Germany even after World War I had the largest industrial establishment in Europe. It was that industry that was the backbone of the Central Ppwers war effort. The War had not been fought on German territory and except for the Saarland and Rhineland, Germany was not occupied by the Allies. Germany did loose some territory as a result of the Versailles Peace Treaty, but the country's industrial complex was left largely intact. The country's scientific establishment supporting that industry was also intact. The strength of that establishment can be seen by the number of Noble Prizes German scientists were awarded, One loss to German's industrial capacity was the disolution of the Austro-Hungarian Empire. This meant that the Skoda arms complex was now in Czechosolvakia, a new independent democratic country, orieted toward Britain and France. While Germany remained the most important industrial country in Europe, one area that Germany did not pursue intensively was the automobile industry. Germany of course had some notable automobile manufacturers (Mercedes and Porch), they did not mass produce cars like American automobile companies (Chrysler, Ford, General Motors, Studabaker, and others). The average german worker could not afford cars, especially the expensive cars made by German manufactuers. There were also weaknesses in the German industrial economy, the need to import raw materials. The most notable being petroleum. Nor did Germany have anywhere near the capability to build aircraft that its poptential opponents have. The availability od aluminum which required enormous quantities of electricity was a weakness. Imperial Germany in World War I did not have the same indistrial capability of the Allies--even before America entered the War. The industrial ballance of power was even less favorable for NAZI Germany as Hitler comtemplated another war. Not only had American industry grown, but so had Russian (Soviet) industrial capacity grown, The Germany that the NAZIs seized control of was by any objective assessment not a country capable of wageing another world war. Only a leader patholically commotted to war would have contemplted such a decission. Germany would go to war with essentially the same industrial and scientific complex of Imperial Germany (the NAZIs did little to expand either).
Hitler and the NAZIs planned from the beginning for a massive rearmament program--Aufrüstung. NAZI propaganda promoted the idea that Germany must rearm. The NAZI objectives could in fact only be achieved by war. The NAZIs did not, however, begin a massive rearmament program immediately upon seizing power in 1933. Hitler's first objective was to secure control of Germany and he did not want to precipitate foreign intervention before he was ready. The German military itself has already sponsored secret armament programs during the Weimar era in violation of the Versailles Treaty. The NAZIs thus had a solid foundation upon which to base a revived military. The NAZIs sharply expand weapon research. The German military expanded in secret during 1933-34. Hitler by March 1935, felt sufficiently secure to publicize his military. The NAZIs announced that they expansion - which broke the terms of the Versailles Treaty. Europe learned that the Nazis had a modern 2,500 plane Luftwaffe and a Wehrmacht with 300,000 men. Hitler publicly announced that he was instituting a compulsory military conscription and planned to expand the Wehrmacht to 550,000 men. Actual armaments production began in earnest in 1936. The NAZIs in 1936 doubled armaments spending over 1935 levels. It was in 1936 that NAZI arms spending first exceeded the combined total for transportation and construction spending. The nature of arms spending also increased. NAZI arms spending initially focused on research, development, and capital investment. The NAZIs in 1936 began concentrating on producing actual military equipment. This is one of the least economically beneficial types of government spending.
The Four Year Plan was the second NAZI economic recovery plan. Hjalmar Schacht was Hitler's President of the Reichsbank and Minister of Economics. He this oversaw the first NAZI economic recovery program. This involved borrowing large sums, much of which was used to finance rearmament. The level of borrowing was hidden to the public and international lenders. Schacht had the skills needed to do this. Schacht was actually aware that if the level of debt became know that Germany would have to declare bankruptcy with disastrous economic consequences. He tried to convince Hitler to scale back military spending. Hitler would not hear of it. Thus a year after resuming conscription and announcing the creation of the Luftwaffe, he put the second NAZI economic program in the hands of Reich Marshal Herman Göring. He was given enormous power, including the authority to: 1) acquire property and businesses, 2) issue orders to industrial concerns, 3) rechannel financing, and 4) direct policy. Hitler replaced Schacht with Walter Funk. Hitler no longer needed a man with skills and ideas, but only someone to follow his orders. The second NAZI economic recovery program became known as the Four Year Plan. It was a series of economic reforms with the purpose making Germany self-sufficient (193640). Unannounced was that the reason self-sufficiency was so important was that Hitler planned to go to War and wanted Germany to be less vulnerable to a naval blockade that so weakened the World War I effort. The NAZIs also believed that making Germany self sufficient and less dependent on imports would reduce unemployment. A high priority was building up the nation's military capability and rearming the military forces. It was the beginning of placing the German economy on a war footing. This meant violating Versailles