Hjalmar Schacht was an economist of the Weimar Republic and for the Nazis until his dismissal in 1937 due to his opposition to German rearmament. He was known for working with or developing several schemes that the Germans used throughout the interwar period.
The first scheme he was known for was the introduction of the Rentenmark. The currency of the Weimar Republic was normally the Reichsmark, but several things happened after World War I that caused great turmoil in the German economy. Many Germans considered the reparations to be a great outrage (as reparations are paid in “defeat,” and in the view of many Germans, Germany had not lost the war). To that extent, the Germans were willing to sabotage their own economy in an attempt to get the reparations waived or dismissed, due to a supposed German inability to pay it. This is all documented in Sally Marks’ “Myths of Reparations.”
One mechanism of their attempts to sabotage the reparations was to print large amounts of their currency. While there were several relatively sane ways that the Germans could purchase the gold and goods necessary for reparations, such as issuing bonds, raising taxes, or even taking on foreign currency debt, the Germans instead deliberately chose to print Reichsmarks, in an effort to wreck the German economy, thus bringing the Entente to the table to renegotiate the reparations. And it worked-the Dawes and Young Plans, created in the wake of the ensuing Weimar Hyperinflation, allowed to Germans to restructure and reduce the amount of reparations. This was of course at the expense of two years of German economic growth, which resulted in gross wealth destruction and was only fixed by the introduction of the Rentenmark. The Rentenmark, which Schacht was one of several economist that developed the scheme, was a substitute Reichsmark that used German land (real estate) as collateral, much in the lines several other countries used gold or silver to back their currencies. This was introduced into the German economy and helped to restore stability.
It should be noted that during this time, Schacht was only one of a handful of economists and political figures that assisted in the Weimar Republic’s return to economic growth. Hans Luther and Karl Helfferich were the main economists responsible for the Rentenmark.
Schacht in Nazi Germany, because of his political support and his rather sketchy if not outright illegal financial maneuvering to support the Nazis, was able to become Minister of Economics. During this time, he continued the programs of the previous German administration (namely, public works to artificially lower unemployment numbers, such as the autobahn) and expanded them into a general plan for German autarky. The two main issues he had to deal with were the lack of foreign reserves (caused by the German sell off due to the Great Depression) and the means of rearmament.
Simply put, if Germany ran out of foreign reserves, it would not only be hard pressed to trade with other countries but it would also severely weaken the strength of the German mark. To get around this, Schacht helped structure several trade transactions with South American, European, and even a handful of Asian countries whereby German could acquire strategic materials necessary for rearmament in exchange for either German marks or German goods, which would allow time for the Nazis to balance the foreign reserves deficit (which they never did, instead doubling down on it to increase the rate of rearmament).
The Mefos bills that he created were another tool whereby the Germans could secretly rearm themselves using economic tricks. As president of the Reichsbank, Schacht in theory was only supposed to be a lender of last resort-namely, his job was to be independent of the government and only to step in to preserve monetary stability. However, by issuing Mefos bills, he was able to secretly (if not fraudulently) loan money directly to the German government through a dummy corporation.
This allowed the German government to take on far more debt than any sane investor would have bought on, at a lower rate of interest. For a simple finance lesson, the more debt a country has, the greater the risk. An investor would demand a higher interest rate in return for taking on this higher risk. Since the interest rate for Germany was essentially fixed around 4.50%, this meant there was a theoretical ceiling after which nobody would be willing to buy German government bonds. Through the use of the Mefos bills, in addition to hiding arms purchases from Britain and France, they were also able to bypass this ceiling.
Of course, this would have been completely unsustainable, and would have required the acquisition of large amounts of foreign reserves to balance out the fact that the ostensibly independent Reichsbank was in fact loaning money to the German government, which would otherwise cause rapid inflation as it turned out German currency wasn’t worth what people thought it was. This was part of the reason why the Nazi government chose to invade many countries-one of their most important objectives was the seizure of all the currency and reserves in the various banks, to feed the gaping maw in the German economy left by Schacht and the Nazis’ policies.
At the end of the day, Schacht wasn’t a particularly brilliant economist, but he did participate in both legitimate economic schemes (as the Rentenmark) as well as some more fraudulent ones (like the Mefos bills) in order to keep Germany’s economy afloat. Still, the fact remains that despite his willingness to fund German rearmament, Nazi rearmament was still too fast even for him, which eventually led to his resignation and collaboration with the German resistance. This should show that he was not in fact some lone genius, but rather one of several German economists that happened to be in a position of leadership during the Weimar Republic and later the Nazi regime.
Sally Marks, The Myth of Reparations
Adam Tooze, Wages of Destruction
Nazi General Anton Dostler is tied to a stake before his execution by a firing squad, Italy; ca. 1945.
