IBM and the Holocaust (16 page)

To achieve his goals, each man had to cooperate in an international campaign of corporate schizophrenia designed to achieve maximum deniability for both Dehomag and IBM. The storyline depended upon the circumstance and the listener. Dehomag could be portrayed as the American-controlled, almost wholly-owned subsidiary of IBM with token German shareholders and on-site German managers. Or Dehomag could be a loyal German, staunchly Aryan company baptized in the blood of Nazi ideology wielding the power of its American investment for the greater glory of Hitler's Reich. Indeed, Heidinger and Watson both were willing to wave either banner as needed. Both stories were true. Watson had seen to that.

Dehomag's Aryan facade was carefully constructed. In newly Nazified Germany, many good and decent businessmen looked the other way, dread-ing the day stern-faced men sporting swastika armbands knocked on the door demanding anti-Semitic loyalty oaths, subscriptions of financial support, and ultimately invasive Party control via
kommissars.
At the same time, some could not wait to join the movement. Dehomag was among those who could not wait. IBM was among those who did not mind.

Early on, Heidinger sought out the sponsorship of the Nazi Party hierarchy. He wanted Dehomag draped in the authority not only of the government but the Nazi Party itself. However, before the NSDAP would ally with Dehomag, the powerful Political and Economics Division demanded, in December 1933, that the company answer some pointed questions. The Party's probe was designed to detect just who controlled the corporation, whether the firm was German enough, Nazi enough, and strategic enough to receive the Party's seal of approval.
⁸

Heidinger proffered incisive, if dubious, written replies. "My company is an entirely independent organization which has acquired patent rights from their American owners," he insisted, and is merely bound to pay "royalties." But, argued Heidinger, "any worries as to whether or not excessive amounts of German funds are being exported are thoroughly unjustified," especially since most of the royalties remained in blocked German bank accounts until released by the government.
⁹

One Party question inquired why Dehomag could not sell any wholly German-built office equipment instead of American products. Heidinger explained that the Reich could not achieve its goals without Hollerith tabulators. "[A]side from ours, no other punched card machinery is manufactured in Germany," asserted Heidinger, adding, "Our machines cannot possibly displace other machines, because the work they are called upon to perform cannot be accomplished by the other machines."
¹⁰

Heidinger concluded his written comments by reminding the Party examiners that Dehomag had been "entrusted . . . with the compilation of statistics for the Prussian census." He added knowingly, with that air of ominous lack of specificity so common in those days, "Moreover, negotiations are now pending in Berlin, their object being an agreement between my company and the SA [Storm Troopers] high command in that city for the compilation of certain necessary statistics."
¹¹
Nothing more need be said. Dehomag was approved.

Verbatim translations of the NSDAP's questions and Heidinger's answers—along with the German originals—were delivered to the New York office within several business days for review by Watson and other IBM executives.
¹²

New York agreed with a sub-rosa approach if it could garner the Nazi Party affiliation needed to secure more government contracts. IBM willingly diminished its own identity as part of the effort. New York executives were advised of a Dehomag request: "in the future, on all machines shipped to them [Dehomag], the following designations are to be omitted: 1) International Business Machines, 2) International." A 1934 memo from IBM's Paris managers didn't even want IBM billed for small German registration fees, explaining, "we all should be very careful in exploiting or advertising the name of IBM Corp. in Germany."
¹³
Watson himself would continue his high visibility, but would be portrayed during his frequent visits not as a foreign controller of Dehomag as much as a supporter of IBM technology in Nazi Germany.

Heidinger's assertions of allegiance to Nazi ethics and independence from foreign influence were certainly acceptable to IBM in New York—so long as everyone in the company understood the truth: Watson remained in charge. To ensure that Watson in fact retained full control of Dehomag's activities, IBM NY insisted on several provisions.

First, Dehomag by-laws would allow New York to supercede the German board of directors at any time. Dehomag's corporate by-laws five and six declared that the corporation would be comprised not only of shareholders and a board of directors, but of an unusual third component: "representatives and attorneys—in-fact . . . determined by the shareholders." These would be IBM accountants, managers, and lawyers who could project Watson's authority on a day-to-day basis. The fifth by-law added, "The shareholders shall be in a position to annul the board of directors." By-law seven ordered, "The representatives [Watson's attorneys and accountants] shall follow the instructions of the shareholders and the board of directors, if there is one."
¹⁴

Second, Heidinger's token 10 percent share of the Dehomag were his to own, but only so long as he remained with the company. The stock could not be sold without the shareholders' permission, according to by-law four.
¹⁵

Clearly, the power at Dehomag was wielded by the shareholders. Watson and IBM NY owned 90 percent of the stock. This gave Watson and his attorneys veto power over any Dehomag activity and indeed over Heidinger himself.

Watson also wanted his own people on the Dehomag board to counter-balance Heidinger. Representing IBM NY were trusted Watson representatives Walter Dickson Jones, who operated out of IBM's Paris office, and John E. Holt, who mainly operated out of IBM's Geneva office.
¹⁶
Heidinger acquiesced to the concept of foreign control, but he resented Watson's interference. The first test came quickly. It involved German Sales Manager Karl Hummel.

