The Transfer Agreement (50 page)

On July I5 the final figures for Germany's balance of trade were made public. For June, the surplus dropped 68 percent compared to the month before; for the entire first half of I933 it was down 5I percent. That six-month loss would have been greater except that the anti-Hitler boycott had not really commenced until late March. Overall export volume had also dropped, almost 9 percent from May to June. France's purchases alone decreased by
25
percent, finished goods suffering the greatest losses.
³⁰

The German Chamber of Commerce issued a brave report admitting that the export decreases were caused by the "growing shutting out of German goods from many countries." The word
boycott
could not be used. And
Deutsche Bergwerks Zeitung,
the newspaper of the powerful Ruhr industrialists, editorialized that the latest figures now made the acquisition of foreign exchange and the increase of exports the Reich's greatest priority.
³¹
All this occurred about the time Samuel Untermyer proclaimed that his World Jewish Economic Conference would suddenly convene in Amsterdam.

Outrages against Jewish citizens, especially the anti-Jewish boycott, increased the legitimacy of Untermyer's demand for a worldwide economic war against Germany. So the suppression of "atrocity propaganda" was revived as a Reich imperative.
It
now became clear to Goering that the only real way to diminish atrocity tales was to outlaw the atrocities themselves. The new adamancy about suppressing anti-Jewish acts and forbidding business interference was certain to provoke mass disobedience. The ranks would insist on taking drastic measures to redistribute Germany's remaining economy, and of course deprive Jews of whatever remaining resources they enjoyed.

United States Ambassador Dodd warned of the coming clashes in a July I7 letter: "Hitler realizes that any further attempts at Nazification of business and industry might throw the German economy completely out of joint and thus imperil the existence of his regime." Dodd predicted, "Many of Hitler's followers will resent this sudden change of policy as a betrayal of the Party's program." To illustrate the likelihood that dissident Nazi groups might set up their own kommissar-dominated mini-governments, Dodd quoted a recent
warning by Interior Minister Frick: "Any form of auxiliary government is incompatible with the authority of the totalitarian State." Dodd ended his letter by focusing on the "danger that the numerous extremists in the Nazi Party may get out of hand once they realize they have been deceived."
³²

On July 23, Goering called a press conference and announced extraordinary measures to combat any insurrection among the ranks. First, a political prosecutor's office was established to work with the Gestapo. Second, all violations of law that interfered with German reconstruction and offenses against the Storm Troopers, Stahlhelm, or the police would be punished ruthlessly "no matter by whom they are committed." The families of persons convicted of such offenses would be disqualified from any unemployment or relief benefits. Third, a sentence of fifteen years to life imprisonment and possibly death by decapitation would be imposed on "any person who kills, plots, or instigates to kill a policeman, a member of the Storm Troopers or Stahlhelm; or who brings into Germany foreign periodicals or pamphlets with political content, which may be regarded as treasonable in the sense of existing decrees ... proscribing certain organizations ... [or] the formation of new parties."
³³

Although the law seemed designed to protect Nazi party units, the real object was to prevent members of the party from turning on each other in a bid for control. Any encouragement of such action, especially if violence were involved, would be deemed by Goering an act of "atrocity propaganda." And any Brownshirt advocating violent anti-Jewish behavior would simply be accused of infiltrating SA ranks to foment atrocity propaganda. Any provocative leaflets or unauthorized newspapers preaching disobedience or loyalty to new factions would be deemed "foreign" and once again "atrocity propaganda." Goering stressed that dissemination of atrocity propaganda was punishable by death.
³⁴

Despite the sternest of government warnings, anti-Jewish boycotts continued unabated and in the most public fashion. Newspapers throughout Germany published locally ordered boycott ordinances in open defiance of der Fuhrer's orders. For example, the
Dortmund Generalanzeiger
circulated a boycott ordinance on behalf of the local party unit. The
Chemnitzer Neuesten Nachrichten
publicized a boycott sponsored by the Chemnitz Chamber of Commerce. And at the height of Goering's demands that public violence against Jews be abolished, Julius Streicher's followers arrested 300
Jewish
shopkeepers in Nuremberg and marched them through the streets in a humiliation rite. The embarrassed Bavarian authorities quickly released the Jewish internees and warned the local press not to mention the incident further.
³⁵

