Economic Policy Flashcards
Who was the financial mastermind behind the new economic policy?
Hjalmaar Schacht
What was deficit financing?
Government financing spending by borrowing money
When was Schacht minister of economics?
1934-37
What policies were adopted?
- Low interest rates
- debts rescheduled
- assistance to farmers and small businesses
- public works schemes
What public works schemes were introduced?
Public building, mototways, land reclamation, reforestation
How much did government expenditure rise between 1933-36?
70%
What was a balance of trade deficit and what was the result of this?
Importing more goods than are being exported, short of money
What happened to unemployment?
Decreased
When was the ‘New Plan’ introduced?
September 1934
What were the terms of the ‘New Plan’?
- Government control over tariffs, capital and exchange rate
- Government decided on imports
- Bilateral trade treaties (SE Europe)
- Mefo bills introduced
What were Mefo Bills?
I-O-U bills/credit notes
What did the plan hide?
Balance of payment problem
What did Schacht want?
Reduce arms expenditure and increase production of industrial goods
What was the ‘guns or butter’ debate
Debate focused on whether Germany should focus on goods or rearmament.
What was Goering’s economic agenda called?
The 4 year plan
When was Goering’s plan introduced?
1936
What was the main aim of the 4 year plan?
Autarky (self sufficiency in materials), rearmament, self sufficiency
What did Goering’s plan aim to do?
- Increase raw material and agricultural production
- Control labour force
- Develop ersatz products
What were ‘ersatz’ products?
Substituted products such as synthetic rubber (Buna S)
Who replaced Schacht as economics minister in 1937?
Walther Funk
What was the effect of Funk?
Production rose in some industries e.g. aluminium but didn’t reach target levels in oil and rubber
How much did Germany rely on other countries for materials when was broke out?
1/3 of raw materials
What was the total war economy?
Economy specifically focused on production for war
What did unemployment fall to in 1937?
1.6 million (job creation schemes)
What were independent unions replaced by?
DAF - German Labour Force
What rights did workers lose?
Rights to negotiate wages and conditions of work
What did working hours raise to?
43-47 (1933-37)
