Economic Development and Policies Nazis Flashcards
3 phases of Nazi economy, periods and who it was dominated by:
1) 1933 - 36 –> Recovery, dominated by Schaht’s new plan
2) 1936 - 39 –> Rearmament, dominated by Goering’s Four Year Plan
3) 1939 onwards –> War, dominated by Albert Speer
What land did Hitler want to gain and what was this term known as?
- Lebensraum = Territory that a grp believes is needed for its natural development
- Czechoslovakia and Poland
What were Hitler’s aims for economic policy?
- Reasonable living standards for morale
- Necessary resources for rearmament
- Autarky
- Resources for major architectural projects to redesign country for Aryan race
What did Hitler believe in and what did this mean?
- Primacy of politics
- Economic policy should serve political objective + good of the race
What 2 main methods did the Nazis try to stimulate the economy (give examples) ?
- Indirect stimulus eg. tax cuts, gov grants means more money to spend, which boosts spending
- Direct stimulus eg. schemes employing people
In which 3 key economic areas did the Nazis cut taxes in?
- Farming
- Small business
- Heavy industry
Who were gov grants given to?
- Businesses to repay debts/buy new machinery/employ more
- Newly married couples for furniture
- Home owners to finance home imporvement/employment of domestic services
In general what were the Four Year Plans designed to do?
- Make armed forces ready for war in around 4 years
- Achieve autarky
When was the first Four-Year Plan announced, up until when did it last and what was its main aims and targets?
- 1 Jan 1933
- Until 1936
Aim: - Autarky
Targets: - Unemployment
- Agriculture
When did unemployment hit its peak and at what number? Compare this w/ 1936
- 1932 –> 6 mil
- 1936 –> 1.6 mil
How did the Nazis have such an effect on unemployment?
- Depression had already hit its lowest point –> recovery was bound to happen as part of economic cycle
- Statistics manipulated
- Built on economic policies created between 1930 and 32 eg. RAD was an expansion
- Work created and businesses encouraged to do this, especially temporary ones for long-term unemployed
How were employment stats manipulated by Nazis?
- Women discouraged from working
Definition of workforce changed: - Jewish people no longer allowed to work in civil service and others –> not part of workforce
- Married women who left/sacked not counted workforce
- Conscription for all 18 to 25 year old men from 1935
How many young people were removed from the unemployment register by RAD?
400,000
What programme was established on 1 Jun 1933, with what law, who drew it up and how much did it commit to public work schemes?
- Reinhardt Programme
- Law to Reduce Unemployment
- Drawn up by Minister of Finance, Fritz Reinhardt
- RM1,000 mil
How did Hitler make it seem like they were doing a lot for the people and what was actually the case?
- Through public work schemes eg. RAD
- Extended those initiated in 1932 under Brüning
What other law was established on 1 Jun 1933 and what was it?
- Debt Regulation Law
- Restructured agricultural debts to reduce/write them off
How did gov spending on work creation change between 1932 and 1933?
- 1932 –> RM1455 mil
- 1933 –> RM1985 mil
What scheme was created, what did they provide, when did it become compulsory and what were the conditions like?
- Reich Labour Service (RAD) schemes for unemployed
- Provided manual work for people between 19 and 25
- 26 Jun 1935 –> Became compulsory
- Excluded from unemployment rate even though they are unpaid
- Gave women a marriage loan in vouchers if they leave work when they marry
Conditions: - Often less pay than unemployment pay
- Basic food and accommodation
- Tents/Barracks
What did work creation schemes do?
Sent people, esp young women, to work on farms/building projects
What stat shows how successful these measures were, specifically gov schemes?
- Between 1933 and 1934 –> 2.8 mil jobs created
- 20% of these created through gov schemes
The appointment of which man to the position of president of Reichsbank boosted business confidence, when did this happen and when did this man also become Economics Minister?
- Hjalmar Schaht
- Mar 1934
- Aug 1934 –> Economics Minister
What approach did Schaht take to stimulate recovery and what is this?
- Deficit financing
- Spending more than they have
What benefits did the autobahn schemes have (give stats)?
- Increased car and truck manufacture eg. between 1934 and 1936 –> 126,000 trucks built
- Improved communications when moving goods to support other industries
When did Hugenburg resign, who replaced him, what did this man set up, when and what was its purpose?
- May 1933
- Richard Darré
- 13 Sep –> Set up Reich Food Estate (RNS)
- Regulated food production and distribution of farm produce
- Set prices and farm wages
- Reich Entail Farm Law –> banned selling of large and medium-sized farms
Why were Darre’s reforms concentrated on the protection of the peasantry?
Believed they were the purest of all Aryans as they were not corrected by urbanisation
However, how did these reforms disadvantage workers?
- Price controls reduced farmers’ profits –> Hard to have high wages that would attract workers
- Sale of food supervised by Reich Food Estate which took a cut from the money raised
- Banks refused to offer loans based on value of land as they could no longer be sold (Reich Entail Farm Law)
- Women also lost out –> new laws took away their right to inherit farmland
Why did agriculture not seem to be a big problem for senior Nazis?
