The Minister of Economics and the Expulsion of the Jews from German Economy (Part A)
Source: Albert Fischer, International conference: German Society's Responses to Nazi Anti-Jewish Policy 1933-1941, Yad Vashem, 10-13 February 1995.
Hjalmar Schacht lived from 1877 to 1970. During this time he was twice president of the Reichsbank, the first time as a left-wing liberal from 1923 to 1930 and again as a follower of Adolf Hitler from 1933 to 1937. In addition, he served under Hitler as Minister of Economics from 1934 to 1937 and as Minister without Portfolio until 1943 1 . Schacht was thus one of the dominating figures in the field of economic policy and the prime mover of the National Socialist economic upturn 2 . Not only was he a powerful figure in the economy during the first years of the Hitler regime, he played a significant political role as well. In 1936 the New York Times Magazine called him 'dictator no. 2' after Hitler, the 'dictator no. 1'. 3
Hjalmar Schacht's political role has always been a subject of dispute and controversy - with one exception: for decades there had been widespread agreement that Schacht had opposed Nazi antisemitism, in particular that he had prevented the expulsion of the Jews from the German economy. The business world was considered to have been a so-called refuge in which, despite the Nuremberg laws, the Jews were able to continue comparatively unmolested until the second half of the thirties, almost until Schacht stepped down as Minister of Economics 4 . In the post war years Schacht himself claimed again and again that this was the case. Once he even said that he would feel embarrassed to admit the extent to which he had helped the Jews in Germany 5 .
However, in the 1980s an Israeli historian, Avraham Barkai, refuted that view. He maintained that Schacht could not have done much for the Jews who were working in industry and commerce, nor for the Jews in general 6 . But Barkai did not support this view with specific research on the banker's Jewish policy. He announced this as a hypothesis that should be further investigated. Soon afterwards other historians, such as Reinhard Ruerup and Werner Mosse for example, called for a more detailed investigation of Schacht's role in relation to the Jews 7 .
This article takes up the challenge, and poses, examines and attempts to answer the following questions. Firstly, what was Schacht's attitude towards the Jews in principle? Did he actually want to help them? Secondly, did he fight for the Jews to the extent he afterwards claimed? In other words, how far did he act if he really wanted to help them? Thirdly, did he achieve any notable results? If he did help the Jews, was he successful? The investigation only covers the years up until the dismissal of Schacht as Reichsbank President in January 1939. The investigation does not deal with the war years and the mass extermination of the Jews. It is limited to examining the extent to which Schacht opposed the expulsion of the German Jews from their jobs and from the country prior to January 1939.
The source of the research material was the Central State Archives at Potsdam in the former German Democratic Republic, which houses the files of the Reichsbank and the Ministry of Economics. The Federal Archives at Koblenz, the Foreign Office records and some municipal archives in the Federal Republic of Germany were also used. The records of the International Military Tribunal held at Nuremberg, those of the de-Nazification Chamber at Ludwigsburg, and the records of American archives at the Institute of Contemporary History in Munich were also consulted.
The investigation revealed that Avraham Barkai was correct in his assumption. Schacht neither fought for the Jewish minority to the extent claimed, nor did any efforts on his part really contribute to protecting the Jews. And, most importantly, not only was Schacht unable to achieve as much as he himself claimed, he actually did not want to oppose Nazi policy. In fact, from time to time he even helped to tighten those laws discriminating against the Jews 8 . This is not as surprising as it may seem. Schacht was never the champion of the German Jews as he is portrayed by his biographer, Pentzlin, for example. 9 According to his own confessions, he was not. Even in Schacht's post war writings, antisemitic resentments surfaced again and again. And in 1953 he was still complaining about Jewish overrepresentation in the spheres of culture, justice, administration, and medicine in the Weimar Republic. He called this 'the break-in of an alien spirit into the spirit of the host nation,' 10 and he concluded: 'If they [the Jews] had been a little bit less urgent in these things, no one would have done anything to them 11 . The fact is that Schacht did not oppose the expulsion of the Jews from the civil service, the bar and the medical profession at all. He kept silent at cabinet meetings 12 . He implemented the racial laws in his Ministry of Economics and at the Reichsbank, although he was not obliged to do so. That is to say he personally arranged and signed the decrees that ordered the dismissal of Jews and of those Germans married to Jews 13 . Furthermore, Schacht justified the antisemitic policy in public and made light of it to the international community 14 . As he had justified the laws and edicts of the early years of the Third Reich, so he energetically defended the Nuremberg Laws 15 . In November 1935 he declared to the Saxonian Chamber of Commerce:
I welcome the [racial] classification that is realised by the Nuremberg laws. ... I welcome ... that the Jew won't be a citizen of the Reich any more, that he is being repelled back into his isolation from which he has pushed out of to dominate the German people in an impertinent and impudent manner, that he is being repelled into his ghetto. That is completely right and justifiable. If we had 600,000 Chinese people in Germany today who presumed to occupy our theatres, our press, our culture, we wouldn't tolerate it and would put them into a Chinese ghetto. ... So we have to agree to the Jewish policy of the Fuehrer and, you may be surprised to hear, that of Julius Streicher as well. The race problem will be solved by the Nuremberg Laws and by throwing the Jews out of the administration, the theatres and so on' 16 .
