British report of German metal stocks as of September 1939, at 1939 consumption rate, months of stocks, copper 7.2, lead 9.7, zinc 11.5, antimony 13.6, cobalt 30, nickel, molybdenum, chrome and vanadium all about 13 months, tungsten 15, manganese ore 18 months, iron ore stocks 9 months at 1938 (not 9) consumption rate. I suggest dropping the spoiler label of included data.
Basically, the war as fought. Going into 1940, the Germans weren't expecting a quick victory but a prolonged struggled for France.
The original statement talked about things before the war, the strengthening of key war making industries in the 1930's, reduction of key imports, now we are in 1940, at war, with many uncertainties resolved, and like others entering the war pruning of long term projects had happened, those that could produce useful items over the next couple of years continued. So yes, the Germans in early 1940 assumed a war in France would be at least a two year campaign. What was the pre war planning assumptions on war opponents and duration? The ones that formed the basis of pre war capacity planning?
The GSWW series notes their build out plans were meant for this, with munitions output set to peak in the second half of 1941 and thus presumably striking the fatal blow around that point. With the conquests they did rack up in 1940-1942, the systems the Germans did build before the war were able to carry them through until their collapse in 1944-1945 as Schmelzig notes.
The systems built before and early in the war were capacity, which is separate to the sources of inputs, September 1939 to May 1944 is 56 or so months, no one could afford that level of vital war stocks. The conquests gave the raw materials and extra industrial capacity, including niche items like steel mills able to use different ore grades. During the war German capacity was overall quite well matched to raw materials once adjustments were made, like everyone else, shortages were worked around. The old assumption the Germans did not do long term capacity planning and expansion is as wrong as they did a really good job at it so the conquests are not really that relevant. Essentially the Germans idled large numbers of non German factories etc. to ensure the German ones had enough raw materials, that had its usual downside, for example making new, or just spare parts for, non German agricultural machinery.
I agree with some of this and some I don't. The UN trading statistics for example show Germany had recovered to 80% of the level of 1928 by 1938:
Germany and the Second world War yearly figures have a different take which needs to be resolved, the UN figures have a footnote regarding Germany, in 1938 Germany expanded to absorb Austria and parts of Czechoslovakia, what does the UN report for those countries? Things like goods or goods and services and loan repayments come into play.
The north eastern Europe trade table provided does not include Sweden, which had a quite stable requirement for coal from Germany and in turn a reasonably stable export of high quality iron ore. It would be good to see what that trade did in the period, similar for Denmark which exported food. The Balkans table provided is running at roughly twice the value of the NE Europe one, in 1939 the Balkans is reported as having 9.9% of German trade, Scandinavia 11.4%, the Baltics 1.8%. We know Germany made a strong effort in these areas as they were safe from blockade, good prices were offered to the Balkans but only in return for purchasing German goods, a problem that military equipment sales ultimately helped fix. Another 9.1% of trade was Belgium, Holland and Switzerland, Italy 4.5%.
If you put the Balkans and NE Europe tables together the two way trade goes up by 60% 1935 to 1938 for around 15% of German trade, Germany and the Second World war reports a 27% increase in total trade. The 1938 Balkans trade was worth about 8% more than 1929 trade.
By the time the Nazis came to power gold and foreign exchange were down to under a fifth the 1930 peak, by 1937 about 2.5%, Austria restored things to about the 1933 levels.
Without question, the loss of trade with the Soviets was a blow initially, but the Germans made up for it by intensified trade with Southern and Eastern Europe, as Germany had effectively established economic hegemony in the region and this was a major reason for the Anglo-French taking a hardline on Poland:
How exactly does an April 1939 decision be affected by a long standing trade situation? Which is different to hegemony, that came in 1940/41. Also how does Poland fit in the hegemony concept, given its trade in 1938 in value terms is around those of the Balkan countries, though Poland had 1.75 to 5.7 times more people than the Balkan countries listed. The Balkan states noted they were at a disadvantage with Germany, being a minority of German trade but a big slice of theirs, unfortunately the British table of Balkan trade in 1938 only lists the major powers, there had to be intra Balkan trade for a start, so these percentage will need adjustment down, but 54.5% Germany, 7.1% Austria, 10.3% Czechoslovakia, 9.2% Italy, 4.7% France, 14.2% Britain
As for the MEFO situation, what had happened was they had run out of foreign exchange to fund the purchases necessary for continued rearmament at the pace they were on.
