0 H N WE1IZ h j a l m a r H O R A C E G R E E L E Y S C H A C H T BIOGRAPHY FPT Canada HJALMAR HORACE GREELEY SCHACHT was a genius — but like his name, eccentric and highly enigmatic. Now, in the first-ever full- scale biography to appear in English, historian John Weitz brings this brilliant Nazi-era financier to life Born to an impoverished family of the German upper middle class. Schacht gained worldwide fame as Germany's commissioner of currency and president of the Reichsbank in the 1920s Single-handedly, he halted Germany's runaway inflation and, as a tough negotiator, freed Germany from the crippling reparation debts imposed by the Versailles Treaty. Later, under the Nazis, he built the economic and financial juggernaut that underwrote Hitler's military machine. Yet before the war was over. Hitler had imprisoned him in Dachau; afterward, he was one of only three defendants at the Nuremberg trials to be acquitted Arrogant, witty, caustic, and urbane, Schacht disdained economists and mathe mattcians; his true strengths lay in public relations, |ournalism, and psychology As one of the dominant financial figures in the world, he understood that the German mark had no intrinsic worth; its value was what he could make the public-and the world- believe it to be While he had financed the Nazis, he held most of them in contempt and protected a number of Jewish financiers. He frequently clashed with the Nazi hierarchy — and with Hitler himself — over anti-Jewish laws and war spending In addition, he remained in close touch with, and was probably involved with, the high ranking conspirators who attempted to assassinate Hiller. Althouq^i^n^ officers 10972945 hitler ’ s banker ALSO BY JOHN WEITZ Hitler ’ s Diplomat: The Life and Times of Joachim von Ribbentrop Friends in High Places Man in Charge Value of Nothing hitler ’ s banker H jalmar H orace G reeley SCHACHT John Weitz 18 3 7 Boston New York Toronto London Copyright © 1997 by John Weitz All rights reserved. No part of this book may be reproduced in any form or by any elec tronic or mechanical means, including information storage and retrieval systems, with out permission in writing from the publisher, except by a reviewer who may quote brief passages in a review. First Edition Illustrations 4-19 courtesy of UPI/Corbis-Bettmann. Library of Congress Cataloging-in-Publication Data Weitz, John. Hitler ’ s banker : Hjalmar Horace Greeley Schacht I John Weitz. p. cm. Includes bibliographical references and index. ISBN 0-316-92916-6 1. Schacht, Hjalmar Horace Greeley, 1877-1970. 2. Bankers — Germany — Biography. 3. Banks and banking — Germany. 4. Inflation (Finance) — Germany. 5. Germany — Economic conditions — 1918-45- I- Title. HG1552.S33W45 1997 332.1'092 — dc2i [B] 97-7«B2 10 987654321 MV-NY Book design by Julia Sedykh Published simultaneously in Canada by Little, Brown 8c Company (Canada) Limited Printed in the United States of America Tor Susan and the children CONTENTS Acknowledgments ix Introduction xi 1. 'Nuremberg, October 1,1946 1 2. The Trisians 3 3. The New Century 24 4. 'World 'War 39 5. 'Brussels, 1914-15 44 6. The Moment 59 7. The Tfero 75 8. Changes 88 9. Dining with the 'Devil 108 10. Hitlers Banker 131 11. The Task 145 12. Tower 160 13. Cabinet Minister 181 14. The Tightrope 201 15. The Outsider 209 viii Contents 16. fllone 222 1 7- Clash 244 18. Second Life — TAanci 262 19- Trisons 287 20. To 'Nuremberg 299 21. Accused 304 22. On Trial 312 23- The New Qermany 325 24- Once a 'Banker ... 329 25- Tinal Balance 339 Epilogue: Questions 344 Bibliography 349 'Index 353 Illustrations/photographs appear on pages 171-79. ACKNOWLEGMENTS I would like to express my warm thanks to the following: Kurt Viermetz Baroness Christina von Vietinghoff-Scheel Joyce Hoven Dr. Hans Huber Frau Manci Schacht Mark Lynton Herlinde Koelbl Tom Wolfe Michael M. Thomas Morley Safer Michael Mertes Hans Jurgen and Victoria von Goerne Countess Aline de Romanones Paul Volcker Joachim Stresemann Karola Noetel Jonathan Kranz My special thanks to Roger Donald, who has shepherded the likes of Shirer and Manchester and, eventually, me, and to Ned Chase, who had the idea. INTRODUCTION the time of Adolf Hitler continues to fascinate and to horrify. The events he unleashed baffle and bewilder even those of us who lived in the midst of them. How could they have happened in Germany, that bastion of ethics, logic, and enlightenment, with its high rate of literacy and education? Even though