Nazi economic policies

Question 1

What were the aims of Nazis’ economic policies in 1933?

Answer 1

Reduce male unemployment
Strong economy = Strong Germany
Increase standards of living
Control workers
Unity of purpose
Protect traditional + pure German communities: farmers, artisans and small shopkeepers

Question 2

What economic areas did the policies look at?

Answer 2

Rearmament

Employment

Four-Year Plan

Question 3

What policies were put in place to reduce unemployment?

Answer 3

1 billion Reichsmarks were invested in public work schemes-saw the building of roads, canals and houses
Introduction of conscription in 1935 absorbed a large number of young employed
Gov continued the Voluntary Labour Service, by 1935 this employed 500,000 men
Law for the Reduction of unemployment took some women off labour market by offering loans to those about to marry if they gave up jobs

Question 4

What evidence is there that the policies to reduce unemployment were successful?

Answer 4

by 1938 there was virtually full employment

industrial production doubled

Question 5

What evidence is there that the policies to reduce unemployment failed?

Answer 5

Although unemployment had fallen to 2.5 million by 1934, it did not fall again until 1936 following the introduction of conscription + rearmament
Much of the work was poorly paid + involved hard labour often in poor conditions. Therefore although statistics suggest the problem was solved-they didn’t consider the human effects

Question 6

Who was Hjalmar Schacht?

Answer 6

Appointed Minister of Economics from 1934-37 to help with recovery

Question 7

What did Schacht do to bring about recovery?

Answer 7

Encouraged heavy state spending following a policy of deficit financing
resulted in gov spending rising by 70% from 1933-36

Question 8

What did Schacht’s actions (heavy state spending + policy of deficit spending) and public work schemes lead to?

Answer 8

led to fall in unemployment, but also accompanied by a balance of trade deficit as Germany was importing more raw materials and failing to increase exports

Question 8

What did Schacht’s actions (heavy state spending + policy of deficit spending) and public work schemes lead to?

Answer 8

led to fall in unemployment, but also accompanied by a balance of trade deficit as Germany was importing more raw materials and failing to increase exports

Question 9

What is a balance of trade deficit?

Answer 9

Occurs when a country’s imports exceed its exports during a given time period

Question 10

When was Schacht’s new plan introduced?

Answer 10

September 1934

Question 10

What did Schacht’s new plan do?

Answer 10

Gave gov control of all trade tariffs, capital and currency exchange
Priority given to imports for heavy industry
A series of bi-lateral trade treaties were signed, particularly with South-East Europe and South America
Rapid increase in spending created prospect of inflation but avoided this through mefo bills

Question 11

What bi-lateral trade treaties mean?

Answer 11

German purchases were paid for in Reichsmarks, which the countries then had to use to buy German goods.
The rapid increase in spending created

Question 12

What were mefo bills?

Answer 12

Credit notes used to pay armament factories
Didn’t leave paper trail-allowed them to rearm
Could be exchanged to Reichsmarks on demand
added to national debt

Question 13

What were the positive impacts of Schacht’s policies?

Answer 13

Industrial production doubled
Full employment (of a sort)
Industrialists satisfied they could work with the Nazis
Investment in infrastructure

Question 14

What were the negative impacts of Schacht’s policies?

Answer 14

Balance of trade crisis
Run on foreign currency and gold reserves
Real earnings in 1938 all but the same as 1928 figure
Schacht’s policies would lead to overheating of the economy by 1939
Annual food consumption in 1937 had fallen for wheat bread, meat, bacon, milk, eggs, fish vegetables, sugar, tropical fruit and beer compared to the 1927 figures

Question 15

What was the aim of Göring’s Four Year Plan?

Answer 15

Increase armaments production, achieve autarky

Question 16

What were the driving factors of the four year plan?

Answer 16

Preparation for war
Autarky
Infrastructure preparation
radicalisation

Question 17

How did he plan to achieve these aims?

Answer 17

By increasing agricultural and industrial production, developing ersatz and regulating imports and exports so that armaments were favoured over agriculture
Clarified that Hitler was moving towards creating a total war economy

Question 18

Who was given responsibility for rearmament?

Answer 18

Göring

Led to Schacht resigning in November 1937

Question 19

What else did the plan aim to do?

Answer 19

Increase the production in key war industries such as synthetic rubber, fuel, oil and iron ore.

Question 20

How did they increase production in key war industries?

Answer 20

By building large plants
In 1938, Austrian companies were taken over the Anschluss
Took over the Skoda works in Sudetenland after annexation

Question 21

What evidence supports that the Four Year Plan was successful?

Answer 21

Industrial production rose at considerable rate in some industries eg aluminium increased from 172,000 tons in 1933 to 434,000 in 1939
Germany rearmed
Inflation kept under control
Army tanks
In 1938 the German economy was almost 40% larger than in 1928 but spent less on consumer goods and exports declined by 57%

Question 22

What evidence supports that the Four Year Plan failed?

Answer 22

Most targets not met, particularly for oil and rubber + demands of armed services not satisfied
By 1939 when war broke out, Germany still relied on foreign supplies for 1/3 of its war materials, therefore economy not ready for total war

Question 23

What was the “Guns or Butter” debate?

Answer 23

debate as to whether Germany should focus on rearmament (guns) or consumer goods (butter)

Question 24

Who was Albert Speer?

Answer 24

The minister of armaments

Question 25

What were the positives of rearmament?

Answer 25

Reduced unemployment, rearmament involved 1/4 of workforce
Speer’s policy was successful at first eg tank production rose by 25%, ammunition production rose by 97% and total arms production increased by 59%

Question 26

What were the negatives of rearmament-it failed?

Answer 26

Economy expanding too quickly
Growing shortages in many areas eg food, consumer goods + raw materials
Balance of trade in perilous state + had become difficult to finance
Labour shortages pushed up wages
Expenditure + the deficit had grown, gov found it difficult to finance
Led to resentment among WC, pushed Hitler into war as way out of economic crisis
Economy prepared for lightning war not long one

Question 27

What was the German Labour Front (DAF)?

Answer 27

Stripped workers of their rights
Replaced trade unions
arranged poor wages + working conditions

Question 28

What were conditions like for workers?

Answer 28

Take-home pay deteriorated, had to pay large contributions to DAF for insurance
working hours increased
pressure to do overtime with increase in military demands

Question 29

What was the Strength through Joy movement?

Answer 29

a state welfare organisation to gain the support of workers + improve conditions and morale in the workplace

Question 30

What did the Strength through Joy movement offer to workers?

Answer 30

real benefits with sports facilities, cultural visits + holidays. Only available to loyal workers-limited their impact
Limits to the benefits demonstrated when people started paying towards the ‘People’s Car’, many workers contributed but no cars delivered

Question 31

Reasons why the economic policies were successful?

Answer 31

The regime had been able to virtually eradicate unemployment, which had been one of Hitler’s promises
there were increases in the production of goods eg synthetic rubber, fuel oil and iron ore, aided by the taking over of the Skoda works
Argue that they would have been prepared for war as it was prepared for 1943

Question 32

Reasons why economic policy failed?

Answer 32

Unemployment only achieved because 1/4 of workforce was employed in rearmament
Despite increases, production targets weren’t met, imports still needed continued to drain financial resources of the country
Spent large amounts on rearmament, created other economic problems eg labour shortages
main aim from 1936 was to prepare Germany for war, failed to prepare for total war