Nazi economic policies

Question 1

What economic problems did Hitler face when he came into power ?

Answer 1

• debt to America
• huge rates of unemployment
• food supply
• welfare payments
• living standards/ conditions

Question 2

What were some Nazi economic policies ?

Answer 2

• project labelled the ‘ battle for work’
• the ‘ New plan ‘ of 1934
• use of Mefo bills
• Big businesses

Question 3

What was the - battle for work’ project ?

Answer 3

large sums of money spent on the building of roads and public buildings and increased industrial production which was stimulated through loans and tax relief to private companies

Question 4

impact of the ‘battle for work ‘ project ?

Answer 4

• measures undoubtedly helped to reduce unemployment faster

Question 5

What was the Reich labour Service ?

Answer 5

• introduced in 1935 under which young unemployment men had to do is months labour in farming or construction.
• helped create jobs

Question 6

What was the ‘ New Plan ‘ of 1934 ?

Answer 6

• Schact placed controls on imports and access to foreign currency
• He also initiated a series of trade agreements Wirth foreign countries, especially states in the Balkans and South America

Question 7

Impact of the ‘ new plan ‘

Answer 7

Germany was supplied with food and raw materials, which were paid with German Reichsmarks and the supplying countries could then only use this money to buy German goods

Question 8

What was the use of mefo bills ?

Answer 8

• scheme where the government paid for its military equipment using credit notes or mefo bills
• these bills could be exchanged for cash at the Reichsbank, thereby ensuring private companies they would get their money. Companies were given an incentive to defer asking for payment by the offer of 4 % per annum interest on the bills if they kept them for the full five year term

Question 9

Why did the Nazis use mefo bills ?

Answer 9

In order to finance the rearmament programme in 1935 without the government having the funds to finance

Question 10

What process was Schacht’s economic policies part of ?

Answer 10

the recovery process

Question 11

Relationship between the big businesses and the Nazi regime ?

Answer 11

In general, the Nazi regime were able to enlist cooperation and expertise of big businesses in the implementation of its economic policies

Question 12

How were big businesses involved in the four year plan ?

Answer 12

there were many opportunities to make profit through involvement in the rearmament programme.

Question 13

Example of a big business benefitting from the four year plan

Answer 13

• large chemical company , I.G. Farben which was involved in the research and production of synthetic materials. I.G. Farben held a key post in the administration in the four year plan ,profits increased from 74 million - 240 million in 1935 - 1939

Question 14

What happened to Schact in 1936 ?

Answer 14

• Schact was sacked by Hitler as Schact started to become concerned by the vast amounts of public spending

Question 15

what happened in the years 1936 - 1939 ?

Answer 15

Rearmament programme

Question 16

Who replaced Schact ?

Answer 16

• Goering took over
• became in charge of the four year plan

Question 17

What was the four year plan ?

Answer 17

• this plan aimed at making Germany ready for war in 4 years
• Germany also had to become self sufficient in this time, known as policy of autarky.

Question 18

Aims of the four year plan ?

Answer 18

• aimed to achieve autarky ( self sufficiency ) in food production and vital raw materials.

Question 19

Autarky in the Nazi ideology ?

Answer 19

• Autarky with its links to national sovereignty and its embodiment of national pride and independence fitted well with Nazi ideological aims
• effort to increase production was presented as a battle in which the whole people’s community had to help ( Volksgemeinschaft )

Question 20

how successful was the policy of autarky ?

Answer 20

• German industry, despite massive investment, did not meet the targets set by the regime
• in 1939 Germany still imported one third of its raw materials
• in food production, there were similar feelings

Question 21

overall success of the policy of autarky ?

Answer 21

• the reality was that the German economy did not have the resources to achieve all of the regime’s aims
• • to maintain the levels of consumption and avoid the risk of alienating people, labour and capital had to be deliverted from war industries

Question 22

What was the Guns Vs Butter debate ?

Answer 22

• the argument of that the Nazis had to promise the economy
  Guns ( Major rearmament )
  Butter ( Consumer goods, imports and exports, limited rearmament, links with other countries )

Question 23

Degree of economic recovery achieved by 1939 ?

Answer 23

Propaganda exaggerated the successes and covered up the failures in Nazi economic policies

Question 24

The role of propaganda in the perception of Nazi economic policies and the economy ?

Answer 24

• ’ battle for work ‘ was not mentioned after 1936, reflecting the success of propaganda in convincing people that unemployment was no longer a problem
• advertising campaigns for products like the ‘ people’s car ‘ and for cruise ship holidays gave the impression that Germans were experiencing an unprecedented rise in their living standards as a result of the regime’s polices
• military parades showing off latest equipment and patriotic campaigns to persuade Germans to buy only German goods were used to show that Germany was achieving autarky and was ready for war

Question 25

Benefits of Nazi rule for the elite and big businesses ?

Answer 25

• relations between Nazi government and economic elite was good
• Industrialists benefitted from the smashing of the independence labour movement and the government’s expansion of the economy to help rearmament
• Major landowners benefited from the growing demand of food
• private ownership of businesses was not threatened provided firms conformed to requirements and some firms benefited considerably from the regime

Question 26

Drawbacks of Nazi rule to the elite and big businesses

Answer 26

• In 1957, government threatened some industrialists with a charge if sabotage if they did not conform with self sufficiency
• relations with coal firms were generally hostile
• some industrialists were critical of the degree of state control.

Question 27

Benefits of Nazi rule for the Mittlestand ?

Answer 27

• Nazi theorists like Gottfried Feder and Otto Wagener advocated policies to protect the interests of the German Mittlestand.
• Initially appeared to be favoured by the Law to Protect Retail Trade in 1933 which placed special taxes on large stores and banned new department stores.Small businesses benefited from the economic recovery and from autarky
• The May 1933 Entitled Farm Law was designed to protect traditional small farms ( 18 - 50 acres ), about 35 % of all acres.These family farms could not be sold or mortgaged but had to be passed on to one person

Question 28

Limitations of Nazi rule for the Mittlestands ?

Answer 28

• Factors such as tight credit, influence of big businesses and the slowness of official agencies meant that many went bankrupt and their overall role in the economy declined
• The number of independent artisans declined ( skilled craftsmen ) fell from 1,645,000 to 1,500,000 in the period of 1936-39.Many went bankrupt as a result of increased costs and through finding it difficult to compete with big firms
• Peasants suffered from labour shortages and came to resent the government. Life on farmsremianed hard with long hours and poor facilities. Rural population fell from 21 % to 18% despite Nazis claiming that it was the backbone of the country