Nazi Economics

Question 1

When was the DAF created?

Answer 1

May 1933

Question 2

When was the Strength Through Joy movement created?

Answer 2

November 1933

Question 3

When was the New Plan introduced?

Answer 3

September 1934

Question 4

When was the Reich Labour Service made compulsory for all men aged 19-25?

Answer 4

June 1935

Question 5

When was the Four Year Plan introduced?

Answer 5

October 1936

Question 6

When did the DAF organise the Volkswagen car scheme?

Answer 6

1938

Question 7

When were the War economy decreed?

Answer 7

December 1939

Question 8

When was the Rationalisation Decree?

Answer 8

December 1941

Question 9

When was Speer appointed minister of armaments?

Answer 9

February 1942

Question 10

When was Goebbels’ ‘Total War’ speech?

Answer 10

February 1943

Question 11

What were the economic issues in Germany when the Nazis came to power?

Answer 11

6 million unemployed

Industrial production had returned to the levels of the 1980s

Agricultural sector was depressed

Question 12

In what ways was the economic landscape already improving by the time the Nazis came to power?

Answer 12

The worst of the Great Depression was over (lowest point in winter 1932-33)

Schleicher had already initiated public works schemes that Hitler was able to build off

Reparations had ended in 1932

Question 13

How did the Nazis help farmers recover from the depression?

Answer 13

1. Subsidies for farmers from the Reich Food Estate
2. Tariffs on imported food stuffs to protect German farmers
3. The Reich Entailed Farm Law, which gave small farmers greater security of tenure and helped to reduce their debts

Question 14

What was the Reich Food Estate?

Answer 14

Government body responsible for everything involved in agricultural production. It fixed prices, regulated supplies and even decided what fertilisers and seeds were to be used.

It also secured protection from the selling of foreign food supplies in Germany.

Question 15

Why did the Nazis choose to put a specific focus on helping farmers?

Answer 15

Members of the agricultural sector were often loyal supporters of the regime

Question 16

What were the key economic aims of the Nazis?

Answer 16

1. Reduce unemployment
2. Rearmament
3. Autarky (self-sufficiency)
4. Increase production
5. Wehrwirtschaft - defense economy
6. Protect foreign currency
7. Removal of Jews from the economy

Question 17

What did the government invest money into?

Answer 17

1 billion Reichsmarks invested into public works schemes such as roads, housing, canals, and railways (specific projects include the 1936 Olympic Stadium and the Autobahnen (motorways))

Car industry was given tax concessions, which resulted in a 40% increase in production

Businesses given tax concessions and subsidies if they adopted re-employment strategies

Question 18

What was the point of government investment into certain sectors and businesses?

Answer 18

It would stimulate demand for goods and hence revitalise the economy

Question 19

How did the Nazis reduce the unemployment figure?

Answer 19

1. Voluntary Labour Service - Established by Bruning in 1931 and continued by the Nazis. Removed young people from the labour market and by 1935 employed ~500,000 men
2. Law for the Reduction of Unemployment - Offered loans to women about to marry if they gave up their jobs (marriage loans)
3. National Labour Service (RAD) - In 1935 made compulsory for all men between 18 and 25 to undertake 6 months of labour, extended to women in 1939
4. Conscription - From 1935 onwards, men between 18 and 25 were conscripted into the army or 2 years
5. Rearmament - Millions of jobs created in factories in the production of weapons

Question 20

In what period was Schacht the minister of economics?

Answer 20

From 1934-1937

Question 21

When was the Law for the Reduction of Unemployment passed? (Marriage Loans)

Answer 21

June 1st 1933

Question 22

What were the problems Schacht faced when he was appointed minister of economics?

Answer 22

1. Low export levels
2. Lack of foreign currency to buy imports
3. Lack of raw materials for industry (result of ToV)
4. Loans withdrawn
5. High unemployment
6. Low rates of industrial and agricultural output

Question 23

What was Schacht’s policy of heavy state spending called, and how did this affect gvmt spending?

Answer 23

Deficit financing

Government spending rose by 70% between 1933-1936

Question 24

What were the negative side effects of deficit spending?

Answer 24

Trade deficit - Germany was importing more raw materials and failing to increase exports

ie. More importing than exporting. Result: shortage of money

Question 25

What did the New Plan do?

Answer 25

1. The gvmt took control over all trade, tariffs, capital and currency exchange
2. Gvmt control of imports - priority given to those needed by heavy industry
3. Bilateral trade treaties signed with south-east Europe and South America (e.g. Hungary)

Question 26

What was the benefit of bilateral trade treaties in the New Plan?

Answer 26

When Germany imported food and raw materials from these countries, Germany paid these countries back in Reichsmarks.

These countries could then only use these Reichsmarks to buy German goods.

Question 27

How did Mefo bills work?

