IBM and the Holocaust

by Edwin Black

  First, Dehomag by-laws would allow New York to supercede the German board of directors at any time. Dehomag’s corporate by-laws five and six declared that the corporation would be comprised not only of shareholders and a board of directors, but of an unusual third component: “representatives and attorneys—in-fact… determined by the shareholders.” These would be IBM accountants, managers, and lawyers who could project Watson’s authority on a day-to-day basis. The fifth by-law added, “The shareholders shall be in a position to annul the board of directors.” By-law seven ordered, “The representatives [Watson’s attorneys and accountants] shall follow the instructions of the shareholders and the board of directors, if there is one.”14

  Second, Heidinger’s token 10 percent share of the Dehomag were his to own, but only so long as he remained with the company. The stock could not be sold without the shareholders’ permission, according to by-law four.15

  Clearly, the power at Dehomag was wielded by the shareholders. Watson and IBM NY owned 90 percent of the stock. This gave Watson and his attorneys veto power over any Dehomag activity and indeed over Heidinger himself.

  Watson also wanted his own people on the Dehomag board to counter-balance Heidinger. Representing IBM NY were trusted Watson representatives Walter Dickson Jones, who operated out of IBM’s Paris office, and John E. Holt, who mainly operated out of IBM’s Geneva office.16 Heidinger acquiesced to the concept of foreign control, but he resented Watson’s interference. The first test came quickly. It involved German Sales Manager Karl Hummel.

  Watson had cultivated a personal alliance with Hummel. He had arranged for Hummel to attend IBM’s sales training school at Endicott, New York, and entertained Hummel and his wife in his home. The Hummels and Watsons periodically exchanged gifts. Watson knew how to develop loyalty. He wanted Hummel on the German board. December 15, 1933, Watson made his move, sending a radiogram to Dehomag General Manager Hermann Rottke: “To give Dehomag fuller representation in Germany, I request that Karl Hummel be made second director (Geschaftsfuhrer) and his name so listed…. Kindly notify me when this is done.”17 Watson had not asked Heidinger first.

  Heidinger erupted, and just days before the new factory was to open in a grand ceremony, Rottke cabled back: “According to German law, not I but only shareholders meeting and board of directors have authority to promote Karl Hummel… sending your cable and a copy of this answer to Heidinger.”18

  Sarcastic and threatening, Heidinger on December 20 dashed off a warning to Watson. “I do not seriously fear… your positive will in the future to put me aside in questions of importance for the Dehomag. Nevertheless, I of course feel deeply depressed that you are not interested to hear my opinion [about]… such an important decision…. That feeling of depression… might be considered as not important. But what could be important is the following.19

  “As you know,” Heidinger continued, “we all considered it of greatest importance to proof [ sic] that the Dehomag is a German-managed company… free from American influence… our authorities are very sensitive if they should believe to be fouled.” He hinted that the Nazi Party might feel the need to install two of its own kommissars on the board. During a recent conference at the Nazi Party headquarters, Heidinger had reassured ranking officials that Dehomag would function free of American influence. Now the Hummel appointment was showing the opposite, he claimed, adding that Watson’s move would “shock” Party stalwarts and create a “dangerous” situation for the company.20

  Watson went into damage control mode. Upon receiving Heidinger’s irksome missive, he cabled Rottke, who would soon sail to America for meetings at IBM: “Do nothing further about Hummel until I see you in New York.”21

  It was difficult, but Watson humbled himself. In a rambling, two-page letter filled with spelling errors, Watson apologized over and over again, regretted Heidinger’s upset, professed his unqualified friendship to Germany, recalled his pleasant times in Berlin, enumerated his forthcoming dinner engagements with the German ambassador, and staunchly assured, “you have nothing to worry about in connection with the German government, so far as my connection with our German business is concerned.” Watson blamed not his lack of respect for Heidinger, but a simple typo. In his original cablegram asking for Hummel’s appointment, Watson averred, “one word was misquoted. The cablegram dictated was ‘I suggest,’ and I find in the copy it was written ‘request’… it is always my policy… to make a suggestion, rather than a request.”22

  Suggest. Not request.

