IBM and the Holocaust (79 page)

With Heidinger out of the way, Fellinger was free to operate Dehomag and its sphere of influence as he saw fit. In that vein, he was far more than just an inert oversight officer. Fellinger functioned with as much commercial zeal and dedication to the IBM enterprise as any senior executive Watson could have personally selected. It was exactly as Watson had envisioned. Germany's custodian, Fellinger, was the perfect solution to the Dehomag revolt and the predicament of a business alliance with the Third Reich while America was fighting a war with Germany.

In Norway, Fellinger received regular progress reports from Watson Norsk's longtime manager, Jens Tellefson. Fellinger limited his involvement to "smoothing his [Tellefson's] path with [various Reich] departments, and especially the German occupation authorities." When machines and parts could no longer be imported directly from New York, Fellinger arranged for imports from Watson Italiana and Dehomag. Tellefson purchased the Italian and German machines not in the Norwegian subsidiary's name, but in the name of IBM NY to preserve the American parent company's claim to the property being used in occupied Norway. When the Norwegian company ran low on card stock, Fellinger also arranged for supplies through Dehomag's paper vendors.
¹⁴

At one point, Norwegian saboteurs used explosives to destroy Watson Norsk's offices. They hoped to disrupt the company's in-house servicing of the Nazi labor office, which coordinated both conscripted and slave workers. Anticipating such an attack, Tellefson had arranged for Nazi records to be moved off-site daily. Nonetheless, most of the IBM machines serving the labor office were crippled in the bomb attack. So Fellinger approved relocating the IBM office to a more secure neighborhood with replacement machinery. This allowed IBM's lucrative service to continue. In Norway, annual revenues doubled from 161,000 crowns in 1940 to 334,000 crowns in 1943, and declined only slightly in 1944, just months before Norway was liberated in 1945. Fellinger attributed Watson Norsk's excellent performance to "wartime conditions."
¹⁵

In dismantled Czechoslovakia, Fellinger allowed Watson's handpicked director, Emil Kuczek, to remain in command. Fellinger was pleased that "Kuczek has conducted the business with great care and expert knowledge . . . acting conscientiously in the interest of that company." He remembered that Kuczek "always acted in complete harmony with myself." The Czech subsidiary's card printing capacity was doubled thanks to a transfer of printing presses and paper cutters from Dehomag. In turn, the Czech subsidiary filled Dehomag's punch card orders. A number of Czech machines were assigned to "German railways in the East." Kuczek accepted all machine rental payments, but did not provide any receipts. He deposited the money in IBM's account at Prague Kreditbank. IBM Geneva in turn notified Kreditbank that Kuczek was permitted to freely spend up to 20 percent of the deposits to pay for ordinary subsidiary operations, such as salaries and rent.
¹⁶
In this way, Czech operations were routinely funded without any written instructions from IBM NY, and service rendered with a minimal paper trail.

Fellinger worked hard to keep the Czech division's profits high. He insisted on eliminating discounts, limiting expenses, and even added a bonus to Kuczek's contract based on net profits. From 1941 to 1944, Czech punch card revenue alone doubled from 2.6 million crowns to nearly 5.3 million.
¹⁷

Fellinger showed equal diligence in his administration of the other IBM subsidiaries under his control, such as Poland and Yugoslavia. The devoted receiver never failed to demand the best terms and formulate the most conservative business decisions to protect the companies he administered.
¹⁸

Fellinger even put IBM's interest before that of the Third Reich, constantly badgering Berlin to pay more rent, and clear up its delinquencies. He even demanded that the
Wehrmacht
pay for CEC machines the German military seized from occupied France. It took months of burdensome legal wrangling, but Fellinger successfully argued that the German military had no right to remove CEC's machines without properly compensating IBM. His argument hammered away at the theme that because the plundered machines were leased items, they never belonged to the French government, but to IBM. As such, the transferred devices were not subject to traditional rules of "war booty." Only after reams of Fellinger's dense briefs, supported by attestations by CEC Managing Director Roger Virgile, did the
MB
finally consent to nearly a million Reichsmarks in back rent for machines transported out of France.
¹⁹

Even when 308 leasing contracts—one for each requisitioned machine—were printed and submitted to CEC, at the last minute Fellinger asked Virgile to withhold signature. Fellinger learned that the
MB
had negotiated slightly better maintenance discounts with the custodian for IBM units in Belgium and Holland. Only after an adjustment guaranteeing parity did Fellinger finally agree. To replace the 308 now obsolete leasing contracts, Fellinger proposed reducing the entire agreement to a punch card but wondered about the validity of a "punch card signature." Ultimately, the parties relied on traditional written contracts.
²⁰

Dehomag engineer Oskar Hoermann, who doubled as CEC's deputy custodian, transmitted the basic format for the 308 leases to Paris. During the war years, Hoermann stayed in contact with IBM NY by various means, including posting ordinary letters—casual and formal—from Vichy France. For example, in April 1942, while transiting from Berlin through Vichy, Hoermann mailed a handwritten "Dear Jimmy" letter to manufacturing executives at Endicott, New York, routinely reporting factory developments at Dehomag and CEC. From Vichy, Hoermann also was free to communicate with Lier in Geneva. The protracted negotiations with the
MB
specified the number of hours IBM machines could be used each month, thus limiting wear and tear, as well as monthly rental fees. CEC managers in combination with Fellinger stubbornly held out for the best terms, yielding the most money for IBM. Un til the agreement was finalized, CEC was willing to just wait for its back rent.
²¹

