Commentary Magazine

Confessions of "The Old Wizard," by Hjalmar Horace Greeley Schacht

Hitler’s Economist
by Maurice J. Goldbloom
Confessions of “The Old Wizard.” By Hjalmar Horace Greeley Schacht. Houghton Mifflin. 484 pp. $5.50.

In Medieval demonology, a wizard was the male equivalent of a witch, a man who had sold his soul to the devil. Thus far we need not quarrel with the title of the American edition of Dr. Schacht’s autobiography. But “confessions”? Only if acknowledging unfailing rectitude of purpose and infallible judgment in oneself may be called a “confession”; to these Dr. Schacht is ready to confess, even if nobody else accuses him of them.

Yet the Confessions can be a useful source of information, if we read them with our eyes open. In some instances Schacht convicts himself out of his own mouth. Thus, in explaining why he signed the Young Plan modifying the terms of Germany’s World War I reparations, and then later denounced it, he writes: “The question at issue was whether one was justified in refusing to sign, since to do so would give rise to the danger of serious new political entanglements; or whether, having signed, one should continue steadily to resist reparations in general until the occasion arose which would enable them to be put an end to once and for all. I had decided in favor of the second method.” The alternative of making an honest attempt to fulfill an agreement which he had negotiated—and as a part of which, not mentioned by Dr. Schacht, Germany received a large international loan—seems never to have occurred to him.

One need not believe that the reparations system set up by the Treaty of Versailles made political or economic sense, even as modified by the Dawes and Young plans, to condemn the systematic dishonesty of Schacht’s treatment of the reparations question. This dishonesty characterized his methods as an official and politician, and it characterizes his discussion today. Thus he makes it seem as if the proceeds of Germany’s huge foreign loans in the 20’s played no constructive role, but were merely paid back again to the Allies in reparations and debt service. Actually, they served to give Germany a tremendous new industrial machine, more efficient than any other in Europe. The economic expansion of Germany under the Weimar Republic, on the basis of foreign loans which were made possible by the Dawes and Young plans, was the indispensable prerequisite of the financial legerdemain by which Schacht and Hitler later financed German rearmament. For it created a productive capacity which could have been used to repay the commercial debts and even pay reparations, but which Schacht diverted, by a policy of debt repudiation (reparations had already been canceled), into arms manufacture and the purchase of foreign raw materials for them.1



Dr. Schacht is again his own accuser in seeking to dissociate himself from Nazi anti-Semitism. He writes: “As I see it there is one single factor which gives rise to the widespread unpopularity of the Jews . . . owing to his ability, and whenever he resides in a non-Jewish community, the Jew endeavors to insinuate himself into the intellectual and cultural leadership of that community. . . . But when the legal and medical professions showed an unusually high percentage of Jews; when most of the theaters, the press, the concerts, were under Jewish management, then this constitutes the incursion of a foreign element into the spirit of the hostess nation. . . . All the above-mentioned professions exercise a civilizing influence. And civilization, in the long run, is rooted in religion. . . . A nation whose civilization is rooted in Christianity will therefore always be at pains to . . . discourage foreign elements in its cultural life.” And later he quotes from his Nuremberg testimony the statement: “In regard to the predominating influence of the Jews in government, legal, and cultural matters. . . . I have always declared myself in favor of limiting Jewish activity to a certain extent in all these fields—a numerical limitation, based not absolutely on population figures, but rather on a certain percentage.”

It is of course true that there were many differences between the anti-Semitism of the Nazis and that of Schacht. He had no use for the brawling Storm Troopers who destroyed national assets by burning Jewish-owned buildings or smashing the windows of Jewish stores. Nor was he unmindful of the adverse effects of anti-Jewish violence on Germany’s international economic relations. On these points he repeatedly made his opinion clear, to the annoyance of various Nazi leaders and eventually of the “Fuehrer” himself. But Schacht is, of course, not to be believed when he writes that from the Nuremberg indictment he “learned for the first time of the monstrous crimes committed against humanity, above all against the Jews, by Hitler himself and by his orders.” He was at least nominally a member of Hitler’s cabinet until 1943, although he played no active part in the government after 1939, and he had excellent independent sources of information. Indeed, his friend Gisevius, testifying for him at Nuremberg, stated that they “had known about all the horrors.” Since Schacht emphasizes and re-emphasizes his claim that he was an active opponent of the Nazis almost from the beginning of Hitler’s regime, both within the government and outside it, one wonders what he hopes to gain from this particular little attempt at deception. Nevertheless, he can certainly not have approved of the extermination camps or other mass atrocities; they represented a type of political and economic lunacy altogether alien to his spirit. The considerations of prudence which led him to object to the anti-Jewish boycott and the 1938 pogrom apply all the more forcefully here.



