topic 3 germany

• what state was germany at the end of ww1

  economy geared to war - v expensive

  high inflation

  bad living standards

  employment

  mark = worth nothing
• occupation of the ruhr

  debt and reparations- govt borrowed heavily during war = 150 billion marks owed- govt tried paying reparations initially + carried on borrowing + printing money- gave coal, wood, railway carriages when there wasnt enough money

  the ruhr- place allies would occupy if germany didnt meet payments in time

  1921- agreed french move into if tofv payment arent on time

  1923- french moved in with aid of belguim

  outcome- hyper inflation
• money in circulation


  1914 - 6.300 million marks

  1918 - 33,000 million

  number of printing firms - 150

  number of printing presses - 2000

  Newspaper in 1922 cost 1 mark - 1st Sep 1923 cost 100,000 - 17 Nov 1923 cost 700 billion marks

  Many turned to the black market
• crisis + govt response

  - food production fell 20%

  - govt set up social welfare + restraining schemes for ex soldiers

  - set up pension payments for women

  - 1,537,000 veterans

  - 420,000 widows

  - children left = 1,020,000

  - parents of dead soldiers = 190,000

  - 10% of population recieved welfare
• a change of govt

  - aug 1923 - coalition with DVP + stresseman

  - emergency decree

  power to postpone reichstag meetings

  governing by decree - article 48 = give laws without talking to reichstag

  - helped by allowing govt to act rapidly + decisively to make decisions

  
  

  new currency = rentenmark

  rentenmark = low value against one gold mark

  hjalmer schact saw its introduction

  govt used emergency decrees to control rent + wages + prices
• dawes plan


  Hitler + hugenburg attacked it

  disliked idea of foreigners controlling the economy
• foreign policy


  - dawes + young plan made reparations more manageable

  - helped rebuild economy

  - germany is more accepted in world = trade boosted

  - stabilised germany

  - BR + FR recieved loans from USA = 'worlds banker'

  - loans could be revoked
• recovery of businesses

  - govt helped business

  - big businesses rode out economic problems

  - small business suffered

  - 1924 = more bankruptcys than previous 5 years

  - big business formed cartels = fixed pricing

  - I.G Ferben set up = biggest 1925

  - factories rebuilt = mass production

  - 1925 - chemical industries producing 1/3 mroe than 1913 2/3 1930

  - disputes common - workers want better working conditions

  - owners wanted to cut wages + increase hours
• state arbitration


  - set up 1923

  - changed agreement ebert made

  - state intervention resolved workers issues 1924-29 = 69,648 cases

  - at first favoured workers 1924

  - 1928 accepted industrialists more = locked workers out + resolved outside arbitration courts
• tade recovery


  - difficult to establish trade links with BR + FR

  - shifting trade - usa isolationism

  - tariffs imposed

  - germany produced - steel + chemicals

  - admission to LOFN 1926

  - 1926 = exports back to 10 billion reichsmarks (1913 levels)

  - 1929 - 34% higher than 1913
• agriculture


  - 1920= 1/3 of all workers are in agriculture

  - bigger farms managed better than smaller ones - invest in machinery + techniques

  - small farms = heavily in debt - couldnt pay loans or taxes

  -landowners like Hindenburg could block land reforms in reichstag

  - 1918 govt tried to make a reich settlement law - landowners sell land to govt to redistribute to poorer tenants = failed

  - press for high grain subsidies which benefitted wealthy landowners
• govt spending


  - loans helped short term

  - govt subsidiesed grain production + industry and spent heavily on social welfare + benefits

  - funded through borrowing + taxes

  - people paid less taxed - resented tax increase

  1913 - lowest tax band = 47%

  1926 - 62%

  1928 - 55%

  - germany had to borrow money - could have been raised through tax

  - econ plan flawed

  - govt had own bank to lend money

  - industry expansion constantly disrupted by disputes - disrupted production + drove wages up until 1930

  - unemployment increase after 1929 (WSC)
• Wall Street Crash reactions

  Gov failed to act quickly - coalition failed to agree what to do (Stresemann death didn't help) - Grand coalition fell apart

  1932 - Production half of its level in 1928

  Wages fell 20-30%

  Prices fell

  Hindenburg didn't want to rule by Emergency Decree
• -Initial raise taxes, cut gov spending especially on welfare

  - Trade Unions suggested USA public works

  projects/devaluing the currency

  Hindenburg went through with Bruning

  - Conservative ministry set up with no Reichstag majority

  High taxes, reduced gov spending, high tariffs on foreign agricultural product, cut backs in salaries and unemployment benefits, continued payments of reparations
• change in living standards

