Helfferich, Karl

(1872-1924)
   economist and politician; largely re-sponsible for the war's inflationary policies, he inspired creation of the Renten-bank* to end the inflation.* Born to a textile manufacturer in the Palatinate's Neustadt, he began legal studies in 1890 and earned a doctorate in economics in 1894. He volunteered for the army, but his hopes for a military career were dashed in 1893 by a riding accident. While studying at Berlin,* he became involved as a gold-standard advocate in the bimetallism dispute; his Habilita-tionschrift was an 1898 polemic against bimetallism. He then taught at Berlin until 1906, becoming ordentlicher Professor in 1902. His celebrated Geld (Money) appeared in 1903 and went through six editions; underscoring a com-mitment to gold, the book claimed that paper currency only affirms a state's financial trouble. In the years preceding World War I he promoted Weltpolitik and industrial growth. He was employed in 1901 by the Colonial Office, he became director in 1906 of the Baghdad Railway (among Germany's key en-terprises), and was promoted in 1908 to the board of Deutsche Bank, the rail-way's parent company. In 1910 he joined the Reichsbank's governing board.
   Helfferich resigned his positions in January 1915 when he was appointed State Secretary of the Treasury and assumed responsibility for Germany's war fi-nances. Reversing his monetary notions, he financed the war, with support from the Reichsbank's Rudolf Havenstein,* via bond sales, fully expecting a victo-rious Germany to require its enemies to meet the bond obligations; because
   Germany lost the war, his policies induced the Republic's inflation. In May 1916 he replaced Clemens von Delbrück as Vice Chancellor and State Secretary of the Interior. An economic liberal and proponent of freedom of the seas, he initially opposed the use of submarines, but by late 1916 he had changed his mind. His zeal for Hindenburg* and Erich Ludendorff* helped persuade Theo-bald von Bethmann Hollweg to support their elevation to supreme command in August 1916; both men thought that the generals would restrict the use of sub-marines. Yet once the U-boats were "unleashed," Helfferich reversed his po-sition, stressing optimism in the submarines' eventual success. Matthias Erzberger* impugned his optimism in a July 1917 speech that spawned the Reichstag's* Peace Resolution; Helfferich never forgave him. He was quite un-popular when he left office in November 1917. In July 1918 he became the Kaiser's last envoy to Russia.
   The November Revolution* revised Helfferich's politics. Although he had been a prewar National Liberal, he joined the DNVP and bitterly opposed the Republic and treaty fulfillment.* His vendetta against Finance Minister Erzber-ger began in mid-1919. Broadly hated for signing the Armistice,* Erzberger was an easy target. In articles and speeches Helfferich assailed Erzberger's "stupid-ity" in nullifying Germany's military successes with the Peace Resolution. When he published the August 1919 pamphlet Fort mit Erzberger! (Away with Erzberger), the Finance Minister sued. Before the trial began in January 1920, Helfferich sparked another sensation when, at the National Assembly* hearings into Germany's defeat, he refused to answer questions put to him by Oskar Cohn,* implying that his questioner had committed treason during the war. His action subverted the hearings, helped launch the Dolchstosslegende,* and was the harbinger for the court battle. The trial, which ran until 12 March 1920, so damaged Erzberger—and, by association, the Republic—that he resigned his ministry. Helfferich indicted the government's policy of fulfilling the Versailles Treaty,* and his self-righteousness induced him to extend his battle against the policies of Joseph Wirth* and Walther Rathenau.* His rhetoric poisoned the atmosphere and was partially to blame for the murders of Erzberger and Rath-enau.
   Elected to the Reichstag in 1920, Helfferich exercised unprecedented authority over his faction. To his credit, he opposed the efforts of anti-Semites to gain control of the DNVP, and in October 1923 he recommended a creative monetary policy—basing the value of a temporary currency, the Roggenmark ("rye mark"), on a 5 percent mortgage against agricultural and industrial properties— that quickened Hans Luther's* currency measures. When Havenstein died on 20 November 1923, the Reichsbank's directors unanimously requested Helffer-ich as successor; Gustav Stresemann,* wishing to cultivate the Left, turned to Hjalmar Schacht.* Helfferich's last public act was a scornful critique of the Dawes Plan.* While returning from Italy in April 1924, he died in a railway accident in Switzerland. Despite his irascible nature, his loss left the DNVP and Germany without an important leader.
   REFERENCES:Benz and Graml, Biographisches Lexikon; Kent, Spoils of War; NDB, vol. 8; John Williamson, Karl Helfferich.

A Historical dictionary of Germany's Weimar Republic, 1918-1933. .

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