How did Hitler gain the trust of big industries?

Discussions on the economic history of the nations taking part in WW2, from the recovery after the depression until the economy at war.
HansvonLuck
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How did Hitler gain the trust of big industries?

#1

Post by HansvonLuck » 30 Dec 2005, 02:33

According to a documentary I just saw, it seemed that big industries like Mercedes and Daimler loved and supported Hitler because Hitler offered them many "promises".
I was sadden to see that the documentary offered no more information on this subject.

Does anyone know what kind of promises Hitler gave?
Did Hitler elaborate them a way to give them more profit? or did he simply talk that they won't be owned by the (Communist) State?

Gothard
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#2

Post by Gothard » 30 Dec 2005, 04:25

Be more specific about the industries in question. And the answer to your question was his lightning fast disolution of the trade unions. It was one of Hitlers most masterful political strokes. He also froze wages and ordered that workers werent allowed to change jobs. he based his entire economy on a barter system based solely on industrial production and made vast amounts of capital available to enterprises.


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#3

Post by Pentanov » 30 Dec 2005, 11:12

(Edited out)
Last edited by Pentanov on 31 Jan 2006, 15:35, edited 1 time in total.

Gothard
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#4

Post by Gothard » 30 Dec 2005, 11:56

Pentanov wrote:Hitler offered the prospect of huge profits from their share of state-invested rearmament programs. Masses of tax payers cash going straight into their buisness accounts, boosting profits for the owners of vehicle manufacturers, componant manufacturers, steel mills and mines that powered them.

remember that armaments were just a proportion of german production. the entire german economy was devoted to manufacturing goods and trading them for needed resources. the state funded arms which were in reality not funded at all but self supporting. any manufacturer was given the huge profits from radios to refrigerators, bicycles, cars, furniture etc... the market was wide open for manufacturers who controlled the entire domestic and export market with no foreign competition.

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#5

Post by Pentanov » 30 Dec 2005, 12:16

(Edited out)
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Gothard
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#6

Post by Gothard » 30 Dec 2005, 14:14

Pentanov wrote:
the state funded arms which were in reality not funded at all but self supporting.
The state created the market for the arms and ensured the placing of confirmed orders for profit-based manufacturers, thereby kick-starting the economy through arms manufacture, which was the most rapidly growing section of the economy. Luxury goods were not just for the home market but produced for export to generate a barterable product to sustain a protectionist economy.
excellent summation. the market was created in 1928 with the advent of the 4 year armaments plan. The military used a policy called order dispersal which lowered efficiency but gave everyone a piece of the pie. By 1932 Hitler took over and greatly expanded on this by issuing checks on an account with 0 balance that was paid out of the national treasury by simply printing more cash. He also allowed this to extend to consumer industry. he used the income generated by this industry to fund capital improvements and expansion and modernization of industry as well as heavy subsidization of the chemical and domestic steel industries. existing industry went along and furnished capital based on the assumption that if the space was there the orders would come. Luxury goods werent really the main export. base consumer goods, Machine tools, finished metal products, automobiles and tractors were among the exports germany sent out in exchange for raw materials and foodstuffs. Arms manufacture was part of a long term multi phased plan formulated by the army and although the growth was high it was nothing compared to the growth in the german automotive and synthetic chemical industry. both of which manufactured a vast array of consumer goods. the economy was never protectionist. it was simply closed to credit based trade. the intent of the government was economic self sufficiency - not tariffs and trade restrictions. this was forced on them by versailles debt, the stock market crash and political embargoes and boycotts as well as a simple lack of cash.

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#7

Post by Gothard » 30 Dec 2005, 14:20

Pentanov wrote:
the state funded arms which were in reality not funded at all but self supporting.
The state created the market for the arms and ensured the placing of confirmed orders for profit-based manufacturers, thereby kick-starting the economy through arms manufacture, which was the most rapidly growing section of the economy. Luxury goods were not just for the home market but produced for export to generate a barterable product to sustain a protectionist economy.

sorry about the vagueness. I was referring to schachts mefa bills. the origional funding for hitlers arms beyond draining the germans foreign trade balance and cash resreves was mefa. billions were spent thru mefa. the military would order arms and give the producer a check written on the mefa account. the was no money in the mefa account... it didnt exist. the reichsbank honored all mefa checks simply by printing cash as the checks arrived. Thats what i mean by not funded. the money was magically pulled from the air. the extra income from taxes and consumer spending by employed workers generated enough income to gradually buy back the mefas and the whole thing was shut down after a few years. during that time the program almost supported itself on a national economic level.

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#8

Post by Pentanov » 30 Dec 2005, 14:29

(Edited out)
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Gothard
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#9

Post by Gothard » 30 Dec 2005, 14:33

inflation is caused when theres more cash onhand than their are goods available to purchase. the cash loses its value as prices rise. many factors contribute of course.
1. increased wages will cause demand as the workers try to spend the influx of cash and demand outpaces supply. the germans froze wages.
2. increased prices as consumer goods become scarce and money more plentiful. the germans set up strict price controls.
3. a government printing more cash in order to increase spending without a corresponding increase in income.
fema was a very sneaky way to pursue the 3rd option but only let cash trickle into the economy as it was being spent. the stimulus created offset the inflationary trend and the public was never aware of the scam.

