Hugo Stinnes bought an empire with inflation money — then fought the end of inflation

After the First World War, Hugo Stinnes — already a leading coal and steel industrialist — used the reparations-driven collapse of the German mark to buy up distressed businesses across coal, steel, shipping, newspapers and oil. He funded the purchases with cheap loans from the Reichsbank and repaid them with money that was losing value faster than his assets, so buying on credit in a collapsing currency was nearly free.

The strategy only worked while the mark kept falling, and Stinnes knew it. On 9 November 1922 he declared that he would fight any attempt to stabilize the mark 'um jeden Preis' — at any price — because a stable currency would make his debt-funded acquisitions worthless. He used his seat in the Reichstag and the press he controlled to oppose currency reform.

The cost came when the inflation was actually ended. The 1923/24 Rentenmark reform stabilized the currency, and the cheap money Stinnes had built on stopped being cheap. The Stinnes concern — around 1,535 companies and 2,888 plants at its peak by the museum's count — was carrying mark-denominated debt whose real value reappeared. Already in 1925 the concern was insolvent and disintegrated.

The empire collapsed within about a year of his death in April 1924, and the cost landed on his heirs. Stinnes had warned his sons: 'Denkt daran: Meine Kredite sind eure Schulden' — remember: my credits are your debts. They disregarded the warning, accumulated new debts and quarrelled while the empire was broken up and sold.