During the three years before Hitler came to power, total earnings had fallen by more than half, from 23 billion marks to 11 billion. The average per capita income had dropped from 1,187 marks in 1929 to 627 marks, a scarcely tolerable level, in 1932. By January 1933, when Hitler took office, 90 percent of the German people were destitute.
- General Leon Degrelle
Worthless German Money
ADOLF TAKES OVER A BANKRUPT STATE
When Adolf took office in 1933, Germany was the European country with the bleakest future; possibly no country in the world had worse prospects. Germany was technically bankrupt with no likelihood of rehabilitation. The reasons for this were many and varied:
- Massive unemployment
- Industrial stagnation
- Crippling strike actions by unions
- Private investment had fallen to one sixth
- Collapse in agricultural prices
- Escalating numbers of bankrupt companies
- Total earnings had fallen by half
- 90% of the German people were in dire straits
- The Versailles treaty confiscated the richest mineral land and imposed escalating debt repayments that would not be lifted for fifty years.
- Communists, funded by the Soviet Union, were taking advantage of the political turmoil with frequent strike action and violent abortive coups.
On taking up office as Chancellor of Germany, Adolf Hitler was determined to address the economic catastrophe and coupled problems of unemployment and crime by any means and as soon as possible. He summoned the Reichsbank President, Dr. Hans Luther to his office. Luther was a frugal and practical man. Since the total remaining State Funds equaled only 150 million marks, he offered Adolf no assistance or advice. Adolf decided that Luther was not the man for the job.
Having turned the party newspaper, Volkisher Beobachter, around from economic ruin to solid profitability, Adolf had developed a keen and sound interest in economics, and had solid ideas on what could and what could not be done with the German economy. Next he summoned Dr. Hjalmar Schacht, and put the same request to him. These two brilliant minds met, and the historic result was the scheme known as "Mefo Bonds"
"It was necessary to discover a method that would avoid inflating the investment holdings of the Reichsbank immoderately and consequently increasing the circulation of money excessively." |
Inflation cartoon depicting the value of German money
Adolf Hitler had inherited a totally bankrupt economy.
Thousands of Unemployed march in Berlin.
By the end of Adolf Hitler's first year in office unemployment had fallen from 6,000,000 to 3,374,000. An unprecedented 2,627,000 jobs had been created at a time when the rest of the world was in deep eceonomic recession.
MEFO BONDS
Mefo Bonds, when presented to the Reichsbank could be converted into cash. Schacht designed the bonds to be short term so that there would be ready public acceptance of the bonds, which paid an interest rate of four percent, an acceptable figure at that time, and normal banknotes hidden under the mattress paid no interest at all! The public eagerly accepted the bonds and Adolf had his billions with which to create jobs without causing inflation. In the next four years the public subscribed to over 12 Billion marks worth of Mefo Bonds.
"The nation does not live for the sake of the economic system, and the economic system does not exist for the sake of capital. On the contrary, capital is the servant of the economic system and the economic system is the servant of the people."
- Adolf Hitler. First Reichstag Speech
SOUND ECONOMIC PLANNING
As the creation of jobs progressed, government income automatically increased due to several factors:
- Many unemployed and destitute no longer needed to be supported out of State Funds
- The newly employed now paid tax from their wages
- With increased confidence, private industry in turn dared to expand and employ new staff
"I don't think Hitler was reduced to begging for my help. If I had not served him, he would have found other methods, other means. He was not a man to give up." |
Hjalmar Schacht,
German Finance Minister
Adolf meets with farm workers
| "They must learn to respect each other and be respected again – the intellectual must respect the manual labourer and vice versa. Neither can exist without the other" - Adolf Hitler - 1924 |
Arbeit Adelt! (Work Glorifies)
The social status of the german worker was drastically elevated by Adolf. He would regularly tour factories and farms, talking to workers and other folk, to learn their opinions at first hand. It was usual for him to attend without bodyguards of any sort and there was never an untoward incident. The workers idolized him.
"In 1932, before National Socialism acquired power, the German national income amounted to 45.2 milliard Reichsmarks.... and in 1937 reached the round figure of 68 milliard Reichsmarks. In contrast to this increase in income the general cost of living index remained practically unchanged. In other words, while the national income increased by nearly 50% the increase in the general cost of living rose by only 4%."- Adolf Hitler
"Prejudices aside, anybody visiting Germany again for the first time after an interval of five years, cannot fail to be impressed by the obvious signs of an economic renaissance. He would see factories, formerly dilapidated and closed down, now reopened and refitted, working again under normal conditions. He would see an army of employed workers increased by hundreds of thousands, and above all, note the loading ramps piled high with commodities, stand amazed at the constant stream of big transport lorries, each with its four-wheeled or six-wheeled trailer... all the signs and portents, which five years ago told the story of business depression, had vanished into thin air and been replaced by an auspicious display of re-awakened enterprise.
- Cesare Santoro
ADOLF'S PERSONAL INVOLVEMENT WAS ALWAYS THE KEY FACTOR
Adolf's economic policy was based on the renewal of industry through large public works. Later the billions invested would be returned to the State by painless tax revenues. Germany soon saw the results and all opposition to his leadership melted away before the economic miracle.
Large projects were undertaken, including the world's first freeways, or Autobahns, and the world's cheapest family car, the Volkswagen, also innovated by Adolf Hitler.
German stamp commemorating the invention of the Autobahn by Adolf Hitler.
Adolf with the first model of the Volkswagen he conceived
AFTER FIVE YEARS
Five years of National Socialist industrial and economic activity show that:
- Paper manufacture has increased by 50%
- The manufacture of diesel oil has increased by 66%
- The production of coal has increased by 68%
- The production of oil fuel has increased by 80%
- The production of mineral oil has increased by 90%
- The production of artificial silk has increased by 100%
- The production of Kerosene has increased by 110%
- The production of steel has increased by 167%
- The production of lubricating oil has increased by 190%
"German economic salvation has been brought about solely through the efforts of the German people and the experience they have gained. Countries abroad have contributed nothing to this." "We have made it possible, without gold and without foreign exchange, to maintain the value of the German mark. Behind the German mark stands the German capacity for work, while some foreign countries, suffocated by gold, have been compelled to devalue their currencies." — "Today in May, 1938, the world around us suffers from the anxiety which the unemployment of millions brings with it. In Germany we begin to be anxious because we have not enough workmen."
Adolf Hitler
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