Economic Development and Policies Flashcards
Why was the German economy in trouble in 1918?
The goverment had spent all of its gold reserves in the war and had been printing more and more money which caused severe inflation and people being less willing to spend their money as it was worth less, which was bad for trade which had been disrupted all over Europe
What made trade in Europe even worse in 1918 then it had been during the war?
When the war ended the production of war goods such as ammunition had ended with it
How much had farm production dropped by during the war?
20%
How much had industrial output dropped during the war?
It had almosted halved
What parts of the treaty of versialles slowed the economy?
The reperations and the loss of both agricultural and industrial land
What had developed during the war because of inflation and the scarcity of goods?
A black market
How did the goverment attempt to support soldiers leaving the army?
It provided retraining schemes and provided loans for those leaving the army until they could find work
Who did the weimar goverment set up pensions for?
The wounded, widows and orphans
What institutions provided layers of support for people?
The federal goverment and lander
In 1920 how many estimated disabled veterans were there?
1,537,000
How many survivor veterans not categoried as disabled were there in 1920?
1,945,000
By 1924 how many veterans, war widows, children and parents of dead soldiers were the Weimar goverment supporting?
768,000 disabled veterans, 420,000 war widows, 1,020,000 children and 190,000 parents of dead soliders
What percent of the weimar population were reviewing federal welfare payments?
About 10 percent, many more were on poor relief
How did the goverment pay for all the welfare costs?
They went into debt
How much had goverment debt increased from 1914 to 1918?
3 times, owing about 150 billion marks not including reparations
From 1921 on how was Germany dealing with reperarion payments?
It was in negotiations with the allies on how to pay it, but the allies, especially France felt that Germany was deliberately trying to avoid having to pay any payments at all arguing that all Europe had economic problems
How were reparations paid up till 1924?
Through things like coal wood and railway carriages.
What happened in January 1923?
Germany failed to pay its reparation payments in full
What had happened when Germans had fell behind on reperation payments before?
The London Ultimatium of allies in 1921 had said that payments should be made in full or the allies would occupy the Ruhr
Why was the Ruhr essential to the German economy?
It’s coal and industries were based there
How did the allies respond to the German failure to pay reparations?
The French with the aid of Belgian troops invaded the Ruhr
How did the German goverment respond to the invasion of the Ruhr?
They instantly stopped all reparation payments to France but not the other allies, told all German officials not to accept orders from non Germans and urged workers in the Ruhr to have passive resistance such as strikes and sabotage.
How did the French respond to the German orders?%
They cut of the Ruhr from the rest of Germany by setting up a border, patrolled by armed forces and taking control of the postal and telegraph services. They brought in their own workers to solve the problem of passive resistance
What did the new German coalition goverment do in 1923?
They called for a stop to passive resistance tactics and began negotiations with the French as the occupation had been beneficial to neither sides.
How did the French treat the Germans during the occupation?
Very badly, things such as murder occurring and they provided very little in the ways of food and shelter
What had the crisis in the Ruhr lead too?
Inflation turning into hyper inflation
How did the cost of a newspaper go up throughout 1923?
One that cost 1 Mark in May 1922, cost 100,000 marks by 1 September 1923 and 700 billion marks by 17 November 1923
How did people deal with hyper inflation?
Through the black market and a bartering system
What happened when more people began using the black market?
It could not supply enough for everyone so the prices rose so much that only the rich could afford to buy on it and the black market made huge profits
What was a way that towns, businesses and regions delt with hypernflation?
They began to issue their own emergency money
How much staff did the goverment cut back on during hyper inflation?
About 750,000 federal and regional government employees lost their job
Why did even the wealthy suffer during hyperinflation?
They lost their savings and investments
What happened in August 1923?
The hyperinflation was at its worse so the goverment collapsed and a new coalition goverment with Streseman of the DVP as chancellor was formed
What was one of the reasons Stresemann was able to successfully deal with the crisis?
He was given emergency powers which sped up descion making in the reichstag without the problems of the coalition goverments in the past
How long did the new coalition goverment last for?
Only until November 1923 but Stresemann stayed on as foreign minister in the next goverment
What temporary measure did Stresemann take to deal with inflation in October 1923?
The almost worthless mark was withdrawn and the rentenmark took its place and the various forms of emergency money was banned
Why did people with savings object to the retenmark?
It had such low value against one gold mark.
How was the rentenmark changed?
In August 1924 it got changed to the reichsmark
What was the dawes plan?
