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Hjalmar Schacht

The International Military Tribunal trials at Nuremberg [Nuernberg] in 1946 charged the defendants with four crimes. Count One charged all of the defendants with being "leaders, organizers, instigators, or accomplices in the formation or execution of a common plan or conspiracy to commit, or which involved the commission of, Crimes against Peace, War Crimes, and Crimes against Humanity." Count Two charged the defendants with crimes against peace by their participation "in the planning, preparation, initiation, and waging of wars of aggression." Count Three charged the defendants with war crimes. Count Four charged the defendants with crimes against humanity. Schacht was indicted under counts one and two of the indictment.

Schacht served as Comnlissioner of Currency and pesiclent of the Reichsbank from 1923 to 1930; mas reappointed president of the bank on March 17,1933; Minister of Economics in August 1934; and Pleni- potentiary General for War Economy in May 1935. He resigned from these two positions in November 1937, and was appointed Minister without Portfolio. He was reappointed as president of the Reichs- bank for a 1-year term on March 16, 1937, and for a 4-year term on March 9, 1938, but was dismissed on January 20, 1939. He was dis- missed as Minister without Portfolio on January 22,1943.

Schacht was an active supporter of the Nazi Party before its accession to power on January 30,1933, and supported the appointment of Hitler to the post of Chancellor. After that date he played an important role in the vigorous rearmament program which was adopted, using the facilities of the Reichsbank to the fullest extent in the German rearmament effort. Reichsbank, in its tradi- tional capacity as financial agent for the German Government floated long-term Government loans, the proceeds of which were used for re- armament. He devised a system under which 5-year notes, known as M. E. I?. 0. bills, guaranteed by the Reichsbanli and backed, in effect, by nothing more than its position as a bank of issue, were used to obtain large sums for rearmament from the short-term nioney market. As Minister of Economics and as Plenipotentiary General for War Economy he was active in organizing the German economy for war. He made detailed plans for industrial mobilization and the coordination of the army with industry in the event of war. He was particularly concerned with shortages of raw materials and started a scheme of stock-piling, and a system of exchange control designed to prevent Germany's weak foreign exchange position from hindering the acquisition abroad of ram materials needed for rearmament. On May 3, 1935, he sent a memorandum to Mitler stating that "the ac-complishinent of the armament program with speecl and in quantity is the problem of German politics, that everything else therefore should be subordinated to this purposc."

Schacht, by April 1936, began to lose his influence as the central figure in the German rearmament effort when Goering was appointed Coordinator for Raw Materials and Foreign Exchange. Goering ad- vocated a greatly expanded program for the production of synthetic raw materials which was opposed by Schacht on the ground that the resulting finallcia1 strain might involve inflation. The influence of Schacht suffered further when on October 16, 1936, Goering was appointed Plenipotentiary for the 4-year plan with the task of putting "the entire economy in a state of readiness for war" within 4 years. Schacht had opposed the announcement of this plan and tlle appointment of Goering to head it, and it is clear that Hitler's action represented a decision that Schacht's economic policies were too conservative for the drastic rearmament policy which Hitler wanted to put into effect.

After Goering's appointment, Schacht and Goering promptly be- came embroiled in a series of disputes. Although there mas an element of personal controversy running through these disputes, Schacht dis- agreed with Goering on certain basic policy issues. Schacht, on financial grounds, advocated a retrenchment in the rearmament pro- gram, opposed as ineconomical much of the proposed expansion of procluction facilities, particularly for synthetics, urged a drastic tight- ening on government credit and a cautious policy in dealing wit11 Germany's foreign exchange reserves. As a result of this dispute and of a bitter argument in which Hitler accused Schacht of upsetting his plans by his financial methods, Schacht went on leave of a.b-~ence from the Ministry of Economics 011 September 5, 1937, and resigned as Minister of Economics and as Plenipotentiary General for War Economy on November 16, 1937.

