Where did Germany find the money to build its army?

Answer 1

Hitler took money from the Jews. He stole billions from them. A lot of their money and valuables he put in Switzerland. So he begged, borrowed and stole from the countries he invaded and from his own people.

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The Nazi's didn't use confiscated money or money from invaded countries to begin rearmament. That came later, although the Nazis were indeed confiscating Jewish property early in the Nazi era. This would not have raised nearly the amount of money needed for a full scale rearming.

It is illogical for Hitler to use money from countries he invaded, because he didn't have an army to invade with in the early '30's.

Hitler used a variety of means. One of the most successful was the use of Mefo bills. Mefo was a short version for Metallurgische Forschungsgesellschaft. They were the brainchild of the Minister of Finance, Hjalmar Schacht, in 1934.

It gets a bit complicated. So be patient.

Under the terms of the Treaty of Versailles, Germany was not allowed to rebuild it's army. To get around this Hitler and his government used all sorts of dodgy means and cloak and dagger tricks to begin the build up.

In order to do this, Germany needed huge amounts of money - soldiers had to be paid, technology investigated, weapons built. The money had to be raised and spent in such a way the the Allies would not notice. In other words, no trail leading to where the money came from and went to could be left.

Schact created a shell company, or a fake company called Metallurgische Forschungsgesellschaft (Mefo from now on) to act as a way of getting money to buy weapons. Mefo didn't do anything - it was a fake. The government created what were called Mefo bills - they were bills or credit notes that charged a 4% interest and sold to armament companies who could then redeem them for proper German currency.

So Mefo paid the weapons manufacturers with Mefo bills, who then turned around and traded the Mefo bills in for real money. But since Mefo was owned by the government (but this was a state secret), the government was paying for the rearmament. And again, since Mefo was the government, the Nazis were getting a steady supply of weapons.

The existence of Mefo was so well hidden, no one outside the Nazi ruling circle knew it existed until after WW2. It was the primary means of rearming from 1935 to 1939. It's not known how many Mefo bills were issued.

Oddly enough, Schact was later removed from his job as Minister. He disagreed with many of the Nazi policies and became involved in an anti-Hitler group prior to the war. After a failed attempt on Hitler's life in 1944 (not by Schact) he, along with many others who were suspected of being anti-Nazi was arrested and inprisoned. Eventually he was sent to first Ravensbruck and then Flossburg and finally Dachau. He survived the war but was arrested by the Allies for his role in helping the Nazis rearm Germany. He was on trial at Nurmberg and was found innocent.