An agreement made by the allies that reduced the amount of reparations to be paid and extended the time in which to pay it. The plans also included US loans to help Germanys economic recovery
What year was the Dawes Plan?
1924
What replaced the Dawes plan in 1930?
Young plan
What is the lacarno Treaty?
Germany agreed to accept the borders set by the treaty of versailles and the demilitarisastion of the rhienland. The allies also agree to open up talks about Germany joining the league of nations
What happened on the 10th of September 1926?
Germany joined the league of nation’s and were given a seat on the council with other major powers
What was the young plan?
Germanys debts were reduced from £6.6 billion too £2 billion and they are given am extra 59 years to pay it off
What does lower reparations mean for the economy?
It means lower taxes for German people so they have more spending power and this boosts the economy and employment
What percentage of voters voted for the young plan in 1929?
85%
When did the French leave the Rhur?
1930
What is Stresemann awarded in 1926?
The Nobel peace prize
What was the kellogg briand pact?
Germany and 61 other countries signed it which was a promise not to use war to achieve foreign policy aims
When was the Kellogg Briand pact passed?
August 1928
What did the kellogg briand pact do?
It showed that Germany was now included in the main powers, not dictated by them. This improved support for the Weimar goverment and moderate parties
How many seats did extremist parties hold in May 1924?
40%
How many seats did extremist parties hold in May 1928?
Only 28%
Why did Hindenburgs appointment as president reassure the middle classes?
Because he was a strong leader and this increased support for the Weimar goverment.
How had big businesses helped stabilise the economy in the early 20s?
As many small business had collapsed, the surviving big business began to form cartels whose fixed prices helped stabilise the economy.
What are cartels?
A group of businesses in the same industry or retail sector that makes agreements to set and control prices. In the mid 1920s there were 2500 competing cartels.
How was factory production changing in the 20s?
Many factories were being rebuilt with the latest mass production assembly lines which increased profits
How is the chemical industry an example of factories improving throughout the 20s?
By 1925 the chemical industry was producing one third more then in 1913 and almost two thirds more in 1930
What were some problems that factories were facing in the 20s?
There was significant dispute between workers and business owners. Workers pressed for better conditions and owners tried to cut wages and extend working hours. Strikes and lockouts were common although they were fewer in the more prosperous years of 1926-27
What did the goverment set up to try improve relations between workers and business owners in October 1923?
State abitration
What is State abitration?
They were boards which fixed working hours at eight hours a day as previously done in an Eberts agreement. But it now settled wages and any other matters of disputes, at first they tended to support the owners but eventually by 1924 started to make compromise rulings.
Why had there been a shift of trade world wide?
The USs isolationism
What had the shift in trade led too?
Many countries increasing tarrifs on foreign goods and Germany suffered from heavier ones due to countries initial reaction from the war.
Why did other countries need to trade with Germany?
Germany was producing steel and chemicals which they needed.
What was the result of Germany entering the league of nations and other international agreements Stresemann had set up?
German exports were back at their 1913 levels of 10 billion marks by 1926 and by 1929 exports were 34% higher than in 1913
How much of German workers were agricultural ones in the 20s?
Between a third and a quarter of all workers.
Why were bigger farmers doing better then smaller ones in the 1920s?
Small ones could not invest in new farming equipment or techniques. Many were heavily in debt and could not even afford to pay the interest owed on their loans. and sometimes their taxes.
Who is an example of a big land owner in Germany at the time?
President Hindenburg
How did big land owners effect the success of small farms?
They had political influence which enabled them to block farming reforms which did not work in their interest. They could also press for high grain subsidies which benefited those with the biggest farms the most.
How was the goverment spending heavily aswell as borrowing alot?
It subsidised grain production, industry and spent heavily on social welfare
How did the goverment fund all of the welfare they were handing out?
Taxation and borrowing
Why was it hard for the goverment to tax people?
Even with economic recovery, most ordinary people were not as well off as they had been before the war. This meant that they paid less tax and resented the idea of tax rises.
Why was the economic recovery flawed?
Not only was it built on foreign borrowing but it was kept afloat by goverment support
What happened when the US economy collapsed?
They stopped renewing short term foreign lending and called in loans from abroard
How did the Great Depression effect people?
- Businesses sell fewer goods so have to lay off staff and buy fewer supplies and suppliers have to cut back 2. Unemployment rises so people have mess money to spend 3. Businesses go bankrupt and cycle repeats
By the end of 1932 how was industrial production doing?
