The Nazi Economy

Schact

  • Hitler placed Hjalmar Schact in charge of the economy from 1934 - 37 as Reich Minister for Economics.
  • He devised novel schemes to help pay for rearmament.
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Reinhardt Plan

  • 1933
  • Over one billion Marks pumped into public works and infrastructure
  • Assisted in stengthening and rearming Germany. The autobahns, for example, aided the mobilisation of German tanks.
  • Public works did not come under Defence Ministry budget and so Allied scrutiny was avoided.
  • Heavily reduced unemployment, especially when combined with the industries that developed out of public works e.g. rearmament.
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New Plan

  • 1934
  • Germany was heavily reliant on imported food and raw materials but could not export enough goods because of foreign economic protectionism and boycotting. Therefore, Germany struggled to pay for imports.
  • Schact's New Plan set up trade agreements with Eastern European and South American countries.
  • These countries exported valuable food and raw materials in exchanged for German manufactured goods (which were not always needed).
  • Imports were regulated by the allocation of all foreign exchange by the government.
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Mefo Bills

  • 1934
  • Schact could not fund rearmament by printing more money nor by borrowing money from abroad.
  • Mefo Bills were issued. These were government guaranteed bonds repayable in periods of up to 5 years.
  • They were trusted by the public and financed 50% of arms expenditure in 1934/35.
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Four Year Plan

  • 1936
  • Plan brought in under Goering as Schact wanted to cut rearmament in favour of food imports.
  • Hitler wanted to find a provisional solution to food shortages as well as getting Germany ready for war.
  • Germany had to be self-sufficient to avoid the same food crisis faced in WW1.
  • Though production did rise due to the Four Year Plan, Germany still needed foreign imports and so were short of foreign exchange.
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Policies of the Four Year Plan

  • Reducing unemployment
  • Increasing synthetic fibre production
  • Undertaking public works projects under Todt
  • Increasing automobile production
  • Initiating numerous building and architectural projects
  • Further developing the Autobahn system.
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German Expansion

  • Hitler benefitted from the expansion of Germany.
  • The Anschluss with Austria and the incorporation of the Czechoslovakian Sudetenland (1938) greatly added to the Nazi economy.
  • The Reich gained their industries, raw materials, food supplies and gold/foreign currency reserves. 
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Economic Downturn

  • 1939
  • Shortages of raw materials and skilled labour whilst armament spending increased.
  • Hitler tried to counter this by creating fresh demands for armaments by lauching the Second World War.
  • Banks and firms involved in the armaments industry pledged support for war and territorial conquest.
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Economic Downturn

  • 1939
  • Shortages of raw materials and skilled labour whilst armament spending increased.
  • Hitler tried to counter this by creating fresh demands for armaments by lauching the Second World War.
  • Banks and firms involved in the armaments industry pledged support for war and territorial conquest.
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