Economic development and policies

Question 1

What evidence is there about the state of the german economy when the Nazis took control?

Answer 1

• Economy had shrunk by 40%
• > 8 million unemployed
• Agriculture was in recession
• Demand for German goods was low

Question 2

What was the name of the man in charge of the economy in Nazi Germany, 1933-36?

Answer 2

Hjalmar Schacht

Question 3

How did Schacht help farmers get reasonable prices for their produce?

Answer 3

He introduced subsidies and tariffs on imported goods

Question 4

How much did public investment increase by?

Answer 4

Public investment tripled

Question 5

What was built under the public works schemes?

Answer 5

Autobahns, houses and public buildings like libraries and schools.

Question 6

What did Schacht create to help pay for government spending?

Answer 6

Mefo Bills - government produced IOUs which could be used by the government as a form of extra currency. Recipients could exchange Mefo bills for real currency after 5 years

Question 7

What countries did Schacht arrange bilateral trade with?

Answer 7

South-east European countries like Romania and Yugoslavia

Question 8

What 2 pieces of evidence suggest Schacht’s economy reforms were successful by 1936?

Answer 8

• Unemployment fell to 1.5 million

- Production increased by 90%

Question 9

What was the major weakness in the German economy that failed to solve?

Answer 9

Trade deficit, Germany imported more than it exported which created a shortage of foreign currency

Question 10

What is the name for the ‘war economy’ Hitler wished to create?

Answer 10

Wehrwirtschaft

Question 11

Why did Hitler remove Schacht from power in 1936?

Answer 11

Hitler and Schacht disagreed about military spending. Schacht wanted to focus on developing exports to address Germany’s trade problem whereas Hitler wanted to focus on preparing the economy for war

Question 12

What did the phrase ‘Guns or butter’ refer to?

Answer 12

The economic choice in the mid-1930s between rearmament and consumer goods

Question 13

Who replaced Schacht as economic minister?

Answer 13

Hermann Goering who was prepared to go along with Hitler’s vision for the economy

Question 14

What is Autarky?

Answer 14

A self-sufficient economy not dependent on foreign loans

Question 15

What is Ersatz?

Answer 15

Substitute materials that are made to make the German economy less reliant on foreign imports to help them achieve Autarky

Question 16

What were the two key elements of the 1936 Four Year Plan?

Answer 16

• To increase production in agriculture and raw materials e.g. steel, iron (partly through ersatz) to reduce the financial cost of importing goods
• To massively expand armament production

Question 17

What was the main weakness of ersatz products?

Answer 17

They were of inferior quality and 1/3 of raw materials still had to be imported

Question 18

Did the Four Year Plan achieve Autarky by 1939?

Answer 18

No, Ersatz could not replace all the raw materials that the Nazis needed. However, Germany’s reliance on imports had not increased.

Question 19

Who did Hitler appoint to improve Germany’’s armaments production in 1942?

Answer 19

Albert Speer