IBM and the Holocaust (13 page)

The extraordinary arrangement virtually reinvented Dehomag as a de facto "IBM Europe." Subject to IBM NY oversight, the German subsidiary was granted free rein to cultivate its special brand of statistical services to other nearby countries, especially Austria, Czechoslovakia, Poland, Belgium, France, and Holland. Where census, registration, and other statistical operations did not exist, or where they could be updated along the lines of Germany's anti-Semitic model, Dehomag could now move in. In essence, before the Third Reich advanced across any border, its scientific soldiers would already have a vital outpost.

With its new potency to create a German sphere of statistical influence across the continent, no wonder senior management in November 1933 sent Watson a jointly signed cable proclaiming, "Your visit to Germany has brought encouragement not only to Dehomag, but to the German people."
³⁹

CONSIDERING THE
considering the far-reaching importance of the Watson-Heidinger agreement for commercial hegemony, and the certainty of upsetting other IBM subsidiaries, Watson committed nothing to paper about his secret territorial agreement with Heidinger. Deniability seemed to be the order of the day.

Clearly, Watson possessed an understanding of the value of deniability. When he was prosecuted for criminal conspiracy in the National Cash Register case, he was confronted by exhibit after exhibit of his own incriminating writings, such as instructions to destroy competitors and create fake companies. That error would not happen again. Moreover, IBM was at that very moment being prosecuted by the U.S. Justice Department's anti-trust division for additional secretive acts of monopoly and unfair competition involving punch card technology.
⁴⁰

Watson developed an extraordinary ability to write reserved and cleverly cautious letters. More commonly, he remained silent and let subordinates and managers do the writing for him. But they too respected an IBM code—unwritten, of course—to observe as much discretion as possible in memos and correspondence. This was especially so in the case of corresponding with or about Nazi Germany, the most controversial business partner of the day.

For example, a few weeks after Watson left Germany, one of IBM's European managers in Paris, M. G. Connally, was assigned to monitor details of the merger of IBM's four subsidiaries. On November 18, 1933, Connally wrote a letter to Heidinger concluding with the sentiment: "I only wish we had someone here to do things the way you people do in Germany." Shortly thereafter, Connally circulated a copy of that letter to Watson and other executives at IBM NY. Connally sheepishly scribbled under the last sentence, "I think now I shouldn't have said this."
⁴¹

Whether or not Watson wanted to keep the Dehomag expansion deal a secret, Heidinger was clearly irked by the absence of any proof that he could literally invade any other subsidiary's territory. Census offices and other IBM customers in other countries would be surprised if abruptly contacted by a Dehomag agent. And any IBM subsidiary manager would surely challenge a Dehomag attempt to steal its business.

After many months of waiting, Heidinger suddenly demanded some written proof.

On August 27, 1934, he pointedly cabled Watson, "We need urgently by cable and following letter confirmation for our right granted by you personally to deliver our German manufactured machines for entire European market. . . . This right does not include any obligation of your European companies to give any orders."
⁴²

Watson gave in. The next day, August 28, he dispatched a radiogram to Berlin: "Confirming agreement reached between us last conference in Berlin. We extend German company rights to manufacture machines under our patents for all European countries. Formal contract following by mail. Thomas Watson."
⁴³

But the contract that followed by mail was not acceptable to the Germans. Heidinger detested negotiating with Watson and bitterly remembered how he had lost his company during the post-War inflation. Now, during the new Hitler era, Watson wanted Dehomag to proliferate punch card technology throughout the continent, generating huge contracts. But sales would be funneled through the local IBM subsidiaries rather than through Dehomag's blocked bank accounts. Heidinger reluctantly agreed, but didn't trust Watson and insisted that he be vindicated not just with a new agreement, but written confirmation that this expansion pact was originally sealed almost a year before.
⁴⁴

So on September 11, Watson again cabled Heidinger: "Confirming agreement reached between us in Berlin October 1933. We extend by that agreement your company rights to manufacture and to sell our machines to all European Hollerith companies." Watson followed it up with a signed letter confirming that he had indeed sent the cable, and quoting the exact text. The cable and letter were sent to Nazi Germany. In America, however, the carbons were carefully placed in the file of IBM Financial Vice President and close Watson confidant, Otto E. Braitmayer. A hand-scrawled note confirmed exactly where the carbons were being kept: "Carbons of Letter of September 11, 1934 to Willy Heidinger in which Mr. Watson confirmed cable of Sept 11 regarding agreement that German Co has rights to mfg and sell IBM machines to all Europe in Braitmayer files."
⁴⁵

Deniability in the face of the undeniable required a special mindset. At every twist and turn of IBM's growing relationship with Adolf Hitler, Watson and the other executives of IBM NY were confronted with four undeniable realities.

First, barbaric anti-Semitic violence and general repression were everywhere in Germany and clearly part of a methodical program to destroy the Jews. Second, popular and diplomatic protest against the Hitler regime in America, and indeed throughout the world, was highly visible and threatening to any business that traded with Germany. Third, any corporation willing to ignore the moral distaste and public outcry accepted the stark realities of doing business in the Third Reich: unpredictable local and national Nazi personalities and regulations, confiscatory taxes, revenues trapped in blocked German bank accounts that could only be used within Germany, and the absolute certainty that the company and its employees would be integrated into the fabric of the Nazi game plan. Fourth, he who helped Germany helped Hitler prepare for war.