By the time of this statement Schacht had gone a long way in the sphere of Jewish policy. He had begun his career as a pronounced pro-Jew and, having entered the political arena as a founder and executive member of the left-wing liberal German Democratic Party (GDP) 17 , he was the candidate of the left for the position of Reichsbank President. The fact that the GDP fought for the rights of the Jewish minority more than any other political party meant that Schacht for many years had been exposed to the barrage of insults and ridicule of right-wing demagogues. They had called him an 'obedient pupil of Jewish bankers,' 18 and claimed that he was a Hungarian Jew whose real name was 'Hajum Schachtel' 19 or a Danish Jew 'Chaim Schachtel.' 20
Schacht supported the 'Aryanization' outside industry and commerce without qualification. Moreover, his commitment to the Jews in the business world was not as significant as claimed either by himself or by his followers afterwards 21 . He did indeed try several times to check antisemitic encroachments. He mentioned them in ministerial meetings. He issued decrees regarding the matter. He rebuked local authorities 22 . However, Schacht's ministry and the Reichsbank helped the Jewish firms too infrequently and too half-heartedly to warrant the claim of being a defender of the Jews.
This is clearly illustrated in three incidents that occurred in the banking sphere; each reflects the daily, routine, harassment of Jewish banks as well as the attitude of Schacht's ministry and the Reichsbank. The banking sphere is especially relevant, for two reasons. Firstly, it was under Schacht's control - as Minister of Economics, as President of the Reichsbank, and as chairman of the supervisory authority for the credit system 23 . Sec, the importance of the Jews in the private banking sector was considerable - not in the banking system as a whole but in the private bank sector. For example, the large joint-stock companies that still exist in Germany today were founded by Jewish bankers: The Deutsche Bank , the Dresdner Bank and the Commerzbank . Before 1900 half of the leading positions in the limited companies were held by people of Jewish origin, and in 1928 this figure was still at least ten percent 24 . In 1930 fifty percent of sole trader and partnership private banks were still Jewish owned 25 . The first incident occurred in the autumn of 1935. The Saxon state withdrew the financial administration of the state lottery from a large private bank because its owners were Jewish. The bank had administered the lottery for 75 years. It was not without good reason that the management of the bank feared the deleterious effects on its reputation and concern among its clients were the revocation to be published. The bank therefore asked the Reichsbank to prevent publication of this decision. But the Reichsbank's Board of Directors ignored the request. We won't do anything about it,' remarked one director, and the Jewish bankers found themselves on their own 26 .
The second incident was the declaration by the newspapers of Luebeck that they would publish the usual joint Christmas greetings of the local banks, except for those of the Jewish banks. The local banking association protested. Schacht's ministry, however, remained silent, tacitly accepting the advertising ban on Jewish banks 27 . One might add that these newspapers generally refused to accept advertisements from Jewish firms 28 . The third incident occurred in the autumn of 1936 and is particularly illuminating of Schacht's role inside his ministry. The President of the Hamburg Law Society had proposed revoking the registration of a lawyer because he had begun working for the Warburg Bank. Schacht's subordinates were strongly opposed. They drafted a letter to the Minister of Justice, demanding 'that the aspects of the racial question should come second to the economic aspects in the struggle for the preservation and fostering of our foreign relations.' They further protested with detailed complaints against the harassment of (Jewish-run), companies dealing with foreign countries. For Schacht, however, such wording was definitely going too far and he had these remarks as well as the quoted sentence completely deleted. The critical letter was never sent 29 .