  Unappeased, Heidinger shot back in a melodramatic flourish, “it was a real and great joy for me to receive your letter… [and] to see that the biggest part of the trouble arose from the mistake of using the word ‘request’ instead [of] ‘suggest’ which… formally settles the most dangerous point… I hardly can express how happy I am about the friendly manner in which you explained… the mistaken wording of your cable.”23

  Heidinger’s message was cabled to Rottke, who at that moment was steaming across the Atlantic on the SS President Roosevelt. Rottke had the cable retyped on letterhead and handed it to Watson once he landed in New York. Hummel, it was decided, would be promoted to senior management, but not sit on the board. The conflict was over. Watson filed his original dictation copy of that December cablegram to Rottke. On line two the word “request” was originally typed. Watson edited the cable, scratched out “request” but then upon reflection wrote it back in by hand and signed it. “Suggest” was never in the document. It was always “request.”24

  * * *

  JANUARY 8, 1934.

  In a corner of Dehomag’s vast punch card operation within the great Karstadthaus census complex at Berlin’s Alexanderplatz, with morning light streaming in behind them through banks of tall parallel windows, several dozen officials of the Prussian Statistical Office were joined by leaders of the Nazi Party in full uniform and Dehomag officials in their finest suits to solemnly recognize the coming revolution of data processing and the newly forged alliance with International Business Machines.25

  Hands reverently clasped either behind their backs or across their belt buckles, shoulders and arms touching in fellowship, the assemblage stood in awe of this day, the day Germany would unveil its own factory producing Hollerith machines. The President of the Prussian Statistical Office, Dr. Hopker, delivered brief remarks using the euphemisms and crystal clear ambiguities of the day. “[T]he irresistible force of the National Socialist government… demands the [census] results faster than ever before,” he declared, adding, “German statistics understands this impatience.” He then explained exactly how the punch card process worked, distilling the anonymous German masses into specific names organized by race and religion, as well as numerous other characteristics.26

  Accompanied by a dense din in adjacent halls that clicked and whirred like locusts swarming a field, Heidinger stepped to the front to speak. With the passion of a die-hard ideologist simultaneously presenting an omnipotent gift to the nation and fulfilling a life-long personal dream, he spoke of the demographic surgery the German population required.

  “The physician examines the human body and determines whether… all organs are working to the benefit of the entire organism,” asserted Heidinger to a crowd of company employees and Nazi officials. “We [Dehomag] are very much like the physician, in that we dissect, cell by cell, the German cultural body. We report every individual characteristic… on a little card. These are not dead cards, quite to the contrary, they prove later on that they come to life when the cards are sorted at a rate of 25,000 per hour according to certain characteristics. These characteristics are grouped like the organs of our cultural body, and they will be calculated and determined with the help of our tabulating machine.27

  “We are proud that we may assist in such a task, a task that provides our nation’s Physician [Adolf Hitler] with the material he needs for his examinations. Our Physician can then determine whether the calculated values are in harmony with the health of our peop
le. It also means that if such is not the case, our Physician can take corrective procedures to correct the sick circumstances…. Our characteristics are deeply rooted in our race. Therefore, we must cherish them like a holy shrine, which we will—and must—keep pure. We have the deepest trust in our Physician and will follow his instructions in blind faith, because we know that he will lead our people to a great future. Hail to our German people and der Fuhrer! “28

  The entire group then filed out of the massive building and motored to IBM’s new factory in the quiet Berlin section of Lichterfelde to attend the official opening. At 10:30, Dehomag employees stopped their work to gather for the great event. Tall trees along the perimeter were still nearly barren from the Berlin winter. The swastika-bedecked square in front of the four-story factory complex was already jammed with hundreds of neighborhood onlookers and well wishers.29

