IBM and the Holocaust (23 page)

When a town became Jew-free, it became a publicized event. In Germany, the town administration or local Nazi groups would eagerly advertise the accomplishment. Foreign newspaper and radio broadcasts chronicling Nazi oppression frequently reported the development as well. Typical was an article in the
New York Times,
May 28, 1935, headlined "All Jews Quit Hersbruck." The article reported, "A swastika flag has been hoisted over a house in Hersbruck, near Nuremberg, which has been the home of the last remaining Jewish resident in the district."
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But Watson didn't need to read about Aryanization in newspapers. He discovered it personally. In July 1935, Watson visited Berlin. That July, Nazi thugs ran wild in the streets of Berlin smashing the windows of fashionable Jewish stores. One of those department stores was owned by the Wertheims, family friends of the Watsons. The Watson family learned that to protect the store, Mr. Wertheim first transferred the property to his Aryan wife, but then ultimately decided to sell "for next to nothing" and escape to Sweden. On another visit to Berlin, the Watsons and other IBM executives were invited to an elegant reception at the Japanese embassy. While sipping tea in the garden, a German diplomat boasted that the exquisite home formerly belonged to a Jew who fled the country. Such new ownership of greatly discounted homes was now common in Berlin.
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By late 1935, however, the Nazis envisioned a more systematic and state-controlled process to expropriating Jewish property. Just after the enactment of the Nuremberg Laws, the Nazis began floating plans for a clearinghouse to gobble up all Jewish holdings for a pittance. This plan was no secret. It was widely promoted in Germany through the Party's Economic Information Agency. And the news traveled abroad. A
New York Times
article on September 24, 1935, was headlined "Nazis Plan to Buy Out All Jewish Firms; Stress Bargains Resulting from the Boycott." The article reported, "The plan calls for the purchase of Jewish firms by a central corporation, and their redistribution among ambitious Aryan businessmen. It is suggested that such businesses can be obtained cheaply. . . . The Nazi organ responsible for this 'solution of the Jewish problem' makes startling guesses as to what the prices would be. It says, 'some fairly large Jewish firms can be purchased for 40,000 marks.' Evidently . . . the Jews can be induced to feel a very pressing desire to sell." The newspaper noted that under such conditions, Jews might then be faced either with the prospect of "emigration or semi-starvation."
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As part of the drive to liquidate Jewish assets, Nazis began visiting Jewish homes and invalidating their passports. Now Jews could not even become refugees without paying a confiscatory flight tax of 25 percent of their holdings in Germany.
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Identifying Jewish possessions was the next step.

Banks, financial institutions, and pension funds were among Dehomag's most important clients. Indeed, Dehomag maintained an entire department for the banking industry. IBM designed highly specialized tabulating equipment for banks, including the BK and BKZ models, which were capable of producing customer statements and recording specific transactions. On August 12, 1935, savings banks were suddenly required to provide the
Reichsbank
with detailed information about all their depositors. Some banks used the Hollerith process by coding accounts into one of ten professional categories Dehomag had established.
Hollerith Nachrichten
published a notice for those institutions that did not yet own sorting machines, advertising that Dehomag could do the sorting in-house for a fee. The company bragged that it possessed the ability to cross-reference account numbers on bank deposits with census data, including grouping by profession or industry.
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Dehomag's financial documentation capabilities soared when it un veiled a powerful new model dubbed the D-11, which could process numerous account developments, compute interest, and help create detailed customer records. Within months, the new D-11 would allow high-speed data management of bank accounts at dazzling levels.
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At the same time, the human identification process proliferated. Local and regional statistical offices registered new births on Hollerith cards, carefully noting the religion of both parents. Marriages were also registered on punch cards, again noting the religion of both partners. These cards were then forwarded to regional Dehomag service bureaus, such as the one in Saarbrucken at Adolf Hitlerstrasse 80. More than half the local regional statistical offices operated card punchers, but could not purchase their own sorters because of the backlog and expense of the machines. So Dehomag conducted the sorts on its own premises, just as it did for so many tabulations. Once Dehomag completed its work, the data was sent on to the Reich Statistical Office where it was combined with a confluence of other data streams.
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Personal information about Jewish people in Germany was always changing—precisely because of the innumerable dislocations Jews suffered. For this reason, starting in 1935, the authorities required Jewish communal leaders to report their members by age and gender no longer annually, but quarterly.
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Such data was just one more trickle comprising the river of cross-indexed information Hitlerites processed to isolate the Jewish nemesis.

