15 - Economic Policies in Nazi Germany

Question 1

What economic problems did Hitler inherit?

Answer 1

• depths of depression in January 1933
• nearly 6 million out of work
• previous governments had tried to reform, unsuccessful

Question 2

Who was Hjalmar Schacht?

Answer 2

• 1933-36 in charge of economy
• president of Reichsbank
• August 1934, economics minister
• introduced many schemes to stimulate the economy

Question 3

What were the economic strategies that Schacht used?

Answer 3

• government funding for new jobs
• reduction of unemployment
• mefo bills

Question 4

Government funding for new jobs

Answer 4

• 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

Question 5

Reduction of Unemployment

Answer 5

• 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

Question 6

Mefo Bills

Answer 6

• 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

Question 7

What was the balance of payments problem?

Answer 7

• 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

Question 8

What was Schacht’s new plan?

Answer 8

The scheme he introduced after becoming economics minister in July 1934, introduced from September

Question 9

What were Hitler’s economic aims?

Answer 9

• expansion of work schemes
• tackle unemployment
• Autarky
• Lebensraum
• Wehrwirtschaft

Question 10

What was Wehrwirtschaft?

Answer 10

A defence economy so they could be ready for war

Question 11

What methods did Schacht use to resolve the balance of payments?

Answer 11

• bilateral trade treaties
• government control of trade
• Reichmark currency
• mefo bills

Question 12

Bilateral trade treaties

Answer 12

• with Balkan countries, ex Romania
• allowed to show economic control before the military control

Question 13

Government control of trade

Answer 13

• could approve or disapprove of imports
• metal was approved but cotton and wool weren’t

Question 14

Reichsmark currency

Answer 14

• 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

Question 15

What progress had the economy made by 1936?

Answer 15

• unemployment fell to 1.5 million
• industrial production had icnreased by 60% since 1933
• GNP grown by 40% since 1933

Question 16

What new economic problems had emerged by 1935/36?

Answer 16

• balance of payments
• shortage of foreign exchange
• food shortages and rising prices
• lower living standards

Question 17

Hermann Goering and the 4 year plan:

Answer 17

• Goering took over in October 1936
• no economic experience
• explosives target 233, 300 in 1942

Question 18

Why did Schacht resign?

Answer 18

Germany had not reached Autarky, despite many of his policies moving in that direction. When Goering was implemented, he resigned in 1937

Question 19

What was Ertsatz?

Answer 19

Substitute products, ex. buna for rubber

Question 20

How successful was Goering’s 4 year plan?

Answer 20

• 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

Question 21

How successful was the reduction of unemployment?

Answer 21

• 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

Question 22

What were the successes of living standards?

Answer 22

• workers in armaments industries were better off than before
• Volkswagen scheme was introduced
• rationing helped to alleviate food shortages

Question 23

What were the limitations of living standards?

Answer 23

• meat, fruit and eggs was less consumed
• Volkswagen scheme never came to fruition
• longer hours, higher prices and shortages

Question 24

How did big businesses benefit from Nazi rule?

Answer 24

• 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

Question 25

How did big businesses experience drawbacks from Nazi Rule?

Answer 25

• 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

Question 26

How did the Mittelstand experience benefits of Nazi rule?

Answer 26

• May 1933, Entailed Farm Law passed to protect small farms (18-30 acres) but tied peasantry to the land

Question 27

How did the Mittelstand experience drawbacks of Nazi rule?

Answer 27

• independent artisans fell from 1.645 million to 1.5 million across 1936-39
• many small businesses went bankrupt from increased costs

Question 28

How did the Workers experience benefits of Nazi rule?

Answer 28

• 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

Question 29

How did the Workers experience drawbacks of Nazi rule?

Answer 29

• wages frozen at 1933 levels
• wages only increased by 1% over the period
• no one received a Volkwagen