Schact Nazi Economic Policy

  • Created by: khooper
  • Created on: 28-04-18 17:21
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  • Schacht
    • From Aug 1934, Schacht was Economics Minister
    • Stimulated Economy by:
      • Pumping money into economy to build homes and Autobahns
        • Autobahns were a sign of economic revival
          • Only ever employed 125,000 people
          • Construction slowed after 1938
            • Stopped completely in 1942
            • Was also underused
        • Large sums of money were spent on building roads and public buildings
      • Stimulate consumer demand by giving tax concessions/grants to certain groups
        • This increased industrial production
          • When they came to power, economy was already beginning to revive
            • Large sums of money were spent on building roads and public buildings
            • Measures nevertheless helped reduced unemployment faster than might have other wise happened
      • gave subsidies to private firms - encourages them to take on more workers
        • This increased industrial production
          • When they came to power, economy was already beginning to revive
            • Measures nevertheless helped reduced unemployment faster than might have other wise happened
      • Controls on wage/price - to control inflation
      • New Plan (1934) control foreign trade, improve balance of payments
        • As economy revived in 1933 and 34, foreign trade increased
          • Meant that imports grew faster than exports
            • Then shortage of foreign currency
              • Then led to New Plan (1934)
        • Schacht placed controls on imports and access to foreign currency
          • Also initiated trade agreements
            • Especially with states in Balkans and South America
              • Germany supplied food/raw material but were paid for in German Reichsmark
                • Supplying countries could then only use this money to buy German goods
      • Introduction of Mefo Bill
        • Need to pay for rearmament without causing inflation
          • Schacht created scheme where gov paid for armament through Mefo bill
            • Bills were exchanged for cash at the Reichsbank - private companies could then get their money
              • Incentive by deferring payment for 5 years - then 4% interest
                • Thus, rearmament could start in 1935 without having funds to finance
                  • also could begin in secret because it did not go through the books

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