Nazi Economic Policy 1933-45

What was the economy based on when Hitler took to power in 1933?

small business

light manufacturing

large numbers of traditional craftsmen, retail shops, and cafes

How many businesses a year had been lost since 1933

100,000

What problems did hitler have to address when he took power?

mass unemployment

restoring agriculture

state investment

winning over the workers

What was unemployment at in 1933?

6 million

Why was state investment necessary?

hitler badly needed to stimulate the economy but it was difficult due to the lack of monetary resources the state had following the removal of US

Why was wining over the workers necessary?

as a class they'd generally not voted NSDAP due to the strength of the socialist parties and their links to trade unions

Who was president of the Reichsbank?

Hjalmar Schacht

Who was minister of economics?

K. Schmidt

Were Schacht or Schmidt nazis?

no - this was a problem for hitler as economic policies were not alligned with his political view

[tackling unemployment] Throughout the 30s hitler had campaigned on a promise of what and how did this affect his policies?

'Arbeit und Brot' - work and bread

he now had to be seen delivering on that promise

[tackling unemployment] By 1936 what had unemployment fallen to?

2.5 million

[tackling unemployment] unemployment was sucessfully reduced in the recovery years. Name the ways hitler did this.

massaging the figures

work creation programme

R.A.D/Reich labour service

general improvement in the world and german economy

rearmament

[tackling unemployment] [massaging the figures] what were the invisible unemployed?

people that had no jobs but were never included in the govt. stats as they were ideologically unsuitable - this was largely responsible for 1933's drop in the unemployed

[tackling unemployment] [work creation programmes] who began them?

Bruning, Von Papen, and Von Schleicher

[tackling unemployment] [work creation programmes] were the successful and why?

had little success due to the lack of funds available at the height of the depression

[tackling unemployment] [work creation programmes] when did they expand and become more used by the govt.?

June 1933 - Law to Reduce Unemployment

[tackling unemployment] [work creation programmes] State expenditure on construction rose from what in 1933 to what in 1938?

18.4 billion RM to 37.1 billion RM

[tackling unemployment] [work creation programmes] What was a particular part of this programme?

the Autobahn Law of 1933

[tackling unemployment] [work creation programmes] Who began the autobahn law and when?

September 1933 - Fritz Todt

[tackling unemployment] [work creation programmes] By decemeber 1941, when wartime needs brought construction to a halt, Germany had completed how many km of the autobahns?

2500

[tackling unemployment] [work creation programmes] How many jobs was the autobahn construction mean to create?

600,000

[tackling unemployment] [work creation programmes] At its height, how many were employed under autobahn construction?

120,000

[tackling unemployment] [work creation programmes] What was the construction itself marked with?

sickness, death, hunger, misery, and regular strikes - tho the public was not told this

[tackling unemployment] [R.A.D] when was it started?

1932

[tackling unemployment] [R.A.D] What did a law passed in June 1935 say?

made 6 months labour compulsory for all men 19-25 and was eventually extended to women in 1939

[tackling unemployment] [R.A.D] What made it unsuccessful?

poor conditions

low pay

barrack style living away from home

[tackling unemployment] [R.A.D] What did it manage to achieve?

removed people from the 'official unemployment figures'

[tackling unemployment] When did rearmament start secretly?

1933

[tackling agriculture] What image of the peasants was presented as propaganda to the german people?

the 'blood and soil' image as the racial stock of the Herenvolk

[tackling agriculture] Why did Hitler like the peasants so much?

• they provided the backbone of Hitler's electoral support

• were needed for his later drive for self-sufficency in food

[tackling agriculture] Who was the minister of Agriculture and Reich Peasant Leader?

Darre

[tackling agriculture] When was the Reich Food Estate Office and what did it do?

September 1933 - took control of the overall planning and organisation of agriculture

[tackling agriculture] What did the Reich Food Estate Office control and organise?

controlled food imports and organised quotas and distribution

[tackling agriculture] What were farmers attitudes to the Reich Food Estate Office?

much resented by farmers

[tackling agriculture] What was the Battle of Agricultural Production (1934)?

Propaganda encouraged the peasantry while subsidies were used in an attempt to increase production, especially grain

[tackling agriculture] Was the Battle of Agricultural Production (1934) successful?

largely unsuccessful due to the lack of new machinery, labour, and poor harvest

[tackling agriculture] What was the Reich Entailed Farm Law (1934) intended to do?What

• keep the peasants on the soil as the 'blood spring' of the race

• help increase production, particularly in the drive for autarky

[tackling agriculture] What did the Reich Entailed Farm Law (1934) prohibit?

outlawed the selling of farms, which resulted in farms staying the same (usually small size), nor could they be split between children

[tackling agriculture] What was the ultimate result of the Reich Entailed Farm Law (1934)?

a flight from the land began into the major cities, where industrial work was better paid and appeared more stable

[tackling agriculture] There was a sharp deterioration in peasant morale despite farmers' income rising by how much?

