IBM and the Holocaust (53 page)

November 9, 1940,
New York Times,
"Reich Jews Sent to South France; 10,000 Reported Put Into Camps."
At Camp de Gurs, the refugees, it was said, were forced to live in small wooden barracks without
enough water and practically no food supply.
¹

November 26, 1940,
New York Times,
"Walls Will Enclose Warsaw Jews Today; 500,000 Begin 'New Life' in Nazi-Built Ghetto."
By
German decree, all Jews in Warsaw have been required to take up residence in the ghetto . . . with as many as seven persons living in one room
in some buildings. The wall—unusual in modern times, surrounds 100 or more city blocks and closes off 200 streets and even street car lines
.
²

December 5, 1940,
New York Times,
"Rumania Emerges From 'Revolution'; Death Toll Nearly 400, Wounded Exceed 300—Terror Reign Lasted for Eight Days."
Moldavian Iron Guard "Purists" launched
a pogrom of large proportions. Jews were kidnapped, beaten and killed at Galati and Turnu Severinu, Giurgiu and Craieva. . . . In daytime raids, Iron
Guards confiscated Jewish shops in Brasov, Timisoara and Ploesti.
³

December 5, 1940,
New York Times,
"Cholera Killing Men in Concentration Camps in France."
Refugees transferred from one camp to another . . . were
locked into cattle cars without food, water or sanitary equipment for as long as four
days at a time . . . nearly all of the 15,000 inmates were stricken with cholera and
approximately 500 died. "There were no shovels to dig graves with and no coffins
to bury the bodies in," [an imprisoned doctor said]. "We dug shallow graves with
our hands and cremated those we could."
⁴

December 17, 1940,
New York Times,
"Property of Jews in Alsace Is Confiscated."
The property of Jews is confiscated and will be distributed either gratis
or at low prices. . . . The finer furnishings . . . have been sent to Germany by the
trainload.
⁵

January 14, 1941,
New York Times,
"Netherland Jews Must Register."
All
Jews must register within six weeks, under a decree issued today by the German
Commissioner for the Netherlands.
⁶

January 25, 1941,
New York Times,
"300 Jews Reported Slain."
Some of
the more extreme elements of the insurgent Iron Guard in Bucharest implemented
the threat to oust the Jews . . . by killing an estimated 300 Jews [that] they had
herded into cellars and then turned machine guns on.
⁷

January 26, 1941,
New York Times,
"Misery and Death in French Camps."
In some of the camps, . . . an "unbreathable atmosphere of human hopelessness" was
reported, with "an intense desire to die" attributed to most of the older refugees. . . . [A Gurs camp source reported] "They will not fight any more; apathetic, they lie on
their straw mattresses, often refusing food and waiting for the end."
⁸

Despite all the atrocity stories being broadcast, Watson was waging his own struggle. His was an undying determination to retain IBM's favored dominance in the Third Reich's commercial-industrial complex. The struggle was not going well.

In the first week of January 1941, German Finance Ministry officials ruled that IBM's settlement with Heidinger, worth almost $900,000, could not be transacted using the company's blocked Reichsmarks. In frustration, Chauncey sent word to New York that he would "have to begin all over again." One of the main government objections was the continuing existence of IBM's so-called royalty program, which was considered a sham to extract profits from Germany in the form of fake expenses. Why else, critics complained, did IBM's own subsidiary pay the parent company royalties?
⁹

At the same time, Party circles continued to demand IBM shed its majority ownership. IBM executives began to wonder if they might sell some shares to the Hitler government itself, going into a direct partnership with the Reich, "provided, simultaneously, official formal recognition by the government . . . [of] the validity and binding nature of the royalty agreement." On January 24, 1941, a Nazi official at the Deutsche Bank met with Chauncey and repeated the assertion that if IBM ceded the majority, "we will take care of any new competition." New York did not mind making a token transfer to some German nationals, but Watson still hoped he would not be forced to reduce IBM's ownership to a minority.
¹⁰

By the very end of January, a tired Chauncey was hoping to return to Manhattan to make his confidential report in the security of IBM headquarters. Once he obtained the board's decision, he would fly back to Berlin and again confer with Veesenmayer as promised. By now, Chauncey had learned when speaking over the phone to refer to Veesenmayer obliquely as "that official" or "an official." Chauncey went to Geneva and phoned New York for his next instructions. The conversation, as usual, was conducted in code and studded with cryptic allusions.
¹¹

J
ANUARY 31, 1941, 4:45 P.M.

Chauncey at IBM Geneva

John G. Phillips and Charles R. Ogsbury at IBM NY

P
HILLIPS
: Hello, Harry, this is Phillips. . . .

C
HAUNCEY
: Yes. There are two courses open to me at the moment. I shall send you a report of the big question [retaining the majority], which I cannot even here send to you completely in all respects, over the telephone or written. . . . Or I could come back to the United States and give you a written report. . . . [But] then I [must] return to Germany at the request of "an official."

P
HILLIPS
: You cannot define that any more?

C
HAUNCEY
: No, but you can understand. Because of the time that may be involved, I promised "that official" that I would go back to America with some degree of haste and return as soon as possible.

P
HILLIPS
: Does it need you, Harry, to complete it?

