Nazi Economic Policies

Question 1

What were the two periods of Nazi economic policies?

Answer 1

. Recovery (1933-36)
. Rearmament (1936-39)

Question 2

What were Hitler’s ultimate aims behind his economic policies?

Answer 2

Reducing unemployment and preparing country for war

Question 3

How did Nazis have a big opportunity to positively impact economy and get support following their coming to power?

Answer 3

. Germany low on materials, didn’t have currency strength to pay for imports, exports were low and confidence and investments were low too (clearly it would take very little for Germans to be impressed with German policies following such drastic events such as Great Depression)

Question 4

What was Hjalmar Schacht’s role in Nazi regime?

Answer 4

March 1933: became president of Reichsbank
August 1934: becomes Economics Minister

Question 5

What were Schacht’s main economic policies (super good)?

Answer 5

. The battle for work
. The ‘New Plan’ of 1934
. Mefo Bills

Question 6

What was the aim of the Battle for work and what did it do?

Answer 6

It’s aim was primarily to reduce unemployment
. Loads spent on buildings roads and public buildings (first Autobahn built)
. Loans and tax relief to private companies stimulated greater industrial production

1935: Reich labour service set up compulsorily for 18-25 year old unemployed men to do 6 months labour in farming/construction (almost seen as pocket money)

Question 7

What was Hitler’s secret motive behind the RAD besides helping unemployed young men?

Answer 7

It created military discipline to prepare for war

Question 8

What are the limitations of the policies in the Battle for Work?

Answer 8

. Economy was already recovering a bit when Hitler came to power, so the impact of the battle for work may be slightly exaggerated
. People were forced into RAD
. Unemployment statistics were manipulated and didn’t include women or minorities at all

Question 9

What was the aim of the ‘New Plan’ of 1934?

Answer 9

To fix shortage of foreign currencies needed to purchase imported goods as imports were growing faster than exports with foreign trade increasing

Question 10

What actions were made in the ‘New Plan’ of 1934?

Answer 10

. Controls on import and access to foreign currency
. Series of trade agreements with foreign countries such as South America, where Germans paid in Reichsmarks to be supplied with food and raw materials
- these countries could only use this money to buy German goods

Question 11

Why did Germany decide to become reliant on foreign agreements for good trade in the New Plan and how was this limiting?

Answer 11

Germany refused to make another European power rich, however these foreign countries economies were extremely volatile

Question 12

What was the aims of the Mefo Bills?

Answer 12

To finance rearmament safely by borrowing money without risking another hyperinflation crisis

Question 13

How did Mefo Bills work?

Answer 13

Government paid for its military equipment using these Mefo Bills (credits)
- the bills could be cashed in, meaning private companies were reassured they could get their money
- to make sure the Bills were used and not immediately cashed in, there was a 4% interest per year on the bills if they were kept for a full five-year term as an incentive to not cash in.

Question 14

What were the strengths of using Mefo Bills?

Answer 14

The rearmament programme could be started in 1935 without government having all the funds the finances it
- as the programme had to be kept secret, they were good as Mefo Bills didn’t appear in government accounts

Question 15

How were the Mefo Bills a bit of a scam?

Answer 15

As you had to hold onto them for a full five-year term to get full interest, war had broken out by this time and it took ages to get your money back as they weren’t prioritised at the time

Question 16

Why was Schacht sacked as Economic Minister and who took over?

Answer 16

Schacht became concerned with high public spending and Hitler didn’t like this criticism
- Goering replaced Schacht on 4th September 1936 (no economic experience)

Question 17

What was Goering’s economic role from 1936-39?

Answer 17

In charge of the Office of the Four Year Plan
- aimed at making Germany Randy for war in 4 years (rearmament phase)
- aimed for a policy of Autarky (German self-sufficiency)

Question 18

Why was the aim of Autarky completely unrealistic?

Answer 18

Germany’s economic policies had always relied on imports and foreign trade, and Germany’s land mass was too small to completely rely on itself.
- only countries such as America with diverse locations can even think about self-sufficiency

Question 19

What was the Guns vs Butter Debate?

Answer 19

The idea that rearmament and increasing consumer goods and links with other countries couldn’t work together, so one part of the economy would always fall short

Question 20

How did big businesses feel about Nazi economic policies?

Answer 20

. Major landowners benefitted from growing demand of food in Autarky
. Industrialists benefitted from the ending of independent labour movements and the expansion of the economy for rearmament
- it seemed as though big businesses were willing to tolerate the huge amount of state intervention as it benefited them enough

Question 21

Which big business firms were particularly against Nazi economic policies?

Answer 21

Coal firms, therefore in 1937: Nazi government threatened to sabotage some industrialists if they opposed Autarky

Question 22

Which big businesses particularly benefitted from Nazi economic policies?

Answer 22

. Daimler-Benz aircraft’s (benefitted by rearmament) from 1932-41, it’s production increased over 800%
. IG Farben

Question 23

How did Thyssen lose out from Nazi economic policies?

Answer 23

Was an iron baron who fled to Switzerland in 1939 as he claimed Germany would soon look like Bolshevik Russia (didn’t agree with state interventions)

Question 24

Why was steel so important to Nazi economic policy?

Answer 24

Crucial for military equipment, so it needed autarky principles to be strictly followed

Question 25

Why did Nazi’s intervene in steel industry?

Answer 25

It was showing reluctancy to process low-quality domestic ores
- Nation Herman Goering steelworks established (RWHG)

Question 26

How was RWHG such a good example of the strength of Nazi state intervention on big businesses?

Answer 26

. Produced a rival operation to rest of steel industry and pressurised private steel industries to invest 130 million of 400 million marks to the project
. RWHG had priority as an industry over well-established private industries

Question 27

How successful was RWHG?

Answer 27

Very successful: By 1939, it was the largest industrial firm in Europe

Question 28

Despite RWHG’s success, how was it still not enough for German rearmament?

Answer 28

Failed to meet steel production target in 4 year plan (maybe the target was too unrealistic in the first place)

Question 29

Which big business were the biggest winners under the Nazis and what were they?

Answer 29

IG Farben - chemical firm that had historically been very cautious of Nazi regime in 1920s but won under Nazi rule

Question 30

When did Nazis become more interested in IG Farben?

Answer 30

In 1933: it experimented with synthetic manufacturing of oil and rubber
- Farben lent its knowledge to the office of the 4 year plan, receiving over 50% of government investment in return
- played a huge role in four year plan and onwards

Question 31

How did IG Farben still benefit Nazis later on and how are they significant?

Answer 31

. Produced gas for extermination camps later on
- example of how businesses become riddled with Nazi values and beliefs all for some big profits (greedy)