General Dostler ordered and oversaw the unlawful execution of fifteen captured US Soldiers. The soldiers were sent behind the German lines with orders to demolish a tunnel that was being used by the German army as a supply route to the front lines. They were captured and upon learning of their mission, Dostler ordered their execution without trial. The US soldiers were wearing proper military uniforms and carried no civilian or enemy clothing and were in compliance with Hague Convention to be considered non-combatants after their surrender. Under the 1907 Hague Convention on Land Warfare, it was legal to execute “spies and saboteurs” disguised in civilian clothes or enemy uniforms but excluded those who were captured in proper uniforms. Since fifteen U.S. soldiers were properly dressed in U.S. uniforms behind enemy lines and not disguised in civilian clothes or enemy uniforms, they were not to be treated as spies but prisoners of war, which Dostler violated. They shot the Americans and buried them in a ditch by their field headquarters.
The general was convicted and sentenced to death by an American Military Tribunal. The trial found General Dostler guilty of war crimes, rejecting the defense of superior orders. He was sentenced to death and shot by a firing squad on December 1, 1945 in Aversa. The execution was photographed on black and white still and movie cameras.
*You can see this photo being taken at 1:22 here:
“Before Japan’s attack on Pearl Harbor, Emperor Hirohito criticized plans to go to war with the United States as ‘self-destructive,’ and opposed an alliance with Nazi Germany, though he did little to try to stop the war that Japan waged in his name, according to the long-awaited official history of his reign released on Tuesday.” (Source)
Well, I can imagine that there are some things doctored, but there is definitely some truth behind this. For years, there has been information coming out how the Emperor was hesitant about the war, as well as wanting to surrender well before Nagasaki and Hiroshima. It isn’t out of the question for Emperors/Kings to be ‘taken’ advantage of in times of war. Look at the bombings of England in WWI by Germany, the Kaiser was some-what left out of the loop there.
I am more interested if these texts talk about the war crimes that Japan committed and on what level was the emperor aware of these atrocities, not so much the whole US/Japanese relations. Japan terrorized and murdered millions of people, and that is often forgotten in the western world. And this is a sensitive subject for Japan and countries in its close proximity, mostly because Japan does not admit these things actually happened.
The Emperor was not held accountable what-so-ever for the crimes that were committed in his name; (imagine if Hitler didn’t shoot himself, surrendered, and then set free. That’s how some countries feel about this). In the western world, the German people were held personally responsible for WWII (I’m not saying this was right or wrong, just that it happened), while Japan was more or less ‘forgiven’ after having some higher-ups executed.
To this day, countries still HATE one another because of what happened in this time in history. While in Europe (Western Europe anyways), countries have made great progress in improving the relations between one another.
SA (Sturm Abteilung or “Brownshirts”) call for the boycott of Jewish shops in Friedrichstraße, Berlin; April 1, 1933.
The sign says: “Germans, Attention! This shop is owned by Jews. Jews damage the German economy and pay their German employees starvation wages. The main owner is the Jew Nathan Schmidt.”
One reason is certainly the vastness of the whole conflict. The ‘Vietnam’ or ‘Korean’ Wars can largely be said to confine within the geographical limits of those two countries. Obviously they involved the US, China, Soviet Union and extended geographically into other areas, but you get the point. WORLD WAR, however, carries a much more epic connotation.
So if we lay out a few things, I think it’ll make it clearer. Let’s discuss scope, including beligerents, the origins, and the ramifications or long-term results.
1.Scope: The enormity of the war defies logic, and it really should be classified as ‘The World Wars of 1937-1954’ if you ask me. When an American student is asked to assess WWII, s/he will often begin with Pearl Harbor, some 8 years after the start of the Asian Theatre. The Wars transformed the ‘dynamic of destruction’ begun in WWI into a truly catastrophic and epoch-defining conflict in which Race, Ethnicity and Combatant-Status were given entirely new meanings. The Wars involved nearly everyone on the globe (not literally) fighting nearly everyone else, and in seemingly any single theatre of fighting, the complexities are mind-boggling enough to almost defy explanation. In looking at the scope of destruction in Warsaw in 1939, it’s difficult to imagine that War could be more brutal, until you look at the ‘Rape of Nanking’ or the fratricidal and very confusing wars fought in the Balkans. The scope of the war also involved ideologies on a scale not really seen before. The clash of western liberalism, national socialism and marxist inspired communism really dealt a sense of seriousness and existentialism to the conflicts. By that I mean there was a real sense of an apocalyptic showdown: each saw the ‘other’ as not only the enemy, but barbaric and even ‘evil.’ Barbarism is present in all wars, but again, the scope, the severity of the death and destruction of both individuals and of groups of people, is staggering.
