Nazi experiment: 16 economic developments Flashcards
what was the German economy like in 1929?
finally surpassed its 1913 levels thanks to US loans and the investment following the Dawes Plan of 1924
equipped with modern machinery, fast rail transport and efficient planning through vast industrial conglomerations and cartels
though developments were uneven and slight signs of recession in Germany
recession may have helped cause the crash as American investors grew concerned about their German investments
what was the impact of the Wall Street Crash on Germany?
- US loans and investment came to a rapid end
- export markets disappeared, prices and wages fell and bankruptcies occurred
- increased unemployment and falling tax receipts produced a budget deficit of 1700 million Marks by the end of 1929
how did Bruning react to the Wall Street Crash?
- attempted to balance the budget by implementing a policy of deflation or austerity
- cut gov spending and tried to balance outgoings against income from taxation
^ decreased as unemployment increased, demands for unemployment benefits grew forcing him t o adopt unpopular measures such as salary cuts of public workers and decreasing unemployment benefits - agricultural interests in the gov were strong so agriculture continued to be protected by government subsidies taxes on the import of foreign food keeping food prices artificially high
what was the July 1931 banking crisis?
- in March 1931 Weimar gov announced it was setting up a customs union with the Austrians. French and British were not consulted and French showed their anger by withdrawing currency from Austrian banks
- In May Austria’s largest bank, the Kreditanstalt collapsed
- corresponding withdrawals of foreign currency from German banks and in July 1931 Germany’s largest private bank, the Danatbank collapsed
what was Bruning’s main success?
negotiating an end to reparations
July 1931 US president Hoover greed to moratorium (a temporary halt or delay) on the payment of reparations and war debts
in June 1932 (under Papen) reparations were abandoned
why did Bruning lose his position?
drew up a plan for modest ‘reflationary measures’ shortly before being forced from office by Papen
he suggested borrowing money to fund job creation schemes and devaluing the Mark to make exports more competitive
Hindenburg was not keen on his ‘agrarian socialism’ and he lost his position before implementing any plans
what was the depression like under Papen?
tried to introduce measures to halt the mounting unemployment which peaked at 6 million in 1932
Papen issued an emergency decree in September 1932:
- tax rebates granted to employers that took on new staff
- end of compulsory arbitration
- relaxation of the system of wage agreements
approved by employers but opposed by trade unions and left wing parties
what was the depression like under Schleicher?
tried to introduce measures to halt the mounting unemployment which peaked at 6 million in 1932
attempted to win over trade unions with a programme of public works, price fixing, restoration of wage and relief cuts and land settlement in East Prussia
however he alienated industrialists and large landowners as well as Hindenburg
the worst of the depression was over before Hitler thanks to some revival in world trade but not due to the Chancellors
what was Germany’s economic performance like in comparison to the UK, France and USA?
lowest in 1932
what more ‘socialist’ economic policies did Hitler implement?
did not come to power with a concrete economic programme despite ending unemployment being a key part of his campaign
- March 1933 all peasant debts suspended
- May 1933 the ‘Law for the protection of retail trade’ forbade the setting up of new department stores
- July 1933 the Reich Food Estate was established under Richard Darte (minister of food and agriculture) which laid down guaranteed prices for farm produce as well as high tariffs on imported foodstuffs to help ‘protect’ farmers
- October 1933 the ‘Reich Entailed Farm Law’ prohibited the sale, confiscation, division or mortgaging of any farm between 7.5-10 hectares owned by Aryan farmers
wehrwirtschaft
economy to provide for Germany’s needs in a future war so as to establish and spread the racial state
high importance to Hitler
who was Schacht in Nazi Germany?
Dr Hjalmar Schacht a non-Nazi but proven economist with right wing views
Schacht was appointed as President of the Reichsbank in 1933 and Minister of Economics in 1934
how did Schacht reduce unemployment 1933-36?
June 1933 - law to reduce unemployment was passed, including:
- gov spending on public works schemes
- subsidies for private construction and renovation
- income tax rebates and loans to encourage industrial activity
other measures that helped combat unemployment:
- 1933 emergency relief schemes
- 1933 development of armaments factories and discouragement of female labour including marriage loans to remove women from the labour market
- Sept 1933 law for the construction of 7000km of motorway (autobahnen) - regulations such as no machinery used when surplus labour was available
- March 1935 reintroduction of conscription
- June 1935 recruitment into the Reich Labour Service (RAD) 18-25 yo sent to work on various civil, military and agricultural projects for 6 months before their military service
how did Schacht stimulate economic growth 1933-36?
tax concessions offered to businesses and Schacht raised money for investment through ‘mefo bills’ these were credit notes issued by the Reichsbank and guaranteed by the gov. the bills were a means of ‘deficit financing’. they were paid back after 5 years from the increased gov tax revenue they helped to generate. repayments on mefo bills accounted for 50% of gov expenditure in 1934-5
mefo bills provided subsidies and agreements such as that to match private investment in the car industry
this helped stimulate housing, road construction and a variety of other industries
how did public and private investment change from 1932 to 1938?
public 2.2 to 10.3 billion reichsmarks
private 0.3 to 12.2 billion reichsmarks
