15 - Nazi economic policies Flashcards
1
Q
Dr Schacht
A
Economic policy between 1933-37 was largely under the control of Economics Minister Dr Schacht, a Nazi sympathiser, though not a member of the Nazi Party.
2
Q
Nazi economic policy
A
- Short term the priority was economic recovery from the Depression and the reduction of unemployment.
- Long term they aimed to create an economy capable of sustaining a major rearmament programme and geared to the needs of a future war.
3
Q
Economic policy
A
- Money was provided for various employment schemes. New motorways (autobahns), houses, schools and hospitals were built.
- All men aged 18-25 had to spend 6 months in the National Labour Service.
- Encouraged women to stay at home meaning there were more jobs for men. Helped to reduce unemployment to 1.7 million by 1935.
- Schacht’s New Plan (1934) encouraged the signing of trade treaties with countries of south-east Europe and South America.
4
Q
Recovery from the Depression
A
Regime stimulated economic recovery by:
- Pumping money into the economy to build homes and Autobahns.
- Giving tax concessions and grants to particular groups.
- Giving subsidies to private firms to encourage them to take on more workers.
- Putting controls on wages and prices to control inflation.
- Introducing the ‘New Plan’ in 1934 to control Germany’s foreign trade
- Taking the first steps towards rearmament using the Mefo bill
5
Q
The battle for work
A
- Priority was to reduce unemployment.
- Large sums of money were spent on the building of roads and public buildings.
- Increased industrial production was stimulated through loans and tax relief to private companies.
- Their measures helped to reduce unemployment faster than might otherwise have been the case.
- A Reich Labour Service was introduced under which unemployed young men were compelled to do 6 months labour in farming or construction.
- Military conscription was reintroduced for young men.
6
Q
The ‘New Plan’ 1934
A
- Foreign trade increased and this led to imports growing faster than exports.
- Led to a shortage of foreign currencies.
- Under the New Plan, Schacht placed controls on imports and on access to foreign currency.
- Initiated a series of trade agreements with foreign countries whereby German was supplied with food and raw materials, which were paid for in German Reichsmarks.
- The supplying countries could then only use this money to buy German goods.
7
Q
Use of Mefo bills
A
- Government paid for its military equipment using credit notes, or Mefo bills.
- These bills could be exchanged for cash at the Reichsbank, ensuring that private companies had confidence they would get their money.
- Companies were given an incentive to defer asking for payment by the offer of 4% per annum interest on the bills if they kept them for the full five-year term.
- Rearmament could begin in 1935 without the government having the funds to finance it.
- Advantage that the rearmament could be kept secret since the expenditure did not appear in the government’s accounts.
8
Q
Growing disillusionment
A
- In addition to the balance of payment problems and shortage of foreign exchange, there were also food shortages, rising prices and lower living standards for ordinary Germans in 1935-36.
- Growing disillusionment with the regime.
- Conflict of priorities (food shortages and rearmament) referred to as a choice between ‘guns or butter’.
- Decision to strive for economic self-sufficiency (economic autarky) was the basis of a new Four Year Plan.
9
Q
The Four Year Plan
A
- Aim was to make Germany ready for war within 4 years.
Priorities of this plan were rearmament and economic autarky: - Creating a managed economy with control on labour supply, prices, raw materials and foreign exchange.
- Setting production targets for private companies.
- Establishing new State-owned industrial plants such as the Hermann Goering Steelworks.
- Increasing key commodities such as iron, steel and chemicals.
10
Q
Economic autarky
A
- Four Year Plan aimed to achieve autarky (self-sufficiency) in food production and vital raw materials.
- Effort to increase production was presented as a battle in which the whole ‘people’s community’ had to participate.
- Propaganda campaigns to persuade people to buy only German goods
11
Q
Results of the Four Year Plan
A
- Did not match the propaganda claims.
- German industry did not meet the targets set.
- In 1939, Germany still imported one third of its raw materials.
- In food production, there were similar failings.
- By 1939, the German economy was under severe strain.
12
Q
Nazi policy towards management and the industrial elites
A
- Many, but not all, of Germany’s business leaders welcomed the Nazi takeover of power.
- In the early months of the Nazi regime, many of their policies were of benefit to businesses
- The suppression of free trade unions, the establishment of political stability and the revival of the economy all helped to create an environment favourable to business.
- There were many business leaders who did not welcome the greater state intervention in the economy.
- In general, the regime was able to enlist the cooperation and expertise of big business and management in the implementation of its economic policies.
13
Q
Big businesses and the Four Year Plan
A
- There were many opportunities for businesses to make profits through involvement in the rearmament programme.
- Large chemicals company I.G. Farben benefited enormously which was heavily involved in the research and production of synthetic materials.
- Between 1935-1939 the profits of I.G. Farben increased from 71 million to 240 million Reichsmarks.
- Some companies were sceptical about the plan.
- Many of the Ruhr iron and steel firms were reluctant to invest in new steelworks to produce steel from poor-quality and expensive German iron ore, rather than use cheaper and superior importer ore.
- Regime bypassed them altogether by establishing the Hermann Goering Steelworks.
14
Q
The Hermann Goering Steelworks
A
- Owned by the State but partly financed by private companies.
- By 1939 it had become the largest industrial enterprise in Europe.
- After 1938 it expanded into Austria, Poland and France.
15
Q
The degree of economic recovery achieved by 1939
A
- Nazi propaganda machine used all their resources and skills to project an image of the success of Nazi economic policies.
- Speeches and radio broadcasts by Hitler repeatedly claimed that the ‘battle for work’ had been won by 1936.
- Advertising campaigns for products such as the ‘people’s receiver’, the ‘people’s car’ and for cruise ship holidays gave the impressions Germans were experiencing an unprecedented rise in their living standards.
- Military parades showing off the latest equipment and patriotic campaigns to persuade Germans to buy only German goods were designed to show that Germany was achieving autarky and was ready for war.
- Propaganda exaggerated the successes and covered up the failures.