- Rearmament was the priority
- Believed it would be solved by gaining Lebensraum
What company was set up to initially buy armaments with what system and how was this helpful?
- Mefo GmbH, a private company placing orders for military goods
- Company would pay for armaments using Mefo bills
- Similar to IOUs
- Allowed gov to hide its actions and delay payment
What is a Mefo bill and what is the procedure when using it?
- Credit note saying you owed a specific amount
- Converted into RMs and paid w/ interest after 5 yrs
What was the purpose of Mefo bills?
Increased public expenditure without causing inflation
In total, what fraction of all military spending did Mefo bills finance between 1933 and 39 and what value was this?
- 1/5 of military spending
- RM 12 bil
What was announced on 6 May 1933, was this voluntary or compulsory, what was the benefit of this new organisation for big businesses and who led it?
- Now only 1 union: DAF (German Labour Front)
- Voluntary however it became quite difficult to get work as a non-member
- Easier to exploit workers as they could set their own working conditions
- Robert Ley
Between 1933 and 1939, how did membership for DAF change?
- 1933 –> 5 mil
- 1939 –> 22 mil
When were divisions created within DAF and give examples of these?
- 24 Oct 1933
- Strength Through Joy
- Beauty of Labour
What was the NSBO?
- National Socialist Factory Cell Organisation
- Workers organisation for factory workers
What happened in 1934 to GER’s debts and how significant was this?
- Failed to pay US debts
- Trade w/ USA collapsed
- Not very important as Nazis did not intend to rely on foreign trade
What did Schaht draw up, when and what was this?
- ‘New Plan’
- Spring 1934
- Made trade treaties w/ other countries
- Involved exchanging goods rather than paying for imports
As part of the New Plan what was introduced to limit consumer imports but continue imports of goods w/ military applications? What goods had they done this on?
- Series of import quotas
- By Summer 1934 –> strict quotas on wool, cotton, leather, fur and precious metals
By Aug of the same year, what had Schaht created, what was their purpose and what industry was given priority?
- 25 new departments in Ministry of Economics
- Issue import licenses for an increasing number of controlled goods (illegal to import w/out one)
- Priority to arms industry
What moves did Schaht make that meant trade initially improved, however what was the implication of this (give example)?
- Shift of GER’s trade esp to Balkan states
- Use of exchange of goods through bilateral trade agreements
- However, by 1935, many countries were demanding cash eg. Bulgaria wanted cash for their oil
Why was the fact that many countries demanding for cash a problem for GER and as a result, what decision did Schaht have to make?
- Still not self-sufficient
- Need to import raw materials –> for rearmament and work creation
- Need to import food –> shortages of fats and meat
- Schacht did not want to increase borrowing, so he had to cut consumption and press for higher production (guns v butter) –> formed basis of Four Year Plan of 1936
How did the poor harvests of 1934 - 35 lead to eventual creation of a command economy?
- Darre lobbied for imports of food to keep prices down, otherwise regime would become unpopular
- Hitler authorised more food imports for the time being to avoid rationing (more unpopularity)
Give stats to show how bad the food shortages got:
- 1935 –> Butter rationed
- 1934 to 1936 –> Price of pork and ham rose by 30%
What countries did Schaht seek to trade with, why these ones and what were the advantages of doing this?
- Developing countries in Eastern Europe and Latin America eg. Yugoslavia, Peru
- Did not have the money to trade freely with great powers
Advantages: - GER had more powerful economy therefore more favourable trade deals
- Barter deals could be negotiated w/ some of these countries
Even though the New Plan was successful, what were the consequences of prioritising rearmament?
- Standard of living dropped
- Limiting imports of materials like wool collapsed textiles industry (20% of country’s industrial workers)
- Price of clothing rose much faster than that of goods in 1930s
Why did Hitler put Goering in charge of the Office of the Four Year Plan and when did he do this?
- Schaht wanted to slow arms expenditure but Hitler became impatient
- 4 Sep 1936
Who was in charge of the Four Year Plan of 1936, until when did it last and how many departments did the Office of the Four Year Plan have (what were each of these?)
- Goering
- Until 1942
- 6 departments: raw material, agricultural production, distribution, labour, prices, foreign exchange matters
What happened to the raw materials GER could not produce (give examples) and what did this mean?
- GER manufactured synthetic alternatives (Ersatz) eg. rubber replaced by Buna
- New factories had to be constructed
How fast were results from synthetic production and why?
- Not much
- New processes
- Technical difficulties
How much coal was required to produce a tonne of synthetic fuel and by 1939, what fraction of GER’s raw materials depended on imports?
- 6 tonnes
- 1/3
Give one fig to show ambitious targets of Four Year Plan and one where the target was actually fulfilled
- Oil (including synthetic petrol) only ever came to half of target (6,260 of target 13,830) in 1942
How had percentage of imports changed between 1934 and 1938?
Decreased from 20% to 17%
What were Goering’s weaknesses as the head of many departments (give example)?
- Too many roles that he didn’t want to delegate either
- Allocated resources in a way that served his interests eg. promoted those that were no threat to him rather than talented ones
When did Schaht resign as Minister of Economics and head of Reichsbank and why?
