Economic Developments

Question 1

Bruning after Wall Street Crash

Answer 1

. Budget deficit 1700mil marks by end of 1929
. Deflation/austerity policy: cut gov spending + tried to balance outgoings against income from taxation
. Demands for unemployment benefit grew, forcing him to cut salaries of public workers + decreasing unemployment benefits (unpopular)

Question 2

Agriculture after Wall Street Crash

Answer 2

. Continued to be protected by gov subsidies + taxes on import of foreign foodstuffs, which kept food prices artificially high
. Protected bc of powerful agricultural interests

Question 3

July 1931 Banking Crisis

Answer 3

. March: Weimar gov announced customs union w Austrians
. British + French weren’t consulted, French angry + withdrew currency from Austrian banks
. May: Austria’s largest bank Kreditanstalt collapsed
. Withdrawals of foreign currency from German banks
. July: Germany’s largest priv bank collapsed

Question 4

Successes of Bruning

Answer 4

. Negotiated end to reparations
. July 1931: President Hoover agreed to a moratorium on payment of reparations
June 1932: reparations abandoned under Papen

Question 5

Schleicher and Papen

Answer 5

. Intro measures halting unemployment: 6mil in 1932
. Papen issued emergency decree Sep 1932:
- tax rebates given to employers that took on new staff
- end of compulsory arbitration
- relaxation of system of wage agreements
. approved by employers, opposed by trade unions + left wing parties

Question 6

Hitler and Economy

Answer 6

. worst of depression already over before he became Chancellor bc of some revival of world trade
. ‘socialist’ policies to address needs of peasant farmers (29% of work pop) + smaller urban traders

Question 7

Hitler’s Policies

Answer 7

• March 1933: all peasant debts (12bilRM) suspended
• May: ‘Law for Protection of Retail Trade’ forbade setting up of new department stores
• July: Reich Food Estate set up under Minister of Food + Agr Richard Darre: guaranteed prices for farm prod
• Oct: ‘Reich Entailed Farm Law’ prohibited sale, confiscation, division or mortgaging of any farm between 7.5 + 10 hectares owned by Aryan farmers
  . gave small farmers security of tenure

Question 8

Wehrwirtschaft

Answer 8

. Economy geared towards war
. Most important thing to Hitler
. He hired Hjalmar Schacht as President of Reichsbank in 1933 and Minister of Economics in 1934 to gear economy to war

Question 9

Schacht’s Law to Reduce Unemployment

Answer 9

. June 1933:

• gov spend on public works schemes: Arbeitsdienst
• subsidies for private construction + renovation
• income tax rebates + loans to encourage industrial activity

Question 10

Other Unemployment Measures 1933

Answer 10

. Emergency relief schemes
. Development of armaments factories + discouragement of female labour, eg marriage loans to remove women from labour market
. Sep: law for construction of Autobahn (7000km), no machinery used when surplus labour available

Question 11

Other Unemployment Measures 1935

Answer 11

. March: conscription re-introduced
. June: Reich Labour Service (RAD) - 18-25yr olds sent to work on various civil, military + agricultural projects for 6 months before military service

Question 12

Mefo bills

Answer 12

. Credit notes issued by Reichsbank + guaranteed by gov
. A means of ‘deficit financing’
. Tax concessions offered to businesses + Schacht raised money through them to stimulate economy

Question 13

Use of mefo bills

Answer 13

. Paid back w interest after 5yrs from increased gov tax rev they helped to generate
. Repayments on them accounted for 50% of gov expenditure 1934-5
. Permitted subsidies + agreements
. Helped to stimulate housing + road construction + a variety of industry eg rearmament: main growth area before 1936

Question 14

Addressing balance of payments

Answer 14

. 1933: controls intro’d to limit draining of Germany’s foreign exchange by paying foreign debts in Reichsmarks
. July 1934: debt repayment stopped altogether, creditors given bonds instead - creditor countries opposed this but failed to put pressure on Germany

Question 15

Schacht’s New Plan

Answer 15

. Sep 1934

• increased gov regulation of imports
• development of trade using Reichsmarks w less developed countries
• development of German trade w Balken + South American states: provided for import of vital raw materials. Imports paid for in RM so trading partners encouraged to buy German goods in return

Question 16

Other influences helping to revive economy

Answer 16

. avoidance of Labour troubles w suppression of unions
. banning of strikes + creation of DAF
. propaganda to increase illusion of success + prosperity which led to confidence
. seizure of Jewish property + Austrian assets following union w Austria 1938

Question 17

Various other factors helping economy

Answer 17

. reparations ended
. work creation schemes established before 1933
. unemployment began to fall after June 1932
. general world economic recovery

Question 18

Failures of Nazi economic policies

Answer 18

. reserves of foreign currency low + balance of payments still in deficit: worse after Schacht’s dismissal
. rearmament put strain on economy
. real wages did increase but so did food prices

Question 19

Hermann Goering

Answer 19

. Replaced Schacht in 1936 after Hitler grew impatient w Schacht’s insistence on slowing down pace of rearmament
. 1936-42

Question 20

Four Year Plan

Answer 20

. August 1936

• autarky (self-sufficiency): plants built for production of ersatz synthetic materials, eg artificial rubber
• promotion of chemical industry + development of synthetic fuels
• development of steelworks that could use lower grade ores available within Germany
• production of heavy machinery

Question 21

Things done as a result of Four Year Plan

Answer 21

. Special office set up to issue regulations controlling foreign exchange, labour + raw material distribution
. Prices + targets established for private industry
- created a ‘merged economy’ working w big business
. Private industry continued but failure to meet expectations could result in business being taken over

Question 22

Failures of Four Year Plan

Answer 22

. Failure to meet expectations could result in business being taken over
. Overall targets, eg for synthetic fuel, rubber, fats + light materials weren’t met
. Prod of synthetic substitutes costly: by 1939 still imported 1/3 of its raw materials
. Insufficient foreign exchange to buy needed imports
. Need to maintain consumer goods meant investment sometimes diverted elsewhere

Question 23

Wartime

Answer 23

. When war broke out, rearmament incomplete
. Poor management in early months: army conscripted workers regardless of skill, women still told to stay home + few POW (40% by 1942) set to work
. Invading USSR in June 1941 made it worse

Question 24

Fritz Todt

Answer 24

. Made Minister of Armaments + Munition March 1940 to support longer war
. He set up committees with industry chairmen to rationalise production
. Died Feb 1942 and replaced by Albert Speer

Question 25

Central Planning Board

Answer 25

. Speer made Hitler set one up in April 1942
. To organise allocation of war materials + ensure more went into armaments
. It provided for substitution in raw materials + ensured development of new processes; increased industrial capacity; organised distribution of labour, machinery + power supplies

Question 26

Result of Central Planning Board

Answer 26

. Armament prod rose 50%, guns 27%, tanks 25% within six months
. Despite military losses + Allied bombing raids, Speer continued to increase production
. 1940: 3744 aircrafts produced, 25,285 in 1944, 500 in first 4 months of 1945

Question 27

Albert Speer

Answer 27

. His work impeded by military interference + battles w other Nazi leaders Goering, Himmler, Bormann
. Jan 1943: got fem conscription into factories
. Fuhrer reluctant to endorse rationing or cut consumer prod - still only 3% below peace time prod 1942
. Inc. prod by using 7mil foreign workers transferred to German factories
. His last order was to destroy economic capacity to prevent it falling into enemy hands - he didn’t