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Rearmament had its costs on the balance of trade, the available raw materials and the funding. For paying armaments producers the official military budget was expanded but the main instrument were Mefo bills, off-budget IOUs like those used in the Battle for Work. Yet by spring 1938 the Reichsbank was worried about the uncontrolled growth of government spending and no more bills were issued. Instead of putting a damper on spending, the Reich simply used short-term debt, an unsafe form of funding, and the growth continued unabated while the money supply was now dangerously increasing (see Budgets). On foreign currency and material inputs, too, a ceiling was being hit by the end of the decade. Together with those economic limitations, the expected time of war, the strength and position of other great powers and the decisions taken by the leadership in response to the previous factors determined the pace of rearmament. In general terms there was an initial buildup in 1933-35, a more intense phase with a shorter time target in 1935-36, stagnation due to economic limitations in 1937, recovery with an even shorter objective in 1938 and another crash in 1939. The initial phase saw the definition of conscription and a remilitarized Rhineland as goals and a program of 35 billion Reichsmarks to be spent over 8 years with 4,4 billion per anuum, amounting to 5-10% of the GDP spent on defense, already a high value. The air force would grow to 2,000 aircraft by 1935, starting with production of existing designs. The army would have a peacetime strength of 21 and wartime strength of 63 by the end of 1937 and offensive striking capacity by 1941. The navy, though of lesser priority envisioned a large fleet with submarines, battleships and aircraft carriers to be ready only in 1949. Expansion targets grew more ambitious in 1935 and by 1936 spending exceeded the initially planned value; the army alone expected to spend 9 billion Reichsmarks a year for 3 years. The air force was to have 200 squadrons by sometime around 1937 and found an adequate fighter in the Me 109. The army would be ready by 1940 and have some offensive capacity even under a defensive posture. Peacetime and wartime strengths would be 43 and 102 divisions, respectively. Of these, there’d be 3 Panzer, 4 motorized and 3 Leichte divisions, forming a substantial mobile force, but horses were still dominant and the majority of the army was not and never came to be mechanized, reflecting the fact that Germany itself was only partially modernized. The Heer was not arming itself specifically for a mobile lightning war years in advance.