  - WW1 Effects - severe food shortages, malnutrition common

  - One district in Berlin = 90% children aged 2-6 malnourished

  - Very low living standards, K-brot bread common - miserable
• success of policies


  Provided benefits for the poorest

  Regulated pensions

  Standard of living rose - more employed, wages rose
• failures of policies

  Inflation caused by wages rising

  - living standards dropped

  - unemployment rose

  - long hours in a bad job

  Cramped housing - poorest shared one room

  Berlin - 130,500 lodgers and 44,600 paid to sleep in bed

  Skilled workers even experienced unemployment
• bruning


  Cut welfare + high taxes

  Prevented inflation but paralysed German economy

  Sky rocketing unemployment and fall in living standards

  Hoover Moratorium signed to suspend debts

  Started path of breaking down TofV

  Ruled by decree
• Von Papen

  No Reichstag support

  Public works schemes

  Cuts to taxes

  Economy slightly improved
• Von Schliecher

  Reich commissioner for employment set up

  RM500m into public works projects
• nazi economy


  - didnt have to pay reperations 1932

  - bruning said Germany could not pay at conference - depression made repayments impossible

  - exchanging goods to counties instead of money

  - germany failed to pay its debt to USA = trade collapsed

  - 1 Jan 1933 - 4 year plan - Autarky - Schacht kept as head of Reichsbank
• creating employement


  - nazis manipulated the statistics

  - 'work force' changed dramatically as jews removed from work

  - women discouraged to work

  - reichsabeitsdient ( reich labour service)

  - basic food + accomadation in labour camps = labour barracks

  - road building schemes increased car + truck manufacture

  - created work + imporved communications = raw materials and moving of goods more efficient
• managing agriculture


  - agriculture = important for nazi desire of autarky

  - agriculture reforms = first 4 year plan

  - minister = alfred hugenburg

  - increased import tariffs on agricultural produce

  - german produce = cheaper

  - banned banks from repossessing farms

  - resigned 1933

  - replaced = richard darre

  - set up reichsnahrstand (RNS) = regulate food production + distribute farm products

  - RNS could fine people = 100,000RM not conforming

  - young women sent to work on farms

  - road bulding schemes - communications improved - german farmers provided 68% produce 1928 - 1934 - 80%

  - autobahns - new road scheme moving goods more efficient

  - 38-39 - 17% agricultural goods still importedPropaganda encouraged people to eat fish instead of meat
• workers unemployed

  jan 1933 - 6 million

  jan 1934 - 3.3 million

  jan 1935 - 2.9 million

  jan 1936 - 2.5 million

  jan 1937 - 1.8 million

  jsn 1938 - 1.0 million

  jan 1939 - 302,000
• managing businesses and the workers

  Some big businesses supported the Nazis like I.G. Farben

  Department stores made 80% less in 1934 than in 1929 due to the 1933 Law for the Protection of Retail Trade

  - Stopped building of new stores and banned expansion of existing ones

  Made small business supported Hitler - gave them more customers

  Unions problem in the Weimar - loss of millions of working days 36,198 million in 1925

  Many workers voted for Hitler in hopes for better working conditions and wages

  DAF created - Nazi TU hard to find work if not in it, exploited workers easier
• raw materials


  - things that germany could not produce were synthetically made

  - rubber replaced by - buna

  - new factories needed = problem

  - not as rapid to implement

  - 6 tonnes of coal needed for industries and heat homes to create 1 tonne of synthetic fuel
• agriculture p2


  - poor harvest 34-45

  - walther darne wanted to import more = party less popular

  - 1935 - butter rationed

  - price of pork + ham rose by 30% 34-36

  - rationary considered

  hitler responded = short term importing

  - long term command economy
• command economy


  an economy in which production, investment, prices, and incomes are determined centrally by a government.
• second 4 year plan

  - focus on autarky + war

  - goering in charage

  - office had 6 departments

  raw material production

  agricultual production

  distribution

  labour

  prices

  foreign exchange
• crisis of 35-36


  - shacht shifted trade to east

  - exchange of goods improved economy

  - however countris started asking for payments - bulgaria oil

  - not completely self sufficient

  - 1935 - import fat and meat

  - import or rationing

  - basis of 2nd year plan
• radicalisation


  - until 1936 senior officials + schact played key role in econ

  - schact - traditionalist + nationalist - could be radical

  - tried to continue to influence policy - resigned as econ minister 1937 then given head of reichsbank

