15 - Economic Policies in Nazi Germany Flashcards
What economic problems did Hitler inherit?
- depths of depression in January 1933
- nearly 6 million out of work
- previous governments had tried to reform, unsuccessful
Who was Hjalmar Schacht?
- 1933-36 in charge of economy
- president of Reichsbank
- August 1934, economics minister
- introduced many schemes to stimulate the economy
What were the economic strategies that Schacht used?
- government funding for new jobs
- reduction of unemployment
- mefo bills
Government funding for new jobs
- increased public expenditure to stimulate consumer demand
- building of homes and motorways paid for by state
- subsidies for hiring more in the public sector
- married women and jews pushed out of public service
Reduction of Unemployment
- agricultural workers could no longer register
- RAD took young off unemployment register (400,000)
- 1935, young men conscripted into the army for 2 years
- army grew from 100,000 in 1935 to 1.4 million in 1939
Mefo Bills
- used to help fund rearmament
- Schacht set up Metallurgische Forschung, which provided credit to those providing services to the government
- payable after 5 years with interest from government tax revenue
- by 1937, 12 million Reichsmarks had been paid in mefo bills
What was the balance of payments problem?
- fears of a rapid increase in demand causing inflation and a balance in trade deficit
- had increased imports but not exports
- low in foreign currency and gold reserves
What was Schacht’s new plan?
The scheme he introduced after becoming economics minister in July 1934, introduced from September
What were Hitler’s economic aims?
- expansion of work schemes
- tackle unemployment
- Autarky
- Lebensraum
- Wehrwirtschaft
What was Wehrwirtschaft?
A defence economy so they could be ready for war
What methods did Schacht use to resolve the balance of payments?
- bilateral trade treaties
- government control of trade
- Reichmark currency
- mefo bills
Bilateral trade treaties
- with Balkan countries, ex Romania
- allowed to show economic control before the military control
Government control of trade
- could approve or disapprove of imports
- metal was approved but cotton and wool weren’t
Reichsmark currency
- would purchase raw materials from countries but they would need to purchase German goods in Reichmarks
- did not use up foregin currency
- Reichsmark estimated to have 237 values at one point
What progress had the economy made by 1936?
- unemployment fell to 1.5 million
- industrial production had icnreased by 60% since 1933
- GNP grown by 40% since 1933
What new economic problems had emerged by 1935/36?
- balance of payments
- shortage of foreign exchange
- food shortages and rising prices
- lower living standards
Hermann Goering and the 4 year plan:
- Goering took over in October 1936
- no economic experience
- explosives target 233, 300 in 1942
Why did Schacht resign?
Germany had not reached Autarky, despite many of his policies moving in that direction. When Goering was implemented, he resigned in 1937
What was Ertsatz?
Substitute products, ex. buna for rubber
How successful was Goering’s 4 year plan?
- aluminium and explosives produced nicely
- oil not successful, target of 13,830 tons but 6260 in 1942
- Germany still dependent on other countries for 1/3 of their raw materials when war broke out
How successful was the reduction of unemployment?
- post 1936, labour shortages up by 39%
- conscription for men 18-25 in 1935
BUT - jews and women not included in unemployment statistics
- many of the work programmes had been started by Bruning in 1930s
What were the successes of living standards?
- workers in armaments industries were better off than before
- Volkswagen scheme was introduced
- rationing helped to alleviate food shortages
What were the limitations of living standards?
- meat, fruit and eggs was less consumed
- Volkswagen scheme never came to fruition
- longer hours, higher prices and shortages
How did big businesses benefit from Nazi rule?
- independent labour movement smashed by the DAF
- Dalmier Benz gained from rearmament and production rose by 800% from 1932 to 1941
- in 1935, IG Farben received 50% of government funding to produce synthetic oil and rubber
- By 1943 IG owned 334 plants
- 1939 contributed 7.5 million to party
How did big businesses experience drawbacks from Nazi Rule?
- 1937, faced a charge of sabotage if they didn’t comply with the party
- Hermann Goering Steelworks received 130 million marks of investment from private steel industry
- by 1939 was the largest industrial firm in Europe
How did the Mittelstand experience benefits of Nazi rule?
- May 1933, Entailed Farm Law passed to protect small farms (18-30 acres) but tied peasantry to the land
How did the Mittelstand experience drawbacks of Nazi rule?
- independent artisans fell from 1.645 million to 1.5 million across 1936-39
- many small businesses went bankrupt from increased costs
How did the Workers experience benefits of Nazi rule?
- by 1939 only 35,000 / 25 million unemployed
- wage average of 35 marks a week
- 6 - 12 days a year of paid holiday by 1939
- DAF had 32 million marks of funding by 1939
- 1938, 10 million took KdF holidays
How did the Workers experience drawbacks of Nazi rule?
- wages frozen at 1933 levels
- wages only increased by 1% over the period
- no one received a Volkwagen
