The economic recovery Of 1933-36 Incl Schacht’s New Plan Flashcards
When was Dr Hjalmar Schacht appointed as President of the Reichsbank?
March 1933
What was Schachts main aims for the New Plan
Reduce unemployment and increase consumer confidence
A balanced economy which advanced on all fronts and not solely focused on war prep
How did Schacht fall out w Hitler
Advocating a reduction on armaments expenditure and more focus on consumer goods
What did Hitler tell his cabinet on Feb 1933
“For the next four to five years the main principle must be: everything for the armed forces”
Why was Hitler somewhat obligated to focus on the economy
Election promise of ‘Arbeit und Brot’ that got him into power and must have a good economy
When did Hitler tell his cabinet: “for the next four to five years the main principle must be: everything for the armed forces”
Feb 1933
By 1935, unemployment fell to just over
2 million
How was unemployment reduced
Through large work creation projects
When was the RAD established?
1935
What was the RAD
National Labour Service
How was the RAD compulsory?
Compulsory for men 19-25yo to work on projects for 6 mts
How much was invested in the RAD?
5 billion RM
When was conscription intro
1935
What were the bilateral trade agreements made by Schacht?
Bilateral trade agreements with the Balkan states and South America where the import of foreign goods was conducted by barter
What was the advantage of the bilateral trade agreements?
- Reduced foreign currency demand
- eliminated the risk of running up foreign debt
- increased exports
What were mefo bills?
Issued by the govt to help pay for goods.
Held by investors/banks as short-term loans that could be exchanged for cash or held up to 5yrs ensuring 4% interest per yr
How did mefo bills help the economy?
Financed increased public expenditure without causing inflation, encouraging demand
Helped enable rearmamenr
How did mefo bills help with rearmament?
Credit notes provided to armaments manufacturers instead of payment
How much of rearmament was financed by mefo bills?
1/2 rearmament program financed in this way between 1934-36
GNP rose by 100% in what years
1933-37
When did industrial production increase by 49.5%?
1933-35
Industrial production increased by 49.5% when?
1933-35
What did bilateral trade agreements help reduce/
Balance of payments
By the end 1933, how many reichsmarks were poured into public works schemes including housing, railways and autobahns
3000 million
Why did Schacht use deficit financing?
Thought it would benefit G economy in long term by ensuring people had mo[ney to spend on goods and services
Con of Schachts deficit financing thru mefo bills
Put govt further in debt than Schacht let be known
Schacht gave priority to imports of ——
Raw materials; non-essential items imported in much smaller quantities
G farms not producing significant agricultural produce by when
Winter 1935
What did Darré unsuccessfully ask Schacht for/
Import items from abroaf
In the aftermaths oh Gorings arbitration in Darré’s favour, what did Schacht realize?
New Plan not a lasting solution as impossible to reconcile completing Nazi demands of ‘Guns Vs Butter’
Schacht less successful as building on actions of who? How?
Bruning and von Papen who had
- ended reparations
- intro spending cuts so start hitlers dictatorship worst of depression over
How did Schachts successes disguise fundamental structural weaknesses?
- women and Jews not on unemployment register
- mefo bills a short-term cheat
- Schacht not fully honest abt extent of govt debt
What happened as the pace of rearmament grew?
German imports sucked in
