Karl Theodor Helfferich was born on July 22, 1872 in Neustadt an der Weinstraße in the Palatinate. He studied law and political science at the universities of Munich, Berlin, and Strasbourg. Helfferich subsequently embarked upon a career as a journalist and academic, writing extensively on monetary policy and reform. In 1899 at the University of Berlin, he qualified as a lecturer… and was appointed professor in 1901… the same year he entered the German Foreign Office, specifically dealing with colonial affairs. Helfferich also taught at the government school for colonial politics and Oriental languages.
In 1902, Helfferich began a career in the diplomatic arena. He soon became a leader in the German government’s policy of economic imperialism. One year later, Helfferich published The Money (Das Geld), which was to become a highly popular and influential monetary work. He emphasized the importance of a stable currency and defended the employment of a gold standard.
In 1906, Helfferich was appointed director of the Anatolian Railway which was financed by Deutsche Bank. Two years later, he was made chairman of the directorship of the powerful Deutsche Bank in Berlin. For the next seven years, Helfferich served on the board. In 1913, he was also the German financial delegate to the international conference after the close of the First Balkan War.
But when the Great War spread all over Europe, Helfferich left Deutsche Bank in early 1915 and entered the government as Secretary of State of the Treasury. May 1916 brought new appointments as both Minister of the Interior and Vice-Chancellor under Theobald von Bethmann-Hollweg, then Dr. Georg Michaelis, and finally Georg von Hertling.
As Minister of Finance, Helfferich’s policy of financing the war effort primarily via loans rather than through direct taxation served to increase inflation. To remedy the situation, he counted on a final German victory and imposing heavy indemnities upon the Allies. But by November 1917, Helfferich was out of office.
After the March 1918 Treaty of Brest-Litovsk, Helfferich was sent to Moscow as the new German Ambassador to Russia. He succeeded Wilhelm Mirbach, who was assassinated.
Following Germany’s military defeat in November 1918, Helfferich became increasingly politically active, implacably opposed to the institution of the Weimar Republic. To this end, he became leader of the German National People’s Party (DNVP), a group which espoused arch-conservative and pro-militaristic policies. Helferrich strongly opposed reparations and the economic fulfillment of the Versailles Treaty. In particular, he directed his denunciations against the democratic Catholic leader Matthias Erzberger (against whom he had a celebrated lawsuit).
During the 1923 hyperinflation, Helfferich developed a plan for a new rye currency, indexed to the price (in paper marks) of rye and other agriculture products. His plan was rejected because of the extreme variability in the price of rye compared to other commodities. However, many of his plan elements were incorporated in the successful Rentenmark (the prototype of the future Reichsmark), which was put into circulation on November 15, 1923. In practice, the Rentenmark differed from Helfferich’s principles. Nevertheless, he was dubbed “the father of the Reichsmark”.
On April 23, 1924, Karl Helfferich was killed in a railway wreck near Bellinzona, Switzerland. He was fifty-one years old.
WORKS
– The Reform of German Finance, 1897
– Studies on Money and Banking, 1900
– The Money (Das Geld), 1903
– Germany’s National Wealth 1888-1913, (Deutschlands Wohlstand, 1888-1913) 1915
– Speeches and Essays from the War, 1917
– Do Away with Erzberger!, Verlag Scherl, Berlin, 1919, letters to the editor, the Berlin newspaper “Tag”
– The World War, (Der Weltkrieg) (3 vols.) published 1919 by Ullstein Berlin