[10][11][12] Germany also lost its entire battle fleet of modern warships at the end of the war and although new ships were being built as fast as was practical – the battleships Bismarck and Tirpitz had been launched but not yet completed – they were in no position to face the British and French navies on anything like equal terms.
Although Hitler was credited with lowering unemployment from 6 million (some sources claim the real figure was as high as 11m) to virtually nil by conscription and by launching enormous public works projects (similar to Roosevelt's New Deal), as with the Autobahn construction he had little interest in economics and Germany's "recovery" was in fact achieved primarily by rearmament and other artificial means conducted by others.
[15] The works were located in the area bounded by Hanover, Halle and Magdeburg, which was considered safe from land offensive operations, and a programme was initiated to relocate existing crucial industries nearest the borders of Silesia, Ruhr and Saxony to the more secure central regions.
[citation needed] At the start of the war a large proportion of the German merchant fleet was at sea, and around 30% sought shelter in neutral harbours where they could not be attacked, such as in Spain, Mexico, South America, the United States, Portuguese East Africa and Japan.
[20] The pocket battleship Graf Spee herself was scuttled outside Montevideo, Uruguay, where she sought repairs to damage sustained during the Battle of the River Plate, after the British spread false rumours of the arrival of a vast naval force tasked to sink her, an early success for the Royal Navy.
Churchill was endlessly frustrated and bemused by the refusal of the neutrals to openly differentiate between the British and German methods of waging the sea war, and by their determination to maintain pre-war patterns of trade, but stopped short of condemning them, believing that events would eventually prove the Allies to be in the right.
[citation needed] Despite their declared neutrality, the politically unstable Balkan nations found themselves in an uncomfortable position, surrounded by Germany to the North, Italy to the West and Soviet Union to the East, with little room to refuse German veiled threats that, unless they continued to supply what was requested, they would suffer the same fate as Poland.
In addition, Germany remained cut off by the blockade from oversea supplies, such as copper from Chile, nickel from Canada, tin and rubber from the East Indies, manganese from India, tungsten from China, industrial diamonds from South Africa and cotton from Brazil.
With no passenger trade, and with all Scandinavian and continental sea traffic suspended, the port was far less busy than normal, but as many as 35,000 men still filled the warehouses with grain, tobacco, flour, tea, rubber, sugar, meat, wool, timber and leather every day throughout August 1940.
The Germans held 1,500,000 French prisoners of war as hostages, feeding them on bread and soup so thin that grass was added to bulk it up, and most items were now heavily rationed, with a worker entitled to a daily diet of only 1,200 calories; many people rode bicycles into the countryside during the weekend to scavenge for food.
Following their disastrous invasion of Greece from occupied Albania on 28 October 1940, Italian reserves of rubber, cotton, wool and other commodities began to dwindle, and the high prices charged by Germany to haul coal across the Alps from Trieste made heat a luxury.
A massive cotton operation was begun in Turkestan, new wheat growing regions in the centre, east and north, coal mines were opened and expanded in Siberia, rich mineral deposits tapped from the Urals, across Asiatic Russia, and immense new oil wells and refineries were developed in the Caucasus and Volga valley.
Amid increasing reports of atrocities committed by her forces in these lands, such as the Nanking Massacre and the use of poison gas, world opinion turned against Japan,[6] and from 1938 America, Britain and other countries launched trade embargoes against her to restrict supplies of the raw materials she needed to wage war, such as oil, metals and rubber.
Together they attempted to persuade the remaining neutrals – Portugal, Spain, Sweden, Turkey, Switzerland, Ireland (and Argentina) – that by supplying Germany with the materials it needed they were prolonging the war, and over time a number of measures were tried to pressure these countries into reducing or ending trade with the Axis, with varying degrees of success.
Portugal provided Germany with direct overland exports of a wide range of commodities including rice, sugar, tobacco, wheat, potassium chlorate, inflammable liquids and yellow pitch, and Portuguese merchants were also known to be sending industrial diamonds and platinum via Africa and South America.
The U.S. and Britain were sympathetic to Sweden's difficult position and of her attempts to maintain her neutrality and sovereignty by making important concessions to the Nazis, such as continuing to export timber and iron ore and by allowing the Germans use of their railway system, a privilege which was heavily abused.
