PUBLIC WORKS

• One billion Reichmarks were invested in these schemes, which saw the building of roads, canals and houses

• Car industry was encouraged by tax concessions, 40% increase in production

• Introduced conscription in 1935, which helped to absorb a large number of young employed

• VOLUNTARY LABOUR SERVICE: removed young people from the labour market and, by 1935, employed some 500,000 men

• LAW FOR THE REDUCTION OF UNEMPLOYMENT: succeeded im taking some women out of the labour market by offering loans to those about to marry if they gave up their jobs

• Policies seem to be a great success at first as by 1938 there was virtually full employment

• Unemployment had fallen to 2.5 million by 1934 it did not fall again until 1936 following the introduction of conscription and the rearmament in 1935

• REICH LABOUR SERVICE: 18-25 year-old men had to do six months work service, was not only poorly paid but involved hard labour, often in poor conditions

• Although statistics suggest that the problem was solved, it does not consider human effects

SCHACHT’S NEW PLAN

• President of the Reichsbank from 1933 to 1939, was appointed Minister of Economics from 1934 to 1937

• Encouraged heavy state spending, following a policy of deficit financing which resulted in government spending rising by 70% between 1933-36

• Balance of trade deficits Germany was importing more raw materials and failing to increase its exports, which resulted in a shortage of money

• NEW PLAN (Sep 1934): gave the government control over all trade, tariffs, capital and currency exchange

• Meant that the government could decide which imports were allowed with priority given to those for heavy industry

• Bi-lateral trade treaties were signed, particularly with South-East Europe and South American, through which German purchases were paid for in Reichsmarks, which the countries then had to use to buy German goods.

• Rapid increase in spending created the prospect of inflation, but this was avoided through the introduction of Mefo bills

• These were credit notes to pay manufacturers of military equipment- used to raise funds by offering them at 4% interest rate on the money market

• Banks were forced to invest in them

• Despite the raising of funds for rearmament, the demand this created for imports meant that the balance of payments problem was worsening by 1936

• Schacht argued that arms expenditure should be reduced and the production of industrial goods increased so that there was more to sell, leading the ‘guns or butter debate’

• Hitler rejected Schacht’s argument and appointed Goring as Commissioner for Raw Materials and Currency

GORING’S FOUR YEAR PLAN

• Increase armaments production and also achieve autarky, so that Germany was producing its own food and industrial goods.

• The plan set out to increase agricultural and industrial production, develop ersatz and regulate imports and exports so that armaments were favoured over agriculture

• Hitler was moving towards creating a total war economy and that he was contemplating large-scale rather than localised war

• Goring was given responsibility for rearmament, with the result that Schacht resigned in NOV 1937

• One of the aims of the plan was to increase the production in kye war industries, such as synthetic rubber, fuel, oil, and iron ore

• Large plants were built in order to achieve this and, in 1938, after the Anschluss, Austrian companies were taken over

• Take over of the Skoda works in Sudetenland, after annexation

• Industrial production rose, and at a considerable rate in some industries, such as alumunium

• However, most targets were not met, particularly those for oil and rubber

• Demands of the armed services were not satisfied

• 1939- Germany still relied on foreign supplies for one-third of its raw materials and therefore although the economy was dominated by preparations for war, it was not ready for total war

CONSCRIPTION, REARMAMENT AND WAR

• Reintroduced in 1935

• Large-scale rearmament had created a number of problems

• There were growing shortages in many areas, including food, consumer goods, and raw materials

• Balance of trade was in a perilous state and had become difficult to finance

• Labour shortages, particularly among skilled workers and this pushed up wages

• Expenditure and the deficit had grown and the government was finding it increasingly difficult to finance

• Hitler would not countenance any restraint on rearmament

• Discontent among the working class and it has been suggested pushed Hitler into war in 1939 as the only way out of an economic crisis

• Difficult to argue that the Nazi economy had not been directed towards war as some two-thirds of German investment had been directed to rearmament

• 1939- the German economy was dominated by war preparations

• However, it can be argued that the preparations had been for short wards of conquest

• Long war would create problems in producing sufficient raw materials and would lead to a reduction in the production of consumer goods

• The economy was not ready for the war that Hitler had to fight, which was due to diplomatic developments that brought in France and Britain and forced Hitler into major war in September 1939 rather than a series of Blitzkrieg wars

• German economy was supposed to be ready for a major conflict by 1943, and therefore, the economy was only partially ready when the war broke out

GERMAN LABOUR FRONT

• The position of many workers declined as they were stripped of many of their rights, including negotiations over pay and conditions

• Independent trade unions were replaced by the German Labour Front

• DAF arranged wages and working conditions: these were often very poor, and any unrest was dealt with harshly

• Attempts to improve conditions in factories with campaigns for ‘Good ventilation” or “Hot meals”

• In return for a job the conditions for workers were at best like pre-1933, with real wages rising above 1929 levels only in 1938

• Take-home pay deteriorated as they had to pay large contributions to the DAF and for insurance, while working hours also increased from 43 hours per week in 1933 to 47 by 1939

• Pressure to do more overtime with the increase in military demands

STRENGTH THROUGH JOY

• Created in order to win the support of the workers and to improve the conditions and morale in the workplace

• Offered workers real benefits with sports facilities, cultural visits, and holidays

• However, these were available only to loyal workers and were therefore limited in their impact

• An example of the limits to the benefits is the opportunity workers were given to start paying towards the ‘People’s Car’, the Volkswagen. Many workers did contribute, but no cars were actually delivered