Chapter 15: Economic policies (Sec 4) Flashcards
How did Schacht stimulate economic recovery?
1) pumping money into the economy to build homes and autobahns.
2) stimulating consumer demand by giving tax concessions and grants to particular groups.
3) giving subsidies to private firms to encourage them to take on more workers.
4) introducing the ‘new plan’ in 1934 to control Germany’s foreign trade and improve the country’s balance of payments.
5) taking the first steps towards rearmament, using an ingenious method for financing the expenditure.
Explain the battle for work during economic recovery under Schacht.
1) The first priority after coming to power in 1933 was to reduce unemployment, a project which they labelled the battle for work.
2) Large sums of money spent on the building of roads and public buildings and sums of money were spent on the building of roads and public buildings and increased industrial production was stimulated through loans and tax relief to private companies.
3) 1935- Reich Labour Service introduced under which unemployed young men were compelled to do 6 months’ labour in farming or construction.
4) 1935 - military conscription was reintroduced for young men.
What was the new plan of 1934?
1) Under the new plan, Schacht placed controls on imports and on access to foreign currency.
2) He also initiated a series of trade agreements with foreign countries, especially states in the Balkans and South America, where Germany was supplied with food and raw materials, which were paid for in German Reichsmarks. Supplying countries could then only use this money to buy German goods.
Explain Schacht and the use of mefo bills.
1) In order to finance rearmament, the Nazis had to borrow money whilst avoid the dangers of runaway inflation.
2) Schacht devised a scheme where the government paid for its military equipment using mefo bills.
3) These bills could be exchanged for cash at the Reischbank, ensuring that private companies had confidence they would get their money.
Who was given responsibility for the Four Year Plan?
1) Schacht had opposed the move towards autarky, and was therefore marginalised, and repsonsbility was given to Hermann Goering.
What were the plans of the 4 year plan and how were they to be achieved?
1) The priorities of the plan were rearmament and economic autarky. These were to be achieved by:
- creating a managed economy with controls on labour supply, prices, raw materials and foreign exchange.
- setting production targets for private companies.
- increasing production of key commodities such as iron, steel and chemicals
- encouraging research and investment in the production of substitute products such as artificial rubber and extracting oil on coal, reducing dependence on imports.
1) Why would autarky fit well with the Nazis ideological aims?
2) How did the Nazis promote economic autarky?
1) According to the Nazi Party programme, it would ‘free Germany from the chains of international capital’.
2) There were propaganda campaigns to persuade people to buy only German goods, eat only German food and use only German raw materials in their work presented these targets as the patriotic duty of all German citizens.
What was the result of the 4 year plan?
1) Did not match the propaganda claims. German industry did not meet the targets set by the regime and in 1939, German still imported a third of its raw materials.
2) Similar failings in food production.
3) Reality was that the German economy did not have the resources to achieve all of the regime’s aims.
What was Nazi policy towards management and the industrial elites like?
1) In general, the regime was enable to enlist the cooperation and expertise of big business and management in the implementation of its economic policies.
2) When the 4 year plan was launched there were many opportunities for businesses to make profits through involvement in the rearmament programme. Eg: LG Fraben increased profits from 71mil to 240mil Reichsmarks.
What was the degree of economic recovery achieved by 1939?
1) Goebbels and the propaganda machine used all their resources and skills to project an image of the success of Nazi economic policies.
2) Hitler made speeches claiming that the battle for work had been won by 1936.
3) 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 economic autarky and was ready for war.
4) In reality, propaganda exaggerated the successes and covered up the failures in economic policy.
What were some of the flaws in the claim that the ‘battle for work’ had been won due to Nazi economic policy?
1) Economic recovery had actually begun before the Nazis took power in Jan 1933. Many of the job creation schemes used by the regime to reduce unemployment were actually based on policies introduced by Chancellor Heinrich Bruning in the early 30s.
2) Part of the reduction in the unemployment figures was achieved by persuading married women to give up their employment through granting them marriage loans, releasing jobs for unemployed men.
3) Reintroduction of male conscription in 1935 for 18-25 took a large proportion of young males out of the labour market.
4) Historian Richard Evans has estimated that those who were out of work but were not counted in the official figures (invisible unemployment) was as high as 1.5 million workers. Therefore the official figure of 1.6 million people out of work in 1936 should be increased to over 3 million.
What effect did economic recovery have on living standards?
1) Despite official attempts to hold down money wages, incomes for many workers did increase during 1933-39.
2) Pay increased due to longer hours being worked but, workers’ wages were subject to increased deductions because of the compulsory contributions they had to make to the German Labour Front and to welfare organisations.
3) Therefore, difficult to generalise about what happened to the standard of living. Workers in key industries such as armaments better off than before.
4) Living standard depend as much on prices as they do incomes. Prices rose during the 1930s and there were shortages.
5) The drive for rearmament and the target of achieving economic autarky placed strains on the German people.