By late July, a clash of fanatics seemed unavoidable. To the lower-downs, the Reich's economic failures seemed a symptom of laxity and loss of faith. One local NSDAP unit even refused to rescind its boycott when directly
admonished by Berlin. Their answer: "We don't need to check with Berlin. On this matter the platform of the Nazi Party is clear. That is good enough for US."
³⁶

It
is unknown how far the "second revolution" had advanced by July 25. There is no way to know whether the threat was greatest from the forces of former economics minister Hugenberg, Nazi theoretician Julius Streicher, imprisoned chief kommissar Otto Wagener, the growing throngs of the Estate for Handicrafts and Trade, or any of a dozen other coalitions and political factions. But on July 25, action was taken.

Precisely at noon,
I
million policemen, Storm Troopers, and SS officers whose loyalty to Hitler could be assured, brought Germany to a standstill. Everything was searched. Trains, cars, waiting rooms, railway stations. The countrywide operation lasted about an hour. The results were never revealed, since the action was executed under Goering's decree promising death to atrocity mongers.
³⁷

But even the mobilization of a million men could not restrain the
druck
von unten,
the pressure from below.

No one knew the precise answer: whether the total breakdown would come in a week, a month, or in two months—or whether it would come at all. That was the question that kept people guessing. But the clear connection between Germany's jobless and national unrest was widely known. All the desperate Nazi speeches and economic alarms of July
I933
were openly reported in the newspapers of London, New York, Paris, Amsterdam, and Washington.

Yet in the face of those headlines and seductive encouragements to strangle the Reich economically, key Jewish leaders were doing all they could during July to block the anti-Nazi boycott. Clearly, the Third Reich was prone, in chaos over unemployment, frantic for time to save its economy, and unable to withstand further erosion of its export trade. But imponderables plagued the international Jewish community: Could the boycott work fast enough?
If
it did succeed, would German Jewry not be left in ashes beneath the rubble of the Reich?

Those who rejected boycott in favor of the Zionist solution questioned whether Jews could ever truly win such a war, and if they did, would the battles only continue from generation to generation? They believed that the only way to win such wars was to avoid them.
If
constructing Palestine could achieve the Zionist ideal of Jewish independence, then the victory would not be transient; it would be everlasting. This was the torment of the times for Jewish leadership: to fight fire with fire, or to fight fire with foresight.

I
N
THE MINDS
of Zionists, Jewish life in Germany could not be saved, only transferred. Even if Hitler and the German economy were crushed, Jewish wealth in Germany would
be
crushed with it. The wealth had to be saved. Through the speedy liquidation and transfer of that wealth, the Jewish Homeland could
be
built, thus creating the refuge needed for a mass transfer of the people. Zionism had declared from the moment of Herzl that anti-Semitic regimes were not to be opposed. They were to
be
cooperated with in the transfer of Jews and their assets.

As Landauer saw it, vast amounts of money—from immigrants as well as so-called potential immigrants—would be at the disposal of Zionist institutions. Thus, a virtually endless bank account could finance Palestine's development: roads, water supply, housing, and the unique Zionist enterprise of coaxing the desert into bloom.

The great threat to this reach for utopia was Landauer's erstwhile partner, Mr. Sam Cohen. During the July 13 meeting, Landauer had stressed that an agreement could be realized only under the supervision of a special Zionist clearinghouse controlled by the Anglo-Palestine Bank, the bank most Jews and Zionists trusted. This stipulation would deprive Hanotaiah of its monopoly on the futures and fortunes of German Jewry.