  Just before noon, two columns of Storm Troopers took up positions along either side of the walkway leading to Dehomag’s front door. A band from the SA’s 9th Regiment played Nazi victory songs. Finally, the NSDAP hierarchy arrived.30

  Dehomag had invited Nazi higher-ups representing the organizations most important to the future of IBM’s partnership with the Third Reich. From the German Labor Front came Rudolf Schmeer, a last-minute stand-in for Dr. Robert Ley, leader of the organization. The German Labor Front was the militant coalition responsible for mobilizing unemployed Nazi millions into both newly created jobs and vacated Jewish positions. The Front also inducted Germans into regimented squads that functioned as veritable military units. So important was Dr. Ley and his German Labor Front that the entire Lichterfelde factory opening was delayed two days because he took ill. Only when it became clear he would not recover for days was the event suddenly rescheduled with Schmeer, accompanied by an entourage of potentates, standing in.31

  At Schmeer’s side was A. Gorlitzer representing the SA, the rough and ready Storm Troopers, the violent edge of Hitler’s forces. Gorlitzer was a powerful Nazi. When Goebbels became Propaganda Minister, Gorlitzer took his place in the Storm Trooper organization. Now, the presence of Gorlitzer, in gleaming, black leather boots and fighting uniform, would testify to the importance of Dehomag in Hitler’s future plans.32

  As the invited Nazi officials paraded through echelons of honor guard, the Brown Shirts pumped their arms rigidly diagonal. Schmeer, Gorlitzer, and the other leaders returned the disciplined Hitler salute with a casual, almost cocky bent-elbowed gesture, their open palms barely wafting over their shoulder.33

  Bouquets decorated Dehomag’s reception hall. One large swastika emblem dominated the front of the podium, and an even larger swastika flag hung across the wall. Music inside was provided by an NSDAP men’s choir. To record the event, a tall, circular microphone stood nearby.34

  The company’s most important users were there as well. Heidinger’s guest list included the directors of the Reichsbank and other financial institutions, the Police, Post Office, Ministry of Defense, Reich Statistical Office, and an executive contingent from the Reichsbahn, that is, German Railway.35

  The future was in the cards—a future of names, of police files and concentration camps, of bank accounts and asset transfers, of war offices and weapons production, of endless statistical campaigns and registrations, and of trains. So many trains. The men and organizations assembled would help shape that future in ways people were only beginning to imagine.

  Representing Watson at the event was his personal representative, Walter Jones. Jones was the Paris-based manager of all European operations and a man who would one day become chairman of IBM Canada.36

  Framed by swastikas front and rear, a clearly impressed Jones was the first to speak. He proclaimed in German, “It is an outstanding honor and privilege for me to be with you and to represent Mr. Thomas J. Watson, president of International Business Machines, on the occasion of the formal opening of this magnificent factory… the new and permanent home of Dehomag.”37

  Repeatedly using Nazi buzzwords for economic recovery, Jones made clear that Mr. Watson agreed to the new construction “because he realized your organization had outgrown the facilities… [and] the time was propitious… as it would give employment to many idle workmen and thus help… the unemployed.” Peppering Watson’s name and imprimatur throughout his address, Jones praised, “the noble work undertaken by your government in its aim to give work to every German citizen.”38

  When Heidinger came to the front, nattily dressed with a small hand-kerchief peeking from his suit jacket pocket, the man was clearly emotional. “I feel it almost a sacred action, if in this hour I consecrate this place of our mother earth,” he began. Reviewing Dehomag’s turbulent history, he described how the tiny company had persevered despite a lack of financing, the Great War, and the suffocating post-War inflation.39

  Although at that very time, Heidinger was battling Watson over the appointment of Hummel, in this moment of Nazi fulfillment, Heidinger was effusive. Recalling IBM’s acquisition of Dehomag, he recast the story not as an acrimonious takeover but as a financial rescue by a benevolent friend of the German people. “I express our deepest appreciation and our thanks for the noblesse not to be surpassed, proved by our creditor… International Business Machines Corporation under the management of their president, Thomas J. Watson, in our condition of distress…. [IBM] could have been in a position to take over our entire firm by… enforcing their claim for bankruptcy… but [instead] purchased a share in our company.”40

