Herman Goering was placed in charge of the second 4 Year Plan: 1936-40. Schacht failed to convince Hitler of the necessity for scaling down rearmament and found that his responsibility for the economy reduced, in 1936, in favour of Herman Goering. Schacht was removed from this role and replaced by the more subservient Walter Funk. Hitler had used Schacht for his ability to rehabilitate the economy and German financing.
Herman Goering and the Second Four Year Plan
Goering introduced the second four year plan for German economic recovery. This plan is key to understanding how far Hitler was creating a war economy in peacetime and creating the conditions necessary for war in the future.
Goering’s Role
Goering was the effective economic overlord of Germany and his main tasks were:
- Rearmament
- Works Programs (keep unemployment low)
- Autarky (self sufficiency)
His powers included:
- The ability to acquire property and businesses for his programmes.
- Directing industry
- Re-channelling of finances
- Directing policy
From 1937 onwards he amassed a vast personal fortune from state-owned mining and industrial enterprise company. It became the largest industrial enterprise system in Europe. He controlled the extraction or production of:
- Iron Ore
- Coal mining
- Smelting works
- Oil refineries
- Steel works
- Armaments
Goering’s method of attaining autarky
One of Goering’s key aims within autarky was to replace products that Germany was not producing enough of or at all by synthetic methods. For example, rubber, oil and petrol were produced in large quantities and stock-piled for future need. Iron ore was concentrated at Salzgitter in Hanover and Fanconia in order to reduce reliance upon Swedish imports. He established companies in the Ruhr to supply German industry with coke and coal rather than importing from Italy and France.
Mixed results for the Four Year Plan
Such schemes did not always meet with success. Production in Salzgitter fell below target levels while in Franconia steel and iron works were not completed before the war started. Additionally, Hitler’s foreign policy (1936-38/9) brought Germany territories that were richer in raw materials and minerals which reduced the need for production within the Reich.
Goering’s use of Industrial partners
Goering was also keen to establish links with big business, especially with those who would be useful to the Nazi regime later. He forged a strong relationship between the Nazi party and the chemical giant IG Farben. The company supported the party financially and committed itself to produce synthetic substitutes for rubber, petrol, petrol, oil and textiles. Likewise, the company persuaded the Nazi party to increase its investment on the promise that it could help Germany achieve self-sufficiency.
Goering, though, was more than a war developer. He was a vicious administrator, who would make continued demands of his staff and would sack civil servants at will. He set up a General Council that was directly answerable to him. He made all the decisions on foreign exchange and raw materials, as well as taking responsibility for the allocation of labour, agriculture, price control, industrial investment and foreign trade.
Summary: Goering and the Second 4 Year Plan
1936 was a turning point for the Nazi party and for the economy.
Hitler’s initial policies had been clearly successful. Confidence was high, unemployment was down to 1.6m, the nation was benefiting from Hitler’s policies. He now needed to keep them up and, if possible, improve. The question was now: how does the Nazi state progress?
The Undermining of Schacht
Schacht had initially accepted the need for government deficit financing in the reflation of the new economy but he was becoming concerned at the distortion of the economy due to rearmament. He was worried at the increasing strains on the budget and on the mounting balance of trade deficit. Schacht wanted to increase exports and slow the increase in arms expenditure. Hitler became impatient with Schacht and put Goering in charge of the Office of the 4 Year Plan.
The Second 4 Year Plan
Goering’s brief was to:
1. Maintain the platform that had been established by Schacht.
2. Rearmament
3. Autarky (Self-Sufficiency) in food, industrial output, raw materials and machinery output.
Goering: Business, Industry and Power in the 4 Year Plan
* Goering planned to take control of the vast resources of the Germany through one vast bureaucratic apparatus to ensure that private industry fulfilled the aims of the State.
* Targets would be pre-set for each company.
* Before long, Goering held almost complete authority over the allocation of capital, raw materials and labour.
* Firms such as IG Farben co-operated with the plan as they benefited materially and from huge Government investment.
* IG Farben also benefited from the centralisation of industry that enabled them to control price, distribution, supply and product.
* Businesses who did not co-operated incurred the Goering’s wrath.
* When the iron ore producers of the Ruhr refused (1936) he set up theReichwerke – a massive state run mining operation – to compete with them.
* He also used compulsory purchase, denied companies access to funding and used intimidation to keep companies in line.
* By 1939, the Reichwerke was the largest industrial enterprise in Europe.
Success/Failure of the 4 Year Plan
* Depends on when you look at the either of the four year plans.
* Unemployment was certainly lowered – it drew great praise from nations outside Germany. Many historians have come to question the success of the programme in actually lowering unemployment as their a natural up-turn in the world economy after 1933.
* Work creation schemes and massive social programmes certainly gave the impression of a vibrant, exciting and exhilarating work for all scheme. The GLF, through Strength Through Joy and The Beauty of Work, may have improved working conditions but real wages rarely rose between 1933-39 despite a distinct labour shortage.
* Heavy industry certainly showed improvement in output – especially industries related to the military and rearmament.
* Iron, steel and chemicals also saw an up-turn in their output figures – this again was partly due to international sales and government patronage.
* Rearmament plans were extensive but they did not provide the platform for full-scale war. That was realised in September and October of 1939 when the requirements of the Wehrmacht and Luftwaffe were challenging for German Industry.
* The strains of attempting to produce for guns and butter produced an economic crisis by 1939 which (according to the historian Ian Kershaw) may have convinced Hitler to go to war early.
In general, it must be remembered that by the outbreak of war Germany was still dependent on foreign sources of supply for one third of her raw material requirements. It was only by 1942 that Germany was in any way self-sufficient but by then Germany was embroiled in a full-scale European war. Her resources were mainly those plundered from enemies and conquests.
Germany 1919 – 1945 Links
The Second Reich
Unification of Germany – Political systems within the Second Reich – German Society during the Second Reich – Collapse of the Second Reich
Weimar Republic
Interim Government – Founding of the Weimar Republic – Impact of the First World War on Germany – The Treaty of Versailles and its impact on Germany – Weimar Constitution1919-1923: Years of Crisis? – Spartacist Uprising – Kapp Putsch – Reparations – Hyperinflation in Germany, 1923 – 1924-1928: A Golden Era? – Gustav Stresemann – German Foreign Relations 1919-1932 – Germany in the Great Depression – Failings of the Weimar Republic
Rise of the Nazi Party
The Munich Putsch – Did the Economic Crisis of 1923 help the Nazi’s? – Origins of the Nazi Party – Rise of the Nazi Party
Nazi Germany
Totalitarian Regime in Nazi Germany – How did Hitler consolidate power? – Mein Kampf – Nazi methods of control – Opposition to the Nazi Regime – Organisation of the Nazi Party – Fuhrerprinzip – Kristallnacht – Youth and Education – Goering and the 2nd 4 Year Plan – Anti-Jewish Boycott, 1933 – Nazi Anti-Semitism – DAF (The German Labour Front) – Propaganda in Germany 1919-39 – Economic Policy of the Nazi Party