C
HAUNCEY
: He asked me to do that, notwithstanding the fact that I had left with our lawyer a power [of attorney] to complete whatever we may decide to do, because that man—our man [attorney Albert]—will have to go into discussions. . . . I am [now] going to read to you from a part of a letter from "our best friend," which has been mailed to Mr. Watson. Quote: "The introduction of influential industrial interests as new shareholders would inure to the benefit of both IBM and Dehomag. Dissatisfaction has evidently found expression in criticism of the price, and other policies—and in the demands for the creation of competition, if necessary, by Governmental initiative or at least with official support." End quote.
¹²

Turning to the threat of a Reich cartel effort that might merge French Bull and Dehomag, Chauncey suggested he try to stem the plan at once.

C
HAUNCEY
: The transfer of the interest recently acquired in the French German Company [the planned German cartel] was offered for the majority holding in Dehomag . . . which, of course, would not be to our advantage. You see that? I am going to attempt to get in touch with our French people.

P
HILLIPS
: I have a question here on that. You are going to attempt to get in touch with our French People. Now Mr. Ogsbury has made some notes here with Mr. Schotte as to [three] things you might want to think about: The Bull suit. The general Bull situation. And any conversations between [IBM French subsidiary director Roger] Virgile and Germany in connection with a merger and buying.

O
GSBURY
: Harry, what will you do? Will you try to see Virgile in Paris or have him go over there?

C
HAUNCEY
: I know he will have to come into unoccupied parts [Vichy France]. They [Nazi authorities] would not let us go to Paris.

O
GSBURY
: There has apparently been some negotiations between Virgile and Dehomag with respect to the manufacture of parts and certain machines. I think you will find all that correspondence with Taylor. I think you ought to get acquainted with it and see who is sponsoring that. It looks as though the French Company [IBM's subsidiary in Paris] is sponsoring it, and it certainly is being done without the consent over here. See what I mean? That ought to be looked into. . . . None of these things do we concur in. . . . How long will you be there?

C
HAUNCEY
: I am perfectly willing to stay here. While I want to be in New York, I am perfectly willing to stay here. The thing is that you cannot understand what it is [like] here [in Europe].

O
GSBURY
: The thing is that if you should return [to New York], these other matters can all wait. You see what I mean? These things that I am talking to you about are only in the event that they are the practical thing for you to do, in view of how long you have to remain there.

C
HAUNCEY
: I will have to be here [in Geneva] two or three weeks before I can get through to Lisbon and get visas, etc. . . . I am going to write you a report as soon as I can. . . . I have sent word to Virgile. It may be necessary for us to go to Italy. I think I should make that connection down there. I think I better find out what it is all about.

O
GSBURY
: That will be all right, if it isn't going to interfere with the other things you ought to do.

P
HILLIPS
: Harry, the thing that worries me this afternoon is this. Both Mr.Watson and Mr. Nichol are home with colds. . . . One or the other or both will probably be back on Monday, and we cannot do anything over the weekend anyway. And we will cable you and talk with you again on Monday. How is that? . . .

C
HAUNCEY
: I am going over with Taylor everything that is open.

P
HILLIPS
: Harry, can you answer this question? Do you consider that you should return and then go back?

C
HAUNCEY
: I have given my promise that I shall return to "this official."
¹³

DURING IBM'S
day-to-day struggle to stay in the Axis during wartime, the firm relied on the cooperation of the State Department to act as postman. Every message relayed through an American Embassy or Legation was not just blindly passed on. Multiple copies were made for senior staff in Washington. Periodically, Watson sent letters of gratitude for the on-going help. For example, on January 8, 1941, Watson mailed Paul T. Culbertson, European Affairs division assistant chief: "I wish to thank you for the courtesy you extended our company in connection with the transfer of a letter to me from Mr. Harrison K. Chauncey, representative of our company, who is temporarily in Berlin. The promptness in which this matter was handled has been a real help to us and all of the officers of our company join me in expressing our appreciation to you."
¹⁴

The Department's desire to secretly advance the commercial causes of IBM persevered in spite of the nation's officially stated opposition to the Hitler menace. For this reason, it was vital to Watson that nothing be done to embarrass or even annoy the Department publicly. This caution was only heightened by an on-going FBI investigation into IBM's operation as a potential hotbed of Nazi sympathizers. Avoiding embarrassing moments was difficult given the far-flung global empire of IBMers so deeply involved with Fascist and Axis countries, and accustomed to speaking supportively of their clients' military endeavors.

Walter G. Ross, affectionately known as "Capt. Ross," was one of IBM's most adventurous and freewheeling European agents stationed on the Continent, triumphantly concluding important deals for the company. He was once described by IBM as "one of the colorful ones," whose "zeal and dedication . . . [and] exploits" would be recounted for decades. Capt. Ross was primarily assigned to Fascist Spain, where he concentrated on the Spanish Railways. In 1940, the popular Ross was ready to retire. He would leave behind a newly organized IBM subsidiary in Spain and would continue on as a special advisor. When he came back to the United States in August 1940, the flamboyant salesman made some comments to a local newspaper, the
Brooklyn Eagle.
¹⁵
Those comments caused a furor.