HISTORY CAMBRIDGE A2 (PAPER 4)PRESENTATION 7

HITLER MODULE2. HITLER’S DOMESTIC AIMS UP TO 1941

HITLER’SECONOMIC AIMS

UNEMPLOYMENTGermany’s economy was in a mess when Hitler was elected Chancellor in January 1933. Hitler and Nazi propaganda had played on the population’s fear of no hope. Unemployment peaked at 6 million during the final days of the Weimar Republic – near enough 33% of the nation’s working population. Now Hitler decreed that all should work in Nazi Germany and he constantly played on the economic miracle Nazi Germany achieved.This “economic miracle” was based on unemployment all but disappearing by 1939.

UNEMPLOYMENT IN NUMBERSJanuary 1933 - 6 million January 1934 - 3.3 million January 1935 - 2.9 million January 1936 - 2.5 million January 1937 - 1.8 million January 1938 - 1.0 million January 1939 - 302,000

DEFICIT FINANCINGHitler’s economic aims were unclear at first as his economic aims were always second to his political aims so they had no coherent plan. His policies were a response to any given situation.Hitler’s first economic aim was deficit financing. He wanted to spend money on public works which would in return provide jobs for people because Hitler knew that he had previously promised work to the millions of unemployed and knew that his popularity was built on this promise.

Hitler starting work at Autobahn

AUTARKYHis second aim was autarky which meant economic self sufficiently. This means that Germany would be free of any world trends such as the Depression of 1929 and this was also made necessary by Hitler’s other economic aims which was to get the economy geared to war.

Prisoner work–force in the construction of the

Valentin submarine pens for U-boats, 1944

THE FIRST YEAR PLANIn 1933 Hitler made his first four year plans with Dr Hjalmar Schacht. Schacht was the President of the Reichsbank and was later the economics minister. The first four year plan was aimed at cutting unemployment by giving money to men aged 18-25 for building things such as autobahns in the form of the Reich Labour Service. Rearmament also meant that jobs were provided and also conscription was introduced after 1935. Women were forced out of work to provide more jobs for men and also more state jobs were created in the expanding bureaucracy.

REINFLATIONCompulsory labour service for young also provided jobs and things for them to do. Inflation was also limited and controlled by the abolition of trade unions, which were replaced with Robert Ley’s Nazi Labour Front, and controlling wages and prices. ‘Mefo’ bills credit note that was issued by the Government of Nazi Germany, from 1934 on, under the guise of a company named ‘Metallurgische Forschung’, or ‘Mefo’ for short. They were a fundamental part of the re-inflation of Germany's economy as it enabled the government to borrow money so they could fund the aims of the plan.

CHOICESThe unemployed were given a very simple choice: do whatever work is given to you by the government or be classed as “work-shy” and put in a concentration camp.Jews lost their citizenship in 1935 and as a result were not included in unemployment figures even though many lost their employment at the start of Hitler’s time in power.

REDUCING THE UNEMPLOYMENTMany young men were taken off of the unemployment figure when conscription was brought in (1935) and men had to do their time in the army etc. By 1939, the army was 1.4 million strong. To equip these men with weapons, factories were built (more off unemployment).With these measures in place the unemployment figure had to fall drastically and many saw the Nazi figures as nothing more than a book-keeping trick. But many would have been too scared to speak out against the Nazis or pass negative comments on the published figures – such was the fear of the Gestapo.

SUCCESS OF THE FIRST PLANThe balance of payments deficit means that little foreign currency was allowed so the New Plan of September 1934 gave the government control of trade and currency. Priority was given to imports needed by industry from abroad. Barter agreements were encouraged to avoid spending and all buying was done with marks therefore other countries had to buy back off Germany so a common market was created. The first four year plan was successful because production was up, trade became surplus and unemployment was down from 6 million to 1.75 million in 1935. However conscription and the rearmament means balance of payments deficit and consumer industries in competition with armament industries for cash, raw materials.

THE SECOND FOUR YEARS PLANTherefore Schacht wanted to slow down rearmament to make more goods to sell abroad. This made him lose influence so he resigned in 1937 and was replaced by Walther Funk.In 1936 Hitler worked with Herman Goering to create the second four year plan. The aim of this plan was the use of traditional and efficient industry to prepare forces and the economy for war. This included autarky by increasing production and developing ‘ersatz’ goods which were synthetic substitutes for products, training the workforce and controlling trade.

CHEAP HOLIDAYSThis plan was a success as industrial production was up such as coal, steel, aluminium and agriculture production was also up.The unemployment was down to 200,000 and the benefits from the ‘kraft durch freude’ meant cheap holidays and other leisure activities. Cheap holidays and the offer of them was a good way to win the support of the average person in the street. A cruise to the Canary Islands cost 62 marks – easily affordable to many though most cruises were taken up by Nazi Party officials. Walking and skiing holidays in the Bavarian Alps cost 28 marks. A two-week tour of Italy cost 155 marks.

THE VOLKSWAGENThe Volkswagen – People’s Car – was designed so that most could afford it. The Beetle, designed by Ferdinand Porsche, cost 990 marks. This was about 35 weeks wages for the average worker. To pay for one, workers went on a hire purchase scheme. They paid 5 marks a week into an account. When the account had reached 750 marks the worker would be given an order number which would lead to them receiving a car.In fact, no-one received a car. The millions of marks invested into the scheme were re-directed into the rapidly expanding weapons factories. This accelerated as World War Two approached. No-one complained as to do so could lead to serious trouble with the secret police.

PROTECTING THE PEASANTSHowever there were also failures of the plan. These included autarky which had limited success as by 1939 30% of raw materials were still imported as peasants were protected by Hitler, who promised to protect them, and therefore stopped the development of large modern farms which were better and more sufficient for the economy than the smaller ones.

THE UNDEMOCRATIC PLANThe plan was also undemocratic because big businesses were squeezing out the small. Cash was raised by forced loans mainly on big businesses and workers weren’t producing arms fast enough so rearmament was slow. Autarky also interfered with Hitler’s other policies e.g. towards women as Hitler initially wanted them at home but later needed them in work as conscription was forcing men into the army and leaving vacancies that needed to be filled in factories and other jobs. Some recovery was also on the way anyway possibly though the policies of Hitler’s predecessors such as Bruning who was chancellor in 1930.

CONCLUSIONSo in conclusion Hitler’s economic aims were successful in the form of autarky which was accomplished in spite of economic expansion Germany had not increased her dependence on imports. A lack of planning meant that Germany was not geared for total war meant that Hitler’s economic aims were also unsuccessful. In the end German economy would not afford both the ‘guns and butter’ which meant the rearmament and higher standard of living.