7 - economic Flashcards
1
Q
General economic facts
Bismarck [1871-1918]
A
- 1883 = Deutsche Edison Gesellschaft [later known as AEG] = one of the first major electrical industrial companies —- electrical output increased by 18% every year from 1890-1913
- Workers in the construction industry increased by 1 million
- Germany’s population also increased from 50 million in 1890 to 60 million in 1910
- Chancellor Caprivi’s commercial treatties with numerous countries from 1890-94 lowered tarriffs on imports of cattle, timber, rye, wheat = guarenteed a market for Germany’s goods for 12 years
2
Q
General economic facts
WW1 [1914-18]
A
- Director of AEG, Walter Rathenau, established the War Raw Materials Department in 1914 which aimed to organise industry to ensure that the country had enough materials to fight = they created synthetic materials for ones they could not import [rubber]
- Imperial Grain Office controlled food rationing and supplies
- Auxiliary Service Act - under Lundendorff and Hindenburg = directed work at all men [excluded women so not total war]
3
Q
General economic facts
Weimar [1918-1933]
A
- Govt. inheritied 140,000 million marks of war debt
- Due to the Treaty of Versialles in 1919 = reparations of 1921 of DM2 million per year - London Schedule of 1921 agreed that Germany should pay 132 billion gold marks
- By 1923 hyperinflation meant that $1 was equal to DM4.2 trillion + DM9 million for a loaf of bread
- Wall Street Crash 1929 followed by the Great Depression
4
Q
General economic facts
Nazi [1933-45]
A
- By 1934, unemployment had halved
- However, by 1939, there was a labour shortage in German industry because the building and metal industries had expanded due to the war
- From 1936, the 4 Year Plan focused on German industry and armaments production —- by 1938, 44% off the government expenditure focused on rearmament
5
Q
General economic facts
West Germany [1945-1990]
A
- Minister for Economics = Ludwig Erhard - GNP trebled during the 1950s
- Using Marshall Aid = $1.4 billion in the first four years — began in 1947
- The Korean War [1950-53] boosted the German industry
6
Q
Mass unemployment 1930-32
A
- In machine-building industries, unemployment was 48.9%, specifically in shipbuilding it was 63.5%
- 6 million unemployed in 1932
- Germany was particularly hard hit as they relied on American loans —- June 1932 = Bank of International Settlement ended Germany’s payment requirements
- By 1931, the Nazis were feeding 200 people a day = growth in extremist parties as a result = Nazis from 2.6% in 1928 to 18.2% in 1930 + KPD gained 4.4 million votes
— inability of Weimar government to deal with the economic situation versus the Nazis dealing with it even when not in govt. allowed Hitler to take over = Hindenburg agreed to allow Hitler to become Chancellor on 30th January 1933
7
Q
Post-War ‘economic miracle’ 1960+
A
- By 1963, West Germany was the strongest economic power in Europe and the third biggest in the world
- Marshall Plan Aid = $99 million in total — developed coal-mining, railay, electrical, steel and iron industries
- 1952 = Works Councils established so increased discussions between employees and employers = very little strikes to halt industries — co-determinism = in 1951, a busines with over 1,000 employees needs a representative of the workers at meetings
- However, slowdown in the economy in 1960s as the inital recovery was over
8
Q
Changes in German agriculture
Bismarck
A
- Turnip Winter 1916-17 = 35% of pigs killed to save grain
Germany relied on 1/3 of food by imports, which led to starvation as the British Blockade was effective - Workers in the construction industry increased by 1 million
- Germany’s population also increased from 50 million in 1890 to 60 million in 1910
- Chancellor Caprivi’s commercial treatties with numerous countries from 1890-94 lowered tarriffs on imports of cattle, timber, rye, wheat = guarenteed a market for Germany’s goods for 12 years
9
Q
Changes in German agriculture
Weimar
A
- By 1931, wheat prices had fallen to 1/3 of pre-1920s prices
- Weimar taxes on agriculture were 4 times higher than they had been during the Kaiserreich
- 30% of the working population was involved in agriculture and forestry work in 1925
- Despite laws in 1925 designed to subsidise agriculture, rural debt and bankruptcy continued to rise increasing by 20-30% by the late 1920s
- The average income of farmers was 44% below the national average.