Answer 27

They were credit notes used to pay manufacturers of military equipment which could be converted into Reichsmarks in 5 years with 4% interest.

This helped disguise rearmament (banned in ToV) as it didn’t leave behind a visible trail as direct exchanges of money did.

They allowed the government to run a greater deficit than usual and obtain various goods and services that it could reinvest into the economy, leading to its growth.

Question 28

Why did Schacht and Hitler fall out?

Answer 28

Schacht opposed Hitler’s objective of launching a full-scale rearmament programme as:

• At the point when Hitler wanted to shift focus to rearmament there were still food shortages, rising prices, and low living standards
• He believed the economic revival should be continued in order to improve living standards and Germany’s international position
• Increased rearmament was creating an increase in demand for imports, which utilised reserves of foreign currency which could otherwise be used to tackle food shortages
• He was concerned that Hitler’s policies would undermine his economic achievements

Question 29

In what ways were the economic policies of Schacht successful?

Answer 29

1. Mefo bills allowed Nazis to rearm in secret
2. Industrial production increased by 60% between 1933 and 1936
3. Agricultural output increased

Question 30

In what ways were the economic policies of Schacht unsuccessful?

Answer 30

1. Imports remained higher than exports - shortage of foreign exchange
2. Gvmt still reliant oon importing goods such as rubber
3. Reduction of unemployment not as impressive as it seemed - unemployment was already falling before 1933 and groups such as Jews and women were removed from the unemployment register
4. There were still food shortages, lower living standards and rising prices

Question 31

In what way was the DAF unsuccessful?

Answer 31

Although it removed young men from the unemployment register, they were badly paid and had to endure hard labour in poor conditions.

Therefore, it could be ruled that the programme did more bad than good on a human level.

Question 32

When was Goering made Commissioner of the Four Year Plan and what effect did this have on Schacht?

Answer 32

18th October 1936

Goering’s ultimate authority to implement the plan sidelined Schacht

Hitler however did not care as Schacht was of no more use to him, having already set Germany on the path to economic recovery

Question 33

What was Hitler’s aim with his policy of rearmament?

Answer 33

Once Hitler deemed the ‘battle for work’ to have been a success in 1936 he wanted to shift focus on regaining land lost in the ToV- Lebensraum

He aimed to have the country ready for war by 1940, but was only expecting a small, localised war in Poland

Question 34

What were the objectives of the Four Year Plan?

Answer 34

1. Create a managed economy with controls on labour supply, prices, raw materials, and foreign exchange
2. Set production targets for private companies
3. Establish new state-owned indistrial plants e.g. Hermann Goering Steelworks
4. Increase production of key commodities e.g. steel, iron and aluminium to reduce cost of importing these goods
5. Develop ersatz products to reduce Germany’s dependence on imports e.g. Oil from coal and artificial rubber (buna)
6. To increase agricultural production to avoid imported foodstuffs e.g. through grants for fertilisers and machinery

Question 35

Why did the Four Year Plan aim to regulate imports and exports?

Answer 35

To favour armaments over agriculture

Question 36

Was the production of ersatz oil through coal a success?

Answer 36

No, it took 6 tons of coal to produce 1 ton of oil

Question 37

When did Schacht resign from his position as minister of economics?

Answer 37

November 1937

Question 38

Why did Hitler feel the need to more closely supervise the economy after 1936?

Answer 38

He had always intended for economic recovery to ultimately lead to rearmament, but feared that, if left to their own devices, generals and businessmen would only produce a modest level of rearmament and focus on boosting domestic living standards as this suited their interests more.

Question 39

Who was against rearmament?

Answer 39

Businessmen - most wanted a period of stabilisation and consolidation. A number of prominent businessmen encouraged the gvmt to move towards a peaceful implementation of German economic power

Schacht - believed living standards should be further improved before extensive rearmament

Gustav Krupp (of the famous Krupp works) - even though he heavily benefited from military spending, he publicly denounced the policy of unlimited rearmament in 1936 and called for further expansion of German trade and civilian consumption

Question 40

What was the ‘guns or butter’ debate?

Answer 40

Should German economic recovery be used rearmament (as Hitler had always intended) or consumer goods (to increase living standards and expand German trade abroad)

Question 41

How does the ‘guns or butter’ debate link to the theory that Hitler was a weak leader?

Answer 41

The fact that a debate over economic priorities existed shows that Hitler was not an all-powerful dictator who organised everything to his wishes

Question 42

How did Germany’s style of economy change in preparation for war?

Answer 42

Switched from a world economy to siege economy

Siege economy = limits on exports and imports

Aim of improving domestic production in preparation for war

Question 43

How did the Nazis mobilise the German population to reach production targets in the Four Year Plan?

Answer 43

The effort to increase production was presented as a ‘battle’ in which the whole volksgemeinschaft had to participate as their patriotic duty.

