Economy of the Nazis (3)

Question 1

Hitler’s plans for economic recovery (1933-36)

Answer 1

• Before coming into power, Hitler didn’t commit publicly to any kind of economic programme and this continued into the early years of Nazi govt.
• Hitler held no financial experience, leaving it to prominent bankers and civil servants.
• Role undertaken by Hjalmar Schact who introduced the Four Year Plans on 1 Jan 1933 (aimed to achieve autarky).

Question 2

What is autarky?

Answer 2

Economic self-sufficiency w/o relying on imports.

Question 3

Economic issues: Trade

Answer 3

• Depends heavily on its capacity to sell manufactured goods. In the slump of world trade, demands for German exports and its goods (steel, machinery and chemicals) declined rapidly and collapsed.
• Values of exports dropped from 13.5 billion RM in 1929 to 4.9 billion RM in 1933.
• Trade fell by 62%.

Question 4

Economic attempts to solve the issue of trade?

Answer 4

• Focused on creating autarky by Schact’s ‘New Plan’.
• Cutting welfare spending.
• Developed arrangements with other developing areas of the world (Latin America + East Europe) to reduce reliance on imports (exchange industrial goods for raw materials, rather than pay for imports).

Question 5

Effectiveness of trade

Answer 5

• Shift of German trade to southeast-Europe and his use for exchange goods meant initial improvement.
• But, in 1935, countries demanded cash rather than exchange of goods (Bulgaria’s oil).
• Didn’t achieve self-reliance yet = rearming and work creation still required importing raw materials.
• Exports went against policy but the alternative was to cut consumption, w/o introducing rationing, and press for higher rationing.

Question 6

Economic issues: Unemployment

Answer 6

• Mass long-term unemployment, even before the Depression:
• Registered unemployment was 1.9 mil in 1929, rising to 5.6 mil in 1932.
• If including the unregistered, unemployment levels increase to 8 million.

Question 7

Economic attempts to solve the issue of unemployment?

Businesses and changing the definition of the work force (bans)

Answer 7

• Businesses employed again after the reversal of the Great Depression.
• But, Nazis manipulated the statistics:
  + Jewish people banned from working in the civil service or other occupation.
  + Women discouraged from working - encouraged to be a home maker and/or a wife.

Question 8

Economic attempts to solve the issue of unemployment

Job creation schemes

Answer 8

Reich Labour Service (RAD):
- Required men aged 18-25 to work for at least six months in a labour programme in manual work.
- Often paid less than unemployment pay and given poor food + accommodation.

Question 9

Effectiveness of employment reforms

Answer 9

• Risky - increasing Govt spending by 70% but appeared to work as unemployment fell from 5.6 to 1.6 mil (1933-36).
• Efficent - road building schemes improved communications, by efficiently moving goods and raw materials.
• But: questionable for the Nazis manipulated the official figures.

Question 10

Economic issues: Agriculture

Answer 10

• Agricultural prices fell as world demand fell.
• As agricultural depression deepened - led to widespread rural poverty as farmer’s wages and income fell sharply.
• Some were forced to sell farms owned for generations.

Question 11

Economic attempts to solve the issue of agriculture

Answer 11

• Hugenburg (Reich Minister for Food and Agriculture) raised import tariffs, forcing consumers to shift their demand to domestically produced goods (cheaper).
• Hereditary Farm Law (1933) stopped banks repossessing debt-ridden farms - gave farming families greater security.
• Richard Darre set up the Reich Food Estate (Sept 1933) to regulate food production, distribution and set prices and farm wages.
• Work creation schemes send people (young women) to work on farms and building projects.

Question 12

Effectiveness of agriculture reforms

Answer 12

• No, not all welcomed Govt control over what price to produce and sell it at.
• Helped move to autarky: increased production from 68% in 1928 to 80% in 1934.
• By 1937, agricultural prices had increased by 20% and wages rose quicker than those in industry.

Question 13

Economic issues: Finance

Answer 13

• Because of war debts, reparations and inflation, German banking suffered serious financial problems prior to the Great Depression. The onset of the GD undermined the confidence even further.
• Foreign investment disappeared and German share prices collapsed. In 1931, five major banks collapsed.

Question 14

Economic issues: Rearmanent (linked to finance)

Answer 14

• Opposed the Treaty of Versailles’s military restrictions - from 1933-39, the army increased 10x its number.
• Germany ceasing to attend the German Disarmament Conference w/ France + renounced the League of Nations = allowed military strength to speed up via the introduction of conscription in 1936.
• But = cost a large amount of money.

Question 15

Economic attempts to solve the issue of rearmament (finance)

Answer 15

• MEFO was a private company to keep the rearmament effort a secret, for it was a direct violation of the TOV.
• MEFO would place orders for military goods, in return would pay via MEFO bills that delayed payment until the late 1930s.
• Bills worth 12 billion RM were issued to pay for rearmament + soldiers and workers were paid using it.

Question 16

Effectiveness of the rearmament and Mefo Bills

Answer 16

• Tripled national debt from 1932-8 = 10 million to 32 million.
• When they had to pay in 1938 - was a cash shortage.
• Banks were forced to buy government bonds to pay + took money from savings accounts = ordinary citizens were responsible to fund the rearmament programme.
• Govt resorted to the printing press to mitigate shortage.