10
Q
Changes in German agriculture
Nazi
A
- The Nazis romanticised agriculture = Blood and Soil programme = The phrase was populised by Richard Walther Darré — Reich Minister of Food and Agriculture
- 1938, the Nazis gave greater subsidies to farmers but decline continued
- From 1933-38 almost 1 million people left rural areas in order to look for work in the cities —- the highest rate of internal migration in Germany during the 20th century
11
Q
Changes in German agriculture
West Germany
A
- 1955 the government introduced the Agriculture Act (or Green Law), which supported agricultural prices through protective tariffs — caused a 10% increased= in agricultural production but failed to stem the overal agricultural decline
- Non-agricultural employment increased by 9 million from 1950-70 whilst agricultural employment dropped by 1.6 million
- By 1989, the agricultural sector contributed 1.6% of GDP and only 630,000 in 1990 from 1.6 million in 1950
12
Q
The introduction of protectionism 1879
A
- REASON = 1873 — the German economy collapsed and over 150 companies went bankrupt
- The Central Association of German Industrialists was formed in 1876 as a pressure group which used its influence to put pressure on Bismarck
- Bismarck used the issue of tarifffs in 1878 to campaign openly against the National Liberal [the most powerful party in the Reichstag] as they believedd in free trade —- Bismarck claimed that tariffs were patriotic — so many NL voters switched to Bismarck’s backed Conservative Party = split the NLs
- 1879 the Reichstag asses the protective tariff law [backed by two conservative parties and the Centre Party]
- The industrialists became more closely allined with Junkers = The alliance of Iron and Steel = prevented major change for the next 40 years (led to the 1918 revolution)
13
Q
Role of the government
The building of a large navy
1898-1914
A
- Kaiser Wilhelm II wanted to have colonies like Britain and France
- 1897 = Admiral Alfred von Tirpitz appointed as secretary of state for the navy = 1898 - introduced a bill to create 17 ships over 7 years = passed by 212 votes to 139 — Germany’s navy increased to 36 ships
- Naval race to develop Dreadnought battleship in 1905 [the most powerful ship at the time] = B won
- 1914 = Germany had doubled the size of its navy — second largest after Britain
- Triple Entent signed with France and Russia in 1907 to surround Germany by this alliance
- International disagreements = Moroccan Crisis in 1905 + Germany threatened France’s power in Africa in 1911 vs. SPD pacifist and largest party in the Reichstag by 1912
14
Q
Role of the government
Nazi policies
1933-1937
A
- Hjalmar Schacht = President of the Reichsbank march 1933 and from August 1934 to November 1937 he was also Reich Minister of Economics [resigned due to his rivalry with Goering and his 4 Year Plan]
- From 1933-35 RM5,000 million was invested in public works [like New Deal] — causing unemployment to fall from 2.7 million in 1934 to 1.7 million in 1935
- Mefo Bills exchanged for Reichmarks — RM12,000 million worth of Mefo Bills issued and they financed 50% of arms expenditure from 1934-36
- However, Germany had a supply due to the restrictions in the Treaty of Versailles — to combat this = the New Plan 1934 = agreement with south-eastern Europe and Latin America – imports paid with German marks but had to be used to buy or invest in German goods and industries
- Goring hired in 1936 to control the economy focused on war, whilst Schacht argued for more consumer goods, which Germany lacked
15
Q
Role of the government
Marshall Aid
1940s
A
1946 = both Soviet and USA tropps agree to stay in Germany
1947 = British and American zones merge + West Germany formedd in 1949
June 1947 = Secretary of State George Marshall promised economic aid to Europe = Marshall Plan [provided $17 billion] + Truman Doctrine
West Germany received $2.7 billion during the 1940s and 1950s — well distributed by Adenauer and the economics minister, Erhard — Marshall Plan paid for 37% of West Germany’s imports
- Marshall Plan led to greater cooperation bwtween Western European nations with all aid coordinated by the Organisation for European Economic Cooperation [OEEC]