Propaganda campaigns persuaded people to buy only German goods, eat only German food, and use only German raw materials in their work.

In 1937 a campaign was launched to collect scrap metal from homes, gardens, and public spaces to make up for shortages in raw materials.

Question 44

How were production targets for private companies in the Four Year Plan enforced?

Answer 44

Threat of being shut down or being deprived of raw materials

Question 45

How did the Nazis use state-owned plants to increase production?

Answer 45

Hermann Goering Steelworks:
- Established 1937
- Commissioned to make up for the steel industry’s unwillingness to mass-produce low-quality steel
- Had priority over established industry
- By 1938 it was the largest industrial firm in Europe and had branched out to coal, heavy machinery, and synthetic fuel

Following the Anschluss, Austrian companies were taken over.

After the annexation of the Sudetenland, the Skoda Works were taken over

Question 46

Did Germany meet the targets set in the Four Year Plan?

Answer 46

Despite the fact that production of aluminium and explosives expanded considerably and the production target of lignite (a type of low-quality coal) was met, no other production targets were met by 1942.

Specific targets that were fallen well short of were those for oil and rubber, two crucial areas.

Question 47

In what respects was the Four Year Plan successful?

Answer 47

1. Germany was self-sufficient in all foods apart from fats
2. 2/3 self-sufficient in raw materials by 1939
3. Armaments industries did well

Question 48

In what respects was the Four Year Plan unsuccessful?

Answer 48

1. Many production targets not met
2. Germany still 1/3 dependent on imported raw materials by 1939
3. Workers’ quality of life decreased - longer hours and more contributions to DAF for little gain
4. Had to divert some resources away from rearmament and to consumer goods to prevent spread of resentment - historians argue this is what made Germany not as prepared for war as it could’ve been
5. Arms production never reached the levels Hitler wished for
6. Shortages of workers by 1939
7. Germany gained economic resources in 1938 not through the Four Year Plan but because of their invasion of Austria and Czechoslovakia - plundering economy

Question 49

Why was gaining control of workers important to Hitler?

Answer 49

Wanted to ensure their loyalty and obedience to his regime - before 1933 they tended to vote for left wing parties

Needed to increase productivity so he could achieve his ambitious foreign policy

Question 50

Why did Hitler ban trade unions and what were they replaced with?

Answer 50

They posed a threat to his plans

Replaced by the DAF (German Labour Front)

Question 51

How did Hitler get rid of trade unions?

Answer 51

TUs had already been weakened by the Depression which led to a fall in membership as workers were more concerned with retaining their jobs

TUs initially hoped they would be able to work with the Nazi government. The Nazis played on their hopes by declaring May 1st, the traditional day celebrating socialist labour, as a national holiday.

The day afterwards, May 2nd 1933, union offices were occupied, their funds seized and many union leaders sent to concentration camps.

Question 52

Who was the leader of the DAF?

Answer 52

Dr Robert Ley

Question 53

What was the DAF responsible for?

Answer 53

1. Working hours and wages
2. Training schemes for apprentices
3. Supervising working conditions through Beauty of Labour
4. Provision of meals for workers
5. Dealing with inductrial unrest, absenteeism, and strikes
6. Ensuring that rents for housing remained stable

Question 54

How did the DAF decrease the quality of workers lives through serving the governments production interests?

Answer 54

Workers could not strike, bargain for wages or leave their jobs without permission.

The DAF nearly always followed the wishes of employers, rather than employees.

The maximum working hours per week were increased from 60 to 72. Workers could not change their jobs without permission.

Question 55

How did the Nazis try to earn the support of workers?

Answer 55

Strength Through Joy (KDF) - Offered cheap holidays, sporting events, trips, and a savings scheme for the Volkswagen Beetle

Beauty of Labour (SDA) - Propaganda organisation to spread the message that work was good and that everyone who could work, should. Encouraged factory workers to improve conditions.

Question 56

In what ways were workers in non-armaments industries disadvantaged?

Answer 56

1. Wages fell
2. The number of hours worked rose by 15 per cent
3. Serious accidents in factories increased
4. Workers could be
   blacklisted
   by employers for questioning their working conditions

Question 57

Who was Schacht replaced by as economic minister in 1937?

Answer 57

Walther Funk

Question 58

What factors were hindering Germany’s weapons output at the start of the war?

Answer 58

1. Lack of a central agency for economic affairs - too many people responsible for the economy
2. Excessive military intervention

Question 59

How did structural problems in the government hinder Germany’s weapons output at the start of the war?

Answer 59

There was no single organisation responsible for economic affairs.

Instead there were multiple offices responsible for individual aspects of the economy e.g. the Economics Ministry, the Finance Ministry, the Four Year Plan, the armed forces’ economic offices.