Eventually, the Hitler regime felt statistically ready to espouse regulations defining just what constituted a Jewish business.

A firm was labeled "Jewish" if the owner or a partner was Jewish, if even a single Jew were in management or on the board of directors. If a quarter of its shares or votes were held by Jews, or under Jewish influence through nominees or agents, the company was classed Jewish; this regulation made it increasingly difficult and dangerous to mask ownership. A company could be owned and operated by undisputed Aryans, but if it maintained a branch managed by a Jew, that branch would be declared Jewish.
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Naturally, it would be impossible to certify a company as being Jewish unless denouncers knew the identities of all business principals and were profoundly certain which of those individuals qualified as Jewish under the Nuremberg Laws. But fewer Jews could hide from the dragnet IBM had helped the Reich construct. This forced companies to quickly identify and terminate, even if reluctantly, any of its Jewish management, and even its own Jewish ownership.

Once a company was deemed to be Jewish, as defined under the special regulations, its inventory and assets would ultimately be registered. Hollerith systems that could inventory people could inventory merchandise as well. Among Dehomag's most important customers were the Trade Statistics Office in Hamburg, the
Reichspost,
and various national and local taxing offices. Decrees of the Reich Economics Ministry's
Kommissar
for Price Control, beginning in 1936, required uniform reporting procedures by key industries. In most cases, the installation of IBM machinery was mandatory in order to comply. Government statisticians and Dehomag had developed coding systems for virtually all raw materials and finished goods. Eventually, the coding system would make it possible for the Nazis to organize its seizures with stunning specificity.
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None of Germany's statistical programs came easy. All of them required on-going technical innovation. Every project required specific customized applications with Dehomag engineers carefully devising a column and corresponding hole to carry the intended information. Dummy cards were first carefully mocked-up in pen and pencil to make sure all categories and their placement were acceptable to both Dehomag and the reporting agency. No information could be input unless it conformed to Dehomag specifications. Therefore, the Reich tailored its data collection to match Hollerith requirements. Moreover, there was only one source to purchase the cards: Dehomag. The company sold them, generally in lots of 10,000, often preprinted with project names. Of course, once Dehomag approved the formats, it trained the reporting agency's personnel to execute the work.
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Dehomag was Germany's data maestro.

During the frenetic rush to expand business with the Nazis and automate more and more Reich projects, never once was a word of restraint uttered by Watson about Dehomag's indispensable activities in support of Jewish persecution. No brakes. No cautions. Indeed, to protest Germany's crusade against Jewish existence would be nothing less than criticizing the company's number two customer. Despite the innumerable opportunities to disengage or decline to escalate involvement in the war against the Jews, IBM never backed away. In fact, the opposite occurred.

Watson became intensely proud of the German subsidiary's accomplishments. In late November 1935, two months after the Nuremberg Laws were espoused, and just days after more headlines were made when the Reich issued highly detailed genealogical dicta defining just who was Jewish under the decree, Watson traveled to Berlin to celebrate Dehomag's twenty-fifth anniversary. A lavish company banquet was scheduled for November 27 at the exclusive Hotel Adlon. More than 150 invitations were distributed. IBM offices in New York, Switzerland, Italy, France, and Norway were represented by their top executives. Dignitaries such as U.S. Ambassador to Germany, William E. Dodd, Hitler's press attache, Ernst Hanfstaengl, former German consul in New York, Otto Kiep, and Reich Economics Minister, Hjalmar Schacht were invited. Important industrial contacts were on the list. Even if some, such as Schacht, could not attend, most did.
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Sumptuous food was served in the Watson tradition of elaborate dinner events. The Heidingers, Rottkes, and Watsons toasted their success. But even as the precious crystal glinted and ornate silverware gleamed, the utilitarian machine rooms of Lichterfelde and countless other data processing offices throughout Germany continued their own demographic clatter. The machines never slept.

