Economic changes

Model answer

A is Mefo bills. The Nazis used them because the spending did not appear in the government budget, so the scale of rearmament, which broke the Treaty of Versailles, could be hidden from other countries.

Model answer

Interpretation A argues that the Four Year Plan was largely a success. The manager praises the 'tremendous effort' that allowed German chemists to make petrol from coal and rubber from coal and lime, and the new factories built in a few years. He claims that this meant Germany could no longer be starved by a blockade, as in 1918, and that without the synthetic fuel and rubber the armies could not have fought for nearly six years.

Interpretation B differs because it argues that the plan failed in its main aim. It says self-sufficiency 'was never achieved', because Germany still relied on imports for about a third of its raw materials and synthetic oil and rubber met only 'a fraction' of its needs, at a much higher cost. Unlike A, it also stresses the costs of the plan, which took money and labour from consumer goods and put the economy under 'enormous strain'. B concludes that Germany could only become self-sufficient by conquest. So A sees the plan as a success that made Germany secure, while B sees it as a failure that pushed Germany towards war.

Model answer

The first change was a huge increase in military spending, which transformed German industry. Spending on the armed forces rose from about 2 billion Reichsmarks in 1933 to about 17 billion in 1938. Arms firms such as Krupp and chemical firms such as IG Farben expanded rapidly and made large profits, and demand for coal, iron and steel rose. Conscription, introduced in 1935, expanded the army to about 1.4 million men by 1939, which helped to end mass unemployment.

Secondly, the Nazis had to find new ways to pay for rearmament. Schacht's Mefo bills, IOUs issued through a dummy company, paid for about 12 billion Reichsmarks of rearmament without it appearing in the budget. His New Plan of 1934 controlled imports and made barter deals with countries in south-eastern Europe and Latin America, so that scarce foreign currency could be spent on raw materials for weapons. This led to a third change: consumer goods became less important. Imports of food were cut back, causing shortages of fats such as butter in 1935-36, which Göring justified by saying guns mattered more than butter.

Fourthly, the state took much more control of the economy. The Four Year Plan of 1936, run by Göring, aimed to make Germany ready for war within four years and self-sufficient in key materials. The government directed investment, controlled prices and wages and even set up its own steel company, the Reichswerke Hermann Göring, in 1937. When Schacht argued for slower rearmament, he lost his post as Economics Minister in 1937. These changes were linked, and by 1939 they had created serious strains: shortages of raw materials, foreign currency and labour, and a mountain of debt that could only be solved, in Hitler's view, by conquest.

Model answer

Reducing unemployment was a major success for the Nazis. In early 1933 about 6 million Germans were out of work, and by 1938 registered unemployment had fallen to about 400,000. The Nazis used the Reinhardt Programme of 1933, the building of the autobahns under Fritz Todt and the Reich Labour Service, which was compulsory for young men from 1935. Rearmament and conscription, introduced in 1935, created many more jobs, and by 1938-39 some industries were short of workers. This success made the regime popular with many Germans. However, the figures were flattered by 'invisible unemployment': women and Jews who were pushed out of work, men in the RAD and the army, and prisoners in camps were not counted, while part-time workers counted as employed. Many of the new jobs were also badly paid, and the recovery depended on rearmament funded by Mefo bills and borrowing.

Making Germany self-sufficient was much less successful. Schacht's New Plan of 1934 controlled imports, and from 1936 the Four Year Plan under Göring tried to replace imports with ersatz products. IG Farben developed synthetic oil from coal and Buna rubber, the Reichswerke Hermann Göring used low-grade German iron ore, and farmers were pressed to grow more food. However, by 1939 Germany still imported about a third of its raw materials, including oil, rubber and Swedish iron ore. Synthetic production fell far short of its targets and cost much more than imported goods, and resources were diverted from consumer goods, causing shortages of fats.

I think reducing unemployment was more successful. Its aim was to put Germans back to work, and even allowing for the missing groups, mass unemployment really had disappeared by 1939. The aim of self-sufficiency, by contrast, was not achieved: Germany remained dependent on imports for vital materials, which is why Hitler looked to conquest to gain them. However, both policies shared the same weakness, because both depended on rearmament, which could not be paid for indefinitely without war. In the short term, though, the fight against unemployment met its target while the drive for self-sufficiency did not.