Nazi Economic Policy 1934-1939 Flashcards
Who was President of the Reichsbank & Economic Minister from August 1934-1936?
Schacht
What were the 2 economic plans of this time & who led them?
Schacht - New Plan - 1934-1936
Goering - Four Year Plan - 1936-1939
Give the years & Economic Ministers of the:
a) New Plan
b) Four Year Plan
a) Schacht - 1934-1936
b) Goering - 1936-1939
Give a brief overview of the New Plan
Run by Schacht from 1934-1936. Involved buildings programmes, Mefo bills, giving money to companies to encourage employment, rearmament, trying to
What was a large issue faced in economic policies?
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)
What does autarky mean? Did the Nazis want this?
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
When was the Reich Labour Service, and what was this?
1935 - Employed young men to do 6 months of labour in farming & construction. Later in the year, military conscription was reintroduced for young men
When was military conscription reintroduced for young men?
1935
Under the New Plan, what did unemployment fall to?
From 6 million (Jan 1933) to 2 million (1935)
Why was there such a pressure for the Nazis to solve the economic situation?
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
What were Mefo Bills? Why were they good?
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.
What are autobahns?
A building scheme to make roads. 1934-1942
Talk through some pros and cons of the autobahns
+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
What did Schacht do to reduce unemployment?
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
How many Germans owned a car in the 1930s compared to the USA and Britain?
1/44 Germans, 1/27 Brits, 1/5 Americans
How did Schacht encourage foreign trade?
Made trade agreements to pay in Reichsmarks, meaning the countries had to buy German exports
What were the issues with foreign trade the New Plan had to solve?
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
What is the ‘Battle for Work’?
Getting people into work as unemployment was at 6 million in Jan 1933
What was guns or butter?
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)
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
a) + Revived
b) + Reduced
c) ? Reduced
d) + No longer
e) ? Rose
f) - Worsened
How did Schacht increase industrial production?
Stimulated it with loans & tax relief for private companies
How did Schacht help & encourage private companies?
Stimulated industrial production with loans & tax relief
Gave subsidies to encourage them to hire more workers
How did Schacht control inflation?
Controlled wages and prices carefully
How did Schacht stimulate consumer demand?
Gave tax concessions & grants to particular groups
Why was Schacht replaced with Goering as economic minister? When?
1936 - because Schacht was against autarky (becoming independent & ready for war)
Who was in charge of the Four Year Plan? When was this made?
Hermann Goering. 1936-1939
What was the aim of the Four Year Plan?
To make Germany ready for war in 4 years time. It prioritised rearmament & economic autarky
Describe the unemployment rates for:
a) 1933
b) 1936
c) 1939
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
Give an example of how the Four Year Plan encouraged autarky
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)
What was the German economy like in 1939?
Under severe strain, largely as 12-13 billion Reichsmarks went into rearmament
How many Reichsmarks went into rearmament under the Four Year Plan?
12-13 billion
The Four Year Plan encouraged German iron over imported iron. What was the issue with this?
German iron was more brittle. When other companies wouldn’t use it, Goering set up his own state-owned ‘Hermann Goering Steelworks’
How did the Hitler Youth help the Four Year Plan?
Collected pots & pans, took iron fences from public spaces in a campaign to get more iron for rearmament
How did the Four Year Plan set up a managed economy?
Controlling the labour supply, prices, raw materials & the foreign exchange
How did Goering reduce imports?
Encouraged German iron to be used
Encouraged research & invested into making substitute products e.g artificial rubber, getting oil from coal
By 1939, German imported 1/2 of its raw materials. True or false?
FALSE - 1/3 of its raw materials were imported. A large amount, so limited autarky
What did Goering increase production of?
Key commodities - iron. steel, chemicals
