When Hitler came to power the greatest economic problem facing him was unemployment. In January 1933, the official total was 5.7 million yet the nazi’s had no detailed plans with the economy. The party’s economic policy was vague. It was both anti-communist and anti-capitalist to attract the support of as many people as possible. Hitler was personally hostile to communism. He was also eager to gain support from the great industrial leaders such as Alfred Krupp. If the Nazi’s had any policy, it was that the party should control the economy: of trade, industry, agriculture, the banks and the workers themselves.
Goring Takes Over The Economy
By 1936 Hitler wanted to spend much more on armaments to prepare Germany for war. Spending had already risen from 2 billion marks in 1933 to 11 billion. Schacht thought this would ruin the German economy. With a year Schacht had been sacked. Hitler ordered Hermann Goering, already in charge of the second four-year plan, to run the economy.
Goering believed that Germany should greatly reduce its need to import certain ‘military’ raw materials and food. In particular he decided that steel, rubber and oil must be home-produced. Only then would Germany be able to fight another war successfully (Hitler agreed with this and it went ahead). The policy was called Autarky, which means self-sufficiency.
Well a new steel works was built which was named after Goering. It was designed to use low-grade German iron ore. Most steel-works used high quality ores usually imported from Sweden. Synthetic rubber and oil was produced from German coal. All these plans however had only limited success. By 1939 Germany was importing one-third of the raw materials it needed. Oil production reached 18% of total needs, which was only half the planned target. Rubber production was more successful but German- produced oil and rubber were both more expensive than the imported supplies. The Goering steel works failed to produce steel suitable for armaments until it began to use Swedish ores. Nevertheless, by 1938 German steel production was 22.6 million tons, third largest in the world.
Goring also tried to make Germany self-sufficient in foodstuffs. At the same time full employment meant people had more to spend on food. The population was also increasing so this policy failed also, except in bread, potatoes, sugar and meat. By 1939 Germany was still importing 17% of her agricultural needs. Overall I think that Autarky was not very successful but it did definitely help Germany, however it could have been a lot more successful than it was.
The Hossbach Memorandum
By 1937 Germany’s re-armament programme was building up rapidly. It was having serious effect on the economy. Re-armament – building warships, tanks and guns – used vast quantities of steel and serious shortages were developing. There was a shortage of skilled workers and the cost of re-armament was growing very quickly. The building programme of autobahnen, stadiums and so on was effectively squeezing the country dry, something needed to be done and soon. Hitler had 3 options to deal with this problem. First he could reduce spending, especially on armaments. Second he could cut the living standards of the German people. Third he could take wealth from other countries by invading then.
The economic situation was getting worse and worse that on November 5th 1937 Hitler called a top-level conference. The war minister von Blomberg, the commanders of the army, navy and air force and the foreign minister were all-present at this minister. So was a colonel called Friedrich Hossbach who wrote a report on the meeting which has survived and is usually referred to as the ‘hossbach memorandum.
Hitler spoke at great length at this meeting. Mostly he spoke of Germany’s needs for more ‘living space’ and therefore resources. It was only by getting lands that Germany could remain rich and powerful. Neither Autarky nor could more trade really achieve that. To get more lands, said Hitler, could only be done by force. This involved risks, especially with Britain and France. However, Hitler was that they were both nervous about war and even if they weren’t they were weak, compared to Germany who had a considerable lead in the re-armament. This lead would last until 1943-45. After that, the other powers would be equally well armed. So unless France had a civil war or a war with another territory such as Italy, Germany must gain its new territories by 1943-45 at the latest.
The first of these targets, which Hitler wanted to capture, were Czechoslovakia and Austria. Austria’s lands were driven into Germany’s like a stake. Austria was the land of Hitler’s birth. He had always believed that it should be part of Germany. Once these two territories had been taken he would move further east.
Overall Hitler’s management of the economy was good but and his plan to take over new lands in order to become more powerful and gain more resources was actually a very good plan and he executed it just at the right time as well. However he just went too far but that is another story.