Chapter 151 Hitler's New Deal

When Hersmann returned to Berlin after his visit to England, it was spring and the leaves were turning green. Compared with London, which was also ravaged by the Great Depression, the situation in this city seemed better. There were more or less customers in the shops on the market, and the restaurants and cafes were not empty. However, the smell of gunpowder in this city was more than that in London, and people in military uniforms were everywhere. The expansion of the German Wehrmacht seemed to ease unemployment in Germany. From January to now, more than 500,000 German youths have enlisted in the army, most of whom are unemployed. The expansion of the Wehrmacht is also a means to reduce unemployment, so the unemployed are recruited first.

However, these people in military uniforms on the streets of Berlin are not all Wehrmacht. Many of them are members of the Nazi Stormtroopers. They are the backbone elites selected from the scattered Volkssturm according to the "National Socialist Armed SS Plan" agreed by Hitler and Hersmann. Some of these people, together with other Wehrmacht recruits, were concentrated in the Potsdam Barracks and Zossen Barracks and trained by officers sent by the Wehrmacht. On their days off, they would go to Berlin in groups to visit. They would spend some of their salary to bring some business to the depressed retail and catering industries in Berlin.

The 500,000 new recruits of the Wehrmacht and the 100,000 Waffen SS soldiers together reduced the number of unemployed people by about 600,000, and the number of unemployed people in Germany suddenly dropped to about 2 million.

However, the military pay for these 600,000 new recruits was the first problem that the Nazi Party-Fatherland People's Party coalition government that had just come to power had to face.

In 1930, Germany's fiscal revenue was about 9.6 billion marks, which was of course much better than in history. However, because the Keynes Plan brought too much debt to the German government, the actual financial situation of the German government was limited compared to history.

The Keynes Plan had not been completely stopped by 1930, and Germany was still paying compensation for coal, steel, aircraft, cars, machinery, etc. to France, Belgium, Luxembourg and Italy - which made the government bear huge interest support. In order to purchase the compensation stipulated in the Keynes Plan, the German government issued long-term bonds with a face value of more than 10 billion. Although it did not need to repay the principal by 1930, it had to pay interest every year. In 1930 alone, it paid nearly 1 billion marks in interest.

At the same time, the size of the German army, even before the rearmament, was at least twice as large as in history, and the annual military expenditure naturally increased by nearly 500 million marks.

Many of Germany's secret war preparation projects were carried out in the Baltic Republic. This made the expenditure of the Baltic Defense Force extremely large, which the Baltic Republic could not afford. Therefore, the German government has provided at least 500 million marks of aid to the Baltic Republic every year since 1925.

The "Strategic Material Reserve Plan" officially implemented in 1923 gradually became a very expensive project - since the Soviet Union implemented its first five-year plan in 1928, the scale of Soviet-German cooperation has further expanded.

The value of technology and equipment exported to the Soviet Union each year exceeded 1.5 billion marks. Due to the barter trade, the raw materials imported from the Soviet Union to Germany (mainly oil, crops, wood, manganese ore, copper ore, lead and zinc ore, fur, etc.) were also worth more than 10 billion marks. Since a large number of Soviet-German cooperation project contracts were signed in 1928 (the year when the Soviet Union's First Five-Year Plan started), the settlement price of the barter between the two parties was also finalized before the Great Depression.

Therefore, the Great Depression did not have a great impact on Soviet-German cooperation. German technology and machinery and equipment were still sold to the Soviet Union at the "high price" before the Great Depression, and the various resources used by the Soviet Union to pay the bills were also priced according to the price before the Great Depression. In theory, neither side suffered a loss, but the German government became a "sucker".

Originally, the Soviet Union paid Germany for raw materials first to the Economic Promotion Company, and then part of it was delivered to German companies by the Economic Promotion Company according to the long-term sales contract. No matter how much the remaining part was, it was covered by the German government according to the pre-determined contract price and stored as a "national strategic reserve".

However, after the Great Depression, the consumption of raw materials in Germany decreased year by year. Many companies that signed procurement contracts with the Economic Promotion Company were unable to execute the contracts, and a large number of breaches of contract occurred. The German government could only bite the bullet and come out to cover the losses, storing a large amount of Soviet raw materials. For this, it not only had to pay a large amount of money to the Economic Promotion Company, but also had to pay for the construction of warehouses.

In addition, the export of machinery and equipment and weapons through barter trade did not only exist between the Soviet Union and Germany. There were also varying amounts of barter cooperation between Germany and Italy, Japan, Turkey, Argentina, Brazil, Chile, China and Siam. There were also many "bad debts" that the government had to cover.

