Hjalmar Schacht was a prominent economist, financial expert and politician from Germany. He is perhaps best known for managing to find a solution to withstand the impending inflation which jeopardized the existence of the Weimar Republic in 1923.
Schacht was born on 22nd January, 1877, in Tingleff, Schleswig. He received his early education from a high school in Berlin, after which he sought to pursue medical studies at Kiel. Schachts’s educational interests were diversified; his endeavors saw him study German philosophy in Berlin and go to Munich to explore the field of political science. This particular inclination is best explained via his eventual career path, which was geared toward economics, a discipline not constituting his educational background. It was only until he entered his doctorate studies that he got a taste of economics, the field in which he received his degree.
Schacht entry in to the corporate world was made via Dresdner Bank, which he joined in 1903. Five years down the road, he became deputy director. However, Schacht later jumped ship to the National Bank of Germany. His competency in the banking field was rewarded as he was made director at the company in 1916 when he only 36 years old. However, one of his most stern tests arrived in 1923 when Schacht had to manage the hyperinflation which manifested across Weimar Germany in 1923. As Currency Commissioner, Schacht was responsible for protecting the savings of the people which were diminishing, and he did so effectively with the implementation of the Retenmark. In doing so, he put in late shifts at the office and put his health at risk in the process.
In December 1923, Schacht was made President of the Reichsbank which was widely considered the top financial institution in Germany. This was largely in light of the manner in which he successfully dealt with the inflationary pressures facing the country, resulting in his burgeoning reputation as a fixer of macroeconomic problems. However, his stay at the organization lasted only until 1930, when a disagreement over the specificities of the Young Plan was followed by Schacht’s resignation from office. Schacht primary objection to the plan was the fact that he didn’t consider it to be a mutually negotiated agreement, as he believed that the American’s had designed it in a manner which furthered their interests.
Even though Hjalmar Schacht played a significant role in the creation of the German Democratic Party, he was a staunch monarchist. He claimed that Germany would only possess a strong government and a prosperous economy if it possessed a powerful leader, which is why he extended his support to Adolf Hitler. Schacht helped solidify Hitler’s regime and enhance his influence by getting him acquainted with business tycoons and other affluent industrialists. His efforts were eventually rewarded, as Hitler made Schacht the Minsiter of Economics in Reich. His tenure lasted within the years 1934 and 1937, and Schacht successfully managed inflation again, facilitated the construction of infrastructure, and serviced foreign currency deficits during this period. He was also inducted in to the Nazi Party (NSDAP) as an honorary member, and received the Golden Swastika in January 1937.
Schacht however, eventually had a falling out with Hitler over the policies of his regime. He constituted a movement against Hitler in an attempt to resist his policies, an activity which lead to a number charges later on. Relinquished from all state positions, Schacht created his own private banking house in 1953 which was based in Dusseldorf. He passed away on 3rd June, 1970, in Munich.