NAZI GERMANY: The Nazi Economy 1933-39

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History Flashcards on NAZI GERMANY: The Nazi Economy 1933-39, created by izzydonnachie on 04/28/2013.

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• When he came into power Hitler had two economic objectives, one short term, the other long term. • Short term objective= to bring down level of unemployment in Germany which he had promised in his electoral campaigns- called campaign the 'Battle for Work.' Long term objective= to reshape Germanys economy as a 'war economy'- what Hitler wanted ABOVE ALL was to wage total war. Eliminating unemployment: • To mastermind campaign Hitler brought in Hjalmar Schact, appointed chief of Germany's national bank in 1933 and Minister of Economics in 1934. • True figure of unemployment was well over 7 million and this figure over the next 5 years fell more quickly in Germany than any other industrialised country in the world.
How unemployment was decreased: • 1932-33 world economic depression bottomed out, leading to a 'natural' economic recovery and consumer spending and company investment increased- so unemployment rates would have decreased without Nazi input. • Schacht focused investment in programme of public works (eg construction of the 7,000km of autobahnen, HOWEVER number of jobs it created were actually not high, as lower profile schemes in house building, land reclamation employed a lot more workers.). • Gov began to rearm- Schacht kept military spending off the gov published accounts 1933-35 by paying arms manufacturers not with money but with 'mefo bills', which were secret government credit notes which manufacturers could then cash at the national bank. • Unemployment statistics tampered with; Jews dismissed from jobs not included as well as women who gave up their jobs under 1933 Marriage Loan scheme. Large number of young taken off register in 1935 when Reich Labour Service was introduced (six months unpaid work 19-25yr olds.) Compulsory military service also reduced number of jobless men.
Schacht's NEW PLAN 1934: Secret rearmament programme sucked huge quantities of imported raw materials into Germany when exporters were struggling due to import taxes. • Left Germany with a sizeable TRADE DEFECIT, meaning the values of imports exceeded value of exports. • Schacht responded with the New Plan, which states no one could import goods into Germany without his permission- this solved the immediate problem but was tough for ordinary Germans as it meant fewer food importants and food shortages. 'Economic miracle' after 1933? • One one hand it is seen that after 1933 there was a Hitler inspired 'economic miracle' based on job creation schemes never introduced by unimaginative individuals such as Bruning pre-1933. These schemes certainly played SOME part in bringing down unemployment, especially 1933-34. • HOWEVER fall in unemployment owed more to 'natural recovery' and secret rearmament than public-works programmes and ordinary people did not see many signs of an 'economic miracle' in their day to day lives. • Return to full employment did not lead to big standard of living improvements: workers badly paid, heavily taxed and made to work increasingly long hours- not as well off as they were in 1920s.
FOUR YEAR PLAN 1936- Hitler recognised increasing size and firepower of Germanys armed forces was only one of the challenges involved in war preparation; needed to ensure Germany was not starved of vital resources by its enemies (like WW1 naval blockade.) • Core aim of plan was to make Germany's economy as self sufficient as possible (autarky.) • Schacht was alarmed by the plan and wanted pace of rearmament to be slowed so resigned in 1937. • Responsibility for Four Year Plan handed to Hermann Goering; had no real expertise but was ambitious, powerful and determined.
Implementing economic self-sufficiency: • Goering aimed to reduce the need for imports of food and raw materials by: 1. Encouraging German farmers to grow more food, for example given grants to bring new land under cultivation. 2. Industries to use raw materials in Germany even if imported ones were cheaper or of better quality (low grade home iron ore vs higher quality ones.) 3. Developing artificial substitutes for natural products (ersatz goods)= motor fuel from coal, ersatz rubber. 4. Extensive programme of labour retraining to maintain workers with essential skills. • Goering expected major German companies to cooperate with him, as they could make big profits- notorious example was I.G. Farben, the chemicals giant which produced both synthetic motor fuel and rubber and later supplied Zyklon-B, the poison gas used in extermination camps. • 1937- Ruhr iron and steel companies refused to invest in expensive new blast furnaces capable of using low grade iron ore, so Goering built the Hermann Goerring Works which by 1940s employed 600,000 people, branching out from steel making into coal mining and armaments manufacture.
SUCCESS OF FOUR YEAR PLAN= only partly successful. • Y: Hitler did not expect plan to make Germany self-sufficient in all respects, accepting the need for more Lebensraum 'living space' to allow Germany to feed itself. • N: Agriculture often abandoned during war preparations; land given away, labourers made to work in factories- around 1.4 million workers left the land between 1933 and 1939 due to the Reich Entailed Farm Law (only one heir.) •Y: German steel production increased later 1930s but (N) contribution of this by home-produced iron ore less than expected. • YN: Attempts to produce synthetic materials had mixed success- in 1939 production of synthetic motor fuel well below target, but synthetic rubber did meet Four Year Plan targets. • N: Plan played havoc with Germany's finances- the government ran huge budget deficits (spending of gov higher than gov's income from taxation. • In 1939 Germany was still importing more than a THIRD of its raw material requirements.
Was Germany ready for war in 1939? • Yes= had an army of nearly 4 million men, air force of 3,000 warplanes. •NO= However army leaders still doubted whether the country was ready for war. • Concern was equipment, due to shortages of labour and raw materials as well as mismanagement. • Stocks of ammunition low. • Main concern was the possibility of a long war against several enemies, as they did not believe Germany had underlying economic strength for a war like WW1. • Main weakness was the lack of guaranteed supplies of essential raw materials- worst problem was oil. • Hitler reacted with impatience to worries expressed by army chiefs late 1930s- in 1938 sacked two leading generals Blomberg and Fritsch and took personal command of Germany's armed forces. However events proved his generals right.
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