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was ALL of the military items used by Nazi Germany PAID FOR after World War 2 was over?

December 28th, 2012 Leave a comment Go to comments

if so, when, and how and by whom?

and TO WHO was paid back and with how much profit and interest to them? DID THESE SAME MONEY LENDERS ALSO MAKE THE WEAPONS? TIGER TANKS? ETC OR JUST LOAN MONEY TO THE ARMAMENT FACTORIES TOO?

None of it was paid for after the war was over because the post-war German authorities did not honour debts incurred by the Nazi regime. In general the armaments were paid for before the war was over, by the Nazi government. Total expenditures by the German government during the war amounted to 657.4 billion Reichsmarks (around $267 billion), two thirds of which was expenditures for the armed forces.

Of the 657.4 billion Reichsmarks, 28 percent was paid for from taxation, 7 percent from other government income, and 13 percent was paid for from "contributions" (i.e. extortions) from occupied countries such as France.

The remaining 52 percent was paid for with loans, of which two-thirds were short-term loans and one third were long-term loans. These loans mainly took the form of bond issues, which were generally sold not to the general public but to the banks. This also included banks in occupied countries as well as German banks,

The banks typically used the money of their depositors (as banks do the world over). Hitler was afraid of selling bonds directly to the general public because he feared that the public weren’t very patriotic and wouldn’t want to invest in the bonds.

The Nazis and later historians use the term "silent financing" to refer to this method of paying for the war. That is because the depositors of the banks were by-and-large ignorant of how the banks were investing their money.

If you google the terms "Nazi", "war" "bond" you will find many examples of these bonds (often on sale on ebay etc).

http://scripophily.net/hiwwgenawarb.html

If you look closely you will see that the interest rates on these bonds steadily declined – from 4.5 percent in the 1930s, to 4 percent at the beginning of the war and eventually to 3.5 percent (even though the risk of holding the bonds was in fact growing as the end of the war approached!) In general the bonds didn’t offer a very attractive return, though it was slightly above the official rate of inflation, which was tightly controlled through price controls.

As most of the bonds were short-term, many of them would have been redeemed by the end of the war. However, the German banks were still holding around 50 billion Reichsmarks of the bonds when the war finished, at which point they were no longer honoured and became worthless. (Presumably there were also many of these bonds still held by banks in the occupied countries as well).

The losses from this default would have more than offset the small interest that banks had earned on the bonds previously. In general the banks lent to the government because they had no alternative, not because they regarded this as a lucrative investment.

By and large the armaments manufacturers in Germany were not owned by banks or by bankers, but by family dynasties of industrialists. The largest German armaments manufacturer, Krupps, is a good example. After the war Alfried Krupp, the sole proprietor, was convicted of using slave labour and sentenced to 12 years in prison, but he only served three. He was also allowed to keep his business.

Tiger tanks were manufactured by Henschel & Son, another family-owned firm. The owner Oscar Henschel regained control of the company after the war, making commercial vehicles and locomotives, but he faced bankruptcy in 1957 and soon after sold out of the company (although he carried on designing vehicles, after 1965 for Daimler).

Many feel nowadays that German industrialists got off lightly after the war, especially given their use of slave labour. With the start of the Cold War the western allies tended to turn a blind eye to such war crimes.

However, it is a moot point how much such industrialists profited from the war. On the one hand they benefited from government orders and slave labour. On the other hand their factories were typically blown to pieces.

  1. Jason B
    December 28th, 2012 at 16:16 | #1

    None of it was paid for after the war was over because the post-war German authorities did not honour debts incurred by the Nazi regime. In general the armaments were paid for before the war was over, by the Nazi government. Total expenditures by the German government during the war amounted to 657.4 billion Reichsmarks (around $267 billion), two thirds of which was expenditures for the armed forces.

    Of the 657.4 billion Reichsmarks, 28 percent was paid for from taxation, 7 percent from other government income, and 13 percent was paid for from "contributions" (i.e. extortions) from occupied countries such as France.

    The remaining 52 percent was paid for with loans, of which two-thirds were short-term loans and one third were long-term loans. These loans mainly took the form of bond issues, which were generally sold not to the general public but to the banks. This also included banks in occupied countries as well as German banks,

    The banks typically used the money of their depositors (as banks do the world over). Hitler was afraid of selling bonds directly to the general public because he feared that the public weren’t very patriotic and wouldn’t want to invest in the bonds.

    The Nazis and later historians use the term "silent financing" to refer to this method of paying for the war. That is because the depositors of the banks were by-and-large ignorant of how the banks were investing their money.

    If you google the terms "Nazi", "war" "bond" you will find many examples of these bonds (often on sale on ebay etc).

    http://scripophily.net/hiwwgenawarb.html

    If you look closely you will see that the interest rates on these bonds steadily declined – from 4.5 percent in the 1930s, to 4 percent at the beginning of the war and eventually to 3.5 percent (even though the risk of holding the bonds was in fact growing as the end of the war approached!) In general the bonds didn’t offer a very attractive return, though it was slightly above the official rate of inflation, which was tightly controlled through price controls.

    As most of the bonds were short-term, many of them would have been redeemed by the end of the war. However, the German banks were still holding around 50 billion Reichsmarks of the bonds when the war finished, at which point they were no longer honoured and became worthless. (Presumably there were also many of these bonds still held by banks in the occupied countries as well).

    The losses from this default would have more than offset the small interest that banks had earned on the bonds previously. In general the banks lent to the government because they had no alternative, not because they regarded this as a lucrative investment.

    By and large the armaments manufacturers in Germany were not owned by banks or by bankers, but by family dynasties of industrialists. The largest German armaments manufacturer, Krupps, is a good example. After the war Alfried Krupp, the sole proprietor, was convicted of using slave labour and sentenced to 12 years in prison, but he only served three. He was also allowed to keep his business.

    Tiger tanks were manufactured by Henschel & Son, another family-owned firm. The owner Oscar Henschel regained control of the company after the war, making commercial vehicles and locomotives, but he faced bankruptcy in 1957 and soon after sold out of the company (although he carried on designing vehicles, after 1965 for Daimler).

    Many feel nowadays that German industrialists got off lightly after the war, especially given their use of slave labour. With the start of the Cold War the western allies tended to turn a blind eye to such war crimes.

    However, it is a moot point how much such industrialists profited from the war. On the one hand they benefited from government orders and slave labour. On the other hand their factories were typically blown to pieces.
    References :
    http://www.esbg.eu/uploadedFiles/Events/Pilcher.pdf
    http://www.nber.org/chapters/c9478.pdf
    http://en.wikipedia.org/wiki/Alfried_Krupp_von_Bohlen_und_Halbach
    http://www.omnibusarchiv.de/include.php?path=content&mode=print&contentid=658

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