A2 History: Hitler’s Germany
Part 3- Hitler’s Economic Policies
The economic situation in 1933
- Short of raw materials (due to the reduction in colonies/land like the Saar/Alsace)
- Little Foreign currency to pay for imports
- 6 million Germans unemployed
- Confidence & therefore investment low
- The worst of the Depression was over before 1933
- Moratorium (suspension) of international debts in 1931/1932
• Adolf Hitler took office in 1933 with no clear economic ideas
• In their program during their rise to power, the party made contradicting promises to:
o Curb the monopoly powers of big businesses
o Abolish department stores (to help small traders)
o Give aid to small businessmen, artisans and farmers
o 1932- he calmed the fears of big businesses by telling them they had nothing to fear
from a Nazi government
Which economic policy to follow? (Aims)
1. A ‘Third way’ between a fully planned socialist economy and completely free capitalist
economy
o A mixed economy of capitalist free enterprise and state-sponsored spending on
public works to reduce unemployment
2. Autarchy (economic self-sufficiency)
o Germany would cut itself off completely from the international trading system, the
government would direct industry and agriculture to bring about self-sufficiency in
food & raw materials
3. Wehrwirtschaft (war economy)
o The organisation of the entire economy towards the needs of a future war
• All of these ideas formed a part of Nazi thinking, but were never coordinated into a
single economic strategy- The Nazi’s then often pursued different contradicting policies
at the same time
Why did Hitler succeed where Weimar had failed?
1. Luck- The Depression was passing by late 1932
2. Psychological effects of ending reparation payments
3. Determination- making employment a top priority
4. Enabling Law- Hitler had no formal constraints on decision making
5. Repression of Trade Unions restored business confidence
1
Notes compiled by: Chew Wen Min
, Nazi Economic Policies in the inter-war years (1933-1939)
Stimulating the economy & The drive for rearmament (Guns or Butter?)
➢ Dr Hjalmar Schacht (1933-1937)
Roles:
• President of the Reichbank (1933)
• Economic Minister (1934)
What he did:
1. Helped with German rearmament- Had the idea of printing Reichsbank credit notes
(mefo bills), which disguised rearmament spending & boost economy
2. ‘New Plan’- froze all interest payments on foreign debts & regulated imports according
to political needs of the regime
o Set priorities over imports and enabled Germany to negotiate bilateral trade
agreements
o Caused a shift from consumer to military production
▪ Production of consumer goods in 1935- 25%, in 1937- 17%
• At the Nuremberg trials, Schacht claimed he tried to oppose gearing the whole German
economy for war. But realising that Hitler was determined to direct the German economy
towards war needs no matter what the consequences were, he resigned in Nov 1937.
o Whilst Schacht wanted a slow build-up of arms in preparation for a lengthy war
whilst encouraging exports, Hitler wanted a speedy build up, which actually
encouraged economic problems
The 4-Year Plan (1936)
• Background: By 1936, the ‘New Plan’ had not solved the need for imports of raw materials to
aid rearmament. There was a raw materials crisis.
• Project leader: Herman Goering (Head of Luftwaffe who knew nothing about economics)
o Th FYP office by Goering clashed with existing economic ministries and intervened
with regulations to control foreign exchange, labour, raw material and prices, much
to Schacht’s discontent
• Aims:
1. To make Germany self-sufficient in food & raw materials
(autarchy)
2. Ready for war by 1940
• Methods:
o Imports to be reduced
o Primary industry (rubber, oil, textiles etc) subsidised
o Developed substitute products (like using coal to make oil-
but it took 6 tons of coal to make 1 ton of oil!)
o Farmers offered incentives to increase food production
▪ From 1936-1940, projects linked to the FYP took up 50% of all industrial
investment in the German economy
2
Notes compiled by: Chew Wen Min
Part 3- Hitler’s Economic Policies
The economic situation in 1933
- Short of raw materials (due to the reduction in colonies/land like the Saar/Alsace)
- Little Foreign currency to pay for imports
- 6 million Germans unemployed
- Confidence & therefore investment low
- The worst of the Depression was over before 1933
- Moratorium (suspension) of international debts in 1931/1932
• Adolf Hitler took office in 1933 with no clear economic ideas
• In their program during their rise to power, the party made contradicting promises to:
o Curb the monopoly powers of big businesses
o Abolish department stores (to help small traders)
o Give aid to small businessmen, artisans and farmers
o 1932- he calmed the fears of big businesses by telling them they had nothing to fear
from a Nazi government
Which economic policy to follow? (Aims)
1. A ‘Third way’ between a fully planned socialist economy and completely free capitalist
economy
o A mixed economy of capitalist free enterprise and state-sponsored spending on
public works to reduce unemployment
2. Autarchy (economic self-sufficiency)
o Germany would cut itself off completely from the international trading system, the
government would direct industry and agriculture to bring about self-sufficiency in
food & raw materials
3. Wehrwirtschaft (war economy)
o The organisation of the entire economy towards the needs of a future war
• All of these ideas formed a part of Nazi thinking, but were never coordinated into a
single economic strategy- The Nazi’s then often pursued different contradicting policies
at the same time
Why did Hitler succeed where Weimar had failed?
1. Luck- The Depression was passing by late 1932
2. Psychological effects of ending reparation payments
3. Determination- making employment a top priority
4. Enabling Law- Hitler had no formal constraints on decision making
5. Repression of Trade Unions restored business confidence
1
Notes compiled by: Chew Wen Min
, Nazi Economic Policies in the inter-war years (1933-1939)
Stimulating the economy & The drive for rearmament (Guns or Butter?)
➢ Dr Hjalmar Schacht (1933-1937)
Roles:
• President of the Reichbank (1933)
• Economic Minister (1934)
What he did:
1. Helped with German rearmament- Had the idea of printing Reichsbank credit notes
(mefo bills), which disguised rearmament spending & boost economy
2. ‘New Plan’- froze all interest payments on foreign debts & regulated imports according
to political needs of the regime
o Set priorities over imports and enabled Germany to negotiate bilateral trade
agreements
o Caused a shift from consumer to military production
▪ Production of consumer goods in 1935- 25%, in 1937- 17%
• At the Nuremberg trials, Schacht claimed he tried to oppose gearing the whole German
economy for war. But realising that Hitler was determined to direct the German economy
towards war needs no matter what the consequences were, he resigned in Nov 1937.
o Whilst Schacht wanted a slow build-up of arms in preparation for a lengthy war
whilst encouraging exports, Hitler wanted a speedy build up, which actually
encouraged economic problems
The 4-Year Plan (1936)
• Background: By 1936, the ‘New Plan’ had not solved the need for imports of raw materials to
aid rearmament. There was a raw materials crisis.
• Project leader: Herman Goering (Head of Luftwaffe who knew nothing about economics)
o Th FYP office by Goering clashed with existing economic ministries and intervened
with regulations to control foreign exchange, labour, raw material and prices, much
to Schacht’s discontent
• Aims:
1. To make Germany self-sufficient in food & raw materials
(autarchy)
2. Ready for war by 1940
• Methods:
o Imports to be reduced
o Primary industry (rubber, oil, textiles etc) subsidised
o Developed substitute products (like using coal to make oil-
but it took 6 tons of coal to make 1 ton of oil!)
o Farmers offered incentives to increase food production
▪ From 1936-1940, projects linked to the FYP took up 50% of all industrial
investment in the German economy
2
Notes compiled by: Chew Wen Min