Table 1
Private Banks in Germany 1 January 1936 30
Total Assets (Millions RM),
Number
Total Assets
(1,000 RM),
'Non-Aryan'
'Aryan'
'Non Aryan'
'Aryan'
0 - 0,1
71
117
3,146
5,742
0,1 - 0,5
133
227
33,965
59,056
0,5 - 1,0
54
97
37,796
68,340
1,0 - 10,0
72
112
217,871
276,242
10,0 - 50,0
10
17
181,871
342,867
50,0 -
5
0
512,123
0
345
570
986,772
752,247
915
1,739,019
The implications of these individual incidents become more significant when seen in the broader context. By the time Schacht was dismissed as President of the Reichsbank in 1939, the Jews had been completely driven out of the banking world 31 . During the first three years after Hitler's seizure of power, almost a quarter of the 1,300 private bankers had given up banking. The vast majority of the more than 300 closed banks had been Jewish owned 32 . After 1935 the 'selection process' continued, as can be seen from Table 1. The table shows that in 1935 half of the private banking firms were still Jewish, and the diagram illustrates the extent of the 'Aryanization' during the years 1936 and 1937. According to the balance sheets one-third of the banks were 'Aryanized', another one-third entered into 'Aryanization' negotiations.
Unfortunately there are no data for November 1937, the month when Schacht was dismissed as Minister of Economics. But the aforementioned secret figures provided by Reichsbank statisticians are evidence enough, even though they continue beyond Schacht's period in office, until the spring of 1938. This is explained by the fact that Schacht remained Reichsbank President until 1939 and was thus responsible for the banking system; Secondly, a significant number of the 'Aryanizations' procedures that were completed after Schacht left had already been initiated. Thirdly, and most importantly, the closure of the Jewish banking firms had begun long before the statistical registration in 1936. As already mentioned, almost half of them had to close during the first three years of Hitler's leadership. Looking beyond the banking sphere to the economy as a whole, we find a similar picture: By the summer of 1935 a quarter of all Jewish enterprises had already been 'Aryanized' or put into liquidation 34 . Doubtless Schacht was not enthusiastic about the 'Aryanizations'. He was only interested in a sound economy, and the persecution of Jewish firms jeopardised this. However, when considering Jewish businesses overall and not only select and famous firms, it is important to recognise that Schacht and his officials, even if they really tried, were simply unable to halt the process. Konrad Fuchs captures the essence of the situation in his monograph on the Schocken Company. He claims that even if Schacht had remained minister the Jewish owners would have taken the same measures that they took after his dismissal, because 'the reasons which had required a certain consideration for the Jews in business life had lost their relevance.' 35
The presence or absence of Hjalmar Schacht would not have affected the 'Aryanization' process. 'Private Aryanization' had already taken place during Schacht's period of office. The state increased its involvement not because of Schacht's dismissal. The state increased it because the factors that had earlier prevented it earlier - namely depression and unemployment on the one hand and dependence on trade with Western Europe and the United States on the other hand - no longer existed. By 1937 there was full employment, and foreign trade had decreased and shifted significantly to other countries 36 . Thus the economic risks against completing the 'Aryanization' process had become calculable and Schacht was now dispensable. The reasons, which had both brought Schacht to power and required some consideration for the Jewish enterprises no longer existed. The minister's dismissal should be viewed, therefore, as a result of the economic and political development in general, and not as a cause.
References:
1. Amos E. Simpson, Hjalmar Schacht in Perspective (Studies in European History. No. XVIII), The Hague, 1969; Edward N. Peterson, Hjalmar Schacht. For and against Hitler. A Political-Economic Study of Germany 1923-1945 , Boston, 1954.
2. Loc. cit. Furthermore: Harold James, The German Slump. Politics and Economics 1924-1936 , Oxford, 1986; Harold James, 'Hjalmar Schacht. Der Magier des Geldes,' in: Die braune Elite II. 21 weitere biographische Skizzen , Ronald Smelser et al., eds., Darmstadt, 1993, pp. 206-218.
3. Emil Lengyel, 'Schacht Challenges the Nazi Hotheads,' in New York Times Magazine , 1 September 1935.
4. Uwe D. Adam, Judenpolitik im Dritten Reich, Duesseldo rf, 1972, p. 173. Willi A. Boelcke, Die deutsche Wirtschaft 1930-1945 , Duesseldorf, 1983, p. 210; Rolf Puppo, Die wirtschaftsrechtliche Gesetzgebung des Dritten Reiches , Konstanz, 1987, p. 274; Karl A. Schleunes, The Twisted Road to Auschwitz. Nazi Policy toward German Jews 1933-39 , London, 1972, p. 217.
5. Hjalmar Schacht, 76 Jahre meines Lebens , Bad Woerishofen, 1953, p. 590.
6. Avraham Barkai, Vom Boykott zur 'Entjudung.' Der wirtschaftliche Existenzkampf der Juden im Dritten Reich , Frankfurt am Main, 1988, p. 73.