But if Dr. Schacht was not a partner to the worst excesses of the Nazi regime, he cannot escape a good measure of political responsibility for them—though he certainly tries to. No amount of double-talk can conceal or excuse his key role in undermining the Weimar Republic and bringing the Nazis to power, as well as in carrying out their policies in the crucial first years of the Hitler regime. He performed the indispensable task of breaking down big business’s distrust of Nazi “radicalism” and winning its support for Hitler. He himself tries to explain the assistance he gave the Nazi seizure of power on the basis of his “democratic outlook.” He writes: “In my opinion the will of the people must always remain the supreme law of government. . . . For this reason I regarded it as certain that a government under the chancellorship of Adolf Hitler could no longer be avoided if one did not wish to run the risk of military dictatorship and civil war. . . . After the uncertainty and feebleness of previous governments who had allowed unemployment figures to increase to six million, the election results of July 31, 1932, enabled me to look forward again to the possibility of an uninterrupted steady and energetic government.” The pleasure he took in the Nazi gains in that election, and the fact that according to his own testimony he had urged Bruening to include the Nazis in his cabinet immediately after his first meeting with Hitler on January 5, 1931, form an interesting commentary on his statement that, prior to July 31, 1932, “I had never . . . supported Hitler either in writing or by word of mouth.”

Other statements of his, however, furnish a somewhat more plausible explanation of the attraction he found in the Nazis. For one thing, he shared their contempt for the German people; at one point he writes: “The people of Germany have never been able to resist a man who forces his way on to the platform.” For another, the Nazi attitude toward the truth must have had a strong attraction for the man who testified at Nuremberg: “If you want to lead anyone, I believe you stand a far better chance if you don’t tell him your real reasons than if you do.”

Schacht’s whole prior career may, indeed, be seen as a preparation for the Nazi period. In 1919, according to his own account, he became one of the founders of the Democratic party after consulting with Stresemann, representative of conservative big business, on the need to form a “left” bourgeois party in order to draw strength away from the Social Democrats. It was through this political connection that he became president of the Reichsbank and had the opportunity, by putting into effect the plans already prepared by others, to become the “savior of the mark.” But when the Democratic party had served his purpose and was rapidly losing ground, he ostentatiously resigned from it in “protest” at its failure to come out unequivocally against the proposed confiscation of the Hohenzollern properties.

As president of the Reichsbank under the Republic, Schacht increasingly engaged in political propaganda against the government, and used his powers to thwart it so far as possible in both its foreign and domestic policies. It is instructive to compare his attitude on specific issues with that which he later adopted under the Nazis. Where, under the Republic, he haggled bitterly about every small Reichsbank advance to the government and demanded policy concessions in return, he tells us now how he unhesitatingly made twelve billion marks available to the Nazis through a scheme of credit inflation. Under the Republic, he denounced and sought to block public works of every type, and contributed to the growth of that unemployment which he was later to use as an excuse for supporting Hitler; under the Nazis, he was as ardent in defending public works of every description as he had been in condemning them previously. Can one doubt that the difference was due to a desire in the one case to undermine the power of the democratic parties, and in the other to reinforce that of the Nazis? Schacht was an enemy of the Weimar Republic long before he came out into the open at Bad Harzburg.



