Quick questions on Nazi economic policy 1933-1939: HSC Modern History National Study

Schacht was appointed President of the Reichsbank in March 1933 and Minister of Economics in August 1934. He had served Bruning and was a conservative monetary expert, not a Nazi true believer.

Unemployment was the regime's most visible challenge.

By 1936 the regime faced a choice: continue Schacht's cautious approach or accelerate towards rearmament. Hitler chose acceleration. His secret memorandum to Goering (August 1936) declared that "the German army must be ready for war within four years; the German economy must be capable of war within four years."

Military spending rose from around 1 per cent of GNP (1933) to around 5 per cent (1935), to 13 per cent (1937), to around 23 per cent (1939). Germany was the most militarised economy in Europe by 1938.

The German Labour Front (Deutsche Arbeitsfront, DAF) under Robert Ley replaced trade unions from May 1933. Strikes were illegal. Wages were set by Reich Trustees of Labour. Real wages stayed around 1928 levels through the period.

The Anschluss (12 March 1938) added Austria's gold reserves (around 80 million dollars), Austrian foreign exchange, and around 100,000 unemployed workers. The Sudetenland annexation (October 1938) added Czech industrial capacity. The occupation of Prague (15 March 1939) seized Czech gold reserves, the Skoda armaments works, and trained Czech divisions' equipment. Adam Tooze argues these seizures bought time for an economy approaching its sustainable limits.

By 1939 the German economy was running into constraints: - Balance of payments: rearmament required imports of iron ore (Sweden), oil (Romania, Soviet Union), and bauxite that could not be paid for without exports. - Labour: full employment from 1937 created shortages that were filled in 1939 by drawing women back into work and from 1940 by foreign forced labour. - Consumption: civilian goods were rationed informally from 1937 (butter, fats, coffee). - Public debt: from 12 billion marks (1932) to 41 billion (1939).

Adam Tooze (The Wages of Destruction, 2006) is the modern standard: rearmament was effective but approaching its sustainable limits by 1939; war was a strategic necessity.

The Plan (1936) was Goering's; Schacht resigned over it in 1937.

Synthetic petrol and rubber covered only a fraction of consumption; Sweden and Romania remained essential.

Off-balance-sheet credit through 1938 hid the scale of rearmament from foreign observers. Around 12 billion marks were issued.

Announced 1937, KdF model 1938; not a single car was delivered to civilian customers before the war.