Page 148 - The Making of the German Post-war Economy

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1947 – DISILLUSION AND

DISAPPOINTMENT

The all but general opinion seems to be that capitalist methods
will be unequal to the task of reconstruction. 1
(Joseph Alois Schumpeter, 1943)

Optimism about the incipient economic recovery and improving living
conditions came to a grinding halt in the severe winter of 1946/1947.
Canals froze, roads and railways were impassable for weeks at a time.
Coal, still in short supply, could not keep up with domestic demand, and
many, not only the 7.5 million homeless – in post-war Germany, at least
3.8 million homes out of a stock of 19 million had been completely
destroyed and in the cities hit hardest by the bombing, losses in housing
stock ran to 50 per cent – suffered from the extreme cold. By February
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1947 it was reported that there had been 305 deaths from hypothermia in
the western zones, 1,155 cases had been admitted to hospital and 49,300
people treated for the effects of the frostiness. Infection rates for
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diphtheria, typhoid and tuberculosis in the British and American zones
doubled. Despite economic growth in the western zones, general industrial
production slumped to the level of the previous year during which it was
merely 32 per cent of the output in 1938. Steel Production fell back
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sharply by 40 per cent compared to the previous year, and agricultural
food output fell from 70 per cent in 1946 to 58 per cent of its pre-war
level in 1947; a development attributable above all to the lack of
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transportation caused, in part, by an exceptionally cold winter. The
economy hit rock bottom, when lack of energy caused widespread
industrial stoppages. But also calorific provision in the western zones of
occupation dropped sharply from an average of 1,500 per day per adult in
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mid 1946 to just 740-800 calories in early 1947. While 30 per cent of the
population mentioned food as their chief source of concern in March