IBM and the Holocaust (50 page)

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.' "
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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."
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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."
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In fact, Germany had already thought better of its first hostile anti-Watson reaction and was trying now to find some rapprochement with the IBM Corporation. As for the machines snatched by the Nazis in France, noted Chauncey, "I understand . . . rental is being paid for them to our French company."
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IBM should rely on its decided technologic edge, suggested Chauncey, because of the profound difficulty in starting a punch card industry from scratch, especially if New York could block French Bull competition. In spite of the quality of its devices, French Bull was a very small company with very few machines. Bull's one small factory could never supply the Reich's continental needs. Ramping up for volume production—even if based within a Bull factory—would take months. Hitler didn't have months in his hour-to-hour struggle to dominate Europe. In a section entitled "Length of Time for Competition to Come in Actuality," Chauncey argued, "Unless the authorities, or the new company, operate in the meantime from the French Bull factory, it would appear that much time may elapse before such new company [could] . . . furnish machines in Germany."
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Watson, in fact, was ready to continue fighting to keep Bull out of the Nazi market. IBM had already preemptively acquired Swiss Bull's patent rights in Switzerland and was preparing to litigate to block the French sister corporation from functioning. IBM had concluded Bull infringed several IBM-owned patents, now that IBM NY had acquired Swiss Bull, which legally controlled French Bull's patents. Moreover, IBM believed that French Bull's use of an 80-column punch card violated IBM patents and could be swiftly enjoined by court action. So Chauncey added his prediction that even if French Bull did attempt to cooperate with the Nazis, there would be a great "length of time and difficulties for actual competition" to appear.
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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.

"My inclination is to fight," Chauncey declared straight out. But the battle would be difficult. He knew that IBM was fighting a two-front psycho-economic war: Heidinger's demand to cash in his stock, and Nazi Party demands to take over the subsidiary. Clearly, the two were organically linked, but Chauncey could not be sure how.
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As they bickered, war and invasion proved it was still good business. By now, Dehomag's profits had mushroomed even more rapidly than expected, especially as a result of the Nazi takeovers of Belgium, Poland, and France. As the Reich expanded its voracious need for Holleriths in occupied lands, Dehomag's value was catapulting daily. The latest valuation of Heidinger's 10 percent stock, Chauncey advised, was now as much as RM 23 million—IBM accountants in Germany had already confirmed it. The new figure was as much as ten times higher than calculated just a few months earlier. It would be an enormous amount of money if payable in dollars—perhaps $5 or $6 million. Chauncey expected Heidinger to prevail in any court, should the Germans press his claim for repurchase. IBM's multimillion-mark blocked accounts in Berlin would be seized by the court to purchase those high-priced dollars, Chauncey warned. For this reason, Chauncey was continuously trying to finesse a settlement. "I am after him every day," he wrote.
¹⁰⁶

As for IBM's fight with the Nazi Party, Chauncey reiterated his willingness to "make any representations to the authorities that our managers need not reveal any information of the activities of Dehomag's customers. . . . but I cannot get the actual persons out in the open."
¹⁰⁷
That chance would now come. After weeks of remaining in the background, Dr. Edmund Veesenmayer would finally come forward.

EVEN THOUGH
Edmund Veesenmayer lived at August Strasse 12 in Lichterfelde, just around the corner from Dehomag's Berlin headquarters, he had declined to make his presence known to Chauncey until the first days of December 1940. Veesenmayer was one of Berlin's quiet but powerful Nazis, often feared, who helped to directly implement the most dramatic phases of Hitler's plans for Europe and the Jews. He was just a step or two removed from
der Fuhrer
, and was from time to time summoned for consultations by Hitler personally—a claim few would dare make, but a claim that was nonetheless quite correct. Although Veesenmayer proudly wore the full uniform and regalia of his SS rank, he avoided noisy street riots and ghetto roundups in favor of boardrooms and embassies. Always lurking in the shadows as Eastern Europe's most heinous actions erupted, Veesenmayer was Hitler's most trenchant facilitator.
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Born Catholic in 1904 in the town of Bad Kissingen, amid the pastoral rolling hills and lush forests of Bavaria, Veesenmayer quickly took to political economics. He became a professor of economics and business administration at the Technical College in Munich. Veesenmayer joined the NSDAP early, in 1932, when he was only twenty-eight years old. When National Socialism came to power in 1933, he became the personal secretary and economic advisor to Wilhelm Keppler, Hitler's personal economic advisor. As such, Keppler functioned as Veesenmayer's direct connection to the
Fuhrer
and the most powerful officials in Germany.
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Keppler was not only Hitler's personal economic advisor, he was also Germany's main nexus to American business. Dubbed "a Kodak Man" by U.S. military intelligence reports for his links to the Eastman Kodak film company, Keppler owed much to the Kodak Company. Before the rise of Hitler, Keppler enjoyed managerial positions with several firms that produced photographic gelatins, including one that exported heavily to Eastman Kodak in America and Kodak Limited in England. Kodak financed 50 percent of Keppler's Odin Company, which specialized in photo gels. Once Hitler came to power, Keppler advised a number of American companies on terminating their Jewish employees. He maintained good relations with executives connected to such companies as International Telephone and Telegraph and National Cash Register, and was Hitler's intermediary to such commercial giants as General Motors.
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Largely through his Keppler connections, Veesenmayer eventually joined the board of directors of the German subsidiaries of International Telephone and Telegraph and Standard Oil.
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Veesenmayer traveled in executive circles and spoke the language of big business.

