Nazi Germany Economy Flashcards
1
Q
Economic Aims?
A
- Drag Germany out of the world wide recession
- Solve unemployment
- Make Germany an ‘autarky’: a self-sufficient country
- Transform the economy to focus on rearmament and war
2
Q
Who was Hjalmar Schacht?
A
- President of Reichsbank who directed german economic policy and was responsible for the Rentenmark
- Was part of economic elite and not a member of Nazi party
- Believed in steady growth and a stable currency
- The worst of the depression was over by 1933, partly thanks to him
3
Q
Basic parts of Schacht’s Policy? (3)
A
- Banking and Control of Capital
- Assistance for Farming and Small Business
- State Investment
4
Q
Describe Banking and Control of Capital
A
- The banking system had been weakened by Wall Street crash and Depression
- State took control of interest rates and kept them at a low limit to reduce debt
- Large debts of local authorities were paid off over a longer time
- This all kept people happy + on their side
5
Q
Describe Assistance for Farming and Small Business
A
- Designed to stimulate growth and reward loyal supporters - Tariffs put on imported good to protect German farmers
- Reich Food Estate offered subsidies to support agriculture
- Reich Entailed Farm Law meant debts were reduced offering land ownership security
- Allowances to encouraging of domestic servants
- Grants for house repairs
6
Q
Describe State Investment
A
- Started under Von Papen
- Reich Labour Services/RAD employed 18 - 25 year olds (members not counted in unemployment figures)
- 1935 compulsory military conscription - 6 months of unpaid work in military construction
- Reforestation, land reclamation, motorisation, infrastructure and building projects
7
Q
Basic parts of Schacht’s New Plan (1934)? (3)
A
- Bilateral Treaties
- Regulation of the Reichsmark Currency
- Mefo Bills
8
Q
Describe Bilateral Treaties
A
- Aimed to promote trade and save foreign exchange, mainly w/SE European countries
- Barter agreements were set up rather then imports paid w/money
- The Soviet Union agreement was set up in 1935
9
Q
Describe Regulation of the Reichsmark Currency
A
- Germany agreed to purchase raw materials from all countries it traded with on the condition that Reichsmark were used to buy back German goods
- This protects their income
10
Q
Describe Mefo Bills
A
- Special govt. money bills (like a credit note) they were guaranteed by the govt. and were held up to 5 years at 4% interest.
- They disguised and delayed govt. spending
11
Q
Impact of Schacht’s New Plan (1934)? (4)
A
- By 1936 unemployment was at 15 mill. Down from 6 mill in 1932
- Industrial production had increased by 60%
- GNP had grown by 40%
- However, still deficits due to the demand for rearmament imports
12
Q
What was the ‘Guns or Butter’ Debate (1936)?
A
Schacht wanted to focus on industrial production whereas Hitler and Göring wanted to focus on rearmament and gearing the economy to support war.
13
Q
Aims of Göring’s 4 Year Plan (1936)?
A
- To regulate imports and exports, focus on chemicals and metals over agriculture
- To control the labour force and prevent wage increases: DAF (German Labour Force)
- To increase production of raw materials
- To develop substitute products e.g. artificial rubber
- To increase agricultural production
14
Q
Effects of Göring’s 4 Year Plan (1936)?
A
- Göring came into conflict w/Schacht, Party vs State
- Schacht resigns in 1939 and Göring became economic dictator
- Plan was not fully supported by business leaders. They believed that there should be SOME rearmament but not at the expense of German living standard
- IG Farben was producing chemicals and Siemens electrical production
- Daimler-Benz transport and aircraft
- Influence of business leaders reduced as the economy came under political control
