Take the 2-minute tour ×
History Stack Exchange is a question and answer site for historians and history buffs. It's 100% free, no registration required.

How did Nazi Germany finance itself during the war? They produced a large amount of war material during 1939-1945, but how was this production financed? What were Germany's revenue streams that enabled them to purchase and transport the raw materials of war and pay the workers? I doubt they were exporting goods during the war, so any revenue was likely internal to the country. Given the Depression was still going on in 1939, how did they pay for the war?

share|improve this question
1  
IG Farbin was financed by Henry Ford and Prescott Bush. –  user2232 Apr 24 '13 at 17:06
3  
@Sam - I converted your answer to a comment. After looking into it, it does look relevant, and might even be true, but it doesn't contain nearly enough supporting material to count as a full answer here. If someone (perhaps you) wants to flesh it out to a full answer, feel free. –  T.E.D. Apr 24 '13 at 23:26
1  
@T.E.D. Nicely done. Thank you for leading by example. –  David Pointer Apr 25 '13 at 14:05
add comment

3 Answers

up vote 16 down vote accepted

I think the Great Depression was quite irrelevant for Germany in 1939 similarly to for other countries that took measures at state regulation.

As for the income, Germany was a well-developed industrial country with advanced technology. It was a pioneering country at chemistry, electrical engineering, machine-tool construction, railroads and transportation, metallurgy and mining. Its industry was known for exceptional quality.

Germany had extensive exports, which did not stop throughout the war mostly through the neutral countries.

With the German conquests German firms earned numerous advantages that maximized their income:

  • They replaced or adsorbed the local businesses in many occupied countries
  • They earned the ability to use cheap forced labour of the conquered peoples

Also prior to the war any strikes were outlawed in Germany so that the firms could operate without risking with workers' protests.

share|improve this answer
    
Very clear, concise answer. Thank you! The answers I managed to find on the web were focused on only one economic aspect or were full of rather advanced (to me) economic terms. –  David Pointer Apr 24 '12 at 17:05
5  
Germany heavily relied on various forms of forced labour not only of conquered peoples but also of the domestic population. For example any worker knew that once he is fired, he would be sent to the front which meant possible death. Once you rely on forced labour, you do not need to care about money any more. Germany was really short only of foreign currency for buying materials abroad. –  Anixx Apr 24 '12 at 17:22
4  
Also many categories of workers and farmers were paid with pseudo-money (occupation marks, ghetto money, camp money, "Ukrainian" and "Polish" money, Soviet banknotes) to minimize the need to use Reichsmark. These "currencies" could not be used outside of certain area and only could be used to buy basic things. –  Anixx Apr 24 '12 at 17:24
add comment

This recent book offers a new and very important look at this question. It is the subject of an ongoing academic debate but many of the factual findings seem to be indisputable, if I understand correctly (haven't read it but read very detailed reviews).

UPDT: Very brief summary: The Nazis borrowed prodigious sums to finance the re-armament of Germany, the Autobahns and the social benefits the Germans received. "Fortunately", at the very moment the chips were due to fall and they would have had to face insolvency, they started the war and turned it into a great expopriation scheme. That the Nazis looted all Europe and made it pay and work for the war machine is quite well-known; Ali goes into great detail showing the mechanics of the process and showing that the German was effort was to a large degree a financial pyramid, where the conquered countries and the murdered Jews were looted to pay off the deficits the Nazis had kept accruing. He posits that the common German people were quite aware of this, grosso modo, and claims that this partly explains the tenacity with which the Germans fought to the bitter end (a claim that may not immediately follow from his economic data, as other factors, e.g. ideology, are involved). One detail for example: they herded hundreds of thousands of Russians to work as labourers, industrial workers and domestic help in Germany; they were ostensibly paid (very low) salaries - but these salaries were stashed into a fund which nobody ever saw. Another example: the Germans paid for goods in the countries they conquered (at least in the East) with "occupation marks" - an artificial currency whose exchange rate they loaded heavily in their own favour.

share|improve this answer
2  
Your answer would be improved by adding a descriptions of the core findings of said book. –  Sardathrion Dec 4 '12 at 13:50
1  
Could you please give us a paraphrase of the "detailed reviews" at the very least? Part of our guidelines is to provide a complete answer rather than sending people off to another location to look for it. Otherwise we will have to closew this answer. Thanks! –  Steven Drennon Dec 4 '12 at 14:42
    
Added a brief summary. –  Felix Goldberg Dec 4 '12 at 19:38
    
BBC History Magazine in the Q&A section contains an article that supports and elaborates on Mr. Goldberg's answer. –  Mark C. Wallace Aug 27 '13 at 18:14
    
@MarkC.Wallace I couldn't find it there. Can you give a direct link? –  Felix Goldberg Aug 28 '13 at 9:29
show 2 more comments

Germany conquered and occupied a number of countries, and stripped them of their gold reserves (except in those instances where the countries were able to ship the gold abroad).

They sometimes paid in either marks, or more often, local currency, since they effectively controlled those countries' banking systems.

And in a pinch, they could requisition the supplies and labor that needed, basically at the point of a gun.

And Germany was one of the first countries to "exit" the Depression. That was a major result of the rearmament program, which had a "pump priming" effect on the economy.

share|improve this answer
add comment

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.