He had been so anxious to see Hitler come to power—and to use the opportunity to regain the Reichsbank presidency he had been forced out of in 1930—that he opposed any limitation on the “Fuehrer’s” power. When he was asked in November 1932 whether Hitler could accept the limitations inherent in taking office under the constitution, Schacht replied: “If a man takes over a great task, and therewith a great responsibility, this task must not be hedged round with restrictions in regard to the new methods to be adopted.” Now, however, he writes impudently of the period after Hitler had taken power with his assistance and was filling concentration camps and cemeteries with political opponents: “The non-National-Socialist Right-wingers and the remaining Moderate parties had it in their power to compel obedience to the rules of the constitution. Why, under these circumstances, an Enabling Act was introduced on March 23, 1933, which should give the government authority to make constitutional changes, was and remains a complete mystery. The Reichstag surrendered its powers of control without any need to do so. . . . Democracy had dug its own grave.” Meanwhile, Dr. Schacht visited the United States and Britain, seeking to win support for the new regime from Franklin Roosevelt, Stephen Wise, and various likelier prospects.

But, inveterate intriguer and seeker after power that he was, Schacht could no more remain contented under the Nazis than he had been under the Republic. He had thought he was using them; it was an illusion they soon dispelled. At first, he was in his element in the scramble for power under Hitler; by securing the support of the “Fuehrer” and Hermann Goering, he was able to outmaneuver various less agile or more principled opponents such as Walther Darré, Alfred Hugenberg, and Kurt Schmitt. (In July 1934—immediately after the notorious “blood purge”—he succeeded in displacing the last-named as Minister for Economic Affairs.) But when he tried to use his offices to acquire power over Hitler, he soon found out the facts of life. The powers of his ministry were transferred bit by bit to a new organization headed by Hermann Goering; it was already a shell when he left it in November 1937. From this time on, he was engaged in continual intrigues against the government, even though he retained the Reichsbank presidency until January 1939 and remained a nominal cabinet member until 1943.



These intrigues are the basis of Schacht’s claim to have participated in the German resistance. But it is by no means clear that at this stage—or even much later—he had any desire to secure the overthrow of the Nazi regime. Rather, there is at least strong evidence indicating that his purpose was to win back his former key place in it. (To do this, he was certainly willing to precipitate a crisis if he could, in the hope that the Nazis would then be forced to come to him for help.) This would explain his offer to Hitler, made in January 1940 and repeated in the autumn of 1941, to go to America as a propagandist. It would also fit in with his efforts, as late as 1943, to give the “Fuehrer” advice.

Actually, Schacht appears to have been willing to have Hitler removed, and to have indicated as much to various others, but to have been sufficiently cautious in his initiatives so that there was little possibility of their producing any result. Those who were seriously endeavoring to overthrow the Nazi regime always regarded him with suspicion. In the words of Professor Hans Rothfels of Chicago (The German Opposition to Hitler), writing about the July 20 rebellion: “Nor can Schacht be included in the group of the civilian leaders. He was certainly very active in opposition since 1936, increasingly so after his dismissal in January 1939. . . . But a marked record of ambition, vanity, and opportunism prevented his being admitted to full partnership.” The SS investigators also concluded that Schacht had no part in the conspiracy.

He was, however, arrested in connection with it, though he was not tortured or executed as were those against whom the Gestapo had any evidence. So, like Hermann Goering, he was the “Fuehrer’s” prisoner when the Americans came and, as he thought, rescued him. It was therefore a great shock to him when he was brought before the Nuremberg tribunal. He was sufficiently resourceful to make a good thing even of his imprisonment; he succeeded in setting up a flourishing trade in his autograph, which he gave to his guards and to the representatives of the press in return for cigarettes and chocolate. His acquittal at Nuremberg was probably technically justified: although he certainly had a part in the preparations which enabled Hitler to wage war, the prosecution was unable to prove he was consciously engaged in preparing for aggression.

Schacht was less pleased at his acquittal than resentful at his trial. But his real wrath was reserved for the subsequent efforts of the German authorities to punish him under the de-Nazification procedures. These he compares unfavorably with Nazi justice. Nowhere does one find any indication that he feels the slightest remorse for his role in bringing Hitler to power, or in facilitating Nazi rearmament. Even today, he can speak of “such political catchwords as Democracy, Freedom, Self-government, which, even among the most highly developed and educated nations, have acquired a certain value only when qualified by corresponding limitations, but which can prove positively devastating when voiced by a completely ignorant, illiterate crowd.” And when the Indonesian government, misled by his reputation for wizardry, asked his advice, his prescription was—labor legislation modeled on Hitler’s!



1 The best account of Schacht’s fiscal methods is Norbert Muhlen’s book, Schacht: Hitler’s Magician (1938).


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