But Veesenmayer was more than just a corporate liaison. He was arguably considered Reich Foreign Minister von Ribbentrop's most important personal troubleshooter and advance man. A technical expert on the eradication of Jewish communities, Veesenmayer was invaluable as a behind-the-scenes organizer in Hitler's war against the Jews. As such, he had a keen appreciation for statistics and Hollerith capabilities. U.S. military intelligence described his meteoric ascent within the Reich's anti-Jewish destruction machine as "an amazing career which took him on missions to Southeastern Europe always, it would seem, at a moment of trouble."
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In the months leading up to the March 1938
Anschluss
with Austria, Veesenmayer functioned as the Foreign Office's principal economic expert in Vienna. The day before Austria was taken over, March 12, Veesenmayer shuttled Himmler from a Vienna airfield to the German Embassy to help form a new Austrian Nazi regime. The next day, however, before the puppet Austrian government could be installed, Hitler annexed the country altogether.
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A year later, in early March 1939, Veesenmayer traveled to Bratislava to help engineer the destruction of Czechoslovakia and the declaration of a puppet state in Slovakia. On about March 11, he drove two handpicked Slovak leaders to Vienna where they met Keppler and then flew on to Berlin for a meeting with Hitler. On that same day, Veesenmayer wired the Foreign Office,
"alle Juden in der Hand,"
that is, "all Jews in hand." He remained in Bratislava on March 15 while Czechoslovakia was dismantled. Jews were quickly identified in the days to come.
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Veesenmayer was a frequent liaison to foreign militant movements. In early 1940, he was assigned to coordinate with two members of the Irish Republican Army visiting Berlin. Later, in Rome, he met with the virulent anti-Semites Amin Husseini, the Grand Mufti of Jerusalem, and Rashid Ali Gailani, former Iraqi premier. He escorted both men to Berlin for meetings with Hitler.
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It was Veesenmayer, who, in April 1941, brokered a written political agreement between Yugoslavian Fascists and a murderous Croatian militia known as the Ustashi, helping the Croats remain in power as Nazi surrogates with the support of the German Foreign Office. Indeed, the same day he brokered the Ustashi pact, Germany invaded Zagreb. Ustashi militias were allowed free rein under Veesenmayer's eye. It was Veesenmayer's job to liaison with Ustashi leader, Ante Pavelich. In the annals of wartime savagery against the Jews, there was no group as sadistic as the Croatian Ustashi. Using chainsaws, axes, knives, and rocks, frenzied Swastika-bedecked Ustashi brutally murdered thousands of Jews at a time. Ustashi leaders openly paraded about Zagreb with necklaces comprised of Jewish tongues and eyeballs cut and gouged from women and children, many of them raped and then dismembered or decapitated. Pavelich himself was fond of offering wicker baskets of Jewish eyeballs as gifts to his diplomatic visitors.
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In the first days of December 1940, just after completing his assignment with the Irish Republican Army and four months before leaving for his behind-the-scenes work with the Ustashi, Veesenmayer telephoned Heidinger and Albert to make the Reich's views on Dehomag known. Then he met with Chauncey.

MEMORANDUM OF CONVERSATION WITH DR. VEESENMAYER

Chauncey in Berlin to IBM New York

Dr. Veesenmayer is the right hand man of Dr. Keppler. Dr. Keppler, I am informed, is and has been Hitler's personal economic advisor. The organization of which Dr. Keppler is the head is a Nazi Party organization called . . . The Department for Policies and Economics. It's not formally a part of the government but has, of course, immense power . . . because it instructs . . . the government on what the Nazi party decides shall be economic policy.

I was present when Mr. Heidinger received a request or summons to visit Dr. Keppler and the morning afterwards when I saw Dr. Albert, he told me he had not slept all night. . . . Until this time, Dr. Albert had been ardently fighting Mr. Heidinger with respect to any reorganization of Dehomag. . . . The only question of competition was whether or not the managers were strong enough to fight, and whether our machines and prices could meet the competition.

Dr. Albert did not tell me what the conversation was between Mr. Heidinger, Dr. Keppler and himself, but did tell me of the conversation with Dr. Veesenmayer which conversation was after the talk with Dr. Keppler. Dr. Albert informed me that Dr. Veesenmayer had said that under no circumstances would any coercion be used to force the IBM to give up the majority but that it appeared advisable that the IBM should do so.