vessels at a cost of 33 billion Reichsmarks. 182 Thus, following the Sudeten crisis the Reich was in the process of creating a plan for increased rearmament that would have equipped it for a major continental war with Britain and France by 1941-42. There was, however, no possibility of such a grandiose plan ever being completed. Timothy Mason, writing in 1989, argued that ‘There was no possible way in which the armaments plans of 1939 could be even approximately fulfilled within Germany’s boundaries of March 1939’. 183 Rather than the untrammelled expansion of armaments production hoped for in 1939, the Reich instead found itself pushing the structural constraints of its own economy. Perhaps the most significant problem facing the Reich throughout the 1930s was the binding balance of payments and trade issues, and the consequent foreign currency deficit it caused. The Reich was spending foreign currency through the purchase of imports at a faster rate than it was recouping foreign exchange through exports. Indeed, by the time war began in September 1939 Germany had almost entirely exhausted its reserves of gold and foreign exchange. 184 This lack of critical foreign exchange caused severe shortages in key raw materials necessary for rearmament, creating substantial backlogs in orders and generally placing pressure on any further increases in rearmament. This was largely the result of the incredibly high rate of military spending, and consequent neglect of exports, that had been pursued in the years prior to the war.
182 Ibid. 183 David Kaiser and Tim Mason, ‘Germany, “Domestic Crisis” and War in 1939, Past & Present , No. 122, (Oxford University Press, Feb. 1989), p. 217. 184 Kaiser & Mason, p. 202.
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