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German History : 3 The Economy - Third Reich - Coggle Diagram
German History : 3 The Economy - Third Reich
1933 -1936
Economic recovery and Schachts New Plan
Sept 1934 New Plan
Regulation of imports through controlling allocation of foreign exchange
Bilateral trade agreements with South Eastern European countries (mostly for oil)
this preserved foreign currency
so less dependant on vunerable imports
Balance of payments crisis and dependency on foreign supplies
Tackling unemployment
1933 6 million unemployed
deficit spending
on public work schemes eg Autobahn
stimulates economic activity
Fritz Reinhard 1933 allocated funds for public works - 'Reinhardt Programme'
Fritz Todt motor car production - in 1935 by 1/4 million cars produced
Voluntary Labour Service (VAD)
Labour intense work promoting sense of national duty
By 1935 half a million 18-25 year olds participating
Rearmament
1933 rearmament began
Kruppsteel firm receiving orders for 'agricultral tractor' which were actually tanks
helped expand employment
March 1935 compulsory military service for 18 year olds which helped with youth unemployment
Mefo April 1933 (mefo bills)
Issued credit
1934-36 secretly financed 50% of weapons
1936 - 1940
Economic crisis 1935-36: Guns vs butter debate
The Agricultral Minister Walther Darre argued for more foreign exchange to import food
Schacht suggested slowing down of rearmament to pay for food imports
Goebbels and Goering wanted to prioritise production of weapons - that guns would make Germany powerful but butter would make Germany fat
Led to Schachts resignation in 1937
After 1937 switched to focus on militarisation
Four Year Plan
production targets
targets set to prepare Germany for war
Chemical industry vital for producing other necessary military items
targets in chemical sector
aimed to meet demand for military and war related products
eg steel for guns and tanks
autarky and economic self sufficiency
insulated Germany from global disruption
also wanted this to address potential shortages of foreign exchange
led by Herman Goring
due to WW1 and great depression outcome was wanted to minimise reliance on global market
investment in synthetic materials
coal
iron ore
oil
rubber
IG Farben
a major German chemical congiomerate
synthetic raw material
rubber (for military and industrial applications)
coal to produce fuel and chemical
oil produced synthetic
subsituted imported goods
Profits increased 71% between 1936-39
Military preperation
defence spending was 29% of GNP by 1939
1938 Germany was spending 3x the amount spent by Britain, US and France on armaments
significant proportion of plan was to rearm and expand military - increase production of weapons, equipment etc
Labour force
Implemented measures to control wages eg set limits, salary increases and restricting power of workers
aim to maintain price stability
large portion of workforce focused on military prep
Command Economy
centralised decision making by Goring who oversaw and coordinated
government planning - through four year plan
Priority to military production - resources directed towards need of military
Labour mobilisation - control labour force
1940 - 1945
occupation and plunder
rapid overwhelming attacks by Nazis (Blitzkrieg) led to a lot of occupation
Poland (1939)
Denmark, Norway,Belgium, the Netherlands and France (1940)
occupation boosted economy for short term as resources from countries could be used (mostly oil)
Problems in the war economy
underlying weakness in economy
lack or planning
lack of organisation
lack of coordination
lack of coordination between 4YP and armed forces
Spring 1940 Fritz Todd
Appointed Minister of Armaments and Munitions
unable to overcome problems in economy
led to deep state of crisis by 1941
Speer and the war economy
Speer was minister of munitions
established central planning board fir coordination
implemented measures to reduce waste and inefficiency in factories
using new workers and manufacturing schemes
reduce amount of types of weapons produced - eg different types of lorries reduced from 151 to 23 in 1942
standardised components eg JU88 bomber used 4,000 different bolts and screws got reduced to 200
Used Russian PoW, inmates from concentration camps and women in the later years to work
Jan 1943 women between 17-65 called to work
1944 IG Farben employed 10,900 worker
End of 1942 5mil foreign workers
Nov 1942 1.5mil Russians worked
Impact of Speers policies
good impact as production reached very high levels despite shortages of resources
didn't overcome military and strategy reversals in Nazi Germany- economic challenges increased with times
Setbacks eg Battle of Starlingrad 1942-43