Summary 8 - Recovery from the Depression Flashcards
Who played a key role in ensuring that the German economy recovered from the Depression?
Hjalmar Schacht
Which two positions did Schacht hold?
- He was President of the Reichsbank
- He was made Economic Minister in August 1934
When was Schacht made Economic Minister?
August 1934
What policies did Schacht employ as Economic Minister?
- He increased government spending
- He cut taxes
- He implemented price controls
How did Schacht’s policy’s lead to a reduction in the unemployment rate?
Increased government spending created jobs and orders for factories.
When was military conscription reintroduced and what impact did it have on the rate of unemployment?
Military conscription was reintroduced in 1935, this helped to further lower the rate of unemployment.
What was the impact of tax cuts?
By using tax concessions and grants the government stimulated consumer demand. This stimulated more orders for factories and increased the demand for workers.
Why did the government ensure that wages and prices were controlled?
The government ensured that the controlled wages and prices so that inflation was kept under control.
The Nazis encouraged the building of Autobahns to stimulate the economy. By 1942, how many kilometres of road had been built?
3870
How many workers were employed in the building of Autobahns before 1942?
125,000
Why was the Autobahns underused?
Very few Germans owned cars so the autobahns were underused.
Give the unemployment figures for 1932, 1934, 1936 and 1938?
1932 - 5.6 million were unemployed
1934 - 2.3 million were unemployed
1936 - 1.6 million were unemployed
1938 - 0.2 million were unemployed
When was the New Plan introduced and what was its purpose?
- The New Plan was introduced in 1934
- Its purpose was to improve Germany’s Balance of Payments (international trade)
As the German economy recovered, the volume of foreign trade increased but the volume of imports outweighed the volume of exports. What was the impact of this?
Germany operated a current account deficit.
Why was the New Plan implemented and what was its impact?
A shortage of foreign currencies led Schacht to introduce the New Plan: This controlled the number of imports and access to foreign currencies.