On June 16, 1944, an
MB
official finally noted for his file, "Fellinger has received the basic agreement signed by us and will give it today to his CEC representative, Mr. Hoermann, who is currently in Berlin. Mr. Hoermann will take it with him to Paris, where General Director Virgile will sign it. . . . The essential factor, however, is that after four years [of negotiation dating back to the invasion of France], a basic agreement is being signed."
²²

Fellinger's counterpart in Amsterdam, H. Garbrecht, who administered IBM companies in Holland and Belgium, exhibited similar assiduity in securing payment for machines removed from subsidiaries under his control. Working with IBM managers in Brussels and Amsterdam, Garbrecht finalized contracts that were typeset into a formal lease contract. Each contract declared at the top that the agreement was between the
Maschinelles Bericht - wesen
in Berlin and "International Business Machines Corporation-New York" through the German administrator in Amsterdam or alternatively in Brussels. Details about the specific machine, its serial number, monthly rent, permissible hours of usage each month, and service terms were typed into the provided spaces. Although the numerous contracts were all executed on September 15, 1943, rental terms and fees were made retroactive to the summer of 1942, depending upon when the specific machines were transferred to Reich offices.
²³

For example, contract series #091/1/0094/43 for a model 034 duplicating alphabetizing puncher, serial number 10167, specified rent at RM 127.47 per month, retroactive to August 13, 1942; the device was deployed at the
MB
field office in Munich. A model 405 alphabetizing tabulator with an automatic cart, serial number 13430, cost RM 945.76 monthly, retroactive to August 26, 1942. Monthly billing tallies were generated until war's end, specifying combined rental fees at such departments as the Foreign Ministry, German Navy,
Luftwaffe,
or Inspectorate Seven. None of the contracts executed through custodian Garbrecht exploited IBM. In fact, German officials complained the hard bargain they agreed to was fundamentally unfair because the Reich was liable to pay for any damage caused by war action.
²⁴

With all the fervor of a Watson devotee, Fellinger also blocked any potential rivals. For example, in early August 1944, when the potential competition posed by the Wanderer-Werke alliance appeared, Fellinger challenged its patent rights in Germany. To avoid litigation, Wanderer-Werke was forced to accept Fellinger's stringent, almost dictatorial licensing agreement. Dehomag would receive a 4 percent royalty on every Bull machine imported into Germany. The 4 percent level was expressed as a temporary wartime royalty, to be increased after the conflict stopped. Fellinger's agreement demanded, "You will inform us about the type, the number, the date of import and the final purpose of every Bull machine imported." To further hush Wanderer-Werke's presence in the market, the license agreement stipulated, "You will not use these machines for advertising purposes." In the end, Fellinger's many procedural delays in Germany and the liberation of France in August 1944 combined to effectively stymie the delivery of any Bull machines into the Reich.
²⁵
Thus, Dehomag's virtual monopoly was preserved.

Through the devoted administration of Fellinger and other Axis custodians, Dehomag and the other IBM subsidiaries in Europe thrived. Their custodial authority stopped when Germany surrendered. It would be a long bureaucratic and uncharted process for IBM to reclaim its property. Fortunately, Watson could rely upon another column of support: the IBM Soldiers.

AMERICAN SOLDIERS
in Europe fought valiantly to defeat the Nazi nemesis. Part of their mission was to take control of German facilities and seize evidence of Nazi war crimes and collaboration. Whether the target was an industrial site, a bank, a military base, or a concentration camp, it was all enemy property to be referred to commanders, and possibly war crime prosecutors.

But among American forces, there existed a cohesive group of men with a common identification. As former employees of International Business Machines on leave from their company jobs, they affectionately referred to themselves as "IBM Soldiers."

The framework for IBM's continuing bond with its employees at war began long before America joined the conflict. At Christmas 1940, Watson informed all employees soon to be drafted into the military that they would be granted three months pay, up to $4,000, while absent. The money would be paid to inductees in twelve monthly installments, a comforting stipend for the family back home while the men were in uniform.
²⁶

Making it clear they were still part of the IBM Family with careers waiting after military service, Watson announced, "We shall miss you during the time you are away, but we feel that your year's training will be beneficial to you physically, mentally and morally. As a result of this training, we believe you will come back to our company better equipped for future service in the IBM. . . . If such is the case, you will be given an opportunity to earn increased compensation. We want you to know that your friends in the company are back of you in every way, and if at any time we can be of help to you please let us know."
²⁷

When the U.S. military formed its Machine Record Units (MRU), IBM employees, or those IBM had trained, became the backbone of the elite MRU forces. IBMers also commanded in other key areas, especially in administrative units, where their experience would be instrumental. In the minds of many of these men, unswerving loyalty to Thomas Watson and devotion to IBM was completely consistent with military discipline in the field and loyalty to the Allied cause. As a result, when IBM Soldiers happened upon Dehomag equipment and factories, they did not see evidence of a war crime to docket or a key Nazi industrial installation to capture. They saw something inspiring and beloved that needed protection and to be returned to its rightful owner. IBM's cause was their cause.

S
OMEWHERE IN
G
ERMANY
Thursday, April 26, 1945

Dear Mr. Watson:

Today I received your letter of congratulations upon my promotion to Corporal. It is impossible to state the wonderful effects your letter gives me especially as a morale builder. And in this respect I feel certain that I am speaking for each and every one of the fellow IBM Soldiers. Your letters and those of the executives received by us go a long way to make our lives over here in the ETC [European Theater Command] a much happier one.