The first four year plan, which was geared towards cutting unemployment, was overseen by Hjalmar Schact who was previously President of Reichsbank before graduating to economics minister.
One way in which the plan aimed to reduce employment was by providing funds for the Reich Labour Service. The labour service saw men of 18-25 constructing works such as autobahns which benefited the public in addition to providing jobs. Conscription also contributed to achieving the aim of the four year plan as Germans were forced to aid in the quest for rearmament and preparing Germany for war. In order to reduce figures on the unemployment register, women were excluded from work and their jobs given to men and jobs also became available within state establishments as part of the duel state organisations.
Schact ensured that inflation was kept under control by placing caps on wages and prices and banning trade unions to discourage workers from campaigning for more money. However Germany was faced with a balance of payments deficit meaning that more money was being spent than was being earned. In order to combat this, the New Plan gave the government control of trade and currency. Priority was given to imports needed by industry and barter agreements were reached with other countries in order to avoid spending. Germany was able to create a common market (Grossraumwirtschaft) by buying foreign goods with marks meaning that countries must then buy in Germany in order to spend the marks.
Mefo bills were also a fundamental part of the re-inflation of the Germany economy under Schact. A Mefo bill was a credit note issued by the Government of , from on, under a company named ‘Metallurgische Forschung’ (MEFO.)
The first four year plan was successful in that production rose and a trade surplus was in operation in that Germany was exporting more good than were being imported. The plan’s main aim of reducing unemployment was also achieved in that figures dropped from 6million to 1.7million unemployed in 1935.
However due to conscription and rearmament the balance of payment deficit still troubled the economy. For this reason Schacht wanted to slow down rearmament in order to make more goods to be sold abroad. Due to loss of influence Schacht resigned in 1937 and was replaced by Walther Funk.
The second four year plan was headed by Herman Goering and was aimed at preparing for war with particular influence on autarky. Farmers and farm were encouraged to increase production and scientists were used to make synthetic replacements for goods that could not be found in Germany.
Successes as a result of the drive towards autarky saw production increase in industries such as coal, steel and aluminium. A further drop in unemployment also occurred as only 200,000 remained without work. The economy benefited from windfalls from conquered countries such as Austria and confiscated goods from minorities such as the Jews.
However a state of autarky was not reached as Germany was still importing 30% of all goods. Another disadvantage of the four year plan was that peasant farmers were protecting meaning that they were preventing the development of large, modern and more efficient farms.
Ersatz was a further failing as the substitute goods created such as coffee, rubber and petrol were of poor quality and because goods were scarce, prices increased. Within Germany big businesses were squeezing out smaller ones which was undemocratic and German business also forced loans. Rearmament was slower than expected and some policies contradicted others, for example the government wanted everyone to work together for autarky but at the same time they expected women to stay at home and have children.
In conclusion Germany did not become anymore dependant on imports than it originally was, however the country was not geared for full-scale war. The economic situation in Germany meant that they could not afford both “guns and butter” meaning that citizens could not enjoy a high standard of living aswell as preparing for total war.
