Stimulating

economic

recovery

The Nazis had achieved power partly as a result of Germans’

worries over the country’s economy.

Therefore an initial priority for the Nazis was rebuilding the economy, to maintain support for the regime. An improved economy was used to rebuild German military strength.

The economy inherited by the Nazis was in an extremely poor

state, based on the global Depression which had ruined

the world economy.

Hitler’s government faced problems such as a lack of raw

materials, limited foreign currency to pay for imports

and a skills shortage.

Hitler’s immediate priority was to fix Germany’s

unemployment problem.

Six million people were out of work and this would

potentially undermine his government and cost him and the Nazis popularity. It could even attract support to the

Communists.

In reality the economy started to improve before the Nazis

took power, but Hitler was well placed to take credit.

The Nazis launched a series of public works programmes –including building roads and houses – all of which created

work, both directly and indirectly.

The Nazis also reduced unemployment in other ways.

This included forcing Jews and married women out of work,

or stopping farm workers claiming unemployment

benefit. The German government also gave

subsidies to private companies to hire more people.

Germany also had to deal with other economic challenges.

The improved economy led to a balance of payments problem, where Germany was importing more than exporting. The New Plan involved the government approving imports. In addition

barter deals with Balkan countries saved foreign currency.

Germany also needed more money to finance its economic and

military rebuilding.

The government spent more money than it raised in taxes. It funded this using a Mefo Bill, which was a note used to pay

companies. It could be turned into Reichsmarks after five years (with

interest). This funded half of Germany’s rearmament.

The Nazis’ policies had a quick impact (albeit that much of the

improvement was underway before they took power).

Unemployment fell from almost 6 million in 1932 to

less than 4 million by the end of 1933. This continued to fall

each year until it was only 200,000 by 1939.

Other indicators also showed a general economic improvement.

Average wage levels rose between 1933 and 1939,

although prices saw an increase too which minimised these

benefits. In addition Germany’s national income rose from 42.6

billion Marks in 1932 to 79.8 million Marks by 1938.

Not all economic improvements were shared

equally by all groups.

Although wages rose so did average working hours for most workers. In addition whilst industrial workers’

income rose 25% between 1933-38, this figure was 116%

for big businesses.

The Nazis also made other attempts to improve conditions

for German workers.

The Strength Through Joy scheme offered them access to

cheap holidays and cars.

In addition the Beauty of Work programme improved

workplace conditions, such as ventilation and lighting.

Historians’ views

• Geoff Layton: By mid-1936 the German economy had significantly improved – including falling unemployment –however this hid major problems which arose by 1936.

• Roderick Stackelberg: A major source of Hitler’s popularity was the improvement of the German economy.

• Wolfgang Benz: Takes the view that, on the issue of unemployment, the Nazi government’s success “was dramatic” but eventually led to labour and skills shortages.