Otto Niemeyer

Sir Otto Ernst Niemeyer
Born	(1883-11-23) 23 November 1883 Streatham, London, England
Died	6 February 1971(1971-02-06) (aged 87) Lindfield, Sussex, England
Occupation(s)	Banker, civil servant
Known for	Director of the Bank of England (1938–1952), Director of the Bank for International Settlements (1931–1965)

Sir Otto Ernst Niemeyer (23 November 1883 – 6 February 1971) was a distinguished British banker and civil servant, who held directorships at the Bank of England from 1938 until 1952 and at the Bank for International Settlements between 1931 and 1965.

An alumnus of Oxford, Niemeyer entered HM Treasury in 1906, swiftly advancing to the position of controller of finance from 1922 to 1927. Invited to join the Bank of England by Montagu Norman, he acted as the bank’s representative at the League of Nations and participated in various international assignments. His 1930 mission to Australia played a significant role in triggering a political upheaval that culminated in the Australian Labor Party split of 1931 and the downfall of James Scullin’s administration.

Personal life

Niemeyer was born in Streatham, London, as the eldest child among three siblings to Ethel (née Rayner) and Ernst August Wilhelm Niemeyer, a German-born naturalised British citizen originally from Hanover. He received his education at St Paul's School, London and later at Balliol College, Oxford. In 1910, he married his distant relative Sophie Niemeyer, with whom he had four children. After retiring, he settled in Lindfield, Sussex, where he passed away in 1971 at the age of 87.

Treasury

Beginning his career at HM Treasury in 1906, Niemeyer climbed the ranks to become deputy controller of finance by 1920 and then controller of finance in 1922, succeeding Basil Blackett. Serving as the principal financial advisor to the Chancellor of the Exchequer, he took part in the financial committee of the League of Nations. Frederick Leith-Ross praised him as "the outstanding Treasury official of the post-war years," highlighting Niemeyer’s pivotal role in shaping the British Gold Standard Act 1925, which reinstated the gold standard. At age 44, he departed from Treasury seeking broader career prospects.

Bank of England

In 1927, Niemeyer joined the Bank of England as an adviser to Governor Montagu Norman. He represented the bank on the League of Nations financial committee until 1937 and was involved with the Corporation of Foreign Bondholders from 1935 to 1965, serving as vice-president (1950–1955) and president (1955–1965). In 1938, after discussions with German Reichsbank President Hjalmar Schacht, Niemeyer proposed a scheme facilitating Jewish emigration from Germany through bond transfers abroad. That same year, he was appointed executive director of the Bank alongside Cameron Cobbold and was briefly considered as Norman’s successor in 1944 but was vetoed by Winston Churchill. Frequently undertaking diplomatic roles, he advised foreign governments and monitored debtors during visits to Australia and New Zealand (1930), Brazil (1931), Argentina (1933), India (1936), and China (1941).

Advice to Australia

By the late 1920s, Australia had accumulated substantial debt primarily owed to Britain’s independent banking sector. This indebtedness stemmed from Prime Minister Stanley Bruce’s "Men, Money, Markets" policy and World War I obligations. Following the Wall Street crash, recalls of U.S. loans prompted Britain to demand repayments from Australia. Facing difficulties even covering interest amid the Great Depression’s onset, Australia requested deferment on its war debts from Britain. The Bank of England sent Niemeyer to evaluate Australia’s financial situation with support from Prime Minister James Scullin and cooperation with the Commonwealth Bank of Australia.

Scullin announced Niemeyer’s forthcoming visit in Parliament on 19 June 1930:

"The Commonwealth representative in London has engaged closely with the Bank of England and other financial authorities regarding challenges in securing exchange for Australian overseas payments... The Government is committed to fulfilling all overseas obligations punctually... The Bank of England has agreed to assist Australia in finding a resolution, and Sir Otto Niemeyer will visit Australia accompanied by an economist and a Bank official."

Economic historian Alex Millmow observes that Niemeyer’s delegation—economist Professor Theodore Gregory alongside Australian economist Raymond Kershaw—did not anticipate the political turmoil their conventional economic recommendations would ignite. During the Melbourne Conference involving Commonwealth and State leaders, Niemeyer declared that Australia was "off budget equilibrium, off exchange equilibrium," burdened with both unfunded domestic liabilities and external debts while undertaking a large loan-funded works program without proper financing. He indicated that Australia had only two years to restore financial stability before a major debt matured in 1932 and criticized what he saw as unwarranted optimism within Australian leadership.

Niemeyer reproached Australia's excessive confidence, asserting it lived beyond its means due to "errors," necessitating acceptance of a reduced standard of living. He maintained that Australia's economic role should continue as a supplier for Britain and condemned protectionist policies as diverging from this function.

Federal and state leaders responded with varying degrees of acceptance; negotiations resulted in the compromise known as the 1931 Premiers' Plan. However, figures such as populist politician Jack Lang and former prime minister Billy Hughes opposed Niemeyer's conclusions. Public opposition was further fueled by anti-English sentiment combined with anti-German prejudice and misguided anti-Semitic attitudes. Consequently, Niemeyer was perceived as championing wealthy foreign bankers’ interests over those Australians enduring hardship during the Great Depression.

Additional roles and distinctions

Outside his tenure at the Bank of England, Niemeyer held a directorship at the Bank of International Settlements from 1931 until 1965, during which he was chairman between 1937 and 1940 and served as vice-chairman from 1940 to 1946. He played a pivotal role in establishing the National Association for Mental Health, acting as its interim chairman from 1943 to 1946. Niemeyer also fulfilled governance responsibilities at St Paul's School, Marlborough College, and the London School of Economics, presiding over the LSE as chairman from 1941 through 1957. His accolades include being appointed Companion of the Order of the Bath (CB) in 1921, elevated to Knight Commander of the Order of the Bath (KCB) in 1924, and receiving the Knight Grand Cross of the Order of the British Empire (GBE) in 1927.

See also

• Money doctor

Further reading

• Attard, Bernard. The Bank of England and the origins of the Niemeyer mission, 1921–30, University of London, London, 1989.
• Hughes, W. M. Sir Otto Niemeyer's Report: Bond or Free – Reply by W.M.Hughes, William Homer: Sydney, 1930.
• Macintyre, Stuart. The Oxford History of Australia – Volume 4 1901–1942 – The Succeeding Age, Oxford University Press, Melbourne, 1986
• Millmow, Alex. Niemeyer, Scullin and the Australian Economists, Australian Economic History Review, vol 44 no 2, July 2004.
• Robertson, J. R. Scullin as prime minister: seven critical decisions, Labour History, no. 17, June 1970.