Hjalmar Schacht

Hjalmar Schacht (1877-1970) was a German central banker and economic official who served as Reichsbank president and, from 1934 to 1937, Economics Minister. His direct state role included the New Plan, exchange control and bilateral clearing. It should be dated separately from later wartime economic command.

New Plan and clearing

Germany faced foreign-exchange and raw-material constraints after the Depression and the Nazi seizure of power. Under the German exchange control and clearing system (New Plan, 1934), state authorities prioritised imports, allocated foreign exchange and expanded bilateral arrangements. Clearing accounts enabled trade without freely convertible payment, while imbalances could bind partners to purchases from Germany.

The Schachtian bilateral clearing and the Reichsmark bloc (1934-1939) combined resilience and leverage. It conserved scarce currency and redirected trade, but also shifted risk and reduced counterparties' freedom to exit. The system was a government instrument. Private firms executed transactions within it without becoming authors of the policy.

Rearmament and removal

Schacht supported financing mechanisms associated with rearmament, including Mefo bills, while later disputing the pace and some policy choices. He left the Economics Ministry in 1937 and was removed as Reichsbank president in 1939. Later offices did not restore his earlier control. His policies contributed to Autarky, but Germany never achieved economic self-sufficiency.

The war economy and Total economic mobilisation developed under other officials and institutions. Editors should not project the full wartime system backwards into Schacht's tenure.

Tribunal result

The International Military Tribunal charged Schacht with crimes against peace and conspiracy and acquitted him. The judgment reasoned that the prosecution had not proved the required knowledge and intent beyond the tribunal's standard. Acquittal is a procedural and legal outcome on those charges. It does not erase his documented official role or decide every historical judgment about the regime's economic preparation.

Assessment

Schacht is an institutional designer of competitive economic control, not a generic non-state intermediary. The strategic claim rests on official powers, exchange allocation and clearing arrangements. Causal claims about rearmament, partner dependence and war preparation require dated fiscal, trade and institutional evidence.

Measurement and attribution

The New Plan should be assessed through the controls it actually used. Import approvals, foreign-exchange allocation, bilateral clearing balances and commodity priorities affected different firms and trading partners. Clearing could preserve trade when convertible currency was scarce, but it could also trap partner earnings within the bilateral account and strengthen German bargaining power. The balance, settlement rule and available alternatives therefore matter more than the nominal value of trade alone.

Institutional roles changed over time. Schacht's presidency of the Reichsbank, economic ministry and later loss of authority should not be treated as one continuous command. A policy adopted while he held office requires evidence of his legal competence, participation and stated purpose. Later wartime controls belong to their responsible institutions unless a direct line of authorship is shown.

The relation between financial technique and rearmament also requires a defined mechanism. Credit instruments and import allocation could release resources or direct scarce foreign exchange, but military expansion depended on fiscal decisions, industrial capacity, labour, raw materials and political orders beyond Schacht's sole control. His documented opposition to some later policies does not undo earlier acts, while earlier service does not prove responsibility for every later measure.

The tribunal judgment remains the controlling legal outcome for the charged offences. Historical analysis may reach broader moral or policy conclusions, but it must not restate an acquittal as a conviction or imply that institutional importance supplied the missing criminal elements.

See also

German exchange control and clearing system (New Plan, 1934) · Schachtian bilateral clearing and the Reichsmark bloc (1934-1939) · Autarky · Total economic mobilisation

Sources

• International Military Tribunal, trial proceedings, volume 5, evidence concerning Schacht's New Plan and the German decree record (10 January 1946).
• Albert O. Hirschman, National Power and the Structure of Foreign Trade (University of California Press, 1945).
• Adam Tooze, The Wages of Destruction: The Making and Breaking of the Nazi Economy (Allen Lane, 2006).
• International Military Tribunal, judgment concerning Hjalmar Schacht (1 October 1946).