Watson had cultivated a personal alliance with Hummel. He had arranged for Hummel to attend IBM's sales training school at Endicott, New York, and entertained Hummel and his wife in his home. The Hummels and Watsons periodically exchanged gifts. Watson knew how to develop loyalty. He wanted Hummel on the German board. December 15, 1933, Watson made his move, sending a radiogram to Dehomag General Manager Hermann Rottke: "To give Dehomag fuller representation in Germany, I request that Karl Hummel be made second director
(Geschaftsfuhrer)
and his name so listed. . . . Kindly notify me when this is done."
¹⁷
Watson had not asked Heidinger first.

Heidinger erupted, and just days before the new factory was to open in a grand ceremony, Rottke cabled back: "According to German law, not I but only shareholders meeting and board of directors have authority to promote Karl Hummel . . . sending your cable and a copy of this answer to Heidinger."
¹⁸

Sarcastic and threatening, Heidinger on December 20 dashed off a warning to Watson. "I do not seriously fear . . . your positive will in the future to put me aside in questions of importance for the Dehomag. Nevertheless, I of course feel deeply depressed that you are not interested to hear my opinion [about] . . . such an important decision. . . . That feeling of depression . . . might be considered as not important. But what could be important is the following.
¹⁹

"As you know," Heidinger continued, "we all considered it of greatest importance to proof [
sic
] that the Dehomag is a German-managed company . . . free from American influence . . . our authorities are very sensitive if they should believe to be fouled." He hinted that the Nazi Party might feel the need to install two of its own
kommissars
on the board. During a recent conference at the Nazi Party headquarters, Heidinger had reassured ranking officials that Dehomag would function free of American influence. Now the Hummel appointment was showing the opposite, he claimed, adding that Watson's move would "shock" Party stalwarts and create a "dangerous" situation for the company.
²⁰

Watson went into damage control mode. Upon receiving Heidinger's irksome missive, he cabled Rottke, who would soon sail to America for meetings at IBM: "Do nothing further about Hummel until I see you in New York."
²¹

It was difficult, but Watson humbled himself. In a rambling, two-page letter filled with spelling errors, Watson apologized over and over again, regretted Heidinger's upset, professed his unqualified friendship to Germany, recalled his pleasant times in Berlin, enumerated his forthcoming dinner engagements with the German ambassador, and staunchly assured, "you have nothing to worry about in connection with the German government, so far as my connection with our German business is concerned." Watson blamed not his lack of respect for Heidinger, but a simple typo. In his original cablegram asking for Hummel's appointment, Watson averred, "one word was misquoted. The cablegram dictated was 'I suggest,' and I find in the copy it was written 'request' . . . it is always my policy . . . to make a suggestion, rather than a request."
²²

Suggest. Not request.

Unappeased, Heidinger shot back in a melodramatic flourish, "it was a real and great joy for me to receive your letter . . . [and] to see that the biggest part of the trouble arose from the mistake of using the word 'request' instead [of] 'suggest' which . . . formally settles the most dangerous point . . . I hardly can express how happy I am about the friendly manner in which you explained . . . the mistaken wording of your cable."
²³

Heidinger's message was cabled to Rottke, who at that moment was steaming across the Atlantic on the SS
President Roosevelt.
Rottke had the cable retyped on letterhead and handed it to Watson once he landed in New York. Hummel, it was decided, would be promoted to senior management, but not sit on the board. The conflict was over. Watson filed his original dictation copy of that December cablegram to Rottke. On line two the word "request" was originally typed. Watson edited the cable, scratched out "request" but then upon reflection wrote it back in by hand and signed it. "Suggest" was never in the document. It was always "request."
²⁴

JANUARY
8,
1934
.

In a corner of Dehomag's vast punch card operation within the great Karstadthaus census complex at Berlin's Alexanderplatz, with morning light streaming in behind them through banks of tall parallel windows, several dozen officials of the Prussian Statistical Office were joined by leaders of the Nazi Party in full uniform and Dehomag officials in their finest suits to solemnly recognize the coming revolution of data processing and the newly forged alliance with International Business Machines.
²⁵

Hands reverently clasped either behind their backs or across their belt buckles, shoulders and arms touching in fellowship, the assemblage stood in awe of this day, the day Germany would unveil its own factory producing Hollerith machines. The President of the Prussian Statistical Office, Dr. Hopker, delivered brief remarks using the euphemisms and crystal clear ambiguities of the day. "[T]he irresistible force of the National Socialist government . . . demands the [census] results faster than ever before," he declared, adding, "German statistics understands this impatience." He then explained exactly how the punch card process worked, distilling the anonymous German masses into specific names organized by race and religion, as well as numerous other characteristics.
²⁶

Accompanied by a dense din in adjacent halls that clicked and whirred like locusts swarming a field, Heidinger stepped to the front to speak. With the passion of a die-hard ideologist simultaneously presenting an omnipotent gift to the nation and fulfilling a life-long personal dream, he spoke of the demographic surgery the German population required.

"The physician examines the human body and determines whether . . . all organs are working to the benefit of the entire organism," asserted Heidinger to a crowd of company employees and Nazi officials. "We [Dehomag] are very much like the physician, in that we dissect, cell by cell, the German cultural body. We report every individual characteristic . . . on a little card. These are not dead cards, quite to the contrary, they prove later on that they come to life when the cards are sorted at a rate of 25,000 per hour according to certain characteristics. These characteristics are grouped like the organs of our cultural body, and they will be calculated and determined with the help of our tabulating machine.
²⁷