Although Hjalmar Schacht had performed the seemingly impossible task of stabilizing the German currency and financial system (and thus the economy) during the inferno of the hyperinflation, not even “the Old Wizard” could take away the fear that the hyperinflation and the chaos would return. The fear, more than the actual economic conditions, was probably more responsible than any other single thing that gave Hitler and his followers the opportunity to consolidate power.
|The Second Largest Party in Germany
The Nazi Party was reorganized as a mass movement following the Crash of 1929, which had no significant direct effect on Germany, and Hitler gained financial backing from business leaders by promising to put an end to labor agitation and give them immunity from confiscation of their assets. By 1930 the Nazis were the second largest party in Germany.
Hitler challenged Hindenburg for the presidency, but was defeated briefly by an anti-Nazi coalition. The nearly senile Paul Hindenburg made Hitler chancellor in an effort to appease him, and — hopefully — control him, but Hitler was able to whip up anti-communist hysteria over the Reichstag fire and called for a general election.
|Reichsmarschall Hermann Goering
Hermann Goering intimidated the opposition before the election, and the Nazi organization voted early and often, preventing others from voting by the effective use of shoulder strikers. This gave the Nazis a majority, and Hitler retained the chancellorship, which he was able to combine with the office of president by forcing through the “Enabling Acts.”
The combined office of president and chancellor under the new title “Führer” gave Hitler dictatorial powers, which he used to good effect to eliminate all rivals, even in the Nazi Party. Many were arrested and executed, especially during Nacht der langen Messer, the “Night of the Long Knives,” June 30 to July 2, 1934. Estimates of the number of people killed range from eighty-four to several hundreds. An exact count is impossible, as many simply “disappeared.”
A new State leader cult became the quasi-official religion of Germany, with the strengthening economy contributing to people’s confidence in Hitler. This was due primarily to the soundness of Hjalmar Schacht’s reforms, even though he had retired in 1930.
|Hitler and Schacht
Knowing who was responsible for stabilizing the currency, Hitler called Schacht out of retirement and made him Reich Finance Minister, a position in which he immediately got into confrontations with the Nazis, Goering especially. Schacht approved of rearmament up to the point of equality, but opposed it when it became obvious Hitler was not arming for defense, but for conquest. He also was at constant loggerheads with Goering over treatment of the Jews, believing that stripping them of their civil rights was sufficient to remove any Jewish influence from the State.
Originally supporting the Nazis due to the weakness of the Weimar Republic and what he believed to be the necessity of a strong leader at the helm, Schacht was gradually disillusioned with Hitler, although it was also evident that to show this after 1936 would probably be a quick way of committing suicide. It is not clear at what point Schacht began assisting some Jews and collaborating with Hitler’s enemies, but by 1937 he had been removed as Finance Minister and was a Minister Without Portfolio, evidently more useful to Hitler as window dressing than in helping create the Reich war machine.