economy

• on outside seemed successful yet had many flaws
• before Nazi's came to power: over 6 million unemployed, declined in industrial production, agricultural depression
• success's before Hitler came to power: reparations cancelled 1932, Schleicher introduced public work schemes to generate employment and signs of recovery by 1933
• Nazi's invested 1 billion reichsmarks into public work schemes to build autobahns, canals, houses
• car production increased by 40%
• 500,000 men employed in voluntary labour service
• 'Law for reduction of unemployment' removed women from jobs
• conscription introduced 1935
• Deficit financing adopted through Schacht(increased government spending by 70%).
• public works and the creation of jobs: aims to recover from depression and reduce unemployment
• public works: dramatic growth in jobs as 1.6 million unemployed in 1936 (hidden as women and jews forced out of jobs), by 1938 virtually full employment in comparison to USA and Britain
• Public works: Germany imported more raw materials while failing to increase exports, unemployment fell to 2.5 million in 1934 and did not fall again till 1936 (instability), men had to do 6 months work service which was poorly paid and hard labour
• Schacht's new plan in September 1934 aimed to give government control of economy and stimulate economic growth
• Schacht's new plan success: financial benefits given to farmers (rewarded Nazi's 1930-33), 'new plan' provided compensation control by government on trade, bilateral trade treaties with south-east Europe exerted powerful Germany over Balkans
• Schacht's new plan success: unemployment fallen, industrial production increased by 60% since 1933, introductions of Mefo bills (credit notes to pay manufacturers for military equipment) avoided inflation
• Schacht's new plan failures: imports of raw cotton and wool cut, Reichsmark currency had 237 different values with countries, success disguised weaknesses, deficit financing rose government spending by 70% from 1933-36
• Schacht's new plan failures: Mefo bills disguised government spending
• Goering's four year plan 1937 with aim to increase autarky and prepare for 'total war'
• Goering's success: developed ersatz products e.g., oil from coal and artificial rubber, production of materials such as: aluminium and explosives increased, Austrian companies taken over after 1938 (after Anschluss)
• Goering's four year plan failures: reduction of arms proposed by Schacht seemed unacceptable to Nazi leadership and created debate 'guns or butter'
• Goering's four year plan failures: turning point in Nazi regime as Goering stated in 1936 German armed forces must be operational in 4 years and German economy must be fit.
• Goering's 4 year plan failures: Schacht replaced by weak Walther Funk, short of targets and army production levels were never reached, still reliant on foreign supplies for 1/3 of raw materials, Goering became 'economic dictator'
• conscription and rearmament: conscription in 1935 reduced unemployment and rearmament involved 1/4 of workforce, 2/3 of German investment directed towards rearmament
• Tim Mason said during rearmament economy growing too quickly
• however rearmament led to food shortages and labour shortages, deficit grown, discontent among workers, pushed Hitler into war too early
• the German economy would have been ready by 1943