Recovery
Policies
- Promised in 1933 to solve unemployment in 4 years
- Government spending to reinflate the economy: public works, subsidies to private firms, rearmament
orders
- Public works schemes, involved public investment, led by the state, 1 billion Reichsmarks were invested
Problems
- Balance of payments deficit: economy recovery led to rising demand for consumer goods, reamend led to
increased demand raw materials
- World protectionism + high value of the mark = hard to increase exports
- Danger of inflation due to increased demand and money supply
Polices
- 1934 New Plan: controls on currency and bilateral trade agreements
- Government control of wages, prices
- Government tripled public investment 1933-36 and increased government expenditure by 70%
- Subsides for farmers from Reich Food Estate
Problems
- Disagreements over priorities guns vs butter
Rearmament
Polices
- 1936 Four Year Plan: prepare for war, autarky by expanding domestic production, developing substitutes,
expanding abroad (Austria, Czechoslovakia)
- Extended government controls
- Expanded rearmament
- 1935 Introduction to conscription, lowered statistics of unemployment
- Voluntary Labour Service established 1931 by 1935 employed 500,000 men
- Law for the Reduction of Unemployment – removed women from job market by offering marriage loans
Problems
- 1939 danger of economy overheating due to labour and raw material shortages and some prices rising
Wartime Economy
Policies
- Initially successful Blitzkrieg 1939-41
- Attempts to organise Total War Economy with large increase in production 1942-45 conflict with USSR6
,The Performance of the economy under the Nazis
1929 – 6 million unemployed, industrial production back to levels of the 1890s
1932 – end of reparations, Autobahn opened, lowest point of Great Depression
1933 – recovery after the Great Depression
1935 – 2 million unemployed
1938 – virtually full employment, women and jews not counted, conscription
1939 – unemployment erased by the war
Hitler’s priority was creating a wehrwirtschaft - a defence economy prepared to the needs of a future war
Schacht – Key Figure 1933 – 39 (Recoevry)
Policies
- Focus on economic recovery from the depression
- Public spending, public work schemes, autobahn, homes, reduce unemployment
- Subsidies to private firms to take on more workers
- Controlled wages and prices
- Tax concessions on particular groups (farmers), more money to spend on goods
- 1935 Reich Labour Service, unemployed men had 6 months labour
- Mefo bills to finance rearmament
Schacht’s New Plan 1934
- increased foreign trade meant shortage of foreign currency
- New Plan: government control on trade, tariffs, capital, currency
- bilateral trade agreements - Balkans, South America
- Germany paid in Reichsmarks which countries had to use to buy German goods, strengthening German
economy
Mefo Bills
German government paid credit notes to businesses, encouraged them to wait 5 years to get the money by
offering high interest rates 4%. Meant rearmament could be started before the government had the funds,
secret, Schacht
, Goering (Rearmament) 1936 - 1940
- Autarky – economic self-sufficiency
Four Year Plan
Aims:
- Increase rearmament (less reliance on imports)
- Economic autarky
- Make Germany ready for war
o Increase production of key commodities
o Establish state owned industrial plats (steelworks)
o Managed economy – controls on labour, prices
o Regulate imports + exports to prioritise rearmament
o Set targets for private companies
o Move to Total War economy
Not all targets were met – 1939, 1/3 of raw materials from abroad
Successes: reached aims of production of aluminium, explosives
Problems, supply:
- Supply problems meant armed forces suffered from shortages
- By 1941, this started to hinder the war effort
- Hitler did not anticipate war starting in 1939, was not his plan
- Suffered from structural weaknesses
- Armament production increased 21% to 55% between September 1939 – January 1941
Problems, politics:
- Goering, lacked technical and economic knowledge
- Goering, poor relations with military leaders and companies, focused on his own economic
- Goering incapable of providing centralised coordination
Failings 1939 – 40 were masked by military successes.
By 1941, weaknesses of the Four Year Plan were apparent.
