Assess the work of Hjalmar Schacht in restoring Germany's economic

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Assess the work of Hjalmar Schacht in restoring Germany's economic

situation.

Germany at the beginning of 1933 had a high unemployment rate, which

meant poverty was widespread. Those in work found that their wages

declining which had consequences for those who produced consumer

goods. International trade, industrial production and national income

had all dropped.

Schacht had been chosen by Hitler to solve Germany's economic problems

due to a couple of reasons. The most important one was the fact he was

the man who had solved hyperinflation in 1923 and had brought

Germany's economy back on track then; the other reason was because

Schacht was strongly right wing.

Schacht became the Economic Minister in 1934 and used the financial

facilities of the Reichsbank to help Germany rearm. He was then given

dictatorial powers over the economy. The new plan of September 1934

provided control of all aspects of trade and currency exchange.

Schacht had many ideas on how to get Germany's economy back up to full

strength. One of his ideas was influenced by Keynes, a British

economist. He adopted the policy of deficit financing; this idea was

that money would be spent of public works to create jobs. The

government would pay people to build motorways, which would then

reduce unemployment. They then had money to spend, which would mean

more products would be needed and companies would have to take on more

workers, lowering unemployment further.

The German government hoped that the secondary jobs, which were being

created, would reemploy the majority of the population, instead of

having to feed more money into the system.

But this didn't just solve unemployment; it was useful to the public,

it meant there were now modern roads, which eased travel over the

country. This idea had one more advantage although this wasn't for the

people; it was for the Nazi party. Building roads and updating the

country was good propaganda; people liked what they were doing and had

even more reason to want to keep them in power. Building wasn't the

only scheme launched; afforestation was also used to create jobs. This

idea paid off as unemployment was down to 2.5 million by mid 1934, and

then by the middle of 1935 it had decreased further to 1.7 million.

Hitler wanted 'autarky', which in principal was that Germany would

become economically self-sufficient. This would then mean that Germany

no longer would have to be dependent on other countries to import

foodstuffs and raw materials. Another advantage was that Reichsmarks

weren't wasted on import taxes. It also gave Germany the opportunity

to strive towards a target and it would give them pride when it was

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