as a banker had meant that he spent a lot of time around Jewish financiers and businesspeople. For instance, in his thirties he was an acquaintance of Albert

Ballin, the Jewish Danish shipping magnate who was the director of the Hamburg-America Line, the largest shipping company in the world in the early twentieth century. Schacht had also briefly studied in Paris back in the mid-1890s in the early days of the long-running Dreyfus Affair, when an Alsatian Jewish French military officer, Alfred Dreyfus, was wrongly accused and convicted of military espionage, sparking a lengthy debate about anti-Semitism there. For all of these reasons, Schacht did not share the anti-Jewishness of

the Nazis and it was a contributory factor in his decision to never join the party. He consequently became disillusioned with his own place in the Nazi government as the Nuremberg Laws were put into place, effectively turning Germany's half a million Jewish people into second-class citizens in their own homeland. Schacht's final major split from the Nazis came over the events of November 1938. Hitler and his followers had been emboldened by the swift manner in which they had acquired Austria and the Sudetenland that year, as well as the capitulation of Britain and France at the Munich Conference in September 1938. Their

approach towards the country's Jewish people took on a harder edge in the weeks that followed. On the night of the 9th of November 1938, squads of Nazi SS and SA paramilitary forces across Germany and Austria, attacked thousands of Jewish businesses, homes and synagogues, destroying buildings, arresting thousands of Jewish people and killing dozens. Schacht objected strenuously to the Night of the Broken Glass. Fearing that further violence would ensue before long, he put forward a proposal to Hitler in which he outlined a scheme for taking Jewish

businesses and property into state ownership and then providing funding to the owners, so that they could move abroad. When his plan was ignored, he stepped down from his post as President of the Reichsbank in January 1939. By then, Schacht was already being monitored by the Gestapo. Schacht's departure from his government positions coincided with the accelerated drift towards war, which had largely been made possible by the Mefo Bills that disguised the full scale of Germany's rearmament in the mid-1930s. After the annexation of Czechoslovakia in March 1939, the

Second World War began when the Germans invaded Poland on the 1st of September 1939. The course of the war in Europe thereafter is well-known. The Germans conquered Poland within six weeks, then Denmark and Norway in April 1940, followed by France and the Low Countries that summer. A year later, Hitler ordered the invasion of the Soviet Union. The failure to capture Moscow, Leningrad and the other major cities before the winter of 1941 set in, and the concurrent entry of the United States into the war, completely changed the complexion of the war. Germany and

its allies were now facing a demographically and economically superior Allied Alliance of the US, the UK, the Soviet Union and others. A total war economy had to be adopted in Germany, one which became reliant over time on slave labour extracted from Occupied Europe. This was unlike anything Schacht had ever envisaged. Moreover, the Mefo Bills continued to be rolled over into new promissory notes. This had ironically established a ticking time-bomb within the German economy. Even if the Nazis had been more successful in the war, hyperinflation would most likely have set in

again afterwards, as without a war, the Mefo Bills would have been called in, suddenly triggering a huge spike in inflation, as their paper value was now stretching into the tens of billions of Reichsmarks in theory. By the time the war broke out Schacht was in contact with various resistance movements. After the war began, he retained ties to sceptics of the Nazi movement, even as most Germans put aside their reservations in the face of the seemingly endless succession of victories on the battlefield between September 1939 and October 1941.

For instance, Schacht was associated with the Kreisau Circle, a group of about two dozen German aristocrats and intellectuals who met periodically at the estate of Helmuth James von Moltke in Kreisau to discuss the possibility of a post-Nazi Germany, although Schacht was not an official member of the group. He also maintained ties to individuals in government who continued to serve under the Nazis, yet who were nevertheless wary of the direction of policy. These included Wilhelm Canaris, the head of the military-intelligence service, the Abwehr. Canaris was eventually

removed from his position at the start of 1944 as Hitler became suspicious of his loyalty. All of these connections landed Schacht in serious trouble in the summer of 1944, after a cohort of Germany military officers tried to assassinate Hitler using a briefcase full of explosives at his Wolf's Lair military headquarters in Prussia. In the aftermath of the failure of the 20th July Plot, Schacht was arrested and interrogated. He was lucky to survive, as nearly 5,000 Germans were executed in rounds of executions which followed in the weeks after the plot.

Schacht's arrest in 1944, was the beginning of a six-year long period in which he was imprisoned in over thirty different concentration camps and prisons. During this time, he spent nearly two years in solitary confinement of one kind or another. He was frequently questioned and the secret police collected evidence about his movements, in the months prior to the attempted assassination. They must have been unable to find a shred of evidence linking Schacht to the conspirators, otherwise, he would have been killed. While this was occurring, the war was coming to an end. The Soviet Red Army was advancing into Poland, Ukraine and then the

Balkans in 1944, while the Western Allies landed in northern France via the D-Day landings on the 6th of June 1944. By the end of 1944, the Americans, British, French and Canadians were preparing for the offensive into the Rhineland and the Soviet Red Army was moving into eastern Germany. The final stages came in the spring, as the Western Allies spread out around Germany, while the Russians undertook the siege of Berlin. Hitler took his own life on the 30th of April in his bunker in Berlin and the war came to an end just over a week later. A final round of

punitive executions could have cost Schacht his life. Wilhelm Canaris, for instance, was not so lucky. After being detained for months after the 20th July Plot, he was dragged to a gallows at Flossenburg concentration camp on the 9th of April 1945 and executed. Schacht was lucky to survive. He had been moved from Flossenburg to the camp at Dachau early on the 9th of April, only a few hours before Canaris was executed at Flossenburg. Had he still been there, perhaps he would have been killed alongside him. Late in April he was moved again, this time to a prison camp in the Tyrol region of western Austria. The camp Schacht

