Nazi Economy 1933 - 1945

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Nazi Economy 1933-1945
o While using the weaknesses of the Weimar Government against them, Hitler advised his
colleagues to "avoid all detailed statements concerning an economic programme of the
o This highlighted the issues facing the Nazi Government upon coming to power in 1933. They
were inheriting a drastic situation which they had taken advantage of to come to power.
They now needed to deal with the situation.
What was the situation in 1933?
Trade ­ Down by 55% and there was no international trade.
Industry ­ 50,000 businesses bankrupt and collapsed. This affected the middle class Germans.
Employment ­ 5.6 million unemployed.
Agriculture ­ Still affected by 1922 `grain-glut' and regular evictions.
Finance ­ 5 banks closed. US recalled all loans to be paid within 90 days.
The Nazi considered a number of ways of dealing with the economic crisis:
1. Following the anti-Communist policies of the 25 Point Programme.
2. Deficit budgeting.
3. Wehrwirtschaft (Defence Economy)
Deficit Budgeting
Hjalmar Schacht (President of Reichsbank) became Minister of Economics in 1934.
Under Schacht, the German Government sought to increase its own spending in order to
stimulate demand and raise National income (GNP). This was similar to the initial policy of the
Weimar Government in dealing with the Post-War economy.
This deficit budgeting also helped the Nazi Government create jobs, thus cutting
Initial public expenditure was on rearmament, construction and transportation.
Public Works
Land reclamation.
Vehicle Industry (Volkswagen scheme).
Construction of motorways (AUTHOBAHNS).
Law to Reduce Unemployment was renewed and expanded on 2nd June 1933 from a scheme
which had been originally started by Papen in 1932.
National Labour Service/RAD (Part of Public Works)
Unemployed men joined the RAD and were given manual labour to do.
By 1934, there were 800,000 workers in RAD.
cIn 1935, it was made compulsory for all unemployed 19-25 year olds to join RAD.

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RAD built new schools, hospitals, drained farms and planted forests. They improved
7,000km of AUTOBAHNS were built.
The Nazi Government attempted to alleviate the problems facing Germany's agricultural
community. His community had been the Nazi government's strongest supporter during
Reich Food Estate ­ Co-ordinated a National agricultural system.
Reich Entailed Farm Law ­ Offered more security regarding farmers' property. Many had
been evicted in the 1920s due to the `grain-glut'.…read more

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+ 5.6 ­ 6 million unemployed (25.9% of Still 1.5 million unemployed in 1936,
workforce) in early 1933 reduced to not a state free of unemployment.
1.5 million (7.4% of workforce) in
+ Creation of jobs in a plethora of areas. The German economy is also
The Reich Food Estate and Reich characterised by a destabilised
Entailed Farm Law to coordinate currency. The Reichsmark at one
agriculture and enhance the security point had 237 different values,
of peasant proprietorship.…read more

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Schacht was aware that German economy was only progressing superficially; Mefo Bills and
bartering agreements have hidden true cracks in German economy.
He does not believe that the budget deficit and balance of payment deficits can co-exist for
much longer without being dealt with.
Schacht wishes to reduce rearmament while increasing production of industrial goods which
will then be used for exporting.
This suggestion angered Hitler and the armed forces within Germany, while it pleased the
industrialists.…read more

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Klein argued that the military effort was modest in the 1930s, and continued to
be so during the first two years of war as the regime attempted to provide both Guns and
Butter. A.J.P. Taylor found in Klein's work support for his idea that Hitler only wanted to
launch small opportunistic wars to revise the Versailles Settlement. Taylor believed that he,
like so many who had lived through the 1930s, had been tricked by Hitler, who was only
`pretending to prepare for a great war'.…read more

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From 19361939, production of petrol At the beginning of the war, Germany was
increases from 1,257 thousand tons to 1,935 only producing 18% of the demanded amount
thousand tons. Production of iron ore of synthetic oil. These synthetic materials
increases from 2,259 thousand tons to 3,928 were very expensive to develop but the
thousand tons. Production of synthetic rubber targets for these materials were not met.
increases from 1,000 tons to 22,000 tons.…read more

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Hitler was aware of the devastating impact of Total War on the Kaiserreich during WWI.
Thus post 1939; he made a number of decrees ensuring that the economy started to
build itself towards being an economy that could survive a lengthy and embittered war.
1939 ­ 1941
When war broke out in September 1939, the German economy was not prepared. Many
projects were not due for completion until 1942-1943.…read more

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Speer increased ammunition production by 97%, tank production
rose by 25% and arms production increased by 59%.
He used those in concentration camps as labour for the war effort. However the mass
genocide and the amount of resources put into this mass slaughter had been discussed in
relation to the economy. The Nazis murdered a mass population, many of whom were skilled
during time of economic hardship.…read more

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Battle of Britain.
a central planning board which monitored
various elements in economy.
+ Arms production increased by 59% during At the beginning of this period German
the first six months of rationalisation. armament production was inferior to that
of the United Kingdom and the USSR.
+ By the second half of 1944, more than a Centralisation and rationalisation
300% increase in arms production since somewhat held back by the Gauleiters at
early 1942.…read more


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