It was only at half of its 1928 levels
Why could the goverment not cope with the great depression?
The parties in the coalition goverment without Stresemann were arguing so they failed to make descions or act quickly and president Hindenburg was resistant to more government by emergency decree.
What happened after the coalition collapsed in 1930?
It was replaced by a new one lead by Bruning who suggested cuts in goverment spending wage cuts and higher taxes
How did the reichstag respond to Brunings suggestions and what did this result in?
They were rejected by the reichstag so Hindenburg who agreed with Brunings policies went back to goverment by Decree in July 1930 to put his policies into practice.
Whats deflation?
Keeping prices low by reducing goverment spending
What were the benefits of Brunings policies?
- It brought deflation but avoided devaluing the currency 2. The hoover moratorium was passed
What was the hoover moratium?
An international agreement which suspended the need for Germany to pay back loans or pay interest to them for a year
Why did Brunings policies not actually work?
They simply worsened the recession as industrial production fell, prices rose and exports fell by around 50 percent.
When was unemployment at its highest ever level?
1932
Who was Bruning replaced by in late May?
Von Papen
What economic policies did Von Papen introduce?
Some tax concessions and subsidies for businesses that crreated new jobs and did produce some economic development
Why was Von papens goverment not really able to make any further progress?
The government was now caught up in political problems which made it harder to focus on the economy and produce a coherent policy leading to a change of chancellor in December 1932
Who was the new chancellor in December 1932?
Von Schleicher
How did von Schleicher attempt to fix economic problems?
He appointed a reich commissioner for employment who drew up a list of public works to be financed by the government in order to create employment. He was given a 500RM budget but failed to achieve anything before the Nazis came into goverment.
What did the Weimar goverments failure at economic policies lead too?
It led to a rise in popularity of more extreme parties whilst president Hindenburg stayed popular as the ever changing chancellors and ministers were held responsible for the problems.
How was the issue of reparations solved in 1932?
Bruning told the allies that Germany could pay and the allies agreed that the depression had made it impossible.
Why did trade with the US collapse in 1934?
Germany failed to pay US debts.
Why did the collapse of trade with the US not matter as much to the Nazis as it would have been for Weimar?
The Nazis had a plan of autarky, so they didn’t want to rely on foreign trade.
What was Schacts new plan?
It was making trade with other countries such as Hungary and Yugoslavia which involved exchanging goods rather then paying for imports
When was the Nazis four year plan announced?
1st of January 1933
What was the aim of the 4 year plan?
Achieving autarky as soon as possible, their important targets being unemployment and agriculture.
What were the 3 reasons why the Nazis had such a effect on employment figures?
- The Great Depression meant that the only way was up. 2. The Nazis manipulated the statistics 3. The Nazis created work, encouraging business to do the same especially temporary work for the long term unemployed.
How did the Nazis manipulate the employment statistics?
The defonition of work force changed dramatically as Jewish people were no longer allowed to work in the civil service or in other occupations, taking them out of the statistics. Women were discouraged from working and married women who left work ot were sacked did not count.
What percent of people were unemployed in 1932 vs 1936?
14% was reduced to 7.4%
What is an example of an organisation that provided work for people?
The Reich Labour Service or RAD
What was the reich labour service?
It provided schemes for unemployed men and women which provided manual work often for less pay then unemployment pay with very basic food and accommodation in labour camps that were either tents and barracks. They also had road building schemes
What was the benefits of the RADs roadbuilding schemes?
They increased car and truck manufacturing, created work and improved communications which helped to move goods and raw materials effectively.
Who was the minister of agriculture?
Alfred Hugenburg
How did Hugenberg improve agriculture?
He increased import tariffs on agricultural produce making German produce cheaper. He banned banks from repossessing farms from farmers in debt to keep the farming. He made margarine manufactures but butter from German margarine in their butter.
When did Hugenberg resign and who was his replacement?
1933 he was replaced by Richard Darre.
What did Darre introduce?
He set up the Reich Food estate or RNS
What did the reich food estate do?
It aimed to regulate food production and distribution of farm produce aswell as setting prices and farm wages. They could fine people up to 100,000 RM for not conforming. It also set up reich agencies to control the importing of farm produce whilst setting up work schemes.
What were the work schemes that the RNS set up like?
They sent people, especially young women, to work on farms especially on building projects.
How did the RAD purposely make work hard for workers and why?
They gave them a minimum amount of equipment to make the work last longer.