Question 17

Attempts to deal with the economy (1936-39)

What is a Command Economy

Answer 17

Government controls economic decisions, usually made by independent business leaders and industrialists on a supply and demand basis.

Question 18

What did the German government attempt to control via the Command economy?

Answer 18

Goal in his ‘four year plan’ to achieve an economy fit for war (self-reliant).

• How many workers hired for each industry.
• How much a certain industry must produce.
• What products should be imported or exported internationally.

Question 19

Guns and butter debate (1936)

Answer 19

• Food shortages in 1934 forced Hitler to authorise more food imports to keep prices low and create a command economy.
• Debate = Govt must choose expenditure on military or social programmes: Goering argued resources should be devoted to the military, but Darre lobbied for greater food imports.
• Strains of production led to an economic crisis in 1939.

Question 20

Attempts to deal with the economy (1936-39)

Why did Hitler replace Schacht with Goering?

Answer 20

• No longer needed because of the economic recovery + disagreed over Hitler’s plan to speed up the rearmament process (guns and butter) by suggesting to reduce arms expenditure to avoid damaging a balance of payments.
• Added Goering in 1935 (willing to enforce the Four-Year-Plans).
• Gave himself supreme eco authority, overriding Schacht’s influence - led to Schacht’s resignation as Minister of the Economy 1937.

Question 21

What was Goering’s Four-Year-Plans?

Answer 21

1) Made Germany ready for war.

2) Increased expenditure on rearmament.

3) Built factories - prioritised those producing military goods (others suffered decreased living standards).

4) INDUSTRY: Strict control & must meet set targets.

5) AGRICULTURE: controlled and targets were set for it to achieve better harvests and better food production.

6) AUTARKY was introduced = make Germany self-sufficient in materials. Industries were encouraged to develop alternatives, for example coffee from acorns.

Question 22

To what extent was there successes of the Four Year Plan?

Answer 22

• Gradual economic improvement and it decreased unemployment (no women, Jews and ethnic minorities).
• Tighter import controls and a radical, unsuccessful economic policy (G needed to start the war to be self-sufficient by invading territories to gain resources).
• To an extent true: only self-sufficient in 1942 because of the countries it conquered and increased its territory.

Question 23

War-time Economy for Germany and how did economic power grow?

Answer 23

• Gained more territories via annexation and invasion for resources and labour (Operation Blue - invaded USSR for oil),
• Employed, foreign workers were employed to make up the labour deficit, treating them depending on their racial background (Polish worse than French).
• Women weren’t involved (unlike other states).

Question 24

Limitations of the war-time economy for Germany

Answer 24

• Inefficent compared to the Allies and Hitler believed the war would end quickly, seeing no need to mobilise the economy.
• Conflicting plans within the German Economy meant it lacked clarity in the economic plan.
• Nazi Ideals = against women in the workforce despite a deficit - even if they’ve returned to the public sphere, the number was drastically less than in Weimar.

Question 25

What caused Hitler and Goebbels to make a speech calling Germans to support a ‘Total War’ in February 1943?

Answer 25

The Operation Barborosssa + push from Russia was a concern - could lose the war.

• 1943: liberation of occupied territories meant the economy became weaker - economic growth dependent on other countries staying under Nazi control.

Question 26

Who was Albert Speer and why was he appointed in 1942?

Answer 26

• minister of armaments to increase productivity.
• Dec 1941 = ‘rationalisation decree’ that aimed to eliminate waste of labour and materials
• Established a ‘Central Planning Board’ to coordinate economic activity and end institutional conflict.
• Encouraged employment of women, increased foreign prisoner of war numbers (2.8M from USSR) and forced labour in concentration camps.

Question 27

Successes of Speer

Answer 27

• Turning point in April 1942.
• Speer used Hitler’s authority to cut through the mass of interests to implement a programme of ‘industrial self responsibility’ to provide pass production.
• The Central Planning Board gave industrialists their freedom but ensured Speer could maintain control of the wartime economy as director of the board.
• Improved production by introducing various personal initiatives, like employing women, using POW as workers, stopping skilled workers becoming conscripted.

Question 28

Speer’s successes in stats

Answer 28

• First six months: ammunition production increased by 97% and tank production rose by 25%.
• By the second half of 1944, German war production had seen more than a three fold increase.

Question 29

Overall limitations of Speer’s economy

Answer 29

• Despite Speer’s efforts - inevitable economic issues.
• Allied mass bombings became more frequent and effective after 1943, slowing industrial production.
• Plagued by oil problems.
• Harsh treatment of slave labour led to decreased productivity, so naturally the economy will slow down.

Question 30

Did the Nazis fail to mobilise the economy during the war?

Answer 30

• Despite the intent of wholesale mobilisation = the low rearmament production.
• Increased number of submarines and aircraft (8,2900 in 1939 to 10,080 in 1941), but the British outperformed Nazis by trebling their air forces.
• Not possible if there was clear and authoritative control of the economy, especially due to the confusion between short and long term plans of leadership.