some were well born, most of Hitler ’ s paladins began as vagabonds and failures. Their worship of National So cialism and its high priest was comparatively easy to explain. But what of those with secure backgrounds and worldly success who decided to throw in their lot with Hitler? What could persuade a prominent industrialist, landowner, banker, lawyer, physician, or academic to join a mixture of vulgar working-class brawlers and hate-filled upper-class misfits? The internationally famous German banker Hjalmar Horace Greeley Schacht was one of these anomalies. His place at Hitler ’ s side seemed as incongruous as his melange of names. Schacht ’ s early endorsement and subsequent know-how legitimized Adolf Hitler and eventually helped him fulfill his many promises to the German people. Schacht, a seasoned banker, first became world-famous in 1923. As the democratic Reich ’ s tough new currency commis sioner, he throttled the fledgling republic ’ s ruinous runaway in flation, restored a semblance of financial order, and probably xii Introduction saved his nation from anarchy. That same year, Adolf Hitler, an upstart agitator and political loudmouth, tried to overthrow the government of Bavaria as a first step toward national revolution. He landed in prison. Ten years later, Adolf Hitler, now the Nazi chancellor of Ger many, recruited the famous Hjalmar Schacht into the newly structured Nazi hierarchy. This is Schacht ’ s story. hitler ’ s banker 1 NUREMBERG, OCTOBER 1, 1946 H jalmar H orace G reeley S chacht , sixty-nine, a tall, forbidding, gray-haired figure dressed in a rumpled business suit, his reptilian neck rising from an incongruously informal sport shirt worn with a tie, stood on a small platform in Nuremberg ’ s Palace of Justice. He was flanked by a white-helmeted American Military Policeman. They faced a vast courtroom crowded with people. For a year, day after day, he had shared the dock just below the plat form with twenty-one other men, all defendants, all accused of war crimes. His assigned seat was at the far right of the front row facing the dock. Their defense attorney sat just below them. Photographs of the fallen and disheveled deities of the Nazi fir mament, crowded onto two long wooden benches like superannu ated schoolboys, had appeared in magazines and newspapers all over the world. Schacht, one of the world ’ s most famous bankers, Germany ’ s senior representative during two decades of international confer ences, the Nazis ’ former minister of economics and president of the Reichsbank and member of Hitler ’ s cabinet, calmly faced the judges and their decision. The verdict was pronounced by the dap per former attorney general of the United States Francis Biddle, the American member of the International Military Tribunal. Speaking in English, Biddle said that the accused Hjalmar Schacht was acquitted of the charges against him. He was free. HITLER S BANKER Through Schacht ’ s earphones, a tinny, mechanical voice need lessly and redundantly repeated the court ’ s sentence in German. Schacht, who spoke excellent English, had no need for interpreters. His hawk-nosed, leathery face showed neither relief nor joy. He al most shrugged his shoulders, as if regretting the waste of time — the court ’ s as well as his own. Like the easy winner of a drawing room debate, he accepted the verdict as a foregone conclusion. For him, there had never been one moment of doubt. He knew that he would be acquitted. Nor did he feel a single second of guilt. The harsh testimony and brutal evidence about the mass murders of civilian and military prisoners, and the horrifying films from the freed extermination camps, had crushed many of his fellow ac cused, but he knew the judges would find him innocent of any complicity with this beastliness. As for “ conspiracy to prepare for war ” and “ conspiracy to commit war, ” the crimes with which he was charged, he had indeed helped rebuild Germany ’ s military strength, but for the sake of peace, not for the conduct of war. If he had erred, it was on the side of patriotism. Like most of the world, he too had been deceived and betrayed by Adolf Hitler, and he had even been sent to Dachau. Surely, the verdict proved what he had been claiming all along. He made a small, courteous bow and left the platform. The ten men who had stood to hear their sentence before him earlier that day were no longer in the courtroom. They had been sentenced to hang the next morning.