Not everyone could be as jubilant and splendid as the Watson revelers at the Hotel Adlon. Unseen and unheard were Jews, cowering in their homes, fearing visibility. Goebbels had already warned them. "We have spared the Jews," asserted Goebbels, "but if they imagine they can just stroll along the [fashionable] Kurfurstendamm as if nothing at all had happened, let them take my words as a last warning." In another warning, Goebbels demanded, "Jews must learn to break with their past behavior and leave public places in Germany to the Germans." These were not quiet comments murmured at obscure party meetings but public threats reprinted worldwide, including in the
New York Times
under headlines such as "Nazi Warns Jews to Stay at Home."
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Now Watson eagerly launched a program to expand Dehomag's capability. Ten more boxes of machinery had been shipped from New York to Hamburg in November 1935 on the SS
Hansa.
Millions of additional punch cards would be rushed across the ocean until Dehomag could produce them in Germany. Branch offices were opened throughout the Reich, the Lichterfelde factory was enlarged, and a second factory was established to manufacture spare parts.
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While in Berlin that November 1935, Watson attempted to gain technical information from Dr. Fels, a key Reich Statistical Office expert who had helped organize the 1933 census. Watson learned that despite Fels' expertise, he had been ousted from his position because he was Jewish. Dehomag delivered a note to Watson's hotel explaining that Fels was now living as an unemployed refugee with his family in New York, "in quite a bit of misery." The note added that IBM in America had declined to give him a job. But Watson wanted Fels' expertise. So immediately upon his return to America Watson arranged a meeting. On February 3, 1936, Fels briefed Watson in his Manhattan office and they spoke of such wide-ranging issues as the German census and the prospects for similar projects elsewhere. As for employment, Watson did assure he would ask around and see if any of the many organizations he was associated with might offer Fels a job.
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After the Fels briefing, joint exchanges on both sides of the Atlantic between IBM NY and Dehomag sales and technical staff became constant. These exchanges were highly selective, well thought out, and very costly investments in future work. Dozens of Dehomag salesmen, engineers, and managers came to America for training and exchange of expertise. IBM established a special sales training school in Endicott, New York, predominantly attended by German and other European IBMers. Sales training was necessary because despite all the proliferation in punch card systems, representatives encountered continual resistance from government officials on just how the elaborate new technology worked. At Endicott, salesmen learned how to fire the imagination of bureaucrats and convince them that IBM's technology could provide solutions for any governmental requirement—no matter how unprecedented.
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Four of IBM NY's brightest engineers and managers, all of Germanic descent, were eventually transferred from America to the Berlin operation: Walter Scharr in 1936, and Otto Haug, Erich Perschke, and Oskar Hoermann in the following years. One Austrian inventor, Gustav Tauschek, was so prized, he demanded—and was granted—an annual contract guaranteeing him six months with IBM in the United States and six months in his beloved Austria. Tauschek generated dozens of valuable patents. Indeed, anticipating Dehomag's expansion, IBM NY filed for patents in various European countries to protect the inventions of its German subsidiary.
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New devices never stopped appearing. Numbered gang punches type 501 for multiple punching. Electrical interpreters type 550 for analysis. Electrical accounting machine type 400 for zone punching. Summary punch type 516 for cumulative information. Dehomag developed its own motor-driven duplicating printing punch type 016 for high-speed processing, and calculating punches type 621 and type 623. Multiplying punches were able to tally the sum of two punched holes on a single card, shortening sort time. High-speed reproducers, alphabetic tabulators, numeric and alphabetic interpreters, horizontal sorters—a parade of metal magicians joined the repertoire.
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Many of these devices were of course dual-purpose. They as routinely helped build Germany's general commercial, social, and military infrastructure as they helped a heightening tower of Nazi statistical offensives.