How did German farm produce change from 1928 to 1934?
In 1928, German farmers provided 68% of all farmers produce in the country, by 1934 this was 80%
Why were some businesses unhappy with the Nazis business running measures?
Some businesses were reliant on exports so this lost them money. Big businesses also suffered from the measures to help small businesses.
How much did department store make in 1934 vs 1929?
They earned 80% less in 1924 because of the 1933 protection of retail trade.
What was the protection of retail trade law?
It said that businesses could not build new stores and stopped the expansion of big ones
Why did Nazi propaganda discourage people from using department stores?
Small businesses had supported Hitler whilst most owners of big stores had not.
What were the problems that the unions posed for Nazis?
Unions had caused alot of issues in the Weimar period causing a loss of 36,000 million working days in 1924 so many big businesses had backed Hitler and expected him to stop this. However many workers had also voted for the Nazis hoping that the Nazis would provide work and good conditions and wages
What did the Nazis make the 1st of May and why?
They made it a national holiday. This was because it was a traditional socialist workers festival.
What did the Nazis announce on the 6th of May 1933?
They announced that there would only be one union
What was the Nazi union called?
The German labour front
How did membership of the German Labour front work?
It was voluntary but it became increasingly difficult for non members to get work.
How did the DAF make it possible for big businesses to exploit workers more?
They could set their own working conditions despite the reich trustees of Labour as it was a last resort and often sided with the employers. The DAF became part of the rewards system controlling people.
What was the initial result of Schachts policy of shifting trade to South East Europe?
Trade initially improved.
What had happened to trade by 1935?
Many countries were demanding cash not an exchange of goods. For example, Bulgaria was demanding cash for their oil
Why was the trade problems such a problem for Germany?
Germany was still not completley self sufficient and learning and work creation meant that it still needed to import raw materials. It also needed to import food as there was a growing shortage of fats and meat.
What caused the new four year plan of 1936?
In 1935 Schacht who wanted to keep borrowing as low as possible, had to chose between food and raw materials imports. The alternative was to cut consumption, without introducing unpopular rationing and press for higher production.
What is a command economy?
Is one where the state decides what and how much to produce, the Nazis worked towards this from the start setting up state control over industry and agriculture.
When did the first and second four year plan start?
The first one started in 1933 ans lasted until 1936, the second started in 36
Why did the state have high foreign debts in 1936?
Because of the raw material imports for rearmanent and work creation
What was the reich trustees of Labour?
There were 12 for the whole country and they regulated working conditions under the minister of labour
What was a law introduced to encourage women out of employment in June 1933?
This gave women a marriage loan in vouchers to spend on household goods, if they leave work when they marry.
What is the second reinhardt programme?
This provides employment and gives businesses tax concession for providing work projects aswell as goverment loans for them
What is the reich entailed farm?
Sets up 700,000 farms with atleast 7.5 hectares to be given to German farmers to be farmed by them and their families passed through the eldest son rather then ne being split.
What was the DAF given responsibility for on the 24th of October 1933?
The strength through jou and beauty of law schemes
What is the law for construction of German craft trades?
Skilled works have to be properly trained and members of a Nazi run guild.
How did the RAD change on the 26th of June 1935?
It was made compulsory for young people between the ages of 19 and 25 who then have to work on a RAD project usually living in state labour camps.
Who was in charge of the new four year plan?
Goering
What did Goering have control over?
Businesses and agricultural production
What were the 6 departments of the office of the four year plan?
- Raw material production 2. agricultural production 3. disruption 4. Labour 5. Prices 6. Foreign exchange matters.
How did the Germans deal with the raw materials they could not produce?
They were replaced as far as possible with alternatives. For example, rubber was replaced by the new synthetic buna.
Why did the production of synthetic materials mean that results were not as rapid as hoped?
Sometimes new factories had to be built. The processes were also new so there were technical difficulties at first
How much coal did it take to produce 1 tonne of synthetic fuel?
6 tonnes
Why was synthetic fuel prioritised instead of coal?
Coal was needed to heat many industries and homes however fuel was essential to military transport so was prioritised.
What was the guns or butter debate?
Germany had a constant problem reconciling the needs of rearmamenr and the needs of people for food, fuel and other necessity whilst the Nazis needed to maintain the support of the people. However the Nazis had also preached the armament was the most important aim.
Why would the state become incredibly unpopular if they introduced rationing?
Too many people remembered the rationing of the first world war and starvation diets and shortages had been prevalent in the Weimar period. The Nazi election promise had been work and bread.
