The Wages of Destruction: The Making and Breaking of the Nazi Economy

by Adam Tooze

What saved Schacht were three things: the continuing recovery of the global economy, which produced a resurgence in demand for German exports; the willingness of countries other than the United States, most notably Britain, to comply with Germany’s new trading system; and the sheer determination and effectiveness with which the New Plan was imposed. The method used to fund the expanded export subsidy system was, as Schacht acknowledged, a measure of last resort. As of May 1935 a progressive tax was levied on the turnover of German industry to raise the tens of millions of Reichsmarks needed every month to maintain the competitiveness of German exports.79 In effect, the profits of the domestic armaments boom were being recycled to assist the ailing export sector. For most industries the levy was assessed at rates between 2 and 4 per cent of turnover.80 This may not seem draconian, but since it was levied on turnover not profit, the impact was very considerable.