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#10

Post by Gothard » 30 Dec 2005, 14:40

Pentanov wrote:Thank you for the clear description of the Mefa notes. The emphasis on the pre-Hitlerian economic policies that Hitler continued and expanded is also an important point. The Brüning, Papen and Schleicher governments were the originators of economic policies largely associated with Hitler. I described the system as protectionist to try and explain its complete break with the free trade ideals (although, at the time greatly compromised) in countries such as Britain and France.

understood. the break was caused by the french and british refusal - despite repeated pleas from the usa and the world bodies to lighten the load of the versailles debt in order to let germany maintain a market based economy. and thanks tons for the interesting conversation =). the free trade break was the direct result of the failure by bruning to renegotiate the versailles treaty. he was the one man in german government with a clearly stated goal of compromise and negotiation and the alliies greatly undermined his efforts. this destroyed the weimar government as the hardliners stepped in and said - we talk they refuse to listen... no more talk !

Basically the allies stated - you owe us billions lets trade, but you have to give us the billions from the goods you sell in full before you can keep any for yourselves.

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#11

Post by Pentanov » 03 Jan 2006, 14:40

(Edited out)
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Bronsky
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#12

Post by Bronsky » 03 Jan 2006, 17:31

Gothard wrote:understood. the break was caused by the french and british refusal - despite repeated pleas from the usa and the world bodies to lighten the load of the versailles debt in order to let germany maintain a market based economy. (...)
Basically the allies stated - you owe us billions lets trade, but you have to give us the billions from the goods you sell in full before you can keep any for yourselves.
I'm not sure where this is coming from, given how the reparations had been all but cancelled by the time when Hitler arrived in power. The Allies had repeatedly backed down over the issue. Germany was doing its best to evade the sanctions, and would rather shoot itself in the foot than pay (as in 1923/24).

Hitler's financial juggling was caused by his huge state spending programs, essentially armament-oriented. Essentially, Nazi Germany was, financially at least, running a wartime economy long before WWII started. What allowed the Germans to keep going was conquest.

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#13

Post by Gothard » 04 Jan 2006, 00:57

The break was started long before hitler came to power. the policy was already in effect before the nazi rise. trouble being that hitler was the only one with the authority to fully enforce it and he was credited for it... as for numerous other policies in total rather than for the part he played. Ive always noticed the guy that blows up a bomb gets more credit than the one who built it. im not apologizing for germany. im merely insisting that the economic policies pursued by france, england, the usa and the league helped to create the nazi state. france being one of the key players in doggedly attempting to enforce versailles reperations that had lost relevance in the current economic scenario. the loss of austria created a balkan vacuum.. france wanted to make sure that germany wasnt ina position to monopolize on this.. their policy backfired sadly im afraid and created just the scenario their policy makers had feared. Hitler was in a position to barter industrial output at a time when his nation was desperate for cash. Industrial leaders saw profit and jumped on the hilter bandwagon.

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#14

Post by Pentanov » 04 Jan 2006, 10:34

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mindstriker
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#15

Post by mindstriker » 04 Jan 2006, 13:57

I've got a problem with the given arguments.
They are just hiding the main idea of Hitler, Göring and German Capitalists.
As industrialist found found themselves in another big disaster during the great
resession, they first of all feared a revolution from the left. Surely, Hitler
destroyed the trade unions, but as a matter of fact the DAF substituted them
intergrated the managers, owners and shareholders as well. But this happened
in May 1933 - after the "Machtergreifung". Earlier Hitler and the NS faught
against the Communists, but they did not finally decide how to deal with the
compqanies. The NSDAP's left wing untill 1933 argued for disappropriation
of major companies in the main economic sectors. On the other hand a
different strategie was developed. It functioned like this:
1. deficit spending to indicate economic groth
2. destruction of the trade unions and fixation of prices and loans
3. total control of im- and exports as well as centralized allocation of resources
4. by the way favouring the pro-Nazi companies and ignoring the others, the
Nazis became supported by most of German businessmen, or at least avoided
to make them opponents
5. the ARmy was build up and weapponry was manufactured, railroads and
motorways were contructed and many unemployed as well as allready employed
workers were forced to work in the RAD under DAF-command. For all this the state
had to pay.
6. The progress of deficit spending lead to finacial problems - these now became
solved step by step with Germany plundering the jews first (1 billion to be payed
by jews in 1938/39 as "Sühneleistung" and all jewish business properties beeing
aryanized and that way eliminating competitors to German shops and plants)
7. Last not least that was not enough and so Hitler started expansion and war.
And the wartime occupation-regimes were more or less ment to strengthen
GErmany's national ecomomy and by the way German capitalists. On the other
hand it was tried to make all the victims of Nazi-German agression pay for
Germany's military efforts.
8. this is why "Wehrwirtschaftsabteilungen" were integrated in every Army Chorp.
They plundered and devastated the areas right behind the frontlines , kept cattle
and sheep as well as they plundered all accessable resources. They even brought
the workers ("Zwangsarbeiter") to Germany and made them slave workers.

See -

the economic concept of national socialism was totally acceptable for industrialist
in Germany for it guaranteed profits for everybody if only the war is won.

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