Nazi Economic Policy 1934-1939

Question 1

Who was President of the Reichsbank & Economic Minister from August 1934-1936?

Answer 1

Schacht

Question 2

What were the 2 economic plans of this time & who led them?

Answer 2

Schacht - New Plan - 1934-1936

Goering - Four Year Plan - 1936-1939

Question 3

Give the years & Economic Ministers of the:

a) New Plan
b) Four Year Plan

Answer 3

a) Schacht - 1934-1936

b) Goering - 1936-1939

Question 4

Give a brief overview of the New Plan

Answer 4

Run by Schacht from 1934-1936. Involved buildings programmes, Mefo bills, giving money to companies to encourage employment, rearmament, trying to

Question 5

What was a large issue faced in economic policies?

Answer 5

Guns vs butter - food shortages could be solved by gaining more imports, but that comes at the cost of using valuable foreign currency (which are also needed to import raw materials needed for the armaments industry)

Question 6

What does autarky mean? Did the Nazis want this?

Answer 6

Becoming self sufficient. Yes - this meant they were better prepared for war. Schacht was against it, which led to Goering becoming the next economic minister in 1936 with the Four Year Plan

Question 7

When was the Reich Labour Service, and what was this?

Answer 7

1935 - Employed young men to do 6 months of labour in farming & construction. Later in the year, military conscription was reintroduced for young men

Question 8

When was military conscription reintroduced for young men?

Answer 8

1935

Question 9

Under the New Plan, what did unemployment fall to?

Answer 9

From 6 million (Jan 1933) to 2 million (1935)

Question 10

Why was there such a pressure for the Nazis to solve the economic situation?

Answer 10

Because unemployment was at 6 million in January, and Hitler promised to solve the economic situation which arguably caused polarisation in the first place and got him the position of Chancellor

Question 11

What were Mefo Bills? Why were they good?

Answer 11

New Plan - A scheme where the government paid with credit notes that could be exchanged for real cash at the Reichsbank. Good as the current economy was too weak to pay money out, so with this & the promise of paying an extra 4% interest per anum if they waited the full 5 years before exchanging it meant the economy had time to recover so they had the money to pay them.

Question 12

What are autobahns?

Answer 12

A building scheme to make roads. 1934-1942

Question 13

Talk through some pros and cons of the autobahns

Answer 13

+Reduced unemployment as people were directly employed
+ built 3780km of road
- posters made them to be modern & lovely & marketed for military, but the road was to thin for tanks
- at its peak, only 125,000 people were directly hired
- only 1/44 Germans owned a car

Question 14

What did Schacht do to reduce unemployment?

Answer 14

Gave subsidies to private firms to encourage them to hire, funded building schemes such as autobahns (roads. Also built public buildings), 1935 Reich Labour Service, conscription

Question 15

How many Germans owned a car in the 1930s compared to the USA and Britain?

Answer 15

1/44 Germans, 1/27 Brits, 1/5 Americans

Question 16

How did Schacht encourage foreign trade?

Answer 16

Made trade agreements to pay in Reichsmarks, meaning the countries had to buy German exports

Question 17

What were the issues with foreign trade the New Plan had to solve?

Answer 17

Germany had loads more imports than exports. This meant there was a shortage of foreign currencies, but they were still dependent on imports (for example, some foods were solely imported).
The New Plan

Question 18

What is the ‘Battle for Work’?

Answer 18

Getting people into work as unemployment was at 6 million in Jan 1933

Question 19

What was guns or butter?

Answer 19

The battle over rearming Germany for war, or solving food shortages.
Food shortages could be solved by gaining more imports, but that comes at the cost of using valuable foreign currency (which are also needed to import raw materials needed for the armaments industry)

Question 20

Evaluate Schacht’s New Plan shortly in terms of whether it improved/ worsened these factors:

a) the economy
b) unemployment
c) foreign exchange rates
d) food shortages
e) prices
f) living standards

Answer 20

a) + Revived
b) + Reduced
c) ? Reduced
d) + No longer
e) ? Rose
f) - Worsened

Question 21

How did Schacht increase industrial production?

Answer 21

Stimulated it with loans & tax relief for private companies

Question 22

How did Schacht help & encourage private companies?

Answer 22

Stimulated industrial production with loans & tax relief

Gave subsidies to encourage them to hire more workers

Question 23

How did Schacht control inflation?

Answer 23

Controlled wages and prices carefully

Question 24

How did Schacht stimulate consumer demand?

Answer 24

Gave tax concessions & grants to particular groups

Question 25

Why was Schacht replaced with Goering as economic minister? When?

Answer 25

1936 - because Schacht was against autarky (becoming independent & ready for war)

Question 26

Who was in charge of the Four Year Plan? When was this made?

Answer 26

Hermann Goering. 1936-1939

Question 27

What was the aim of the Four Year Plan?

Answer 27

To make Germany ready for war in 4 years time. It prioritised rearmament & economic autarky

Question 28

Describe the unemployment rates for:

a) 1933
b) 1936
c) 1939

Answer 28

a) At its worst - 6 million
b) End of New Plan - 2 million
c) End of Four Year Plan - good, some labour shortages in key industries

Question 29

Give an example of how the Four Year Plan encouraged autarky

Answer 29

Encouraged German iron over imported iron
Established new state-owned industrial plants e.g Hermann Goering Steelworks
Encouraged research & invested in producing substitute products e.g artificial rubber & extracting oil from coal (reducing imports)

Question 30

What was the German economy like in 1939?

Answer 30

Under severe strain, largely as 12-13 billion Reichsmarks went into rearmament

Question 31

How many Reichsmarks went into rearmament under the Four Year Plan?

Answer 31

12-13 billion

Question 32

The Four Year Plan encouraged German iron over imported iron. What was the issue with this?

Answer 32

German iron was more brittle. When other companies wouldn’t use it, Goering set up his own state-owned ‘Hermann Goering Steelworks’

Question 33

How did the Hitler Youth help the Four Year Plan?

Answer 33

Collected pots & pans, took iron fences from public spaces in a campaign to get more iron for rearmament

Question 34

How did the Four Year Plan set up a managed economy?

Answer 34

Controlling the labour supply, prices, raw materials & the foreign exchange

Question 35

How did Goering reduce imports?

Answer 35

Encouraged German iron to be used

Encouraged research & invested into making substitute products e.g artificial rubber, getting oil from coal

Question 36

By 1939, German imported 1/2 of its raw materials. True or false?

Answer 36

FALSE - 1/3 of its raw materials were imported. A large amount, so limited autarky

Question 37

What did Goering increase production of?

Answer 37

Key commodities - iron. steel, chemicals