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Flashcards in Economy Deck (31):

What Economic Problems did Hitler Face?

1. Unemployment - 6 mil in 1933
2. Debt - Versailles
3. Embarrassment
4. Wall Street Crash


How did Hitler Initially Deal with the Economic Issues?

- He had no program/solution
- Was careful not to become tied down to details of an economy policy
- More concerned about the economy as a way of solving political problems
- "avoid all detailed statement concerning an economic program of the government" - {Hitler to Cabinet in Feb. 1933}
- "Hitler treated economic policy as the means by which a war economy could be built and a victorious war of revenge and conquest" - {Collier}


What Dilemma did Hitler Face?

- An economy with prosperity as its priority OR an economy capable of sustaining war


Who were the Economic Ministers During the Nazi Regime?

1. Schacht (1934-1936) - wanted to create prosperity
2. Goering (1936-1939) - wanted a war economy
3. Todt (1940-1942) - wanted a sustained war economy
4. Speer (1942-1945) - wanted a sustained war economy


Who was Schacht + What did he Believe?

- Was in control of the early economic policy
- Conservative/Not a Nazi
- President of Reichshank
- Believed state should be involved in creating work + stimulating economy - continuation of Weimar policy


What did Hitler Allow Schacht + Other Businessmen do in the Short-Term?

- Run economy
- Restore confidence
- Reduce unemployment
- Establish the conditions to allow rearmament to take place


Describe Schacht's New Plan (09/1934)

-Creating jobs through schemes (e.g RAD)
- Controlled wages and prices carefully - no trade
- Spend money to create money - speculate to
accumulate e.g.
Debt -> Money Back -> Help Employment


What were Schacht's Other Economic Policy?

- Imports were controlled - needed permits
- Imports (e.g. raw cotton/wool) cut in order to satisfy the import demands of heavy industry
- Tariffs were introduced
- Agreements made with economically weaker nations- Germany's advantage - exchanging finished products for raw materials
- Gave financial help to exporting companies
- Mefo Bills


Describe Mefo Bills

- Bonds given by government as a payment for work
- Banks could hold for 5 years at 4% interest OR could be cashed in
- Used by government to finance work schemes
- e.g. No Inflation = No More Money Printed


What were the Successes of Schacht's Economic Polices?

- 60% industrial increase
- Workers couldn't strike
- Mefo Bills - didn't have to pay workers straight away - 4% interest
- Economy + Production doing well


What were the Failures of Schacht's Economic Polices?

- High unemployment + figures weren't accurate (women/Jews/scheme workers not included)
- Government has too much control
- In debt due to spending
- Shortage of raw materials


What was Goering's Four Year Plan?

- Increase Autarky
- Prepare Germany for war in 1940


What does term 'Guns Not Butter' Mean?

- Germany's priority was rearmament (guns) rather than consumer goods (butter)
- Resulted in shortage of goods consumer goods - created the need to control imports/demands of rearmament and increased spending power of German workers (1/2 employed in the rearmament industry)


What were Goering's Main Economic Policies?

- Four Year Plan
- Guns not butter
- Increases production
- Control imports
- Autarkey


What were the Successes of Goering's Economic Polices?

- Coat + Industry increased
- Exports increased
- Individual decreased
- Ersatz (sub products)


What were the Failures of Goering's Economic Polices?

- Raw Materials shortage
- Autarky was not as successful as planned
- Conflict with Schacht
- Imports > Exports
- No war economy
- No freedom


Was Germany Ready for War in 1939?
(Klein + Milward's Interpretation)

- Germany was not fully prepared for Total War in 1939
- Blitzkrieg military + economic strategy focused on a limited war (short wars) and made fewer demands on civilian population and avoid economic strain of Total War
- Political advantage of not reducing the production of consumer goods excessively
- "scale of Germany's economic mobilization was quite modest"
- Not until after defeat at Stalingrad (1942/3) that full economic mobilization began in earnest - failure to take Moscow = BIG turning point


Was Germany Ready for War in 1939?
(Overy's Interpretation)

- Germany had been preparing for a long war
- Failured to mobilized the economy fully because war started sooner than anticipated - economy was not ready for Total War
- Since 1936 - 2/3s investments went into war related projects
- Full employment was achieved with 1/4 of workforce involved with rearmament
- Blitzkrieg War enabled Germany to win many short wars against Poland + France - providing raw materials + slave labor
- Failure of Blitzkrieg War on the USSR forced regime into a change of policy + to fully mobilize the economy - hampered by shortages of raw materials
- Limited rationing introduced in 1939- Hitler wary of upsetting consumer + realized problems of shortages during WW1
- Occupation of countries eased problem until 1942 when Total War was declared - Rationing increased


Who was Todt + Speer?

- Minister of Armaments in 1940
- Killed in Plane Crash in 1942
- Speer was financial minister until end of war
- Speer's appointment was a BIG turning point - introduced a program of self-responsibility


What were Todt + Speer's Financial Polices?

- Relaxed controls placed on businesses
- Improved armament of production
- Conscription of women
- Slave labor


What were the Successes of Todt + Speer's Economic Polices?

- Arms production increased by 59% in 6 months


What were the Failures of Todt + Speer's Economic Polices?

- Didn't reach full potential


Describe Blitzkrieg War (1939-1941)

- Germany gained vital industries/resources through gaining lands (e.g. Austria/Czech etc.)
- Hitler thought war on Poland would be local
- Britain + France declared war on Germany
- Hitler ordered major economic mobilization for war
- Germany still had war material deficiencies
- Germany was unable to replace lost places
- Invasion of Russia (1941) left his troops with inadequate equipment
- Germany's economy failed to reach Hitler's military requirements


Was Blitzkrieg War a Success or a Failure?

- Able to exploit conquered countries
- Military failure was due to the way the economy was organised
- Confusing + wasteful


Describe German Economy Between 1942-1945

- German economy began to be organised more effectively to cope with Total War
- Relaxed constraints + controls
- Central planning board established - 6000 administrators responsible for increase of output at time when Germany was enduring a massive Allied bombing campaign
- increase of war production = evidence of ineffectiveness of allies bombing + Speer's achivements
- Military situation deteriorated rapidly during 1945 - economy proved unable to support the war effort effectively


What was Rural Volsgemeinschaft?

- Increased support of the Nazis for farmers
- Farmers portrayed as backbone of Aryan stock


Who was Agricultural Minister?

- Hugenberg - conservative + nationalist


What were the Nazi's Economic Polices for Rural Volsgemeinschaft?

- Reich Food Estate
- Raising taxes on imported food
- Getting rid of farmers' debt
- cheap loans
- Exempt from taxes
- Didn't pay insurance/unemployment benefit/health payments
- Reich Entailed Farm Law
- Battle of Production


Describe the Reich Food Estate

- Set up in 1933
- Supposed to rule farming
- Big movement protected 3,000,000 farms/500,000 shops/300,000 food-processing businesses
- Controlled every aspect of agricultural production


Describe Reich Entailed Farm Law

- Set up in September 1933
- Attempt to protect small/traditional/medium size farms
- Recognized farms of 30 acres as hereditary farms - passed on to oldest son (not split up)


Describe Battle of Production

- From 1934-1935
- Aim was to increase grain production
- Ultimately Unsuccessful - due to bad harvests + lack of new machinery