  - schact worked with big businesses and given considerable freedom

  - under 4 year plan - greater control - set targets, prioritise industries and nationalise failing businesses
• 1939 tight control of economy


  - not all targets met

  - 38-39 17% of agricultural needs imported

  - 1934 - 20%

  - propaganda out to encourage people to eat less meat and eat fish instead

  - jam consumption trebled between 28-38
• success


  - coal production increased 319.7 million 1936 - 380.9 million 1938- small increase in steel production- goering decided to nationalist largest steel companies and took control over main deposit of iron one- europes biggest steel company- reichswerke herman goering

  success ????- 19.2 million tonnes of steel produced 1936- 22.6 million tonnes 1938- downside = more expensive to produce- 1937 - military leaders wanted 750,000 tonnes per month- only got 30,000 tonnes
• issues + failures


  issues- still not as prepared for war as they hoped- has produced a rearmament programme- wages + prices had been controlled - no widespread condemnation of lack of goods - toys + electrical goods- had not been able to fully focus on preparing for war, need for importing food

  failures- 2nd 4 year plan created econ problems- turning coal into erzat oil- 1938 officials said they would need 20,000-30,000 more coal miners- severe labour shortages- 1939 - 20% artifical oil required had been produced (sosol)- aircraft production declined in first year of 4 year plan- goering didnt believe in production line = destroyed german craftship- lack of steel + fuel + workers- synthetic rubber increased in production by 500% 36-39- more costly to produce but more efficient to import rubber
• nazi war economy


  GERMAN ECONOMY 1939-41;

  -Government military expenditure doubled

  -55% workforce involved in war projects

  -German productivity lower than its enemies; Britain 2x more aircrafts

  -Chaotic organisation of Nazi state hindered economic efficiency, did not co-ordinate

  APPOINTMENT OF SPEER 1942;

  -Trusted confidant Speer appointed as Minister of Munitions after Todt's death

  -September 1943 powers extended, given responsibility for all industry/raw materials

  -Established Central Planning Board to co-ordinate economic organisation

  -Excluding military from economic planning, encouraged employment of women, using concentration camp prisoners as labour, preventing conscription of skilled workers

  -Ammunition production rose 97%, war production 3x

  -Raw materials used more efficiently, productivity per worker improved 60%

  FAILURES OF WAR ECONOMY;

  -War economy contributed to German defeat in war

  -State remained chaotic; gauleiters and SS acting against economic efficiency

  -Labour shortages held back

  -Women not mobilised in war effort unlike SU/Britain/US

  -Heavy reliance on foreign workers (over 6mil), badly treated/underfed so slower productivity

  -Shortages of raw materials (coal/oil), production of ersatz materials not compensating, destructive manner of conquest did not boost

  -Allied bombing reduced economy, industry targeted, had to move to defensive, scorched earth difficult
• new system p2


  foreign workers

  1929 - 1.4%

  1944 - 13%

  - production in 1944 = 3x 1940

  - 1940 blitz kreig helped germany
• overstretched economy

  - econ overstretched + war production affcted by

  Allied bombing - wipe out factories, mines, towns and transport links

  Loss of land that had lots of raw materials - e,g upper silesia

  Damage to electricity, gas and water supplies

  Sabotage by foreign workers - deliberate mistakes which damaged machinery
• occupation of germany after ww2

  - ended differently to ww1- occupied by allied troops- potsdam - 17 july - 2 aug- wanted to rebuild germanies economy they needed toban munition factorieslimit chemical industires - restrict outputrepreations taken through machinery

  end of ww2-econ ruined- black market flourished- reichsmark virtually worthless- 160,000 POWS in france- 10 million flodded back to eastern europe- 1948 - marshall plan aided $1.5 million to Western zones- new currency = duetschmark
• key words


  social market economyfree market economy with elements of social support for the poorest built in - a society responsible free market economy

  assetproperty or valuable possesion

  co determinationright of workers to take part in management of business they work for
• erhard and reform


  - appointed econ admin 1948

  - believed in social market economy

  - 49-63 econ minister

  - june 1948 - announced replacement of reichsmark for duetschmark

  - 24 june - econ conuncil gave erhard permission to abolish all but essential rationing

  - anabled there to be availability of veg + cakes

  - non food items still available

  - price + quality of goods = important

  - military govt wanted to tax all assts to compensate all those who had lost everything

  - complicated - 1952 bundestag passed equalisation of borders act

  -some failures - business failed to pay wages

  unemployment

  - 442,000 1948

  - 937,000 jan 1949

  - 1,800,000 1950

  - 1,000,000 1955

  - by 1959 car production 4.5 times higher + steel production 2x