The above "extra" expenses added up to 2.5 billion marks in 1930, which made Germany's financial situation not much better than the early 1930s in history.

Now there are suddenly 600,000 more recruits, and the "personnel expenses" alone will cost at least 600 to 700 million marks each year. If the huge expenses of equipment, training and rebuilding the navy and air force are taken into account, the German government's finances may not be able to cope with it.

So in the days after Hitler came to power, various calls for cutting spending, especially military spending, became more common in parliament and newspapers.

The Bolshevik Party and the Social Democratic Party - although the Nazi Party has been in power for almost two months, they have not yet taken action against the two "November criminals". Therefore, Germany is still basically a democratic country - and they are extremely active. Not only have they proposed a disarmament bill in Congress, but they have also organized several anti-fascist marches. They demanded that the military's fascist leaders Schleicher and Hersman resign immediately!

The Nazi Party seemed to have no interest in anything other than "anti-Semitism", but was only fighting the Jewish financial oligarchs with all its strength, forcing many German Jewish tycoons to withdraw from the banking industry and many German large companies, and transfer their shares to capitalists who have close ties with the Nazi Party.

At this time, the situation in Germany seemed a little confusing to Hersman, a "time traveler".

As soon as he returned to his residence in Charlottenburg, Hermann Goering, the Minister without Portfolio in Hitler's cabinet (actually he was responsible for everything, similar to the existence of the Vice Chancellor), immediately ran over with his fat body, and brought a bottle of Heinkel champagne, inviting the Hersmans to have a drink together, and at the same time talked about the "difficult progress" of the new policy.

After using the "Law on Restricting Jews" to hit the influence of German Jews in the banking industry, the Nazi Party and the Fatherland People's Party began to revise the "Banking Law", stipulating: abolishing the independence of the Reichsbank Board of Directors, and transferring the appointment power of the Reichsbank President and Board members to the head of state (that is, the president, but the nomination power belongs to the prime minister); giving the Reichsbank the power to implement open market policies; the Reichsbank can discount "job creation bills" so that the new government can provide funds for job creation.

This "job creation bill" was proposed by Feder, an economist trusted by Hitler, also known as "Feder currency", which is mainly used to pay for special technical engineering projects in order to create jobs through engineering construction - in fact, it is printing money to start projects, which is not much different from the most commonly used economic stimulus measures in later generations.

However, it was not generally accepted in 1931, so it encountered a lot of opposition. Even Hitler's Minister of Economics Dr. Schacht raised objections - he was not against the "job creation bill", but worried that the Reichsbank would repeat the mistake of excessive banknote issuance in the early 1920s after losing its independence.

Therefore, several opposition parties are ready to join forces in the parliament to veto the revision of the "Banking Law". The Bolshevik Party also threatened to organize a protest - once the "Banking Law" was revised, they would tell the "truth" to the workers and call on them to oppose it with a general strike.

Because the great inflation in the early 1920s left a deep impression on people, the Bolshevik Party's protest was likely to succeed. Even if the protest was suppressed, people would still know that the government was going to start printing money again.

And once people lose confidence in the mark again, Hitler's new policy will likely fail!

"Lieutenant General, you know economics better than me. You must know that the basis of paper money is not gold, but people's confidence!" Goering, who looked clumsy because of his weight gain, lobbied Hessmann in a flattering tone while drinking.

"If the Bolshevik Party tells the truth, we will be finished." He said again in a heavy tone, "Then the whole of Germany will be finished, because no one will believe in the mark anymore... The nightmare of 1922 and 1923 will be repeated."

"Creating job bills" is just a careful packaging of the fact of swiping marks, but the essence has not changed, it is still printing money!

But printing money now is very different from printing money from 1918 to 1923. Now the whole world is in deflation, and Germany is no exception. Paper money has become a "scarce resource" - to put it bluntly, the supply of products is far greater than the number of paper money, so there is no problem in swiping more marks.

Moreover, Germany has almost gotten rid of the Treaty of Versailles now, and the 4 billion pounds of compensation can be completely evaded and not paid. Britain and France have no way to deal with Germany now. Theoretically, the "security deposit" of the mark is not a negative number.

However, Germany has a "criminal record" of selling bread for hundreds of millions, so people who hold mark cash are more guilty. Once the information that "the government is swiping marks and issuing banknotes indiscriminately" appears, it is likely to cause a major collapse.