The Anglo-Palestine Bank could of course be relied upon to implement the decisions of the Zionist Organization. Established in
1902,
the oldest and most respected bank in Palestine was owned by the Anglo-Palestine Company. The Anglo-Palestine Company was in turn a wholly owned subsidiary of the Jewish Colonial Trust Company. All controlling shares of the Jewish Colonial Trust Company were owned and managed by the Zionist Organization in London.
¹

Although the bank was still a small financial institution, this transfer project held the potential to make the Anglo-Palestine Bank one of the world's strongest. Years later, Anglo-Palestine would indeed become one of the top one hundred banks in the world. And it would change its name to Bank Leumi—the most important bank in Israe1.
²

To ensure that Sam Cohen would not again intercept the transfer, Landauer decided the ZVfD would maintain constant communication with both the Economics and Foreign ministries. So on July 14, the day after the Wilhelmstrasse meeting, Landauer sent a letter to Currency Control director Hans Hartenstein, with a copy to Hans Schmidt-Roelke at the Foreign Ministry. Landauer's letter was a simple confirmation that, as requested during the July
13
meeting, a memo crystallizing transfer procedures would be delivered shortly. Until then, wrote Landauer, "I find
it
important to reemphasize in advance what I said during that session: It is of the utmost importance that the clearinghouse proposed for Palestine be a public organization which enjoys the full confidence of the Jewish public .... Only the Anglo-Palestine Company is available for this purpose."
³

In a not so subtle move to preclude another Sam Cohen trick, Landauer explained to Hartenstein why he was reiterating his position even before further negotiations. "I want to avoid the possibility of losing this resource through any individual negotiations which might take place prior to the implementation of the overall agreement."
⁴

With German unemployment soaring, and with transfer as the only ready means of breaking the boycott, Landauer was feeling eminently more confident than just weeks ago when he was afraid to even contact the government. That surge of confidence was apparent in the July
14
letter as Landauer made it clear the Zionists would not agree to just any deal. They wanted the deal that was right for Palestine. And so Landauer's short letter closed with what must have appeared like a warning, or even a threat. "I wish to emphasize this in writing beforehand because I consider
it
important to inform you that the [Zionist] authorities which will be dealing with emigration to Palestine will hardly be able to agree to any other method." Schmidt-Roelke was a little astonished when he read that language and he penciled two exclamation marks next to it in the margin.
⁵

Landauer also moved against Cohen at the very center of Cohen's power, Hanotaiah Ltd. Lev Shkolnick, manager of Yakhin, was to negotiate in Berlin the final details of joint implementation with Sam Cohen and Hanotaiah co-owner Moses Mechnes. By June
30,
Mechnes had arrived but nothing concrete could be done without Cohen, who was still en route from Tel Aviv to Trieste, and from there to Geneva and then London before finally reaching Berlin to finalize specifics. Employing an old technique of Mr. Sam Cohen himself, Landauer used the opportunity of Cohen's absence to meet with Mechnes and other Hanotaiah personnel to extract a promise that they relinquish any transfer monopoly.
⁶

At the same time, Yakhin's desire for a joint venture with Hanotaiah quickly dissipated. Telegrams sent by Hanotaiah to Yakhin were answered in vague terms. Yakhin managers realized they no longer needed their competitor Hanotaiah. By mid-July, the publicly controlled Yakhin, which gave the private company Hanotaiah its air of public sanction, had disassociated itself from Sam Cohen
⁷
and was ready to support Landauer.

Landauer spent almost a week polishing his two-and-a-half-page transfer memorandum, which was typed on the stationery of the
Palastina Amt
or the Palestine Office. The Palastina Amt was the actual Zionist emigration office and thereby colored Landauer's memorandum as
the
official emigration and
transfer proposal. On July
19,
it was delivered to Hartenstein at the Foreign Currency Control Office. A copy went to Schmidt-Roelke at the Foreign Ministry with a cover letter that again made the point: "I emphasize that our offices in Palestine are particularly anxious to see money and transactions handled by agencies which enjoy the trust and confidence of the public."
⁸