Edwin Black (1950--) IBM and the Holocaust (2001).
The strategic alliance between Nazi Germany and America's most powerful corporation.
To my daughter, Rachel, who will read this book, and to six million who will not.
Part Two. IX The Dehomag Revolt
...A peculiarity of German law demarcated a strong distinction between the assets of racial inferiors such as Jews, Poles, Czechs, and other vanquished groups, and the property of what in the bizarre Nazi mindset constituted a genuine war adversary, such as Britain and the United States. If the U.S. entered the war, Germany did not believe it would occupy American territory, only defeat the country. During any war, Germany expected its commercial enterprises in America to be safeguarded, managed properly by a trustee, and then returned intact when the conflict ended. In that same spirit, the Third Reich would in turn safeguard, manage diligently, and return American enterprises. Germany's well-developed alien custody laws were
still in effect. So while Nazi Germany was voraciously plundering and pillaging the width and breadth of Europe, a profoundly different set of rules would apply to IBM and other "enemy property" seized in any of those occupied countries.
...Watson would be satisfied with not knowing the specifics held by his European subsidiaries and managers-so long as those subsidiaries tenaciously pressed the Nazi regimes for proper rent payments on each and every machine, on every last one of billions of punch cards, on every spare cog and plate, and on all maintenance calls, all according to carefully worded contracts. Those demands for payment would start with the machines just removed from Paris by Reich officers in August 1940.
Watson's micro-management of the most infinitesimal details would now end. That power would be delegated to trusted senior managers, managers who would be rewarded for their most loyal and most difficult service with generous salaries, and then anointed with great promotions in the powerful foreign divisions of the global IBM that they themselves built. Corporate security for these men would be seemingly endless. Even their children would find lucrative association with International Business Machines. In the company's literature, they would be remembered as "heroes."
The corporate haze would last for decades. With all the European intermediaries, ownership nominees, corporate intrigues, belligerent German managers, and Nazi custodians, it would be impossible to reliably point a finger at the New York office. Hollerith machines could be placed in museums in exhibits tying their use to the most heinous aspects of the Third Reich, but the deniability would be unshakable. For, in truth, from 1933 until the summer of 1940, Watson personally micro-managed virtually every Dehomag decision. From August 1940, IBM NY made sure it did not know most of the gruesome details of Hollerith use. It was better not to know.
...For example, in fall 1936, the third secretary of the U.S. Embassy in Moscow conferred regularly with IBM's office there about Soviet government attempts to break IBM's monopoly.
...For example, in August 1937, the U.S. Embassy in Paris helped IBM's French subsidiary gain a better tariff rate. Just days after the Paris Embassy helped with French customs, IBM sought similar assistance in Czechoslovakia. Tax authorities in Prague were raising IBM's tariffs. IBM's Foreign Division wrote to the Trade Agreement division in Washington, D.C., asking for help "to induce the [Czech] government to revert to the former classification."
...But writing from the security of the Embassy, Chauncey's own report freely outlined what was at stake for IBM NY in retaining its strategic alliance with Nazi Germany. He described the vast financial promise of the Third Reich where "plans are laid for the great economic future of Germany. One of the creeds here is 'Europe for Europeans,' and this probably means 'Europe for Germans.' "*
His report to IBM NY continued, "Naturally everyone here has no doubt about how the war will end, and they build on that. . . . consequently, they vision Dehomag doing business everywhere in Europe, and under the guidance of the new economic order in Europe, Dehomag would grow tremendously because all countries would use machines as Germany now does. . . . I suppose they [are] right." Chauncey added the converse: even "if Germany loses the war, [and] these things will not come into being . . . American-owned companies could probably resume business as theretofore."
Clearly, Chauncey contended, the Nazis now understood that IBM's technology was vital to their war aims and too entrenched to be discarded. Replacing Holleriths, he argued, would be a long, difficult task in view of the military's "large use of Dehomag machines." Indeed, despite all "the animosity," Chauncey wrote, "the business has, however, gone forward . . . due to the need of the authorities."
* Letter, H.K. Chauncey to IBM NY, November 29, 1940, p. 1, IBM Files
...It seemed that in spite of its autarkic impulses and collective rage against Watson, the cold fact remained: Nazi Germany needed punch cards. It needed them not next month or even next week. It needed them every hour of every day in every place. Only IBM could provide them.
