Berlin Stockmarket

The crash in the Berlin stockmarket has been featured very little in the press, although U. S. investors who blithely bought German shares at recent exalted prices are ruefully aware of it.

The trouble was precipitated by the heavy liquidation of shares in the Stinnes companies, which are suddenly beset with lack of working capital and other serious difficulties (TIME, June 8, 15, GERMANY). The sons of Hugo Stinnes have not exhibited their father's conspicuous financial abilities in carrying on his far-flung business interests since his death. But even were the elder Stinnes still alive, it is doubtful whether he could have passed through the recent stockmarket storm unscathed.

The difficulties of the Stinnes concerns relate to the new turn in German currency matters. While the mark was shooting downward toward practical worthlessness, Hugo Stinnes bought everything in sight of a tangible character, and went deeply into debt also. Later, he paid off many of his debts at bargain prices--hence his enormous profits. Meanwhile, he had as little working capital as possible, and the minimum resources in actual money.

With the stabilization of the mark on a gold basis, this fairyland of finance soon faded. The Stinnes heirs found themselves saddled with colossal industries, heavy debts--and no money. As a result, they have been forced to resort to the banks to keep going, and now on the bank's own terms for accommodation. The result is that the colossal concentration of industries once held in Hugo Stinnes' hands is now pasing to the large Berlin banks.