2.Origins: What caused the War(s)? The answer to many is even more disturbing than the actual war, because it appears to many that the origins of this brutal war lie in a decision by the victors of WWI to impose a settlement upon Germany that would end all wars. What does this really mean? It means that even without Hitler, the suffering of the Germans prior to the outbreak of hostilities was incredible. The moral and physical landscape of Europe had been ravaged by WWI to such an extent that it would seem no war could ever take place again. The Great Terror and Holodomor in the USSR had already hit their peaks by 1939 (the traditional start of WWII) and that was only the beginning. The origins of the war lie in nefariousness, in cunning, in duplicity, in deceit and in imperialism. Which means it basically started like any other war – except this time ideologies were the driving force, rather than economics. Hitler didn’t invade Poland to secure minerals, to acquire natural forests or to take advantage of their industry. He essentially invaded to secure ‘living room’ for his Germanic peoples, his ‘Volk’. In his moral landscape there was no room for the Jew, the Slav or the undesirables. At the same time, Stalin invaded to secure the territory of the Ukraine and the Baltic countries in a bid to continue his centralization of Soviet power into a country denied to him in 1921. Russia had all the natural resources in the world with the open tundra of Siberia, so he was not after resources either, his was an ideological mission to spread Communism.
3.Ramifications: We are in the year 2014 and the United States is the lone super-power. Yet in 1938 the US was far from a global super-power in today’s sense of the word. The War(s) dramatically impacted the United States’ meteoric rise to the top of the world. The US was spared the civilian bloodshed and infrastructural damage of the European/Asian wars, yet reaped the physical and moral benefits by defeating Nazism, culturally colonizing Western Europe, and catapulting her economy into superstardom through the tremendous industrial capabilities gained through the War’s result. The USSR and USA came out of the conflicts much better off, and to cut this answer a little short – the Korean War and Vietnam Wars don’t exist without the USA’s triumph in WWII. Neither does our current predicament in Afghanistan. The Soviets continued expanding and went into Afghanistan in 1980, a place even the Tsars at the height of their empire couldn’t do very well. The US’s interventions in Asia and Latin America and the Soviet Union’s interventions and expansions into Central Asia, the Balkans and the Caucasus were direct results of the situation in Europe after 1945.
In a nutshell, that is why people are still fascinated with the Wars of 1937-1954. That and the well-publicized and relatively unprecedented genocide of Europe’s jewry which spawned our idea of, and our word for, Genocide.
The Katyn Massacre was horrifying. 22,000 prisoners of war from the officer corp and high ranking civilians who surrendered peacefully to the soviets when Poland was invaded, murdered simply so there would be less resistance to Soviet rule.
Detailed information on the executions in the Kalinin NKVD prison was provided during a hearing by Dmitrii Tokarev, former head of the Board of the District NKVD in Kalinin. According to Tokarev, the shooting started in the evening and ended at dawn. The first transport on 4 April 1940, carried 390 people, and the executioners had a hard time killing so many people during one night. The following transports held no more than 250 people. The executions were usually performed with German-made 7.65×17mm Walther PPK pistols supplied by Moscow, but 7.62×38mmR Nagant M1895 revolvers were also used. The executioners used German weapons rather than the standard Soviet revolvers, as the latter were said to offer too much recoil, which made shooting painful after the first dozen executions. Vasili Mikhailovich Blokhin, chief executioner for the NKVD—and quite possibly the most prolific executioner in history—is reported to have personally shot and killed 7,000 of the condemned, some as young as 18, from the Ostashkov camp at Kalinin prison over a period of 28 days in April 1940.
The killings were methodical. After the personal information of the condemned was checked, he was handcuffed and led to a cell insulated with stacks of sandbags along the walls and a felt-lined, heavy door. The victim was told to kneel in the middle of the cell, was then approached from behind by the executioner and immediately shot in the back of the head. The body was carried out through the opposite door and laid in one of the five or six waiting trucks, whereupon the next condemned was taken inside. In addition to muffling by the rough insulation in the execution cell, the pistol gunshots were also masked by the operation of loud machines (perhaps fans) throughout the night. This procedure went on every night, except for the May Day holiday.
…but what happened with the discovery of the Katyn burial site is a lesson in how screwed up the world was at that time. when the Germans found the massacre site, they used it as propaganda material against the Russians.
When the Russians retook the area, they planted evidence and said the Germans committed the massacre.
The whole era was colossal race to the bottom: who can kill the most people, in the most brutal fashion, and claim their enemy killed more, in a more brutal fashion. a sort of anti-morality. it really makes you wonder, how humanity can be that screwed up.
