Nazi Economy

• In 1929, thanks to US loans, Germany was equipped with modern machinery, fast railways and effective planning.
• By end of 1929, the budget deficit was 1,700 million marks.
• Value of German exports fell from £630m in 1929 to £280m by 1932.
• Brüning had to cut government spending, cut salaries and unemployment benefits. However, tariffs kept food prices high.
• In the 1931, July Bank Crisis, the Weimar government set up a union with the Austrians, leading to the French withdrawing currency from Austrian Banks. As a result, Austria's largest bank collapsed, along with Germany's largest private bank.
• Brüning negotiated a moratorium, halting reparations.
• By 1932, unemployment hit 6 million.
• Papen introduced tax rebates for employers who took on new staff and wage agreements. They were however, opposed by the unions and left-wing parties.
• Schleicher attempted to win unions over with public works and land settlement in East Prussia, however he alienated industrialists, land owners and Hindenburg.
• Hitler introduced some socialist, economic policies such as: all peasant debts suspended, "Law for Protection of Retail Trade", the Reich Food Estate and Wehrwirtschaft.
• Schacht was appointed Minister of Economics in 1934. He aimed to reduce unemployment by investing in public work schemes and loans to promote industrial activity. Other measures included, developments of armament factories, no female labour and no machinery to build motorways.
• Schacht stimulated economic growth through mefo bills and deficit financing. Repayments on these accounted for 50% of government expenditure 1934-35. Led to more housing and road construction.
• 1933, Schacht controlled the drainage of foreign exchange by paying foreign debts in Reichsmarks,
• In 1934, debt repayments were stopped altogether and creditors were given bonds instead. Countries failed to put pressure on Germany in return.
• New payment policies led to Schacht being able to develop trade with less developed countries and make trade agreements with Balkan and South American states, providing them with raw materials in return for goods.
• Other influences that helped to revive the economy were surpassing unions, constant use of propaganda and banning of trade unions.
• Economic recovery was not all due to Schacht... world economy was recovering, Bruning ended reparations and work creation schemes had begun before him.
• Some failures included: reserves of foreign currency were low, rearmament put a strain on the economy and the price of food rose.
• Goering's four year plan included: developing self-sufficiency to dob this, plants were build to produce synthetic materials, promotion of chemical, steel and heavy industry.
• To achieve this, Goering set up a special office to control foreign exchange, labour and raw material distribution. Prices and targets were set for private industry, if it was not met, they would be taken over.
• Overall targets were not met, production of synthetics were costly and they still imported one third of all raw materials by 1939.
• Economic failure as the demand for consumer goods was taking over, when war broke out, rearmament programmes were incomplete and there was poor war management: men of any skill could join army but not women and only 40% of prisoners were used in workforce by 1942.
• Speer set up the central planning board, which controlled allocation of raw material, set norms for multiple use of parts and set schedules. Due to this, rearmament production rose 50%, ammo 97% in 6 months. In 1940, 3,774 aircraft produced, up 25,285 by 1944.
• Speer won agreement for female conscription in factories by 1943 and used 7 million foreign workers in factories.
• Consumer production in 1943 was only 3% less. By 1945, 400,000 civilians killed, transport broke down and factories were in ruins.