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The economy under Nazis (Economic policy (In what form was the aid to…
The economy under Nazis
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Economic policy
In what form was the aid to farmers? They were allowed to employ teenagers to work as domestic servants for free, they were given tax reductions, they were given state subsidies to help rebuild their businesses and the Nazis put taxes on imports so to encourage Germans to buy homegrown produce
Apart fro helping farmers and small businesses, how else did the Nazis try and boost the economy? Increased government spending by 70% investing money in public work schemes such as the autobahn, schools, hospitals etc, so to decrease the number of unemployed
Why was assistance given to farmers and small businesses? Many were bankrupt following the Great Depression following the Wall Street crash and also farmers were among the most sympathetic to the regime due to their fear of communism, so the Nazis were keen to embrace this
What was the RAD and what did the Nazis do to it? They increased the size of the RAD which employed 19-25 year olds hence also giving them a job in either farming or construction
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Why did Schacht set up the New plan in 1934? Balance of payments was an issue because Germany was importing more than it was exporting which ran the risk of debt and inflation
What was the 1934 New Plan? A plan aiming to sort the balance of payments problem by setting up bilateral trade treaties and controlled government spending
What were the bilateral trade treaties? Trade agreements set up with the Balkans and West Africa meaning that Germany would benefit from their raw material but would pay for it with the Reichsmark, hence meaning they would have to buy German goods - hence increasing exports
Why did Schacht introduce Mefo Bills? They were credit notes with an incentive for banks to not ask for the money for 5 years due to 4% interest rate. This meant Germany could begin rearmament in 1935, despite not having the money to do so. It also meant that rearmament was kept from the German people, hence preventing opposition to the aims of going to war
What did the limit on imports include? Both food and raw materials so the Nazis couldn't rearm to the extent they wanted as they needed to feed the people of Germany
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Schachts Downfall
This was an example of Gleichshaltung and Dualism - The Nazis made use of the skilled economics minister until he would not adhere to Nazi aims and then was replaced with a hard line Nazi - in this case: Gorring
Hence, Hjalmar Schacht was marginalised and Gorring put in charge of the new 1936 Four Year Plan which replaced the "New Plan"
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