41% up to 1937

[tackling investment] What were MEFO bills?

credit notes issued by the Reichbank and guaranteed by the govt

[tackling investment] What did MEFO bills allow the govt to do>

allow the govt. to continue to invest, though it lacked the real

[tackling investment] How did MEFO bills work?

They were to be converted in Reichmarks and payable, with interest after 5 years from hopefully increased tax revenues

[tackling investment] By 1937 how many RM had the govt, paid out in MEFO bills?

12 billion - funded half of Germany's rearmament programme while disguising military expenditure

[tackling investment] What was the consequence of MEFO bills on businesses?

Many large companies could cope with the deferred payments however smaller firms struggled and many went bankrupt due to the slow repayment of debts by the state

[winning over the workers] what two schemes established by the German labour front?

Strength through joy (kdf)

beauty of work

[winning over the workers] What was the strength through joy campaign?

created a host of leisure and social activities for the workers to participate in

[winning over the workers] What was the beauty of work campaign?

focuses on improving working conditions

[winning over the workers] Between 1936 and 1939 it appeared wages were increasing, why was this?

only because the working day had increased as rearmament sped up

[winning over the workers] by 1939, what had happened to 'real wages'

'real wages' had fallen as the cost of living had continued to rise, with only big business owners seeing any financial benefit from supporting the regime

What lead to a balance of payment crisis?

As govt. expenditure grew and the economy began to grow there was growing demands for imported goods

What did the army want?

an increased share of raw materials for rearmament and pressed for an 'economic dictator'

What did Hitler do as a concession to the army and big business?

appointed schacht as economic supremo

When was schacht appointed economic supremo and what power did this give him?

July 3rd 1934 - gave him dictatorial powers over the economy

When and what was Schacht's response to the economic crisis?

'New Plan' - September 1934

What happened to govt. imports under the New plan?

controlled through strict supervision of foreign exchange - cut substantially

What trade agreements were made under the New Plan and why?

Bilateral trade Agreements - Germany sought closer economic ties with South East Europe

What method was used to trade under the New Plan?

much of the trade was done on a simplistic barter system to avoid the necessity of formal currency exchange

What was done to the currency under the New Plan?

regulated - Germany only agreed to purchase foreign goods on the condition that the reichmarks could only be used to buy back German goods

What happened to Mefo bills under the New Plan?

continued to be used

Despite on face value the New Plan looking like a success, what was the problem with it?

it only hid fundamental structural weaknesses which would come to head again in 1936 as the pace and demands of rearmament grew

What two things led hitler to take an important new turn in the economy?

• balance of payment crisis of 1935 and 1936

• Guns vs Butter

What was the Guns vs Butter debate?

emerged following balance of payments crisis

Schacht suggested a reduction in arms spending because consumer goods could be exported to earn foreign exchange

Why did Hitler not approve of the Butter strategy?

made a lot of economic sense but NOT ideological sense

What did Arms production fall to in 1936 as a result of Guns vs Butter?

70% of 1935's levels

When was the Four Year Plan introduced?

October 1936

Who devised the four year plan?

Goring

From the point of the introduction of the four year plan what was the economy driven by?

political/ideological demands NOT economic ones

What happened to Schacht as a result of the four year plan?

Left him marginalised.

He would continue in the post for another 12 months becoming increasingly frustrated by Goring's 'amateur' approach, before resigning in 1937

Who did Goring rely on after being given over sight on all economic ministeries?

dominant figures from big business to help him guide the economy - Carl Krauch of I.G. Farben

What was the organisation of the four year plan like?

not clearly co-ordinated

haphazard collection of separate policies

What type of war was the economy being prepared for under the four year plan?

a short-term, blintzkreig-type war, not a long total war of economic attrition

What was a key driver behind the four year plan?

Autarky - self sufficiency

What were Hitler and Goring convinced of the need for in order to achieve Autarky?

Erzats produts

What was another key driver behind the four year plan?

the need to control big business

What happened to companies under the four year plan and what was this known as?

remained in private ownership, but the free market and business independence was lost to increasing state control - COMMAND ECONOMY

by 1939 Germany had a peacetime economy employing what percentage of its work force on war related products?

40-50%

Impact on peasantry under Nazi peacetime economy? [3]

• saw more regulation (Reich entaied farm law)

• however production of grain would increasing during autarky

• constant battle due to labour shortages

Impact on the mittelstand (small business) under Nazi peacetime economy? [2]

• figured largely in Nazi support