The Nazi experiment 1929-1949: Economic

Question 1

When was the Wall Street Crash?

Answer 1

1929

Question 2

What did the Wall Street Crash do to Germany’s economy?

Answer 2

• Ended American loans and investments
• Export market collapsed
• Led to mass bankruptcies
• Increasing unemployment and decreasing taxes produced a budget deficit of 1700 million marks by 1929

Question 3

How did Bruning respond to the Wall Street Crash and was it effective?

Answer 3

• Implemented a policy of deflation
• Cut government spending and tried to balance outgoings against income from taxation
• However, it ended up decreasing whilst unemployment increased
• Forced him to adopt unpopular measures (cutting salaries of public workers and decreasing unemployment benefits)

Question 4

What crisis happened in 1931?

Answer 4

Banking crisis emerged due to customers withdrawing their money from Germany’s largest private bank, leading to its collapse

Question 5

How high was unemployment by 1932?

Answer 5

6 million

Question 6

How did Papen respond to the Wall Street Crash?

Answer 6

• Issued an emergency decree in 1932 which offered:
  1. Tax rebates granted to employers that took on new staff
  2. End of compulsory arbitration
  3. Relaxation on the system of wage agreements

Question 7

What economic measures happened with the creation of the German Labour Front (DAF)?

Answer 7

1. Strikes were banned
2. Organised labour was suppressed
3. Jewish assets were seized

Question 8

How did Schleicher respond to the consequences of the Wall Street Crash and was it effective?

Answer 8

• From 1932 he attempted to win over trade unions with a programme of public works, price fixing, restoration of wage cuts
• However, he alienated industrialists, large landowners and President Hindenburg
• Worst of the great depression was over by 1933 but not due to the chancellors and their policies

Question 9

What were Hitler’s 1933 economic policies?

Answer 9

1. Law for the Protection of Retail Trade forbid the creation of new department stores
2. Reich Food Estate established which created guaranteed prices for farm produce + put high tariffs on imported food to protect peasant farmers
3. Reich Entailed Farm Law prohibited the sale, confiscation, division or mortgaging of any farm between 18-25 acres owned by Aryan farmers

Question 10

When was Schacht appointed as Minister of Economics?

Answer 10

1934

Question 11

How did Schacht reduce unemployment?

Answer 11

1. 1933 Law to reduce unemployment (government spending on public work schemes, subsidies for private construction, income tax rebates and loans to encourage industrial activity)
2. 1933 development of armament factories and discouragement of female labour (marriage loans to remove women from the labour market)
3. 1935- reintroduction of conscription
4. 1935- recruitment into Reich Labour Service (18-25 year olds sent to work on civil, military and agricultural projects for 6 months)

Question 12

How did Schacht reduce unemployment?

Answer 12

1. 1933 Law to reduce unemployment
2. 1933 emergency relief schemes
3. 1933 development of armament factories and discouragement of female labour
4. 1935- reintroduction of conscription
5. 1935- recruitment into Reich Labour Service (18-25 year olds sent to work on civil, military and agricultural projects for 6 months)

Question 13

How did Schacht stimulate economic growth?

Answer 13

1. Offered tax concessions to businesses
2. Raised money for investment through mefo bills which would be paid back after 5 years from the increased government tax revenue they helped to generate
3. Repayments on mefo bills accounted for 50% of government expenditure in 1934-35
4. Mefo bills stimulated housing and road construction

Question 14

How did Schacht address the balance of payments?

Answer 14

1. 1933- Controls introduced to limit Germany’s foreign exchange draining by paying foreign debts in Reichsmarks
2. 1934- Debt repayment was stopped and bonds were given instead
3. New Plan
4. Series of trade agreements with Balkan and South American states were concluded (provided the import of raw vital materials)

Question 15

What was Schacht’s New Plan?

Answer 15

1. Increased government regulation of imports
2. Development of trade with less developed countries
3. Development of German trade with central and southeast Europe

Question 16

How did the Nazi’s help the revivial of the economy?

Answer 16

1. Pushed Schacht’s New Plan
2. Avoided labour troubles by suppressing the unions
3. Banning strikes
4. Creation of the DAF
5. Use of propaganda to increase the illusion of success and prosperity whilst maintaining confidence
6. Seizing of Jewish property and Austrian assets

Question 17

When was Schacht’s New Plan?

