IBM and the Holocaust Page 8

  On June 16, 1933, one-half million census takers, recruited from the ranks of the “nationalistically minded,” went door-to-door gathering information. Cadres of Storm Troopers and SS officers were added to create a virtual census army. In some localities, when recruitment flagged, individuals were coerced into service. The interviews included pointed questions about the head of the household’s religion and whether the person was in a mixed marriage.16

  In essence, the amount of data that could be stored on a card was a function of the number of holes and columns. A spectrum of data could be extracted by simply recording different combinations of hole punches. For that reason, Dehomag abandoned its standard 45-column cards and moved to a 60-column format. Sixty columns, each with ten horizontal positions, created 600 punch hole possibilities per card. Each column, depending upon how it was punched, represented a biographical characteristic. These 600 punch holes, arrayed in their endless combinations, yielded thousands of demographic permutations. Even still, Dehomag officials wondered whether all the data the Reich needed could be accommodated on the 60-column cards they were using. Dehomag declared in a company newsletter that it was willing to move to an 80-column format for the census, if required “for political reasons.”17 Soon the Reich could begin the identification process—who was Aryan and who was a Jew.

  Population statistics had crossed the fiery border from a science of anonymous masses to the investigation of individuals.

  * * *

  IN MID-SEPTEMBER, 1933, 6,000 brown cardboard boxes began unceremoniously arriving at the cavernous Alexanderplatz census complex in Berlin. Each box was stuffed with questionnaires manually filled out by pen and pencil, but soon to be processed by an unprecedented automated praxis. As supervisors emptied their precious cargo at the Prussian Statistical Office, each questionnaire—one per household—was initialed by an intake clerk, stacked, and then transferred downstairs. “Downstairs” led to Dehomag’s massive 22,000-square-foot hall, just one floor below, specifically rented for the project.18

  Messengers shuttling stacks of questionnaires from the Statistical Office to Dehomag bounded down the right-hand side of an enclosed stairwell. As they descended the short flight, the sound of clicking became louder and louder. At the landing, they turned left and pushed through the doors. As the doors swung open, they encountered an immense high-ceilinged, hangar-like facility reverberating with the metallic music of Hollerith technology. Some 450 data punchers deployed in narrow rows of punching stations labored behind tall upright secretarial displays perfectly matched to the oversized census questionnaires.19

  Turning left again, and then another right brought the messengers to a long windowed wall lined with narrow tables. The forms were piled there. From these first tables, the forms were methodically distributed to centralized desks scattered throughout the work areas. The census forms were then loaded onto small trolleys and shuttled again, this time to individual work stations, each equipped with a device that resembled a disjointed type writer—actually an input engine.20

  A continuous “Speed Punching” operation ran two shifts, and three when needed. Each shift spanned 7.5 hours with 60 minutes allotted for “fresh air breaks” and a company-provided meal. Day and night, Dehomag staffers entered the details on 41 million Prussians at a rate of 150 cards per hour. Allowing for holidays and a statistical prediction of absenteeism, yet ever obsessed with its four-month deadline, Dehomag decreed a quota of 450,000 cards per day for its workforce. Free coffee was provided to keep people awake. A gymnast was brought in to demonstrate graceful aerobics and other techniques to relieve fatigue. Company officials bragged that the 41 million processed cards, if stacked, would tower two and a half times higher than the Zugspitze, Germany’s 10,000-foot mountain peak. Dehomag intended to reach the summit on time.21

  As company officials looked down upon a floor plan of the layout, the linear rows and intersecting columns of work stations must have surely resembled a grandiose punch card itself animated into a three-dimensional bricks and mortar reality. Indeed, a company poster produced for the project showed throngs of miniscule people scrambling over a punch card sketch.22 The surreal artwork was more than symbolic.

  Once punched, the columns were imbued with personal information about the individual: county, community, gender, age, religion, mother tongue, number of children, current occupation, and second job, if any.23

  “Be Aware!” reminded huge block-lettered signs facing each cluster of data entry clerks. Instructions were made clear and simple. Column 22 RELIGION was to be punched at hole 1 for Protestant, hole 2 for Catholic, or hole 3 for Jew. Columns 23 and 24 NATIONALITY were to be coded in row 10 for Polish speakers.24

  After punching, the cards were shuttled to a separate section of the hall, where they passed through long, squat Hollerith counters at the rate of 24,000 per hour. The system kept track of its own progress. Hence, Dehomag was always aware whether it was on schedule. Once counted, the cards moved to the proofing section. No errors would be tolerated and speed was essential. Proofing machines tabulated and verified proper punching for more than 15,000 cards per hour.25

  When Jews were discovered within the population, a special “Jewish counting card” recorded the place of birth. These Jewish counting cards were processed separately.26

  Then came the awesome sorting and resorting process for twenty-five categories of information cross-indexed and filtered through as many as thirty-five separate operations—by profession, by residence, by national origin, and a myriad of other traits. It was all to be correlated with information from land registers, community lists, and church authorities to create a fantastic new database. What emerged was a profession-by-profession, city-by-city, and indeed a block-by-block revelation of the Jewish presence.27

  A Reich Statistical Office summary reported: “The largest concentration of Jews [in Berlin] will be found in the Wilmersdorf district. Approximately 26,000 Observant Jews account for 13.54 percent of the population within that district.” Further: a total of 1,200 “Fur-Jews” accounted for 5.28 percent of the furrier trade, and nearly three-fourths of those are foreign-born. Further: based on existing emigration trends triggered by anti-Jewish persecution “only 415,000 to 425,000 Faith-Jews would remain in the German Reich by the middle of 1936.”28

