The economic recovery

Question 1

Hitler was careful not to become tied down to the details of what policies?

Answer 1

Economic policy

Question 2

In February 1933, what did Hitler tell his cabinet in reference to economic policy?

Answer 2

‘avoid all detailed statements concerning an economic programme of the government’

Question 3

Hitler was politically astute enough to realise that the survival of the dictatorship depended on what ?

Answer 3

Bringing Germany out of depression

Question 4

At first, the Nazi economic policy was under the control of who?

Answer 4

Hjalmar Schacht

Question 5

Why was the Nazi economic policy at first under Schacht?

Answer 5

The Nazi leadership still needed to work with the economic elites

Question 6

Schacht was already what?

Answer 6

A respected international financier because of his leading role in the creation of the Rentenmark

Question 7

Was there a single, easy quick fix solution to the economic problems?

Answer 7

No

Question 8

The heart of recovery lay in the what and led by who?

Answer 8

In the major revival of public investment led, by the most part, by the state itself

Question 9

What did the state embark on?

Answer 9

A large-scale increase in its own spending in an effort to stimulate demand and raise national income

Question 10

Under Schacht’s guidance and influence, what was adopted through a range of economic measures?

Answer 10

Deficit financing

Question 11

Initially, why did the state increasingly assume greater responsibility for the control of capital within the economy?

Answer 11

Because the German banking system had been so fundamentally weakened

Question 12

What did the state proceed to do to interest rates and debts of local authorities?

Answer 12

Set interest rates at a lower level
Reschedule the large-scale debts of local authorities

Question 13

Why were particular financial benefits given to businesses?

Answer 13

To stimulate economic growth and also to reward some of the most sympathetic supporters of the Nazis in the election

Question 14

What were some of the measures given for assistance for farming and small businesses?

Answer 14

Maintenance of tariffs on imported produce to protect German farmers
Subsidies from Reich Food Estate in a nationally planned agricultural system
Reich Entailed Farm Law, tried to offer more security of land ownership to small farmers: debts reduced by tax concessions and lower interest rates
Allowances to encourage the rehiring of domestic servants
Allocation of grants for house repairs

Question 15

What was renewed in June 1933?

Answer 15

Law to Reduce Unemployment

Question 16

Law to Reduce Unemployment was a scheme originally started by who, and when?

Answer 16

Papen in 1932

Question 17

The RAD was extended to what?

Answer 17

To employ 19-25 year olds

Question 18

Give examples of the state and their range of investment projects.

Answer 18

RAD extended employment
Renewal and expansion of the Law to Reduce Unemployment

Question 19

For a long time most historians believed what was the main focus of investment?

Answer 19

Rearmament

Question 20

Figures for public expenditure show that the main focus of investment was initially spread between what?

Answer 20

Rearmament
Construction
Transportation

Question 21

Investment in the first three years was directed towards what? And give examples

Answer 21

Work creation schemes
e.g.
Reforestation
Land reclamation
Road improvement
(e.g. motorways)
Expansion of the housing sector and public buildings

Question 22

The cumulative effect of these policies was to what ?

Answer 22

Triple public investment between 1933 to 1936 and to increase government expenditure by nearly 70%

Question 23

How was the economic recovery by 1936?

Answer 23

Well advanced

Question 24

After 1936, the emphasis began to turn towards what?

Answer 24

Rearmament

Question 25

How many people were unemployed in January 1932?

Answer 25

6 million

Question 26

How many people were unemployed in 1936?

Answer 26

2.1 million

Question 27

Why, even by 1936,did government public deficit not run out of control?

Answer 27

Schacht maintained taxes at a relatively high level and encouraged private savings in state savings banks

Question 28

What foreign factors positively effected the German economy?

Answer 28

All of it took place as the world economy began to recover
Aided by the natural upturn from the low point of winter 1932

Question 29

What two underlying worries were there despite the impressive economic recovery?

Answer 29

Rapid increase in demand would rekindle inflation
Lead to a balance of trade deficit

Question 30

Why did the problem of inflation never materialise?

Answer 30

Lack of demand in the economy
Regime established strict controls over prices and wages

Question 31

What helped the regime establish strict controls over prices and wages?

Answer 31

Abolition of the trade unions

Question 32

Explain the recurring problem with the balance of payments which first appeared in the summer of 1934

Answer 32

Consequence of Germany’s importing more raw materials while failing to increase exports
Gold and foreign currency reserves = low

Question 33

The early economics minister, Schmitt, wanted to reduce unemployment further by what?

Answer 33

By manufacturing more consumer goods
But powerful voices in armed forces and big businesses were already demanding more resources for major programmes, e.g. rearmament

Question 34

Why was Schmitt’s policy consequently rejected and he removed?

Answer 34

Hitler couldn’t ignore such pressure, esp. as economic problem coincided w/ pol. dilemma over SA

Question 35

What did Schmitt’s removal allow Schacht to do?

Answer 35

Combine the offices of minister of economics and president of the Reichsbank

Question 36

By the law of 3rd of July Schacht was given what?

Answer 36

Dictatorial powers over the economy

Question 37

Schacht used his new powers over the economy to introduce what?

Answer 37

The ‘New Plan’ of September 1934

Question 38

What did the ‘New Plan’ of September 1934 provide?

Answer 38

A comprehensive gov. control of all aspects of trade, tariffs, capital and currency exchange in attempt to prevent excessive imports.
Gov. decided which imports were allowed or prohibited

Question 39

The economic priorities were set by what series of measures?

Answer 39

Trade treaties
Reichsmark currency
Mefo Bills

Question 40

Explain trade treaties

Answer 40

Tried to promote trade & save foreign exchange by signing bilateral trade treaties, esp. w/ south-east Europe
Took form of straightforward barter agreements
In this way, Germany exerted eco. influence over the Balkans long before it obtained military and pol. control

Question 41

Explain the Reichsmark currency

Answer 41

Germany purchased raw materials from countries it traded w/ on condition that Reichsmarchs could only be used to buy back German goods
(at 1 time = est. Reichsmarch had 238 diff. values depending on country and circumstances)

Question 42

Explain Mefo bills

Answer 42

Mefo = special gov. bills designed by Schacht
Issued by Reichsbank and guaranteed by gov. as payment for goods, deferred for up to 5 years, earning 4% interest per annum
Main purpose was that they successfully disguised gov. spending

Question 43

Was Schacht an official member of the Nazi party?

Answer 43

No

Question 44

By mid 1936 what happened to unemployment, industrial production and GNP

Answer 44

Unemployment fallen to 1.5 million
Industrial production increased by 60% since 1933
Gross National Product grown over the same period by 40%