How did the Nazis attempt to re-educate people?
They tried to re-educate them to consume less, especially less meat and fat with propaganda aimed at changing their eating habits and getting them to consume less to he patriotic.
What is an example that shows that the second four year plans were unrealistic?
By 1938-39 Germany was still importing 17% of their needs. This was still an improvement on 1934 when the figure had been 20% but not the improvement that had been hoped
What is one example of food propaganda working?
Nazis encouraged people to eat jam on their bread not sausage and as a result jam consumption trebelled between 1928 and 1938
Who was the command economy unpopular with?
Industrialists and manufacturers
What effect would have not been focusing on autarky had on Germany?
If the Nazis had carried on importing they would have been more prepared for war.
What were the sucesseses of rearmament?.
It had been significant and been achieved without pushing up prices or wages and without provoking wide spread protest at having goods that factories might be making such as toys or electrical goods in short supply.
How was Germanys economic situation when war broke out?
Germany was more prepared then Britain and France but was not as self sufficient as Hitler had hoped
What is an example to show that the army was not ready for war in 1939?
The army had wanted 6 months worth of ammunition before going to war but they only had 6 weeks worth
How did the war effect Nazi economic policies?
It didn’t change Nazi economic policies as they had been geared to war since before 1939 however it did change how the war economy was run
Why was the office of the four year plan not managing war production well?
Several different organisations were involved in organising war production with separate competing departments. These were the office for the four year plan, the air force, the army, the navy, the economics ministry and the war ministry
Why did Goering’s own interests effect the office for year plan?
He was also the Head of the airforce which he favoured.
Why was Nazi officials being given posistions a problem?
The people who understood the latest engineering and factory production techniques were ignored in favour of Nazi officials
Who was placed as the minister of armaments and production by Hitler on the 26th of Febuary 1940?
Fritz Todt
What was Todt ordered to do?
Organise industry into full production
Why could Todt not make the war industry more effective?
He needed centralised control and non of the other departments would accept that he had this level of control, especially Goering who carried on allocations more and more recourses to the air force
What memorandum from Hitler was passed on the 3rd of December 1941?
It was on simplifying and improving the armaments industry on a policy of rationalising needs, updating factories and equipment to produce the most effective weapons as efficiently as possible and insisting that the army, navy and air force to keel their demands as low as possible. He did not force the adoption of Todts organisation and centralisation plans.
What happened on the 8th of Febuary 1942 to Todt?
He died in a plane crash
Who was Todts replacement?
The architect Albert Speer
What did Speer convince Hitler?
That an armaments minister needed to be in full charge
What did Hitlers Decree of 22 April 1942 set up?
The Central Planning board. This was to distribute raw materials, decide on whether to build a factory or extend an existing one and to organise transportation
How was the Central planning boards set up?
It had a variety of committees made up of specialists and engineers each with the possibility for a type of armament for example ammunition or tanks
Who did Hitler say could override the boards descions?
Only him
How did The Central planning board improve the efficency of factories?
They looked at all of the factories producing the same equipment. They closed many smaller factories, concentrating production into a few larger ones. Factory machinery was standardised making repair and construction cheaper. They were adapted to the most efficient mass production techniques and machinery
Why did production hBe to become mode mechanised?
Thousands of skilled workers were being conscripted into the armed forces or being replaced by less skilled women and foreign workers
What population of the work force was in the army in 1944?
13
Why was different equipment needed throughout the war?
The course of the war kept changing for example im 1940 they needed more planes and u boats for attempting to invade Britain and when they invaded the USSR this changed again
How was the Nazi war production effected by the constant change in demand?
The changes to factory production had made things easier but it still caused delays.
How did spending on military change from 1936 to 1943?
In 1936 it was at 10.8 million marks. By 1943 it was at 112 million
Why had the economy and war production been negatively effected by allied bombing by 1945?
It had wiped out factories, mines, towns and transport links
How was the loss of land gained in the war effected the Nazi economy near the end of the war?
They had lost the land which provided raw materials such as Upper Silesias coal
What had the process of the war caused damage too?
Electricity, gas and water supplies
How were foreign workers damaging the Nazis war economy by 1945?
They were making deliberate mistakes in order to damage equipment and machinery.
Why were people in Germany starving by 1945?
Food production had been effected by the loss of farm workers to the front and the bombing of transport links. The black market had taken over just as it did after the first World War. As the allied troops advanced the economy grounded to a halt.