was being held in there, was liberated on the 5th of May 1945. He was shocked in the coming months, to learn that he had been selected to stand as one of the defendants at the trial of the most prominent Nazi leaders before the International Military Tribunal at Nuremberg. Schacht complained bitterly during the months of questioning that preceded the trial and at the trial itself, that he had left the regime years earlier and that he had no hand in the Holocaust of Europe's Jews and other groups like the Roma and Sinti. Admittedly, he was only ever charged with two of the main four

charges that the nearly two dozen defendants faced, specifically having contributed to the planning and carrying out of a war of aggression against the peace. He was never charged with crimes against humanity or war crimes in the way which other defendants like Goring and the head of the German Wehrmacht, Wilhelm Keitel, were. In the end, Schacht was found innocent of the two charges he was accused of, despite the objections of the Russians who wanted to find him guilty. Schacht did not escape entirely. Within hours of being released in October 1946,

he was re-arrested. A fresh trial was prepared and prosecutors began urging an eight-year sentence for his role in bringing the Nazis to power and furthering their agenda through his work as an economist. His second trial took place in April and May 1947 and he was convicted on the 13th of May. A sentence of eight years was imposed. Hjalmar immediately petitioned for a retrial and in the months that followed he aided the Allies in the subsequent trials at Nuremberg. For instance, in July 1947, he testified at the trial of the heads of IG Farben and its associates. That

company had run the third concentration camp at Auschwitz, the Monowitz camp, where slave labour had been used to produce synthetic rubber and other war material. He was released in September 1948 and put forward for de-Nazification. Even this did not satisfy some of his detractors and by November 1948 police were searching for him again. This time he tried to elude them for several days before being re-arrested and a third trial was ordered. There followed two further years of legal wrangling, in which Schacht found support from amongst the British in their occupied zone.

A fourth and fifth trial were ordered after the previous ones collapsed without being held, until at last, Schacht was freed for the last time in September 1950. After his many years of imprisonment, during which he spent over four years imprisoned on and off, between the late summer of 1944 and the autumn of 1950, Schacht began to return to civilian life of a kind. Germany was divided in two by then as the Cold War intensified. Schacht's legal fees had decimated his savings and assets and his home in Berlin had been bombed in 1945. Thus, nearing his mid-seventies, he found himself largely penniless and needing to work to pay the bills. This was

especially pressing because he had two new young children. In 1941 he had married his second wife, Manci Vogler. She was thirty years younger than him and still able to have children, so when he was released in 1950, Schacht was the father of two young daughters, Cordula and Konstanze, who needed to be provided for. He was fortunate in that he had a kind of fame, albeit a dubious one. He was, for instance, able to acquire a large amount of money for writing a book, which he had come up with the idea for in prison and which was entitled Settling Accounts with Hitler.

It went on to sell a quarter of a million copies. While German companies were reluctant to hire him, several foreign governments considered that he was a financial wizard. In 1951, he undertook a long trip to Indonesia to advise the government of the newly-independent country on their economic affairs. He also provided economic advice in post-war Iran and the Philippines before returning to Germany to set up his own small bank there in the mid-1950s. Schacht did not slow down as he aged. He became involved in a precedent-setting legal case in Germany after he sued a magazine for what he characterised as a defamatory portrayal

of him in an article. In 1963 he was in North Africa advising the government of newly independent Algeria on how to rebuild its economy, after the long and destructive war of independence against the French. A year later, he travelled to Peru to offer similar economic advice. Not everyone had forgotten his past. In 1959 his bank, Schacht & Co., was offered a contract to finance the construction of a huge 100,000-capacity sporting stadium in the city of Marseille in southern France, but the deal fell through when doubts were expressed about Schacht's connections to the Nazis. He continued to write as well, authoring an autobiography and

another book entitled The Magic of Money that discussed how to deal with heavy inflation and other elements of his economic philosophy. Schacht died on the 3rd of June 1970 in Munich in West Germany at 93 years of age. He was buried in the Munich Ostfriedhof or Eastern Cemetery in the Bavarian capital. rise to power of the Nazis, Hjalmar Schacht was the most contradictory. As an economist he was deeply critical of the way in which Germany was financially punished after the First World War. In the 1920s, he played a leading role as President of the Reichsbank in ending the

hyperinflation of the early Weimar era. Then he saw all his good work scuppered by the Great Depression. In response to this situation, and the political gridlock in the early 1930s, he became a critical mediator between the centre-right establishment in Germany and the Nazis, paving the way for Hitler's rise to power in 1933. He was rewarded with several senior economic positions, though he never actually became a member of the Nazis. In the mid-1930s, he was the architect of the Mefo Bills and the system whereby Germany rearmed in secret, by paying for its rearmament

with promissory notes offered to the country's leading businesses. His role in bringing the Nazis to power and then ensuring their economic success in the 1930s was huge, but he became deeply uncomfortable with their policies over time. By the time the Second World War began in 1939, he had distanced himself from the party and in 1944 he was arrested and imprisoned. Given this, it is perhaps understandable that he was acquitted at Nuremberg after the war. His subsequent re-arrest and relatively swift release, again indicates how conflicted the Allies were about his actions. Historians have been equally divided ever since.

What do you think of Hjalmar Schacht? Was he primarily a patriot who wanted to lift Germany out of its perilous economic situation, or should he have been convicted at Nuremberg for the extensive role he played, in bringing Hitler and the Nazis to power? Please let us know in the comment section, and in the meantime, thank you very much for watching.