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The role of government policies in economic change, 1871– 1990 (key developments: the introduction of protection 1879, the building of a large navy from 1898 to 1914, the impact of Nazi policies, the impact of Marshall Aid, the impact of membership of the European Community and the Common Agricultural Policy post-1956).
What was the capaign for protective tarrifs in 1879 in response to?
A slowdown in the german economy
Why did the German economy slow? X2
Expanded too quickly
Too many businesses had been set up that weren’t sustainable in the long term
How many German companies went bankrupt in 1873?
150
Why did Germany become reliant on imports in early 1873?
Russia and the USA became major exporters of wheat
Poor German harvests
Who went bankrupt as a result of German wheat prices and exports declining?
Small farms
What pressure group was formed in 1876 to put pressure of Bismarck+ Government to introduce reform?
Central Association of German Industrialists
What did the Central Associaiton of German Industrialists point to in why the nation needed reform?
The worldwide economic downturn had seen the majoirty of industrialised nations introduce tarriffs
Who opposed tariffs? X2
Political Parties
German Parliament
What bill was defeated in 1876 regarding imports?
Tariffs on Pig Iron imports
Why did Bismarck become interested in pursuing tariffs?
A long-term price slump could threated Junker wealth
Who was Bismarck reliant on in the Reichstag?
National Liberals
What did calls for tariff reform provide Bismarck the oppurtunity to do?
Break apart the national liberals
How did Bismarck split the national liberals?
In the 1878 election campaigned that tarriff was patriotic and those who backed free trade were working against Germany
What supported left the national liberals as a result of Bismarck labelling them as working against the German state? X2
Small farmers
Peasantry
Who did farmers and peasantry back instead of national liberals?
Conservative backed by Bismarck
What did Reichstag pass in 1879 regarding trade?
Protective tariff law
Who backed the protective tariff law? X2
Right-Wing National Liberals
Centre Party
What had Bismarck achieved by splitting the national liberals?
Strengthened the Conservatives
Weakened National Liberals
Who was dissapointed due to the Tariff introduced on Iron?
Heavy Industry as it was lower than those on agriculture
Who grew closer as a result of the tariff reform?
Industrialists and the Junkers
What was the special relationship between Junkers and Industrialists become known as?
‘Alliance of Steel and Rye’
What did the Tariff reform do for Germany? short term
Boosted the price of German agriculture
revitalise industry by strengthening the domestic market
What did the tariff reform do for Germany in the long term?
Lack of cheaper imports of Russian wheat meant bread cost went up leading to resention from German workers deepening class divide as the wealthy were seen to benefit at the cost of working class
What country did Kaiser Wilhem II want Germany to be able to compete with in 1888?
British Navy
What did the Kaiser invest in to rival Britain?
Construction of a powerful navy
What classes supported Naval Expansion? X2
Middle Class
Academic Classes
Who did the Kaiser promote as the Secretary of State for the Navy in early Germany?
Admiral Alfred Tipirtz
What did Admiral Alred Tipirtz do when he became secretary?
Navy League
What was Admiral Alfred Tipirtz Navy League?
A pressure group to gain support for Naval Expansion
What Bill did Admiral Tipirtzz introudce in 1989?
Proposal to build 19 ships in 7 years
What was the voting result of Admiral Tipez Navy bill?
Pass 212-139
Was the Kaiser content with 19 ships being built
No and in 1900 introduced a second bill
Was the Kaiser Bill to build 36 ships accepted?
Yes and more bills in 1906,1908,1912
Who did Germany have the largest Navy after in 1914?
Great Britain
What did Great Britain see Germanies large navy as?
A challenge to its naval superiority
An arms race was established
Who else saw Germanies naval expansion as a threat?
France
Russia
Did the naval expansion unite the middle class in support for the ruling class as planned?
No showing by SPD becoming largest party in 1912
What are some of the challenges faced by the Weimar republic post WW1? X4
140 million mark debt
Loss in currency value
Loss of Sarrland and Upper Silesia in Versaille treaty
Imposition of Repayment
What was there an expansion in Werimar? X3 minimal but
Expansion of manufacturing
Investment in industry
Recovery of imports after the war at a consdierable rate
Why was the decline in imports worse for Germany?
They were reliant on exports
What was unemployments peak?
6 million in 1932
What grew due to unemployment?
Private extremist parties
What was Hitlers first major economic decision?
Dr Kjalmar Schacht as president of the Reichstag
When was Dr Kjalmar Schacht appointed president of the Reichsbank?
16 March 1933
What else was Dr Kjalmar Schacht alongside president of the Reichsbank?
Reich Minister of Economics
When was Dr Schacht Minister of Economics alonside President of the Reichsbank?
1934-1937
Was Schacht experienced economically?
Yes-
Financial Expert
President of the Reichsbank in 1920s
What was one of Schachts first policies?
