Confessions of "The Old Wizard"': Autobiography

By Hjalmar Horace Greeley Schacht; Diana Pyke | Go to book overview

XXXVII
THE BANK CRISIS

IN MARCH 1931 an event occurred which I could regard only as a storm signal. The largest bank in Austria, the Kreditanstalt, was no longer in a position to meet its foreign liabilities. It ceased its payments abroad and came under the trusteeship of its foreign creditors. It was a decisive shock to the system of the granting of international credits and it was clear that Germany could not fail to be affected by it. Foreign creditors began to call in the loans that had previously been made to Germany.

Matters now developed as I had always foreseen. Private firms could not furnish the necessary foreign currency from their own resources and were obliged to purchase them from the Reichsbank. The Reichsbank's reserves of foreign exchange and gold melted away at a terrifying rate. Since the amount of reserves was invariably published by the Reichsbank in its weekly returns every foreign creditor was able to follow the decline in gold and foreign exchange, which resulted in a steady increase in the calling in of loans.

On June 3, 1931, in the middle of a very heated economic and political atmosphere I had accepted an invitation to the White Hart near Dresden, which included all the so-called German Associations (clubs, societies, unions). It was, if I remember rightly, the last demonstration at which the representatives of laissez-faire monetary policy sought to defend their ideas.

I took the opportunity to address the meeting and pointed out that the very essence of banking advances demanded particular consideration on the part of creditors when faced with difficult times. The creditor should not aggravate the debtor's condition by compulsory calling in of loans, thereby actually creating an insolvency which would have been avoided by the exercise of a little patience.

I had hoped that the Reichsbank would have taken advantage of these expoundings to proclaim a moratorium and thus stem the unlimited withdrawal of foreign exchange reserves. Curiously enough

-262-

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Confessions of "The Old Wizard"': Autobiography
Table of contents

Table of contents

  • Title Page iii
  • Introduction vii
  • Contents xv
  • Illustrations xix
  • I - The Schacht and the Eggers Families 1
  • II - Three Towns Beginning with "H" 14
  • III - Three Emperors in One Year 26
  • IV - Cholera in Hamburg 38
  • V - A Meeting with Bismarck 47
  • VI - At the University 52
  • VII - An Unpaid Assistant on the Kleines Journal 60
  • VIII - Paris at the Turn of the Century 66
  • IX - Doctor of Philosophy 72
  • X - Commercial Treaties 80
  • XI - I Meet Some of the Big Bankers 87
  • XII - The Dresdner Bank 92
  • XIII- The Near East 101
  • XIV - My Family 107
  • XV - Germany's Turning Point 112
  • XVI - The First World War 119
  • XVII - Appointment as Director of the Bank 128
  • XVIII - The Founding of a Party 136
  • XIX - Member of the Workers' And Soldiers' Council 143
  • XX - Inflation 151
  • XXI- With the Danat Bank 156
  • XXII - The Secret of the Stabilized Mark 162
  • XXIII - President of the Reichsbank 173
  • XXIV - The Bank of England 179
  • XXV - The Center of Separatism 186
  • XXVI - Monsieur Poincaré 192
  • XXVII - A Painful Recovery 198
  • XXVIII - The Reichsbank from the Inside 206
  • XXIX - Some Economic Aftereffects 211
  • XXX - Clouds on the Horizon 217
  • XXXI - I Sign the Young Plan 224
  • XXXII - A Far-Reaching Idea 230
  • XXXIII - I Resign from the Reichsbank 237
  • XXXIV - On My Own 244
  • XXXV - The End of Reparations 250
  • XXXVI - Meeting with Hitler 256
  • XXXVII - The Bank Crisis 262
  • XXXVIII - The Harzburg Front 268
  • XXXIX - President of the Reichsbank Again 275
  • XL - A Visit to Roosevelt 281
  • XLI - Conversion Fund and "Mefo" Bills 287
  • XLII - A Stronghold of Justice 294
  • XLIII - The New Plan 301
  • XLIV - Mainly About Pictures 308
  • XLV - At Odds with the Party 313
  • XLVI - The Königsberg Speech 318
  • XLVII - The Jewish Question and The Church Question 322
  • XLVIII - Rearmament 330
  • XLIX - Hermann Goering 335
  • L - Foreign Policy 346
  • LI - I Break with Hitler 353
  • LII - From an Attempted Coup D'Etat To an Attempted Assassination 361
  • LIII - Concentration Camps 382
  • LIV - In American Hands 397
  • LV - Nuremberg Prison 402
  • LVI - The Prisoners 405
  • LVII - The Nuremberg Tribunal -- I 411
  • LVIII - The Nuremberg Tribunal -- II 425
  • LIX - The Denazification Tribunals 442
  • LX - Free Once More 449
  • LXI - Off to the Far East 453
  • LXII - Under the Garuda 459
  • LXIII - Finale 468
  • Index 473
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