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Nuremberg Trial Judgements: Hjalmar Schacht

Schacht is indicted under Counts One and Two of the Indictment. Schacht served as Commissioner of Currency land President of the Reichsbank from 1923 to 1930; was reappointed President of the bank on 17th March, 1933; Minister of Economics in August, 1934; and Plenipotentiary 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 Reichsbank for a one-year term on 16th March, 1937, and for a fourth term on 9th March, 1938, but was dismissed on 20th January, 1939. He was dismissed as Minister without Portfolio on 22nd January, 1943.

Crimes against Peace

Schacht was an active supporter of the Nazi Party before its accession to power on 30th January, 1933, and supported the appointment of Hitler to the post of Chancellor. After that date he played an important role in the vigorous rearmament programme which was adopted, using the facilities of the Reichsbank to the fullest extent in the German rearmament effort. The Reichsbank, in its traditional capacity as financial agent for the German Government, floated long-term Government loans, the proceeds of which were fused for rearmament. He devised a system under which five-year notes, known as M.E.F.O. bills, guaranteed by the Reichsbank 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 money market. As Minister of Economics and as Plenipotentiary General for War Economy he was active in organising the German economy for war. He made detailed plans for industrial mobilisation 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 raw materials needed for rearmament. On 3rd May, 1935, he sent a memorandum to Hitler stating that " the accomplishment of the armament programme with speed and in quantity is the problem of German politics, that everything else therefore should be subordinated to this purpose."

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 advocated a greatly expanded programme for the production of synthetic raw materials which was opposed by Schacht on the ground that the resulting financial strain might involve inflation. The influence of Schacht suffered further when on 16th October, 1936, Goering was appointed Plenipotentiary for the Four-Year Plan with the task of putting " the entire economy in a state of readiness for war " within four years. Schacht had opposed the announcement of this plan and the 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 became embroiled in a series of disputes. Although there was an element of personal controversy running through these disputes, Schacht disagreed with Goering on certain basic policy issues. Schacht, on financial grounds, advocated a retrenchment in the rearmament programme, opposed as uneconomical much of the proposed expansion of production facilities, particularly for synthetics, urged a drastic tightening on government credit and a cautious policy in dealing with 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 absence from the Ministry of Economics on 5th September, 1937, and resigned as Minister of Economics and as Plenipotentiary General for War Economy on 16th November, 1937.

As President of the Reichsbank, Schacht was still involved in disputes. Throughout 1938, the Reichsbank continued to function as the financial agent for the German Government in floating long-term loans to finance armaments. But on 31st March, 1938, Schacht discontinued the practice of floating shortterm notes guaranteed by the Reichsbank for armament expenditures. At the end of 1938, in an attempt to regain control of fiscal policy through the Reichsbank, Schacht refused an urgent request of the Reichsminister of Finance for a special credit to pay the salaries of civil servants which were not covered by existing funds. On 2nd January, 1939, Schacht held a conference with Hitler at which he urged him to reduce expenditures for armaments. On 7th January, 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 19th January, Hitler dismissed Schacht as President of the Reichsbank. On 22nd January, 1943, Hitler dismissed Schacht as Reich Minister without Portfolio because of his " whole attitude during the present fateful fight of the German nation." On 23rd July, 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 programme, 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 programme only because he wanted to build up a strong and independent Germany which would carry out a foreign policy which would command respect on an equal basis with other European countries; 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 Fritsch and von Blomberg 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 programme 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 realise that the economic policy adopted was consistent only with war as its object.

Moreover Schacht continued to participate in German 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 Reichsbank would always be Nazi as long as he was connected with it, praised Hitler, defended the occupation of Austria, scoffed at objections to the way it was carried out, and ended with " to our Fuehrer a triple ' Sieg Heil '." 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 Reichsbank of local Czech banks of issue. On 29th November 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 charged in Count One. He was clearly not one of the inner circle around Hitler which was most closely involved with this common plan. He was regarded by this group with undisguised hostility. The testimony of Speer shows that Schacht's arrest on 23rd July, 1944, was based as much on Hitler'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 Schacht 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 defence. 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.


The Tribunal finds that Schacht is not guilty on this Indictment, and directs that he shall be discharged by the Marshal, when the Tribunal presently adjourns.

Source: The Avalon Project