Nazi economic policy

Question 1

What were the aims of Schacht?

Answer 1

RECOVERY
-Reduce unemployment
-cut expenditure

Question 2

What were the policies of Schacht?

Answer 2

-1934 ‘New Plan’ - controls on currency, bilateral trade agreements
-government control on wages, prices

Question 3

Schacht stimulated economic recovery by..

Answer 3

• pumping money into economy to build homes and autobahns
• stimulating consumer demand by giving tax concessions and grants to particular groups
• giving subsidies to private firms to encourage them to take on more workers
• financing expenditure through The Mefo Bill

Question 4

1934 ‘New Plan’

Answer 4

-foreign trade increased and so imports grew faster than exports
-led to shortage of foreign currencies, which were needed to purchase foreign goods
-Schacht placed controls on imports and access to foreign currency
+ initiated series of trade agreements with states in Balkans and South America for raw materials + food paid for in German Reichsmarks

Question 5

‘Battle for Work’

Answer 5

project introduced to reduce unemployment as it was Nazis 1st priority
- lot’s of money spent on new roads and public buildings: increased industrial production was stimulated through loans and tax relief to private companies

Question 6

Reich Labour Service 1935

Answer 6

-unemployed young men were compelled to do 6 months’ labour in farming or construction
-later in 1935, military conscription was reintroduced for young men

Question 7

Significance of autobahns

Answer 7

• visible sign of economic revival and national renewal
  -propagandised Germany’s technological superiority.

Question 8

Schacht and the use of Mefo bills

Answer 8

• to finance rearmament Nazis needed to borrow money whilst avoiding dangers of runaway inflation
  -Schacht ingenius idea whereby gov paid for military equipment using credit notes (Mefo bills) which could be exchanged for cash at the Reichsbank, thereby ensuring private companies had confidence they would get their money
  -However, companies were give incentive to defer asking for payment by the offer of 4 per cent per annum (p.a.) interest on the bills if they kept them for the full five-year term. In
  this way, the rearmament programme could be started in 1935 without the government having the funds to finance it.

Question 9

Rearmament and the creation of a war economy

Answer 9

• Schacht’s measures succeeded in some ways but the revival created new set of problems
• food shortages, rising prices and lower living standards for ordinary Germans 1935-36
• reports from around Germany spoke of disillusionment in the regime

Question 10

What happened to Schacht?

Answer 10

• he opposed the suggested policy of economic Autarky and upon introduction of the new Four Year Plan, Schacht was marginalised and the responsibility was given to Hermann Goering

Question 11

The Four Year Plan

Answer 11

Priorities: rearmament and economic autarky + ultimate aim of Lebensraum and preparing for war
- creating a managed economy with controls on labour supply , prices, raw materials and foreign exchange
- setting production targets for private companies
- establishing new State- owned industrial plants such as Hermann Goering Steelworks
- increasing production of key commodities such as iron, steel and chemicals (ersatz)
- encouraging research + investment in production of substitute products

Question 12

Economic Autarky

Answer 12

• links to national sovereignty and it’s embodiment of national pride, and independence, fitted well with Nazis’ ideological aims
• propaganda campaigns to persuade Germans to save more, since savings would help fund investment in new production facilities
  -1937: regime launched campaign to collect scrap metal from people’s homes and gardens and public spaces to make up for serious shortages in raw materials

Question 13

Results of Four Year Plan

Answer 13

• did not match the propaganda claims
• German industry, despite massive investment, didn’t meet the targets set by the regime
  -1939: Germany still imported 1/3rd of it’s raw materials
  -German economy did not have the resources to achieve all of the regime’s aims
  By 1939, German economy was under severe strain

Question 14

Nazi policy towards management and the industrial elites

Answer 14

• many but not all of Germany’s business leaders welcomes the Nazi takeover of power in 1933
• Fritz Thyssen and Alfred Hugenberg had helped Hitler in his bid to take power and Hitler was careful to offer reassurance to business leaders to not be alarmed by more socialist elements in the Nazi programme
• as Nazi economic policies developed, many business leaders unhappy with greater state intervention (controls on supply of labour and raw materials)

Question 15

Examples of businesses profiting from Four Year Plan

Answer 15

• large chemicals company, I.G. Farben
  -One of directors of I.G. Farben,
  held a key post in the administration of the Four Year Plan, 1935-1939, the profits increased from 71 million to 240 million Reichsmarks

Question 16

Hermann Goering Steelworks

Answer 16

• enterprise est and owned by the State but partly financed by private companies (which were forced to invest in it)
  -company was given priority over private companies in allocation of materials + labour
• By 1939, became largest industrial enterprise in Europe- obvious value for the regime’s propaganda
• involvement in coal mining and manufacture of heavy machinery and synthetic fuels

Question 16

The reduction of unemployment: flaws in claims that ‘Battle of work’ had been won due to Nazi policies

Answer 16

• economic recovery had already begun before Nazis took power. Many job creation schemes used by regime were based on policies introduced by Bruning
• part of reduction in unemployment figures achieved by persuading married women to give up their employment, through granting marriage loans
• Reintroduction of conscription in 1935 for young men 18-25 took large proportion of young males out of labour market
• rise in employment figs achieved through various statistical devices to inflate figures

Question 17

Living standards 1935

Answer 17

• incomes for many workers did increase 1933-39, some employers prepared to pay bonuses + other benefits to get round the freeze on wage levels to attract more skilled workers
  -workers in key industries such as armaments, undoubtedly better off than before, while those producing consumer goods were not.
• prices rose during 1930s but shortages on some key commodities
• consumption of higher value foods such as meat, fruit and eggs declined while the consumption of cheaper foods such
  as potatoes and rye bread increased

Question 18

The ‘people’s car’

Answer 18

• Volkswagen was a pet project of Hitler’s
• car was promoted through Strength Through Joy with a huge campaign advertising ‘ a car for everyone’
• persuaded workers to pay into savings scheme to purchase one
• cars never went into full production during Nazi regime and only few Nazi elite were able to acquire few models made