The German economist and banker Hjalmar Horace Greeley Schacht (1877-1970), widely admired and hated as Germany's "financial wizard," played a vital role in his country's economic recoveries after the inflation of 1923 and in the Hitler years.

Hjalmar Schacht was born in the small border town of Trigleff in German Schleswig on Jan. 22, 1877, shortly after his parents had returned from their emigration to America. After earning his doctorate in economics at the University of Kiel in 1900, he entered one of Germany's great Industrial "D"-banks, the Dresdener Bank, in 1903, where he remained for 13 years. During World War I he set up a new central bank in occupied Belgium to print and regulate the Occupation currency. At the end of the war--now director of the smaller National bank--Schacht participated in the founding of the new progressive liberal party, the Democratic party, to which he belonged until 1926.

Schacht first gained a...