1936 to 1939
1936 – 1939, Four Year Plan: Military and political rearmament and the plunder economy
This period was defined by a major economic crisis faced by the Nazi government in 1936: demands of military production meant that quantities of raw materials that Germany had were falling dangerously low, and the German economy was heading for a trade deficit; between 1933 – 1936, German export prices dropped by 9%, while import prices increased by 9%, leading to a major financial crisis by 1936.
In response to this new crisis, the Nazi party envisioned a ‘Four Year Plan’, a series of economic reforms which would theoretically continue Germany’s path to becoming a superpower via the following means:
1. Reduction of employment – although this had been quite successful earlier on with Schacht’s New Plan (German unemployment was reduced to one million by 1937), it still had to be prioritised.
2. Increased synthetic fibre production – this included such materials as nylon and rubber. The dual purpose of this was to improve Germany’s technology to be on par with other great powers and to pursue the ideal of autarky, and also to ensure that Germany would not have to suffer from the effects of blockade of resources as had happened in World War One by the Royal Navy.
3. Continue public works projects – the mainstay of this aim was the Autobahn still in development at the time; the necessary number of workers were essentially drafted into service, as all unemployed men from the ages of 16 – 25 were made to work on the Autobahn. Side projects included various sports stadiums scattered around the country, flak towers (military fortifications) and statues and monuments dedicated to Hitler and the Nazi state.
4. Increase automobile production – Hitler loved cars, even though he could not drive himself. While the official reason was for the ‘betterment of the people’, the real driving force behind this was the hope that more men would learn how to drive and therefore enter the military with basic vehicular skills, thus cutting down training time when it came to driving trucks and the like.
5. Begin open re-armament. While military production had been de facto beginning ever since Hitler came to power in 1933, the Four Year Plan increased production drastically and made it ‘official’ government policy, in defiance of the Treaty of Versailles and the Allies.
As one can see from the five points, the Four Year Plan was very much one that was intended to put Germany on a war course; self sufficiency for war, building of military fortifications, military skills training and rearmament. This is in stark contrast to the New Plan, which emphasised stablity, peace and the betterment of the German people as a whole.
Hjalmar Schacht, who was not involved with the creation of the Four Year Plan, disliked the entire Plan as a whole but was vehemently opposed to Point 5, believing that it was in contradiction with attempts to stabilise the German economy and that antagonising the world powers would threaten Germany more than ever. Hitler, however, who was by then impatient with Schacht’s cautious trading measures and ‘consorting’ with ‘inferior’ states, dismissed Schacht’s concerns and placed Goering (with the benefit of hindsight, the ‘yes man’ of Hitler) in control of the Four Year Plan, who was far more supportive of Hitler’s rearmament policies. Schacht, who saw that he had essentially no more power in government, thus resigned his post as Reich Finance minister.
In summary for the two ‘peace’ periods, Schacht’s New Plan created some financial problems for Nazi Germany. Goering’s Four Year Plan which followed tried to improve on every single aspect of the Nazi state despite those problems, thus aggravating the entire situation as detailed below.