Answer 17

1934

Question 18

What are some of the factors involved in the economic turnaround which prove that Schacht and Hitler were not entirely responsible for it?

Answer 18

1. Reparations ended due to Bruning
2. Work creation schemes established before 1933
3. Unemployment already begun to fall after 1932
4. World economic recovery from 1932 laid the basis for the ‘Nazi economic miracle’

Question 19

What is the evidence to show that not all Nazi economic policies were a success?

Answer 19

1. Reserves of foreign currency remained low
2. Balance of payments continued to be in deficit and grew worse after 1936 when Schacht’s influence declined
3. Rearmament put a strain on the economy
4. Food prices increased

Question 20

When was the 4 year plan created?

Answer 20

1936

Question 21

What did the 4 year plan provide and who created it?

Answer 21

• Goering
  1. The development of self sufficiency (plants were built for the production of synthetic materials)
  2. Promotion of the chemical industry and the development of synthetic fuel
  3. Development of steelworks that could use the lower grade ores available in Germany
  4. Production of heavy machinery

Question 22

Was the 4 year plan successful?

Answer 22

• No, most of its targets were not met
• Production of synthetic substitutes proved to be too expensive
• By 1939, Germany still imported 1/3 of all its raw materials
• Insufficient foreign exchange to buy necessary imports
• Plan was impeded by internal rivalry

Question 23

Why/how was the Central Planning Board created?

Answer 23

Albert Speer persuaded Hitler to establish it in 1942 to organise the allocation of raw materials and to ensure that a larger proportion went to armaments

Question 24

What did the Central Planning Board do?

Answer 24

1. Ensured the development of new processes
2. Increased industrial capacity
3. Placed bans/limits on the manufacture of unnecessary goods
4. Organised the distribution of labour, machinery and power supplies

Question 25

What are Albert Speer’s economic successes?

Answer 25

1. Armament production rose by 50%
2. Gun production rose by 27%
3. Tank production rose by 25%
4. Ammunition production rose by 97%
   ^ (All within 6 months)
5. 3744 plans produced in 1940 compared to 25,285 in 1944
6. 500 new plants built in 1st 4 months of 1945
7. 1943- Got female conscription into factories

Question 26

Were Albert Speer’s economic policies successful in the long term?

Answer 26

• No
• By 1945 400,000 civilians had been killed in bombing raids, transport had broken down, factories were in ruins

Question 27

What were the economic developments in the Soviet Zone of post-war occupied Germany?

Answer 27

• Experienced less war damage than Western zones (loss of productive capacity was 15% compared to the west’s 21%)
• Initial policy was to take extensive reparations (3x what was agreed at Potsdam) to compensate for the destruction on the USSR by the Nazis
• Productive capacity was reduced to 50% of that in 1939
• In 1945 7000 large estates over 200 acres were seized and turned into collective state farms

Question 28

How did the Western zones respond to the Soviets’ economic action?

Answer 28

• They opposed it
• Disagreement over reparations led to the abandonment of the Potsdam decision

Question 29

How did the Soviets use nationalisation in their zone?

Answer 29

1. 1945- Private banks were replaced by a centralised state banking system + private insurance companies were merged into 5 public corporations
2. 1945- Nationalisation of mines and factories began
3. 1946- Soviet owned joint stock companies were formed
4. Old Nazi businesses were turned into VEBs (by 1948, these controlled 60% of industry in the Soviet zone)

Question 30

What were the economic developments in the Western Zones of post war occupied Germany?

Answer 30

1946 Level of Industry Plan :
1. Germany’s living standard should be kept to its 1932 level and shouldn’t exceed that of other countries
2. Industrial capacity should be reduced to 50-55% of the 1938 level
3. 1500 plants should be dismantled in Western zones
4. Should be limits on the output of industries
5. Armaments and war related industries should be banned
6. Coal output should be expanded to provide for reparations + reconstruction

Question 31

What was the economic state of Bizonia (UK + US zones)?

Answer 31

• Both economies able to grow with the help of US Marshall Aid from 1947 and a more efficient economic administration
• Production targets were raised
• The restructuring of industries/businesses begun

Question 32

By how much did the Trizone economy grow in 1948?

Answer 32

By 30%