Although the naval blockade, now heavily reinforced by US warships, restricted their efforts, merchants in the Argentine capital of Buenos Aires smuggled important quantities of platinum, palladium, drugs, and other chemicals to Germany, and a major aim of the US contraband control was to use US exports to Argentina to put pressure on her government to turn away from Nazi influence and break financial ties.
[16] Another important target was ball-bearing manufacture, most of which was concentrated at Schweinfurt, which in the months to come, despite the German deployment of smoke screens, mock factories, jamming devices, searchlights and flak in the area received special attention from the USAAF; Albert Speer and Erhard Milch, the Inspector-General of the Luftwaffe, realised that from this point onwards the writing was on the wall.
Once new supplies of oil, rubber, and tungsten began flowing from the newly occupied Far East, mutually beneficial barter agreements were agreed whereby the Germans would acquire these vital commodities in exchange for the precision tools, blue prints and ball bearings which Japan badly needed.
The MEW became concerned at the "steady trickle" of Japanese blockade runners reaching Europe, which one estimate put at 15 ships by the end of 1942,[41] and on the anniversary of the German and Italian declarations of war on the US, General Tojo expressed his pleasure that Japan was able to contribute the resources captured in the South Pacific to the Axis cause.
Although the commandos displayed exceptional courage and the expedition was essentially successful in that a number of ships were damaged, only 2 men survived, including the leader, Major Herbert Hasler, who had to make their way across 80 miles of France, Spain and Gibraltar back to safety.
In addition, excessive secrecy and a lack of communication between Whitehall departments meant that at exactly the same time that Operation Frankton was under way, and without their knowledge, the SOE were in the final stages of their own attempt to destroy the blockade runners by deploying a team of French agents led by Claude de Baissac, posing as painting contractors who planned to carry explosives onto the ships in their baggage.
Despite the humanitarian efforts, by late January 1942 between 1,700 and 2,000 men, women and children were dying in Athens and Piraeus each day, and Italy, which then occupied Greece, was forced to ship 10,000 tons of grain from her meagre domestic supplies, secretly to avoid unrest from her own people.
Portugal also defended her right to neutral trade, fearing German reprisals such as invasion or the bombing of her cities and shipping if she ceased tungsten shipments; however the US Secretary of State Cordell Hull believed that he could have achieved the objective if he had had wholehearted British support.
For six days aircraft factories were subjected to constant pounding, with the Americans flying heavily escorted missions against airframe manufacturing and assembly plants and other targets in numerous German cities including Leipzig, Brunswick, Gotha, Regensburg, Schweinfurt, Augsburg, Stuttgart and Steyr.
[16] From the beginning of Overlord on 6 June, the Allies enjoyed complete control of the skies over the beachhead, and were able to transport adequate oil across the sea via tanker and use of the PLUTO underwater pipeline, while the artificial Mulberry jetties and the capture of small harbours initially enabled them to bring enough ammunition and food supplies ashore.
But following subsequent discussions with Reichsbank Vice President Emil Puhl, the Swiss later reneged on this agreement, and through the remainder of 1945 showed an unwillingness to embrace the Allied proposals to turn German assets in Switzerland towards the benefit of ravaged Europe and stateless victims of the Holocaust and other Nazi crimes.
The German synthetic-oil programme was so successful and advanced that during the world fuel crisis of the 1970s, caused by conflict and uncertainty in the Middle East, large American industrial concerns such as Dow Chemical, Union Carbide and Diamond Shamrock began to reconsider the Nazi-era technology to see if it might provide a partial solution to their problems.
It was made in 1942 in a similar episodic manner to David Lean and Noël Coward's In Which We Serve, but featuring gentle light-hearted propaganda, with a series of sketches designed to illustrate how the British blockade was gradually squeezing the life out of the Nazi war effort.
The Big Blockade starred John Mills as "Tom", a member of a bomber crew over Hanover, Leslie Banks as an efficient Ministry of Economic Warfare civil servant, Robert Morley as the Nazi U-boat Captain Von Geiselbrecht, Michael Redgrave as a Russian based in Germany, and various others, such as Will Hay, Ronald Shiner, and Bernard Miles in bit parts.