  Dehomag’s precious information would now help propel a burgeoning new binary of pseudo-science and official race hatred. Racial hygiene, race politics, and a constellation of related anti-Semitic disciplines were just so much talk in the absence of genuine statistics. Now a lightning storm of anti-Jewish legislation and decrees restricting Jews from all phases of academic, professional, governmental, and commercial life would be empowered by the ability to target the Jews by individual name. Moreover, by cross-sorting the Jews revealed in Column 22 row 3 with Polish speakers identified in Columns 26 and 27 row 10, the Reich was able to identify who among the Jews would be its first targets for confiscation, arrest, imprisonment, and ultimately expulsion. The so-called OstJuden, or Eastern Jews, primarily from Poland, would be the first to go.29

  Friedrich Zahn, publisher of Allgemeines Statistisches Archiv, summed up the glee when he wrote, “In using statistics, the government now has the road map to switch from knowledge to deeds.”30

  * * *

  DEHOMAG’S CENSUS undertaking was an unparalleled accomplishment for IBM. Watson was impressed from the moment Karl Koch secured the contract. Clearly, there was a lucrative future for IBM in Nazi Germany. At a time when other foreign companies were fleeing the Reich’s violence, repression, anti-Semitism, and the inability to retrieve income from German operations, Watson moved swiftly to dramatically enlarge IBM’s presence.

  First, he ordered the merger of several small IBM subsidiaries in Germany. Optima, Degemag, Holgemag, as well as the existing Dehomag, were folded into a new corporation also to be named “Dehomag.” Through a cunning twirl of losses and profits among the four German companies, and then manipulating balances owed by
those subsidiaries to IBM NY for so-called “loans,” Reich profit taxes would be avoided, despite record earnings in Germany. IBM NY would simply apply the incomes to the contrived loans it had extended to its own subsidiaries. IBM’s Maryland division was used as a con-duit for the loan transactions. A report from IBM’s accountants to the corporate treasurer was explicit: “the motive for the merger was to effect an annual savings in taxes by reducing Dehomag’s net profits by the amount of the net losses of Optima and [old] Dehomag… about $30,000 annually.”31

  Heidinger confirmed in a special report to Watson, “As the merger of Degemag, [old] Dehomag, and Optima is effected… corporation profits tax is out of the question… on account of the relief from [loan] claims of IBM, as thereby no profit, but merely a reduction of losses, is obtained.”32

  Second, IBM increased its investment in Dehomag from a mere RM 400,000 to more than RM 7 million—about a million Depression-era American dollars. This would include a million Reichsmarks to purchase new land in Berlin and build IBM’s first German factory. IBM was tooling up for what it correctly saw as a massive economic relationship with the Hitler regime. In the midst of America’s Depression, this expansion of manufacturing base would not relieve unemployment in the United States, but actually transfer American jobs to Nazi Germany where the Hollerith machines would be manufactured.33

  Understandably, Watson decided to visit Germany to observe conditions first hand, which he did on October 13, 1933. Despite a highly publicized boycott against German ocean liners, he ignored picket lines and sailed on the German ship Bremen. 34

  Watson was impressed with what he saw in Berlin. The Watsons and the Heidingers managed many happy social moments together. Mrs. Watson even asked Heidinger for a copy of his portrait as a memento of their joyous time. Heidinger sent two.35

  Watson also visited the massive census operation at Alexanderplatz. There among the rows of data clicking clerks arrayed before their large block- letter instructions to enter Jews in Column 22 row 3, amid the clatter of shiny, black sorters flickering punch cards into a blur, Watson was moved to donate money to buy meals for everyone at IBM expense. As an added gesture, he authorized Dresden pastries for each and every member of the Statistical Office’s Census Department. Heidinger later wrote to Watson that the total bill for his “bountiful gift” of 6,060 meals disbursed to 900 staffers came in at just under 4,000 Reichsmarks.36

  More than just hot meals and baked goods, Watson wanted to make sure Dehomag was successful and effective. He personally dispatched Eugene Hartley, a top IBM census expert and manager of the firm’s statistical department, to advise Dehomag. Hartley would oversee costs in Berlin and become acquainted with all details of Dehomag’s census operation and its methods. These details were to be recorded in a special handbook. No copies would exist. Senior management at Dehomag sent Watson an RCA Radiogram declaring, “We especially appreciate your foresight in sending Mister Hartley who as a census expert is especially helpful to us at a time when we are undertaking greatest service job ever done by any IBM agency.”37

  Most gratifying to the Germans was the secret pact between Watson and Heidinger, entered into that October 1933, while Watson was touring Dehomag. At a time when the Hitler government was declaring its war intentions in Europe, Watson’s secret deal granted Heidinger and Dehomag special commercial powers outside of Germany. Although there were IBM agencies and subsidiaries throughout Europe, Dehomag would be permitted to circumvent and supplant each one, soliciting and delivering punch card solution technology directly to IBM customers in those territories. That gave Dehomag entree to the major foreign corporations, foreign national railroads, and foreign government offices across the Continent. IBM subsidiaries, such as those in Brussels, Paris, and Warsaw would still exist. But now Nazified Dehomag could usurp their clients and even their manufacturing base.38

  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 Watso
n 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.