Treaty ending World War I. Other goals included increasing synthetic fiber production, increasing automobile production; initiating building and architectural projects, and developing the Autobahn system. Public works projects under the direction of Fritz Todt, a Hitler intimate. Göring used the Four Year Plan to enrich himself personally. He directed enormous sums toward military preparations. Göring was a heavy handed, if somewhat chaotic, administrator. He make huge demands of his staff. He fired civil servants with no explntion. He created and absolutely controlled a General Council. He determined allocations of foreign exchange, raw materials, and labor. He had his hand on the foot levers of economic policy: controlling agricultural policy, setting price controls, determing industrial investment, and managing foreign trade. The decesions he made were often based on personal whim and benefit rather than informed assessments. While heavy handd, he did not involve himself in detail or devote the time to the many tasks that such enormous responsibility demanded. More importantly, however, what he did not do was to prepare Germany for total war. He did not address the diversion of resources for the pet projects of local NAZIs. And he often made appointment based on Party loyalty and not competence. These and other inefficiencies would not be addressed until Hitler appointed Albert Speer armaments minister (1942). Göring created the Reichwerke to increase pressure on industry to cooperate with the Four Year Plan and to operate the industrial assets of countries seized by the NAZIS, beginning in Austria (1937). Schacht resigned and largely withdrew from public service.
The French Government refused to permit Britain to bomb Germany from bases in France during the Phoney War. There were some bombing missions, but the bombers dropped leaflets, one more indicatiion as to the degree prime-Minister Chamberlain failed to understand even the most obvious nature of the NAZI regime. After the German Western Offensice and fall of France (May-June 1940), Bomber Command was no longer capable of bombing Germany in force. They did not have the planes with long range capability. The could stage small-scale raids, but not with the force needed for a meaningful bombing campaign. Only with the arival of the iconic Avro Lancaster couls stratehic bombing possible. But it would ve some tome before any numbers of Lancs were available. And because of the fearsome German air defenses, it as only possible to bomb at night.
The bombing of Peenamunde set the German missle program back months. Any assessment of the Allied bombing campaign has to ask the question of how much more the Germans could have expanded production had it not been for the bombing. The bombing significantly disrupted the economy and the ability of the NAZIs to persue their development of new weapons. Some critics say that the Strategic Bombing Campign failed because it did notabsolutely destroy German war production. While this is true, it is also true tht the Cmpign distrupted the Germn war economy nd sithout it that war roduction ould have been muh higher. [Wells]
The German eaction to the bombing threat was to construct a fearsome air defense and to adjust production efforts. The German air defenses or Kammhuber Line was much more effective than the British chain home system that played such an imortant role in the Battle of Britain. The British had very few anti-aircraft. The German installed massed bamks of anti-aircraft guns all around their cities. These were all guns that could not be used in East to destroy Soviet tanks and hold back the Red Army. They consumed huge quantities of amunition. The Germans brought back Lufwaffe squadrons from the East to defend their cities. The Germans maintained production in part by decetralilizing poduction and moving underground, but this adversely affected both the quality and quantity of production as well as putting added strain on the transport system.
Often sited to prove that the strategic bombing campaign failed is that German war production increased in 1943 and 44 until about October. This is true. But it increased because Germany in 1941 was still not mobilied for War ro the same extent as the Soviet Union, Britain, and America. Rmament Minister Albert Speer rationalized German war industries and was able to increase production. The question that should be asked is to what extent could production have been increaed without the bombing. And that production actuall incrased in 1943. This is because the NAZIs despite their image never fully mobilized the German economy for war. Hitler was concerned about the impact on German morale. There was a great deal of slack in the economy. Speer finally began to fully utilize the economy which is why production increased.
Also rarely metioned is what German industry was proucing. It is imprtant to asess mot only what the Grmans were producing, but what hgey were NOT producing. They were not turning out the very effective Wonder Weapons that German propaganda was trumpeting. These weapons did cexist, they had been developed, and they were highly effective, but the Germans just could not produce them, in large part because of the bombing. What came out of German aircraft plants, for example, were the obsolete MNe-109s nand FW-190s, not the marvelous jets, either the Me-262 jets and the second generayion of German jets. Almost none of the new advanced U-boats ever left the shipywards.
The strategic bombing campaign was a major force in the destruction of the Luftwaffe. Berlin and other major cities by 1945 were wastelands of rubble.
Assessments of German war production show that German industry did not begin to collapse until late 1944.
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