All of these groups were poorly informed of what the others were doing and were unwilling to give up any of their own power.

This lead to arguments over production priorities and resource allocation.

Question 60

How did the influence of the army hinder Germany’s weapons output at the start of the war?

Answer 60

In WWI industrialists had done such a poor job of managing weapons production that the army had to take over in 1916.

The army were determined not to have this happen again and so from the very start of WWII they hired engineering officers to oversee every stage of production and insisted on highly specialised equipment of very high quality.

This meant it was almost impossible to produce weapons on a large-scale because the production of many different types of weapons was expensive and required highly skilled labour.

Question 61

What was the initial trajectory of German rearmament?

Answer 61

War would not happen until the launch of Operation Barbarossa in 1941

Luftwaffe expansion due to finish in 1942

Build-up of the navy to be completed in 1944-45

Question 62

How were Germany able to overcome supply issues at the start of the war?

Answer 62

Blitzkrieg tactics (1939-41)

Question 63

At what point in the war did German supply issues become a problem?

Answer 63

Inability to replace planes lost in the 1940 Battle of Britain

When Germany invaded the Soviet Union in 1941, 1/3 of their troops had inadequate equipment (hardly had any more aircraft and tanks than they had had to invade Poland 2 years earlier)

Question 64

What were Goering’s shortcomings as economic leader at the start of the war?

Answer 64

Lacked the technical and economic knowledge needed to do his job effectively.

Had poor relations with military leaders and leaders of large companies and banks - was busy building up his own economic empire.

Incapable of organising more centralised coordination for the economy.

Question 65

Which two people were appointed successively as minister of armaments?

Answer 65

Fritz Todt - appointed minister of armaments in 1940, leading to clashes with Goering. Killed in a plane crash in 1942.

Albert Speer - Replaced Todt as minister of armaments in 1942.

Question 66

How was the power of the clashing groups responsible for the economy reduced?

Answer 66

Replaced in authority by the minister of armaments, who could bypass the Four Year Plan, the Economics Ministry, and the armed forces.

Question 67

What was Speer’s main achievement?

Answer 67

In just two years (1942-44) managed to increase German weapons production more than threefold, all whilst the quantity of resources, manpower, and raw materials assigned to war production increased relatively little.

Question 68

What central coordinating body did Speer set up?

Answer 68

Set up a Central Planning Board in April 1942, of which he was director.

With this he was able to closely control the distribution and allocation of raw materials and industrial equipment.

This was supported by a number of committees, each of which dealt with a specific area of the economy.

Question 69

How did Speer reduce the influence of the army in the production of weapons?

Answer 69

Insisted that military personnel should be excluded from supervising German factories.

Instead recruited people who knew about production e.g. industrialists and engineers into his ministry.

This allowed him to improve productivity levels and make optimum use of resources.

Question 70

To what extent did Speer optimise use of resources to avoid wastage?

Answer 70

In 1941, for every 100,000 tons of steel allocated to the armed forces they received only 10,000 tons of finished weapons.

In 1944, from every 100,000 tons they received 40,000 tons of finished weapons.

TLDR: 4x increase in number of weapons produced from same amount of steel 1941-44

Question 71

Why was the weapons production process in 1941 so wasteful in resources?

Answer 71

• Wasteful factory practices
• Excessive scrapping
• Inadequate machining and processing

Question 72

In what ways was Speer successful?

Answer 72

1. Introduced for the first time a central coordinating body
2. Concentrated production in a small number of gigantic factories
3. Streamlined production by cutting out waste and duplication
4. Sacked ineffective managers
5. Able to successfully organise weapons production despite the Anglo-American strategic bombing offensive

Question 73

In what ways did the 1943 Allied aerial bombing campaign of Germany hinder their weapons production?

Answer 73

Probably reduced Germany’s potential war production in 1944 by as much as 50%

Imposed a strict ceiling on the ability of the economy to expand further.

With Speer’s reforms the Germany economy was capable of the level of output achieved by the USSR or USA, but was restricted to the levels of production of GB or Japan.

Germany had access to more than 4x the amount of steel as GB yet failed to produce as many aircraft, tanks, or artillery pieces as the Soviet Union and barely as many as Britain.

Question 74

What do historians take from the insignificance of the 1943 allied bombing campaign?

Answer 74

Traditionally historians believed this showed that the campaign was a failure, but others, such as Overy, claim that this instead proves the success of Speer.

Question 75

What economic advantages did conquered territories bring Germany during the war?

Answer 75

1. Access to new food supplies and key raw materials e.g. French coal and iron ore, Rumanian oil, Ukranian arable land
2. Large quantities of military equipment which Germany converted for its own use
3. Provided supplies of labour - by 1944 there were 8 million slave labourers working in Germany, nearly 1/5 of the total workforce