Nazi Economic Policy 1933-45 Flashcards
What was the initial policy and what did Hitlers long term goals fit in with?
-initial policy was to reduce unemployment which had been a Nazi election promise. (Deficit financing).
-already in practice in the USA with Roosevelt’s New Deal and von Papen and von Schleicher had started work schemes in 1932.
-Hitler’s long term goals fitted in with WEHRWIRTSCHAFT (defence economy). Related to this was the policy of autarky.
Key features of Nazi economic policy and
Recovery – Schacht
Rearmament – Goering
War – Todt/Speer
How serious was Germany’s economic depression and Economic recovery 1933 – 1936 - the work of Schacht
Exports fell by 62 %
50,000 businesses went bankrupt
In 1932 8 million were unemployed
In 1931 5 major banks collapsed
President of the Reichsbank 1933-39
Minister of Economics 1934-37
Well respected economics expert
Not a member of the Nazi party
Who was Schacht, why did the Nazis want his help and what where his long and short term aims for the economy
-He was a respected international financier
-Nazi leadership still needed to work with the economic elites and after the depression the trade cycle began to improve, which was an advantage to the Nazis
Long- For it to become a war economy
Short- Deficit financing
In June 1933 the Law to reduce Unemployment was renewed and expanded. How did this law create jobs for the unemployed?
-RAD (National Labour Service) extended to employ 19-25 year olds
-Rearmament, construction and transportation investments created jobs
-Work creation schemes such as reforestation, land reclamation, road improvement (autobahn) and expansion of housing sector and public buildings
Describe what reforms were introduced in farming.
-maintenance of tariffs on imported produce to protect German farmers
-subsidies from the Reich Food Estate in a nationally planned agricultural system
-Reich Entailed Farm Law, which tried to offer more security of land ownership to small farmers: debts were reduced by tax concessions and lower interest rates
-allowances to encourage the rehiring of domestic servants
-the allocation of grants for house repairs
What emerged in 1934 and what was Schachts solution?
The balance of trade deficit- It meant that Germany imported more than she exported. The country was in the red. Government spending on unemployment schemes had increased by 70%.
Schacht’s solution was the New Plan (July 1934). The government now controlled imports. The deficit was to be prevented by:
-bilateral trade treaties
-Reichsmark currency
-Mefo bills
Explain Trade treaties, Reichsmark currency and mefo bills
Trade Treaties- Schacht tried to promote trade and save foreign exchange by signing Bilateral trade treaties (trade agreement between 2 countries) eg Romania and Yugoslavia. Often took the form of straightforward barter agreements (thus avoiding the necessity of formal currency exchange.) In this way, Germany exerted economic influence over the Balklands long before it obtained military and political control.
-The Reichsmark currency. Germany purchased raw materials from countries it traded with on the condition that Reichsmarks could only be used to buy back German goods
-Mefo bills. Mefo were special government money bills designed by Schacht. They were issued by the Reichsbank and guaranteed by the government as payment for goods, deferred for up to five years, earning four per cent interest per annum. The main purpose of Mefo bills was that they successfully disguised government spending.
How successful was the New Plan by 1936?
-Unemployment fallen to 1.5 million
-Industrial production increased by 60% since 1933
-GNP grown by 40% since 1933
What was the 1936 a crisis in the New Plan and how did the crisis end?
Schacht (concerned about the government being in the red) wanted to reduce arms expenditure and increase the production of exports to make more money for Germany. The debate was should Germany’s economy focus on rearmament (guns) or consumer goods (butter)?
-Unacceptable to the armed forces and Nazi leadership, as it would be at the expenses of rearmament
