Changes

It was also in 1936 that Hitler informed the regime's top officials that Germany must be ready for war by 1940. In response, the Four-Year Plan was established. Developed under the direction of [[Hermann Goering]], it set forth production quotas and market guidelines. Efforts to regiment the economy were not without conflict. Some of the economic elite desired that Germany be integrated into the world's economy. Others advocated autarchy, that is, firmly basing the German economy in Central Europe and securing its raw materials through barter agreements.

It was also in 1936 that Hitler informed the regime's top officials that Germany must be ready for war by 1940. In response, the Four-Year Plan was established. Developed under the direction of [[Hermann Goering]], it set forth production quotas and market guidelines. Efforts to regiment the economy were not without conflict. Some of the economic elite desired that Germany be integrated into the world's economy. Others advocated autarchy, that is, firmly basing the German economy in Central Europe and securing its raw materials through barter agreements.

In the end, no clear decision on the management of the German economy was made. Large weapons contracts with industrial firms soon had the economy running at top speed, and full employment was reached by 1937. Wages did not increase much for ordinary workers, but job security after years of economic depression was much appreciated. The rearmament program was not placed on a sound financial footing, however. Taxes were not increased to pay for it because the regime feared that this would dissatisfy workers. Instead, the regime tapped the country's foreign reserves, which were largely exhausted by 1939. The regime also shunned a rigorous organization of rearmament because it feared the social tensions this might engender. The production of consumer goods was not curtailed either, again based on the belief that the morale of the population had to remain high if Germany were to become strong. In addition, because Hitler expected that the wars waged in pursuit of his foreign policy goals would be short, he judged great supplies of weapons to be unnecessary. Thus, when war began in September 1939 with the invasion of Poland, Germany had a broad and impressive range of weapons, but not much in the way of replacements. As in World War I, the regime expected that the defeated would pay for Germany's expansion.

In the end, no clear decision on the management of the German economy was made. Large weapons contracts with industrial firms soon had the economy running at top speed, and full employment was reached by 1937. Wages did not increase much for ordinary workers, but job security after years of economic depression was much appreciated. The rearmament program was not placed on a sound financial footing, however. Taxes were not increased to pay for it because the regime feared that this would dissatisfy workers. Instead, the regime tapped the country's foreign reserves, which were largely exhausted by 1939. The regime also shunned a rigorous organization of rearmament because it feared the social tensions this might engender. The production of consumer goods was not curtailed either, again based on the belief that the morale of the population had to remain high if Germany were to become strong. In addition, because Hitler expected that the wars waged in pursuit of his foreign policy goals would be short, he judged great supplies of weapons to be unnecessary. Thus, when war began in September 1939 with the invasion of Poland, Germany had a broad and impressive range of weapons, but not much in the way of replacements. As in World War I, the regime expected that the defeated would pay for Germany's expansion.

Through 1937 Hitler's foreign policy had the approval of traditional conservatives. However, because many of them were skeptical about his long-range goals, Hitler replaced a number of high military officers and diplomats with more pliable subordinates. In March 1938, the German army was permitted to occupy Austria by that country's browbeaten political leadership. The annexation (''Anschluss'') of Austria was welcomed by most Austrians, who wished to become part of a greater Germany, something forbidden by the Treaty of Versailles. In September 1938, British prime minister Neville Chamberlain consented to Hitler's desire to take possession of the Sudetenland, an area in Czechoslovakia bordering Germany that was inhabited by about 3 million Germans. In March 1939, Germany occupied the Czech-populated western provinces of Bohemia and Moravia, and Slovakia was made a German puppet state.

Through 1937 Hitler's foreign policy had the approval of traditional conservatives. However, because many of them were skeptical about his long-range goals, Hitler replaced a number of high military officers and diplomats with more pliable subordinates. In March 1938, the German army was permitted to occupy Austria by that country's browbeaten political leadership. The annexation (''Anschluss'') of Austria was welcomed by most Austrians, who wished to become part of a greater Germany, something forbidden by the Treaty of Versailles. In September 1938, British prime minister Neville Chamberlain consented to Hitler's desire to take possession of the Sudetenland, an area in Czechoslovakia bordering Germany that was inhabited by about 3 million Germans. In March 1939, Germany occupied the Czech-populated western provinces of Bohemia and Moravia, and Slovakia was made a German puppet state.