Policies
- Promised in 1933 to solve unemployment in 4 years
- Government spending to reinflate the economy: public works, subsidies to private firms, rearmament
orders
- Public works schemes, involved public investment, led by the state, 1 billion Reichsmarks were invested
Problems
- Balance of payments deficit: economy recovery led to rising demand for consumer goods, reamend led to
increased demand raw materials
- World protectionism + high value of the mark = hard to increase exports
- Danger of inflation due to increased demand and money supply
Polices
- 1934 New Plan: controls on currency and bilateral trade agreements
- Government control of wages, prices
- Government tripled public investment 1933-36 and increased government expenditure by 70%
- Subsides for farmers from Reich Food Estate
Problems
- Disagreements over priorities guns vs butter
Rearmament
Polices
- 1936 Four Year Plan: prepare for war, autarky by expanding domestic production, developing substitutes,
expanding abroad (Austria, Czechoslovakia)
- Extended government controls
- Expanded rearmament
- 1935 Introduction to conscription, lowered statistics of unemployment
- Voluntary Labour Service established 1931 by 1935 employed 500,000 men
- Law for the Reduction of Unemployment – removed women from job market by offering marriage loans
Problems
- 1939 danger of economy overheating due to labour and raw material shortages and some prices rising
Wartime Economy
Policies
- Initially successful Blitzkrieg 1939-41
- Attempts to organise Total War Economy with large increase in production 1942-45 conflict with USSR6
,The Performance of the economy under the Nazis
1929 – 6 million unemployed, industrial production back to levels of the 1890s
1932 – end of reparations, Autobahn opened, lowest point of Great Depression
1933 – recovery after the Great Depression
1935 – 2 million unemployed
1938 – virtually full employment, women and jews not counted, conscription
1939 – unemployment erased by the war
Hitler’s priority was creating a wehrwirtschaft - a defence economy prepared to the needs of a future war
Schacht – Key Figure 1933 – 39 (Recoevry)
Policies
- Focus on economic recovery from the depression
- Public spending, public work schemes, autobahn, homes, reduce unemployment
- Subsidies to private firms to take on more workers
- Controlled wages and prices
- Tax concessions on particular groups (farmers), more money to spend on goods
- 1935 Reich Labour Service, unemployed men had 6 months labour
- Mefo bills to finance rearmament
Schacht’s New Plan 1934
- increased foreign trade meant shortage of foreign currency
- New Plan: government control on trade, tariffs, capital, currency
- bilateral trade agreements - Balkans, South America
- Germany paid in Reichsmarks which countries had to use to buy German goods, strengthening German
economy
Mefo Bills
German government paid credit notes to businesses, encouraged them to wait 5 years to get the money by
offering high interest rates 4%. Meant rearmament could be started before the government had the funds,
secret, Schacht
, Goering (Rearmament) 1936 - 1940
- Autarky – economic self-sufficiency
Four Year Plan
Aims:
- Increase rearmament (less reliance on imports)
- Economic autarky
- Make Germany ready for war
o Increase production of key commodities
o Establish state owned industrial plats (steelworks)
o Managed economy – controls on labour, prices
o Regulate imports + exports to prioritise rearmament
o Set targets for private companies
o Move to Total War economy
Not all targets were met – 1939, 1/3 of raw materials from abroad
Successes: reached aims of production of aluminium, explosives
Problems, supply:
- Supply problems meant armed forces suffered from shortages
- By 1941, this started to hinder the war effort
- Hitler did not anticipate war starting in 1939, was not his plan
- Suffered from structural weaknesses
- Armament production increased 21% to 55% between September 1939 – January 1941
Problems, politics:
- Goering, lacked technical and economic knowledge
- Goering, poor relations with military leaders and companies, focused on his own economic
- Goering incapable of providing centralised coordination
Failings 1939 – 40 were masked by military successes.
By 1941, weaknesses of the Four Year Plan were apparent.