Overhaul of Germanys banking system to avoid another banking collapse in the future
What did Schacht establish to oversee and regulate Germany out of Great Depression?
New Supervisory Office for Banking
What did Schatch advise to get Germany out of the Great Depression?
Considerable spending on public investment and going into debt to revitalise the economy
How many Marks were invested into the German economy between 1933 to 1935
5000 million
What were 5000 million marks invested into?
Public works programmes
How much did unemployment fall by from 1934-1935 due to public work programmes?
2.7 million
1.7 million
What are Mefo Bills?
Government contracts to large industrial companies which were not paid in cash but instead as government agreed credit
When were Mefo Bills to be payed?
4 years into the future
Why did Schacht make use of Mefo Bills?
To restart the economy without causing inflation
What were the 2 advanatges of Mefo bills?
Hid the government debt from the German people
Spend without inflation
How much worth of Mefo Bills did the Reicsbank issue to German infustry?
12000 million marks
What % of arms did Mefo bills finance from 1934-1936
50
How many firms did the armed forces place for military equipment from 1933 onwards?
2800
How was rearmament hidden from the world?
Tank contracts were disguised as tractor-building
Planes for the Air Force were disguised as commercial planes
Employment in the armaments boomed
What problem did Germany importing raw materials required for rearmament in huge amounts without exporting exports lead to?
Balance of payments
What worsened the balance of payments?
Greater spending power of German people as more was needed to import
What did Schacht introduce to solve the balance of payments issue?
The New plan
When was the new plan introduced?
1934
What did the ‘New plan’ consist of?
Regulating German imports by signing agreements with south-eastern european contries and Latin America
What were the imports bought with?
German marks
What were the countries that exported to Germany to do with the marks they were given?
Only spend to buy German goods
Invest in German industries
Why did South/Eastern European countries enter in these deals with Germany?
Needed a market for their goods and Germany required lots of raw materials
What was the political purpose of the ‘New Plan’?
Made the economic well-being of these smaller nations dependent on Germany
What was the primary aim of German economy from 1933-1936?
Overcoming the Great Depression and Overcoming unemployment
What did the German economy shift from in 1936 onwards?
Massive rearmament
Drive to war
When was Schacht sideline and evetually resigned?
1937
Who directed the economy after Schacht?
Herman Goering as leader of the four-year plan
Why was Schacht sidelined?
Argued that there should be greater focus on consumer products rather than just rearmament as now lots of employment but no where to spend the money
Was the four year plan sucessful?
miixed sucess:
improved military capability but not at rate Hilter had demanded
Improved Germanys production of synthetic fuels
How much did the production of synthetic fuels improve by?
130%
How much of the overall demand did Germanys production of synthetic fuels make up despite improving by 130%
18%
What did Hilter make Goering focus on?
4 year plan prep for war
What of Schachts advice was ignored under Goering as president of Reichbank?
Concerns over deficit spending
What increased as government increased armaments expenditure?
Public debt
What did Hitler do to prevent inflation?
Restrict wage increases
Ban of mortgages
Was Germany ready for war in 1940s?
No said they would be ready in 1942
When was the Nazi Economy becoming increasingly unsustainable?
1939
Why was the Nazi Economy unsustainable from 1939?
Rearmament whilst restricting consumer spending by keeping wages down
Increasing taxation
The German population was growing but houses weren’t
Were Nazis early victories beneficial to Germany domestically?
YES as made the burden on the economy bearable
theWhen did thw Nazi economy slow and the demand of the military increease showing the cracks in Germany?
1941 when the USSR invaded
What was a major issue for Germany once they entered the war?
Hilters governing style
Why was Hitlers governing style negative? X2
Little cohesion
Little attempt to rationalise the economy
What 3 agencies had overlapping control over the war economy?
Ministry of Munitions
Ministry of Economics
Ministry of War
When did munition production decline and why was this ironic?
1941
He had grandiose plans for German military
Why did munition production decline in 1941?
Hitler opposed forced employment of women on ideological grounds
Feared a significant reduction of consumer goods would lead to the opposition of the German people towards the regime
What did Hitler demand in 1940 and who did he appoint to do this?
Massive increase in military production and appointed Fritz Todt
What was the role of Fritz Todt ?
Minister of Armaments and Munitions to streamline economic confusion
What did Fritz Todt do? X2
Rationalised arms production by freeing from military and 4-year plan the
Central planning of raw materials placed under speer
By 1943 what % higher was armaments production per head than 1939?
32%
How did Speer improve productivity? X3
Reduce tank/vehicle models
Assembly lines
Use of factory floor space
By how much did Speer increase the production for planes?
200%
By what % did the manufacture of munitions per workers rise by between 1939-1944?
60
By how much did the production of weapons increase by betweeen 1939-1944 despite how much did workers decrease by?
130%
11%
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Flashcard (32)