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
- Autobahns were a sign of economic revival
- 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
- When they came to power, economy was already beginning to revive
- This increased industrial production
- 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
- When they came to power, economy was already beginning to revive
- This increased industrial production
- 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)
- Then shortage of foreign currency
- Meant that imports grew faster than exports
- 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
- Germany supplied food/raw material but were paid for in German Reichsmark
- Especially with states in Balkans and South America
- Also initiated trade agreements
- As economy revived in 1933 and 34, foreign trade increased
- 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
- Thus, rearmament could start in 1935 without having funds to finance
- Incentive by deferring payment for 5 years - then 4% interest
- Bills were exchanged for cash at the Reichsbank - private companies could then get their money
- Schacht created scheme where gov paid for armament through Mefo bill
- Need to pay for rearmament without causing inflation
- Pumping money into economy to build homes and Autobahns
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