MEFO were internal currency, not foreign exchange, which required selling things to other people.
This had happened before in 1937 and had been resolved without an economic collapse by slowing down the pace of rearmament. What was different in 1939 was that the Anglo-French had begun to rearm following Munich, which made taking another pause more dicey.
The British and French had begun rearmament in 1935/36 and as they noted the increasing German expenditure they in turn increased theirs, and began to involve other countries, like the US. The British and French economies combined were superior to Germany's and that was beginning to tell.
Basically, the Germans weren't at risk of an economic collapse but they did face the situation of having to take another pause or repress living standards.
No one ever said they faced a collapse, only a combination of internal finance plus foreign exchange problems. The Nazis more than quadrupled the military budget between 1934/35 and 1938/39, plus about a sixth of total military spend in the time period came from the loans, with no new loans written in 1939. In 1938 42.7% of German Government expenditure was on the military, representing 18.1% of the GDP. In the first year of WWII the Government was using 35.7% of it's budget to repay loans, from around September 1940 onwards the German government spent more money on loan repayments than new weapons. In the period 1 September 1943 to 31 August 1944, the percentage split was Wehrmacht 23.1%, civil departments 11.6%, debt repayments 65.3%. In 1933 the German government had debts as 1 short and 11 long term, in 1939 it was 15 short and 27 long term (not sure about units).
Ultimately, Hitler created a third option of war with Poland in the expectation it wouldn't lead to the onset of a general war while granting the resources needed to continue arming;
What exactly were the resources in Poland and how long would they last?
With the benefit of hindsight, the best option was to cancel or delay Plan Z which began in 1939 and would've freed up sufficient resources that the Army and Luftwaffe could continue to arm without triggering the onset of a general war yet.
In simple terms no, the German navy was too small. When the RN went around selling total cost of ownership as a yearly sum over the lifetime of the ship, a battleship cost 58.5 naval aircraft, a large cruiser 26.1, a small cruiser 17.6 and a destroyer or submarine around 5.7. As a quick guide double the aircraft cost for twin engine bombers. Apart from changes in manufacturing capacity there were economic reasons why there was no 1930's dreadnought race. During the war a medium tank cost around the same as a single seat single engine fighter, in 1939 the Germans built 732 tanks including 246 panzer II and 8,295 aircraft of all types. The army had a much bigger wages, accommodation, transport etc cost than the air force or navy but a much lower per capita equipment cost. On 2 September 1939 the Luftwaffe quartermaster reported operational combat units held 3,609 aircraft, plus another 552 transports, on 11 May 1940 the figures were 4,782 and 471.
Like everyone the Germans learnt to make things more efficiently, so add a time to any cost figure. Projected costs for the 1,000th a/c of each series, excluding engine(s) and propeller(s) based on a GL Ltd.Chef-Ing. report of 24 April 1941.
Bf109E = 15,000 RM (the Bf 109F would be the same)
Do17Z = 41,000 RM
He111H = 71,000 RM
Ju88A = 73,000 RM
In 1939 the Germans published a price list for various aircraft available for export. The prices dropped according to how many were ordered. The aircraft were fully equipped. So an order for less than 50 Bf109E would have an individual cost of 162,000 RM. An order for 201 or more would have an individual cost of 130,000 RM. The engine alone seems to have been a fixed cost at 47,000 RM. Assuming the 201+ order price was closest to the real cost (plus profit) then
Bf110C 290,000 RM
He111P 328,000 RM
He111H 330,000 RM
Hs126 128,000 RM
Ju52 200,000 RM
Ju87B 140,000 RM
Ju88A 305,000 RM
www.econ.yale.edu/growth_pdf/cdp905.pdf Might be worth digging out the audit reports the article uses.
Table 6 you will note the costs are maximum and minimum for the year and the Ju88 for 1939/1940 it is maximum 523,385, minimum 210,648 marks. So if you ignore the obvious high cost in 1939 you are much more able to see the real lowering of costs. In 1941/42 the Ju88A-4 came it at between 170,605 and 167,129 marks, the tropical version between 173,143 and 159,143 marks. In 1942/43 the Ju88A-4 trop came in at between 141,246 and 139,274 marks.
Be careful about what is actually being paid for here, whether Junkers is charging for just the airframe and not all components. Also the later war use of forced and slave labour