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The economy under Schacht: (What methods did Hjalmar Schacht use so to…
The economy under Schacht:
Nazi party economic aims
Why did Hitler tell his Cabinet to not voice these aims? These aims made it very obvious that the Nazis were preparing Germany for war. Hitler knew that in a time of economic depression and just 13 years after WW1 this would not be welcomed and would cause resistance to his party
Wanted to be self sufficient in the production of raw materials and food
Hence, The Nazis worked on the economy, but kept their aims under wraps
Recovery from the depression that had followed the Wall Street Crash of 1929
Get rid of unemployment - Hitler wanted to make sure every German had a job in Germany
Avoid inflation
Restore Germany's balance of trade - as the amount of imports was larger than exports
Produce substitute products for products Germany could not easily produce
What methods did Hjalmar Schacht use so to stimulate the economy?
What was the Mefo Bill? The Mefo Bill was a scheme whereby the German government paid for rearmament with credit notes
Pumped money into the economy to build houses, schools, parks and autobahn
Began rearmament - financed by the Mefo Bill
Gave subsidies to private firms to encourage them to take on more workers - hence reducing amount of unemployment and increasing production
He implemented tax concessions (reductions) for certain group so to stimulate consumer demand
Put controls on wages and prices so to prevent hyperinflation which had happened in 1923
Schacht set up the New plan in 1934
What was the new plan? The new plan put control on imports and exports because in 1934 there were more imports than exports out of Germany. Also set up trade agreements with Africa and the Balkans for food and supllies
Why was the New Plan a clever idea in regards to trade? Africa and the Balkans would supply Germany with food and raw materials and Germany would pay for this with the Reichsmark. This would mean that the Africans would have to purchase more German good with the money, hence boosting the economy further
What were the drawbacks to the New Plan? Germany economy was still reliant on other countries for food and raw materials, and hence was not achieving its goal of autarky
What assistance was given to farms? Tariffs were put on imports so to encourage Germans to buy German framers produce. Farm law reduced the amount of tax farmers had to pay. Also allowed farmers to employ teenagers as domestic servants for free
What was Schachts attitude to rearmament? Despite the Mefo Bill scheme, Schachts was unwilling to focus on rearmament which was the main reason for his downfall
What was the Reich Food Corporation? Reich food cooperation set up in 1933 regulated agricultural production
What did the Nazis do to reduce unemployment?
What was set up in 1935 to further reduce unemployment? The Reich Labour service which meant unemployed men were compelled to undertake 6 months of labour in either farming or construction
How effective was the autobahn in reducing unemployment? Despite propaganda claiming that thousands and thousands were employed to build it, at the peak of construction, only 125,000 directly employed.
How did they provide jobs? They spent money on public works such as the autobahn, hospitals, homes and schools, Olympic stadium and therefore workers would need to be employed to build these public amenities
What was the name for the Nazis project to reduce unemployment? The Battle for Work
How successful were the Nazi economic policies?
How many unemployed were there in 1938 compared with 1933? 6 million unemployed in 1933, 1 million in 1938
Why is the reduction in unemployment not quite as impressive as on first glance? Jews and Women were accountable for more than half of Germany's population, yet they were stripped of their jobs so to create jobs for men.
Women were not included in the unemployment statistics and following the loss of citizenship in 1935, Jews were also not included, so the reduction was not quite impressive as it seems.istics
Economic recovery was well underway
By 1939, how much aurtarky had been achieved? Germany was self sufficient in grain and potato production and almost with meat and vegetables. However it still relied on imports for 1/3 of its goods
How much had public spending increased by? Government expenditure increased by 70% by 1936
By 1942 how sefl sufficient was Germany - following teh four year plan? Steel was at 85% of its targets, oil was only at 43%
Had Hitler achieved his aims in terms of unemployment? No, Hitler wanted to make sure every German had a job. Hence despite a 5 million reduction, 1 million were still unemployed and many who were not included in the unemployment statistics were also without a job. So no unemployment had dramatically reduced but Hitler complete aims were not satisified