7. Reinhard Ruerup, 'Das Ende der Emanzipation: Die antijuedische Politik in Deutschland von der Machtergreifung' bis zum Zweiten Weltkrieg,' in Die Juden im nationalsozialistischen Deutschland. The Jews in Nazi Germany. 1933-1943 , Arnold Pauker, ed., Tuebingen, 1986, pp. 97-114; p. 110, n. 54.
8. The whole investigation has already been published in German: Albert Fischer, Hjalmar Schacht und Deutschlands 'Judenfrage'. Der Wirtschaftsdiktator und die Vertreibung der Juden aus der deutschen Wirtschaft , Cologne, 1995.
9. Heinz Pentzlin, Hjalmar Schacht. Leben und Wirken einer umstrittenen Persoenlichkeit , Berlin, 1980, p. 14.
10.Schacht, 76 Jahre , p. 450
11.Institut fuer Zeitgeschichte, Munich, Sp. 1/12, Stuttgart, F. F1/89.
12.Konrad Repgen and Hans Booms, eds, Akten der Reichskanzlei. Regierung Hitler 1933-1938 , part 1, 1933/34, vol. 1, 30 January to 31 August 1933, documents no. 1-206, Boppard, 1983.
14.See for example: Gerhard L. Weinberg, 'Schachts Besuch in den USA im Jahre 1933,' in Vierteljahreshefte fuer Zeitgeschichte, 11 (1963), pp. 166-180; Edwin Black, The Transfer Agreement. The Untold Story of the Secret Agreement between the Third Reich and Jewish Palestine , New York, 1984, pp.115-116; Hjalmar Schacht, 'German Trade and German Debts,' Foreign Affairs , October 1934, pp. 1-5; p. 4.
15. Der Prozess gegen die Hauptkriegsverbrecher vor dem Internationalen Militaergerichtshof. Nuernberg. 14. November 1945 - 1. Oktober 1946, Nuremberg 1947-49, vol. 36, doc. 450-EC, p. 525.
16.BAP, 31.01, Deutsche Reichsbank, no. 7169.
17.Lothar Albertin, Liberalismus und Demokratie am Anfang der Weimarer Republik. Eine vergleichende Analyse der Deutschen Demokratischen Partei und der Deutschen Volkspartei , Duesseldorf, 1972, pp. 95-96, 179.
18.Helmut Mueller, Die Zentralbank - eine Nebenregierung. Reichsbankpraesident Hjalmar Schacht als Politiker der Weimarer Republik , Opladen, 1973, p. 36.
19.Alfred Rosenberg, Dreissig Novemberkoepfe , Berlin, 1927, p. 239.
20.Quoted by Norbert Muehlen, Der Zauberer. Leben und Anleihen des Dr. Hjalmar Horace Greeley Schacht , Zuerich, 2nd edition, 1938, p. 31.
21.Document Center, Berlin, B 328, Hjalmar Schacht.
22.Hjalmar Schacht: 'As long as I was minister of Economics not a single act of injustice was done to the Jews in the business world' (IMT, doc. NI-406, p. 37). See furthermore: Schacht, 76 Jahre , p. 404. Hjalmar Schacht, Abrechnung mit Hitler , Hamburg, 1948, p. 13.
23.Fischer, Hjalmar Schacht , pp. 113-209.
24.Christopher Kopper, Zwischen Marktwirtschaft und Dirigismus. Bankenpolitik im 'Dritten Reich' 1933-1939 , Bonn, 1995, pp. 71-74.
25.Jakob Lestschinsky, Das wirtschaftliche Schicksal des deutschen Judentums. Aufstieg Wandlung Krise Ausblick , Berlin, 1932, p. 91.
26.Alfred Marcus, Die wirtschaftliche Krise des deutschen Juden. Eine soziologische Untersuchung , Berlin, 1931, p. 48.
32.Albert Fischer, 'Juedische Privatbanken im 'Dritten Reich,' Scripta Mercaturae, Zeitschrift fuer Wirtschafts-und Sozialgeschichte, 28 (1994), p. 1-54, p. 37.
33.Ibid., p. 17.
34.BAP, 25.01, Deutsche Reichsbank, no. 6581, no. 6791.
35.Barkai, Vom Boykott , p. 80.
36.Konrad Fuchs, Ein Konzern aus Sachsen: das Kaufhaus Schocken als Spiegelbild deutscher Wirtschaft und Politik 1901 bis 1953 , Stuttgart, 1990, p. 237.