As president of the Reichsbnnk, Schncht mas still involved in dis- putes. Throughout 1938, the Reichsbank continued to function as the financial agent for the Gernlan Government in floating long-term loans to finance armaments. But on March 31, 1938, Schaclit dis- continued the practice of floating short-term notes guaranteed by the Reichsbank for armament expenditures. At the end of 1938, in an attempt to regain control of fiscal policy through the Reiclisbank, Schacht refused an urgent request of the Reichsnilnister of Finance for a special credit to pay the salaries of civil servants which were not covered by existing funds. On January 2, 1939, Schacht held a collferellce with Hitler at which he urged him to reduce expenditures for armaments. On January 7, 1939, Schacht submitted to Hitler a report signed by the directors of the Reichsbank which urged a drastic curtailment of armament expenditures and a balanced budget as the only method of preventing inflation. On January 19, Hitler dismissed Schacht as of the Reichsbank. On January 22,1943, Hitler dismissed Schacht as Reichs Minister without Portfolio because of his "whole attitude during the present fateful fight of the German Nation." On July 23, 1944, Schacht was arrested by the Gestapo and confined in a concentration camp until the end of the war.

It is clear that: Schacht was a central figure in Germany's rearmament program, and the steps which he took, particularly in the early days of the Nazi regime, were responsible for Nazi Germany's rapid rise as a military power. But rearmament of itself is not criminal under the charter. To be a crime against peace under Article 6 of the Charter it must be shown that Schacht carried out this rearmament as part of the Nazi plans to wage aggressive wars. Schacht has contended that he participated in the rearmament program only because he wanted to build up a strong and independent Germany which wo~zld carry out a foreign policy which mould con?-nland respect on an equal basis with other Enropean count,ries; that when he discovered that the Nazis were rearming for aggressive purposes he attempted to slow down the speed of rearmament; and that after the dismissal of von Fritscl~ and von Blonlberg he participated in plans to get rid of Hitler, first by deposing him and later by assassination.

Schacht, as early as 1936, began to advocate a limitation of the rearmament program for financial reasons. Had the policies advocated by him been put into effect, Germany would not have been prepared for a general European war. Insistence on his policies led to his eventual dismissal from all positions of economic significance in Germany. On the other hand, Schacht, with his intimate knowledge of German finance, was in a peculiarly good position to understand the true significance of Hitler's frantic rearmament, and to realize that the economic policy adopted was consistellt only with war as its object.

Moreover Schacht continued to participate in Gerinan economic life and even, in a minor way, in some of the early Nazi aggressions. Prior to the occupation of Austria he set a rate of exchange between the mark and the schilling. After the occupation of Austria he arranged for the incorporation of the Austrian National Bank into the Reichsbank and made a violently pro-Nazi speech in which he stated that the Rsichsbaak would always be Nazi as long as he was connected with it, praised Hitler, defended the occupntion of Austria, scoffed at objections to the way it mas carried out, and ended with "to our Fuehrer a triple 'Sieg Hei17." He has not contended that this speech did not represent his state of mind at the time. After the occupation of the Sudetenland, he arranged for currency conversion and for the incorporation into the Reichsbanlr of local Czech banks of issue. On November 29,1938, he made a speech in which he pointed with pride to his economic policy which had created the high degree of German armament, and added that this armament had made Germany's foreign policy possible.

Schacht was not involved in the planning of any of the specific wars of aggression charged in count two. His participation in the occupation of Austria and the Sudetenland (neither of which are charged as aggressive wars) was on such a limited basis that it does not amount to participation in the common plan charge in count one. He was clearly not one of the inner circle around Hitler which was most closely involvecl with this common plan. He was regarcled by this group with undisguised hostility. The testimony of Speer shows that Schacht's arrest on July 23, 1944, was based as much on EIitler's enmity towards Schacht growing out of his attitude before the war as it was on suspicion of his complicity in the bomb plot. The case against Schacht therefore depends on the inference that Scllacht did in fact know of the Nazi aggressive plans.

On this all important question evidence has been given for the prosecution, and a considerable volume of evidence for the defense. The Tribunal has considered the whole of this evidence with great care, and comes to the conclusion that this necessary inference has not been established beyond a reasonable doubt.

After 216 court sessions, on 1 October 1946, the verdict was handed down. Twelve of the defendants (including the absent Bormann) were sentenced to death by hanging. Seven were given prison sentences - Hess, Funk, and Raeder for life. Three - Schacht, von Papen, and Fritzche - were acquitted. The Tribunal found that Schacht was not guilty and directed that he be discharged by the Marshal, when the Tribunal adjourned.