To my daughter, Rachel, who will read this book, and to six million who will not.
Part Two. IX The Dehomag Revolt
...A peculiarity of German law demarcated a strong distinction between the assets of racial inferiors such as Jews, Poles, Czechs, and other vanquished groups, and the property of what in the bizarre Nazi mindset constituted a genuine war adversary, such as Britain and the United States. If the U.S. entered the war, Germany did not believe it would occupy American territory, only defeat the country. During any war, Germany expected its commercial enterprises in America to be safeguarded, managed properly by a trustee, and then returned intact when the conflict ended. In that same spirit, the Third Reich would in turn safeguard, manage diligently, and return American enterprises. Germany's well-developed alien custody laws were
still in effect. So while Nazi Germany was voraciously plundering and pillaging the width and breadth of Europe, a profoundly different set of rules would apply to IBM and other "enemy property" seized in any of those occupied countries.
...Watson would be satisfied with not knowing the specifics held by his European subsidiaries and managers-so long as those subsidiaries tenaciously pressed the Nazi regimes for proper rent payments on each and every machine, on every last one of billions of punch cards, on every spare cog and plate, and on all maintenance calls, all according to carefully worded contracts. Those demands for payment would start with the machines just removed from Paris by Reich officers in August 1940.
Watson's micro-management of the most infinitesimal details would now end. That power would be delegated to trusted senior managers, managers who would be rewarded for their most loyal and most difficult service with generous salaries, and then anointed with great promotions in the powerful foreign divisions of the global IBM that they themselves built. Corporate security for these men would be seemingly endless. Even their children would find lucrative association with International Business Machines. In the company's literature, they would be remembered as "heroes."
The corporate haze would last for decades. With all the European intermediaries, ownership nominees, corporate intrigues, belligerent German managers, and Nazi custodians, it would be impossible to reliably point a finger at the New York office. Hollerith machines could be placed in museums in exhibits tying their use to the most heinous aspects of the Third Reich, but the deniability would be unshakable. For, in truth, from 1933 until the summer of 1940, Watson personally micro-managed virtually every Dehomag decision. From August 1940, IBM NY made sure it did not know most of the gruesome details of Hollerith use. It was better not to know.
...For example, in fall 1936, the third secretary of the U.S. Embassy in Moscow conferred regularly with IBM's office there about Soviet government attempts to break IBM's monopoly.
...For example, in August 1937, the U.S. Embassy in Paris helped IBM's French subsidiary gain a better tariff rate. Just days after the Paris Embassy helped with French customs, IBM sought similar assistance in Czechoslovakia. Tax authorities in Prague were raising IBM's tariffs. IBM's Foreign Division wrote to the Trade Agreement division in Washington, D.C., asking for help "to induce the [Czech] government to revert to the former classification."
...But writing from the security of the Embassy, Chauncey's own report freely outlined what was at stake for IBM NY in retaining its strategic alliance with Nazi Germany. He described the vast financial promise of the Third Reich where "plans are laid for the great economic future of Germany. One of the creeds here is 'Europe for Europeans,' and this probably means 'Europe for Germans.' "*
His report to IBM NY continued, "Naturally everyone here has no doubt about how the war will end, and they build on that. . . . consequently, they vision Dehomag doing business everywhere in Europe, and under the guidance of the new economic order in Europe, Dehomag would grow tremendously because all countries would use machines as Germany now does. . . . I suppose they [are] right." Chauncey added the converse: even "if Germany loses the war, [and] these things will not come into being . . . American-owned companies could probably resume business as theretofore."
Clearly, Chauncey contended, the Nazis now understood that IBM's technology was vital to their war aims and too entrenched to be discarded. Replacing Holleriths, he argued, would be a long, difficult task in view of the military's "large use of Dehomag machines." Indeed, despite all "the animosity," Chauncey wrote, "the business has, however, gone forward . . . due to the need of the authorities."
* Letter, H.K. Chauncey to IBM NY, November 29, 1940, p. 1, IBM Files
...It seemed that in spite of its autarkic impulses and collective rage against Watson, the cold fact remained: Nazi Germany needed punch cards. It needed them not next month or even next week. It needed them every hour of every day in every place. Only IBM could provide them.