- 1937 –> Minister of Economics
- Disagreed w/ focus of Four Year Plan
- His Ministry of Economics had no power once Goering’s Office of Four Year Plan was created (conflict between Schaht’s import control policy and Goering’s increased expenditure + Ersatz goods)
How did Schaht’s resignation change economic policy?
Became more radical and greater gov control as w/out Schaht no-one was willing to work w/ businesses
Successes of Nazi economy:
- Coal production increased from 319.7 mil in 1936 to 380.9 mil tonnes in 1938
- Self-sufficient in terms of bread, sugar + potatoes
Four Year Plan: - Steel production increased from 19.2 mil in 1936 to 22.6 mil tonnes in 1938
- Ersatz rubber production increased by 500% between 1936 and 38
Failures of Four Year Plan:
- Only 20% of the artificial oil needed was actually produced
- Airline production declined in first year
- Process of producing ersatz rubber was expensive –> better to have imported it
- Military leaders advised Hitler they would not be ready for war until 1943
- Brink of inflation crisis
Why did Hitler succeed in comparison to the Weimar Republic when tackling economic issues?
- Took the intervention approach rather than the ‘laissez faire’ approach
- Reducing unemployment was his top priority, whereas Brüning used it for wider aims
- More difficult to take action under Weimar due to Hindenburg, lack of laws, constitution
- Ending of reparation payments and work schemes set up previously helped Hitler
Why was GER on the brink of an inflation crisis?
No new consumer goods being produced so new money from paying for arms only pushed prices further up
What were the initial events that led to war?
- 1 Sep 1939 –> GER invades POL, GBR demands them to leave (they do not)
- 3 Sep 1939 –> GBR declares war
When war broke out how prepped was GER compared to GBR and FRA (give examples)?
More prepped but not as much as Hitler wanted eg. they wanted 4 months’ worth of supplies however in Sep 1939, there were 6 weeks’ worth
What happened in Dec 1939, which confirmed the priorities of the economy?
War economy decrees issued, outlining vast programmes of production
During the war, how was the Office of Four Year Plan handling the organisation of war production and why was it like this?
- Managing it badly
- Several organisations involved in war production eg. this office, Ministry of economics, air force
- Goering favoured air force as he was also head of this so those experienced in engineering and production techniques were often ignored
Who did Hitler make minister of armaments and munitions, what task was he given and when?
- 26 Feb 1940
- Fritz Todt
- Organising industry to full production
What did Todt need to fulfil this task, but what did Hitler do instead and when?
- Needed centralised control
- 3 Dec 1941 –> Hitler gave memorandum about army, navy and air force keeping demands as low as possible to rationalise needs and stay efficient
- However, he did not force centralisation plans
Describe who GER was fighting against by 1941 and what impact this had on their success:
- Against GBR, USSR and USA
- USA was richest country in world
- GBR was at centre of world’s largest empire
- USSR was one of fastest growing economies
Give example of wrong priorities in the Nazi economy:
- Final Solution (eradicating Europe Jewish pop) was expensive and needed a lot of labour power, though it served no military purpose
- Goebbels demanded money and labour to make major films during war
- Military prioritised research and development of new weaponry & production of secret super weapons
- Continued production of goods that were good for morale eg. cosmetics w/ no military purpose
Give an example of one of these films that were made and how many resources it used:
- Kolberg
- More than 100 railway wagons used to bring salt to film set as snow
- 10,000 troops called from front line to act as extras
Who was Todt’s replacement, what did he convince Hitler to do and when did he do this?
- Albert Speer
- Mar 1942 –> Decree issued giving Speer undisputed authority (Speer convinced him)
- 22 Apr 1942 –> Decree set up Central Planning Board to distribute raw materials, decide on building new factory/extend existing one and organise transportation
What did Speer do to rationalise the economy?
- Established Central Planning Board
- Established Armaments Commission to oversee standardisation of munitions
- Introduced modern production methods
- Prevented conscription of skilled workers
- Excluded military leaders from eceonomic decisions
- Encouraged employment of women
- Greater use of concentration camp labour
Why did production have to become more mechanised (give examples)?
- Thousands more being conscripted –> in 1929, 1.4% of workforce in army, compared to 13% in 1944
- Less skilled women and foreign workers doing these jobs instead
Give stats to show the extraordinary effect of these changes on production between 1942 and 44:
- Arms production increased by 59%
- Tank production increased by 25%
What tactic meant GER was performing very well before 1940 and which single Allies was left by Jul?
- Blitzkrieg
- By Jul –> GBR
In 1941, what fraction of troops had inadequate equipment?
1/3
In 1945, what had war production been badly affected by (give examples) ?
- Allied bombing –> wiped out factories, mines, towns + transport links
- Loss of land providing raw materials eg. upper Silesia’s coal
- Damage to electricity, water and gas supplies
- Sabotage by foreign workers eg. ‘mistakes’ damaging machinery
What had food production been affected by?
People were starving due to:
- Loss of farm workers to frontline
- Bombing of transport links
From Dec 1944 to Jan 1945, what percentage had production declined by?
60%
When was Germany defeated and what was the main cause?
- May 1945
- Military and economic collapse
