1. Germany’s Economy Under Hitler’s Rule DONE BY: PEOPLE WITH CUPS

2. Economic Problems Faced Nonetheless, he inherited a number of problems: Unemployment – 6 million official and 8 million unofficial Foreign trade reduced by half Industrial productions reduced by 40%. Hitler was thus presented with the task of saving Germany from an economic nightmare. He made a lot of promises to the peasants and workers, and had a duty to realise them, yet he had no proper blueprint for reforms.

3. The “New Plan” It intended to reduce imports, reduce unemployment, channel government spending into a wide range of industries and make trade agreements with other nations. Hermann Goering also wanted Germany to become self-sufficient in all industries so that as a nation she could survive a war. Were these plans successful?

4. Measures Taken Reflationary Policy/State Investment Policy Schacht’s New Plan Goring and his 4-year Plan

5. Reflationary Policy/State Investment Policy This policy entailed spending less on rearmament and more on public works such as roads and canals. This generated work for the unemployed; granted more subsidies for new housing constructions and wage freeze to keep labour cost low. Hitler initiated a Go Back to Work campaign and this earned him the popular support of many. In September 1933, Hitler took charge of the overall planning and organisation of agriculture, and enhanced peasant ownership of land. He also launched the Battle of Production to increase the production of grain in 1934-35. This was unsuccessful because it coincided with a poor harvest, and was compounded by the problem of inappropriate and insufficient machinery and labour on the fields. Nonetheless, within 11 months, unemployment reduced from 6 to 4 million, and to 2.6 million in 1934. By 1938, Hitler managed to eliminate unemployment. (Statistics may be unreliable)By 1938, Hitler managed to eliminate unemployment. (Statistics may be unreliable)

6. Schacht’s New Plan 1934 saw Hjalmar Schacht, President of the Reich Bank assuming the post of the economic minister. Germany was running a Balance Of Payment deficit as it imported more than it exported. In response, Scharcht introduced the New Plan, 1934 Under the New Plan, the government had extensive powers to regulate trade and currency transactions. He aimed to prevent Germany from becoming too dependent on foreign loans.Negotiated a series of trade agreements with Balkan states and South America.This aimed to prevent Germany from having huge foreign currency deficit.Gave priority to raw materials which were vital for rearmament.Import of cotton and wool was kept.Import of iron ore increased.Schacht‘s Plan enabled Germany to pay for rearmaments and encouraged growth of industries; 1935 had trade surplus.However, he had not tackled the root of the problem as Germany became dependent or reliant on the import of raw materials.By 1936, the German economy had recovered, and it was thought that she could embark on rearmament programmes wholeheartedly.Yet, continued rearmament would restrict goods for exports and pose as a problem to the economy.However, Hitler was unreceptive to such an argument and insisted on autarky, and this marked the parting of ways between Schacht and Hitler.

7. Goring and his 4-year Plan The continued rearmament would restrict goods for exports which would undermine the economy. Increase exports means more revenue. Hitler however was unprepared to accept such an argument and wanted self- sufficiency- autarky [Compare with Mussolini] Schacht resigned for he insisted that German economy was unprepared for war economy. April 1936 saw the appointment of Goring as Commissioner of Raw Materials who had the task of making Germany self-sufficient by producing synthetic fuels and raw materials. Goring was put in charge of the Four-Year Plan with the aim of making Germany economically and militarily prepared for the war. {Compare with Soviet’s 5 Year plan} To make Germany self-sufficient in raw materials by developing synthetic materials. To retrain certain sectors of labour force.To regulate import and export closely.To increase agricultural production.His reforms produced mixed results.

8. Unemployment Rates Unemployment in GermanyTotal/ million January 19336 January 19343.3 January 19352.9 January 19362.5 January 19371.8 January 19381.0

9. Effect of Measures taken Government income had been 10 billion Reichsmarks in 1928. In 1939, it stood at 15 billion. However, government spending had increased from 12 billion Reichsmarks in 1928 to over 30 billion in 1939 - a difference of 15 billion Reichsmarks. From 1933 to 1939, the Nazi government always spent more than it earned so that by 1939, government debt stood at over 40 billion Resichsmarks.Nazi government always spent more than it earned so that by 1939, government debt stood at over 40 billion Resichsmarks. balance of trade figures had gone into the red by 1939 by 0.1 billion Reichsmarks. unemployment had fallen from 6 million in 1933 to 300,000 by 1939 and industrial production in 1939 was above the figure for Weimar Germany before the 1929 Wall Street Crash.Weimar Germany before the 1929 Wall Street Crash. annual food consumption in 1937 had fallen for wheat bread, meat, bacon, milk, eggs, fish vegetables, sugar, tropical fruit and beer compared to the 1927 figures. The only increase was in rye bread, cheese and potatoes. real earnings in 1938 were all but the same as the 1928 figure. Real earnings are wages adjusted to allow for inflation.

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