Anti-Semitic violence and general repression in Germany was an undeniable fact for all in America, but especially for anyone who could read the front page or the first few pages of the
New York Times,
listen to a radio broadcast, or watch a newsreel. In the formative months of February, March, and April 1933, Watson and his colleagues at IBM were exposed to not just several articles in the
New York Times,
but scores of them each week detailing ghastly anti-Semitic brutality. On many days, the New York papers were filled with literally dozens of repression and atrocity reports.

March 18,
New York Times
: In an article detailing Nazi plans to destroy Jewish professional life, the paper reported that a quarter of all Jewish attorneys would be forced to retire each year until they were all gone. It wasn't just the legal profession. Within weeks all German Jews expected to be ousted from their professional positions and occupations, the paper wrote.
⁴⁶

March 20,
New York Times
: The page one center headline decried, "German Fugitives Tell of Atrocities at Hands of Nazis." Making clear that "iron-clad censorship" in Germany was preventing most of the truth from emerging, the paper nonetheless enumerated a series of heinous acts. For example, at Alexanderplatz in Berlin, just down the street from the Prussian Statistical Office complex, Brown Shirts invaded a restaurant popular with Jewish businessmen. Waving a list of names of the restaurant's Jewish customers, the Brown Shirts "formed a double line to the restaurant door." They called each Jew out by name and made him run a gauntlet. As a Jew passed, each Storm Trooper "smashed him in the face and kicked him with heavy boots, until finally the last in the line, knocked him into the street." The last Jew to run the gauntlet was beaten so severely, "his face resembled a beefsteak," the newspaper reported.
⁴⁷

March 21,
New York Times
: Under a page one banner headline declaring, "Reichstag Meeting Today is Prepared to Give Hitler Full Control As Dictator," was a special two-column dispatch from Munich. "Chief of Police Himmler of Munich today informed newspaper men here that the first of several concentration camps will be established near this city."
⁴⁸

By April 20, about the time Watson decided IBM should solicit the census project,
New York Times
headlines reported more than 10,000 refugees had fled Germany in the face of daily home invasions, tortures, and kidnappings; 30,000 more were already imprisoned in camps or prisons; and another 100,000 were facing economic ruination and even starvation. On May 10, about the time IBM was at the height of its negotiations for the census, the world was further shocked when Nazis staged their first and most publicized mass book burning. By the end of May, when Dehomag's contract with the Reich was finalized, the
New York Times
and the rest of America's media had continuously published detailed accounts of Jews being brutally ousted from one profession after another: judges ceremoniously marched out of their courtrooms, lawyers pushed from their offices, doctors expelled from their clinics, professors drummed out of their classrooms, retailers evicted from their own stores, and scientists barred from their own labs.
⁴⁹

On June 11, the day before the door-to-door census taking began, the
New York Times
reported that the government was searching through the backgrounds of more than 350,000 government workers to identify which among them might be of "Jewish extraction who are liable to dismissal." In that same edition, the
New York Times
rendered a page-specific summary of Adolf Hitler's book,
Mein Kampf,
explaining how completely public his program of Jewish annihilation was. Hitler declared on page 344, reported the
New York Times,
"If at the beginning of the [Great] War, 12,000 or 15,000 of these corrupters of the people [Jews] had been held under poison gas . . . then the sacrifice of millions at the front would not have been in vain . . . 12,000 scoundrels removed at the right time might perhaps have saved the lives of one million proper Germans."
⁵⁰

By the time Watson was organizing his plans to set sail on the
Bremen,
on August 29, 1933, the
New York Times,
in a page one article, reported the existence of sixty-five brutal concentration camps holding some 45,000 Jewish and non-Jewish inmates; an equal number were incarcerated at a variety of other locations, creating a total of some 90,000 held.
⁵¹

Banner headlines, riveting radio broadcasts, and graphic newsreels depicting the systematic destruction of Jewry's place in Germany must have seemed endless. Blaring media reports made it impossible for anyone at IBM to deny knowledge of the situation in the Third Reich. But what made a technologic alliance with the Reich even more difficult—moment-to-moment—was an America that everywhere was loudly protesting the Hitler campaign of Jewish destruction. To ally with Germany at that time meant going against the will of an enraged nation—indeed an enflamed world.

Although anti-German protest marches, picket lines, boycotts, and noisy demands to stop the atrocities were in full swing on every continent of the world, nowhere would protest have appeared more omnipresent than to a businessman in New York City. In New York, the air burned with anti-Nazi agitation. All sectors of society—from labor unions to business leaders, from Catholic bishops to Protestant deacons to defiant rabbis—rallied behind the battle cry that humanity must starve Depression-battered Germany into abandoning her anti-Semitic course. "Germany Will Crack This Winter," read the placards and the leaflets.
⁵²

Typical of the vehemence was the giant demonstration at Madison Square Garden on March 27, 1933. Culminating days of loud marches through out the New York-New Jersey area and highly publicized denunciations, the Madison Square Garden event was calculated to shut down New York—and it did.

At noon on March 27, business stopped. Stores and schools closed across Greater New York as employees were released for the day. The rally didn't start until after 8:00 p.m., but by that afternoon, large crowds were already lined up outside the Garden. Once the doors were unlocked, the flow of protesters began. It continued for hours. Traffic snarled as thousands jammed the streets trying to wedge closer. Demonstrators heading for the rally were backed all the way down the subway stairs. Six hundred policemen formed a bluecoat chain along the crosswalks just to allow pedestrians to pass.
⁵³