Economic conditions 1933
* Germany depended heavily on its ability to sell manufactured goods. * The demand for German exports declined and its sale of manufactured goods, collapsed * The value dropped from 13.5 billion Reischmarks in 1929 to 4.9 billion in 1933. Employment
* The industrial contraction was mass long-term unemployment. * Even before the Great Depression, workers were being laid off and in 1929 the unemployment was 1.9 million * The length and severity of the economic recession greatly increased the problems. * 1932 figure rose to 5.6 million
* Reparations and inflation was a result of war debts.
* German banking had serious financial problems
* Foreign investment disappeared
* 1931 five major banks collapsed.
Economic Recovery 1933
Schacht’s economic strategy
* Early years economic policy under Hjalmar Schacht, president of the Reischsbank and minister of Economics. * Schacht was already known and respected because of his leading role in the creation of the 1923 hyperinflation. * Economic depression reached low point in 1932-33, this helps politically and economically the Nazis.
Banking and the control of capital
* Because the German banking system had been so weakened, the state assumed greater responsibility for the control of capital within the economy. * Set interest rats at a lower level
Assistance for farming and small business
* Financial benefits were given to groups, such as farmers and small businesses. * It stimulated economic growth, rewarded of the most sympathetic supporters of the Nazis in the 1930-3: * Maintaining tariffs on imported produce in order to protect German farmers * The Reich Food Estate giving subsidies as part of nationally planned agricultural system * The Reich Entailed Farm Law reducing debts by tax concessions and lower interest rates in an attempt to offer more security of land ownership to small farmers...
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