7. nazi economy

• German Labour Front (DAF) founded in 1933
• Strength Through Joy (KdF) founded 1933
• The Reich Food Estate founded 1933, created to promote agriculture, believed that Germany needed an additional 7 to 8 million hectares of farm land to achieve self-sufficiency in food.
• The first 4 year plan, aimed at economic recovery, began in 1933.
• Hjalmar Schacht was appointed economics minister in 1934.
• In 1935, the National Labour Service (RAD) was founded. It was a paramilitary organization to help mitigate the effects of unemployment.
• Conscription was introduced in 1935.
• 1935, an agricultural crisis sparks the "guns versus butter" debate.
• In 1936 the second Four Year Plan began.
• In 1937 Hermann Goering was placed in charge of the Four Year Plan.
• In 1937, Hjalmar Schacht resigned as Economics Minister due to rising Nazi control over the economy.
• In 1937, Goering began nationalising major industries.
• There were widespread labour shortages in 1938.
• In 1939, Major firms, like IG Farben and Krupp were given government contracts and tax breaks.
• By 1939, rationing had been introduced and despite significant rearmament, autarky had not been achieved.
• In 1941, the invasion of the USSR put further strain on the economy.
• In 1943 Germany was still producing non-essential products and materials.
• In 1942, Albert Speer was placed in charge of the economy.
• Fuel Crisis in 1944
• The 'Scorched Earth' policy destroys more production facilities.
• Hitler's 4 economic aims (1933)

  • ensure standard of living
  • resources for rearmament
  • move towards autarky
  • Resources for civil and architectural projects.
• The Nazis cut taxes in farming , small business and heavy industry.
• Nazis gave grants to ...

  • newly married couples to spend on furniture.
  • businesses to employ workers, pay debts or buy new machines.
  • homeowners to finance improvements/repairs.
• Unemployment peaked at 5.6 million in 1932. In 1933 it was 4.8 million. By 1936, unemployment was at 1.6 million.
• Between 1933 and 1934, 2.8 million jobs were created. Around 20% were directly through government schemes.
• The Reinhardt Scheme in June 1933 committed RM 1,000 to public works schemes.
• From 1935, conscription removed all 18-25 year old males from the unemployment register.
• Mefo bills were used to to buy armament from Autumn 1933, they financed 1/5 of all military spending.
• By 1934, there were import restrictions on wool, cotton, leather, fur and precious metals.
• Steel and goods with a clear military purpose were never subject to import restrictions.
• 25 new departments were created to issue import licences for an increasing number of controlled goods.
• Trade agreements were signed with developing countries like Peru, Brazil, Ecuador, Nicaragua and Yugoslavia.
• Schacht's new plan successes...

  • allowed the economy to rearm
  • balanced payments
  • increased demand for german goods.
• The Nazi regime was able to finance its war effort through Mefo Bills (bonds) which allowed them to borrow money without having to pay it back until after WWII
• Schacht's new plan limitations...

  • living standards dropped
  • the German textile industry failed
  • price of clothes rose
• Poor harvests in 1934 and 1935 lead to a food shortage, Walther Darré lobbied for greater imports of grain to keep prices down.
• Butter was rationed in 1935, the price of pork rose 30% 1934 to 1935. The rationing of bread was also considered as the Nazi economy was not strong enough to deliver both 'guns and butter'.
• Autarky 


  self sufficiency in societies, communities, states and their economic systems.
• command economy 


  an economy in which production investment, prices and incomes are determined centrally by the government.
• Ersatz


  not real or genuine, made or used as a (inferior) substitute for something else.