When, in September 1943, Goebbels was informed that the German army had to withdraw from the Katyn area, he wrote a prediction in his diary. His entry for 29 September 1943 reads: “Unfortunately we have had to give up Katyn. The Bolsheviks undoubtedly will soon ‘find’ that we shot 12,000 Polish officers. That episode is one that is going to cause us quite a little trouble in the future. The Soviets are undoubtedly going to make it their business to discover as many mass graves as possible and then blame it on us”.
Having retaken the Katyn area almost immediately after the Red Army had recaptured Smolensk, around September–October 1943, NKVD forces began a cover-up operation. A cemetery the Germans had permitted the Polish Red Cross to build was destroyed and other evidence removed. Witnesses were “interviewed”, and threatened with being arrested as German collaborators if their testimonies disagreed with the official line. Since none of the documents found on the dead had dates later than April 1940 the Soviet secret police planted false evidence that pushed the massacre date forward to the summer of 1941 when the Nazis controlled the area. A preliminary report was issued by NKVD operatives Vsevolod Merkulov and Sergei Kruglov, dated 10–11 January 1944, concluding that the Polish officers were shot by the Germans.
The way I like to talk about this is in this way: what are the phases necessary for developing a nuclear weapon? In some ways, it’s easiest to first talk about this in the context of the American Manhattan Project.
In 1939, Einstein and Szilard wrote the famous letter to Roosevelt about bomb issues. FDR said, “sounds interesting,” and made a very small exploratory committee to look into it (the Uranium Committee at the National Bureau of Standards). This is what we might call an exploratory stage. It was basically theoretical studies and small laboratory studies. The questions they were trying to answer were very basic: Is atomic energy something worth worrying about? Can an atomic bomb, or an atomic reactor, be built in the near term by anybody?
The conclusions they came to weren’t encouraging. By 1941 the top science advisors in the US had basically concluded that while it might be possible to make nuclear weapons, it was going to be very difficult to do so and probably not worth spending a lot of money and time on in the near term. The atomic bomb, they reasoned, was unlikely to play a role in World War II.
Towards the end of 1941, though, they received a report from scientists working in a similarly exploratory capacity in the UK which concluded that the bomb could probably be built in a short amount of time if a sufficient effort was put into it. The British scientists were successful in convincing the American administrators that the program should be moved into a new stage of development.
This new stage we might call the pilot stage. It sought to establish on a small scale some of the key aspects that would go into a real production model. Roosevelt approved this just before Pearl Harbor. Basically this required building several small-scale production plants, and funding work on building an experimental nuclear reactor.
By mid-1942 it became clear that they felt this was all worth spending more money on, and by late 1942 it was decided that the US Army should be brought into the matter, because they had the experience necessary to construct the massive factories and plants necessary to produce actual atomic bombs. This is the transition into the production phase. You’ll note that in this case, the pilot stage was very brief. This was unusual and noted even at the time; they were really flying by the seat of their pants, drawing up plans to build full-scale industrial reactors even before the first experimental nuclear reactor had gone online (which happened in December 1942).
It is this final phase, from 1943 to 1945, that is the Manhattan Project proper, when it was run by the Manhattan Engineer District of the US Army Corps of Engineers. This is the full (crash) production program to make atomic bombs, and required a huge expenditure of resources.
There is some irony in the fact that the original, 1941 estimate by the US scientists about the difficulty of making an atomic bomb was more or less correct. They had concluded that a bomb, though feasible, would be very difficult to make, and that nobody else was likely to really be working on one. The UK scientists underestimated the difficulty substantially. The final bomb project cost about 5X what was estimated in 1942, when it started the transition into the production phase, to give some indication of the disparity of estimates. And we now know, of course, that making an atomic bomb was difficult and no other nation did get very far in it during the war.
OK, but back to Germany. Where did they end up? They started their exploratory phase in 1939, the same as the USA (and the same as the USSR, Japan, France, and the UK). Like the US, they concluded that this was interesting but pretty difficult. Nobody thought this was going to be an issue in the present war — which, of course, Germany was doing very well in, early on.
By 1942, they started to realize that things weren’t going so well. They started to get more interested in the uranium issue. But even then, it was still just a transition towards the pilot stage — they were looking into building an experimental reactor. They were hampered in this by many factors.
They never got to the end of this phase before the war ended. What if they had? They still would have to start a production phase, which was the most difficult and most costly of the phases.
So by 1945 they were almost to the phase that the United States moved out of in 1942. They were pretty far from getting a bomb, and even if they had decided, in 1942, to start building one, it’s really unclear that they would have been able to pull it off, merely because the sizes of the buildings required for such a program would make them very attractive bombing targets.