  Continually invoking Nazi re-employment cliches, Heidinger promised that Dehomag would provide “bread and work” for German citizens. In that vein, he said that IBM had calculated the cost of a grand opening banquet and instead would contribute the 10,000 Reichsmarks to the Winter Subsidy, a Nazi program donating funds and food to those thrown into deeper joblessness by the international anti-Nazi boycott.41

  He concluded by unveiling a building plaque commemorating the factory both to “the national awakening of the German people” and to its future. Heidinger concluded by asking that “the blessing of heaven may rest upon this place.”42

  Final remarks were offered by Schmeer on behalf of the powerful German Labor Front. “German men, German women,” he proclaimed, “the fact that we are on the way up under Hitler’s leadership despite the present conditions was doubted by many, not just by our enemies, but also by people who were willing to work honestly and diligently. The opening of this factory… shows that the road Hitler has prescribed and which he took last year was right, namely to bring trust into the German economy. People in the past were not lacking commitment to hard work but they lacked trust… the Volks community now present in this factory is here to stay, and stay for all eternity…. It will produce goods, which will help our people in their ascent.”43

  Snapping into respect, Schmeer pumped his arm forward exclaiming, “I now ask you to collect our joy and cry out: ‘Our Fuhrer, Adolf Hitler, Sieg Heil!’” The crowd reciprocated with fire: Sieg Heil! The choir burst into the national anthem, “Deutschland uber Alles.” 44

  Marching out enthusiastic and reassured, swept into the moment, the regaled Brown Shirts chanted the “Horst Wessel Song.” 45

  Soon Hitler’s flags will wave

  Over every single street

  Enslavement ends

  When soon we set things right!

  For IBM and Dehomag both, it was an extraordinary day of Nazi communion. Two days later, Jones sent off verbatim translations of the speeches to Watson with an enthusiastic cover letter declaring, “as your representative, I attended the formal opening… I have never witnessed a more interesting ceremony.” Jones attached a list of all the Nazi figures that attended, and even made clear that the dignitaries included the SA’s “Gorlitzer, who succeeded Dr. Goebbels in the latter’s former position.” Jones’ letter proudly mentioned “a full company of Nazi storm troups [ sic] with band” and promised IBM’s Leader that plenty of photos would follow.46

  Watson sent a persona
l letter to Heidinger. “Mr. Jones sent me a copy of the speech you made at the opening of the new factory in Berlin… and I have read it with a great deal of interest… you are certainly to be congratulated upon the manner in which you conveyed your thoughts.” The company was so proud of the event that Dehomag printed commemorative programs of the event with photographs and transcripts of the speeches made at both the census complex and the factory.47

  There was no turning back now. IBM and the Nazi party had bonded. Swastikas and corporate slogans had found their common ground. Day and night, the Jewish names clattered through IBM systems, faster and faster, city by city, profession by profession. Dehomag was the Third Reich’s informational deliverer. As such, they were afforded a special place in the mindset of Nazi planners. It was an awesome responsibility for Dehomag and IBM, but one they accepted with doctrinaire devotion.

  The feeling was captured by one Nazi newspaper, Der Deutsche, which sent a reporter to cover the Lichterfelde ceremonies. The paper quoted Heidinger on the nature of the company. Heidinger explained it this way: “Children’s character is determined by their parents. Firms’ by their founders.”48

  * * *

  GERMANY WAS quietly tabulating.

  While Hitler’s rhetoric was burning the parade grounds and airwaves, while Storm Troopers were marching Jews through the streets in ritual humiliations, while Reich legislative decrees and a miasma of regional and private policies were ousting Jews from their professions and residences, while noisy, outrageous acts of persecution were appalling the world, a quieter process was also underway. Germany was automating.

  Hollerith systems could do more than count. They could schedule, analyze, and compute. They could manage.

  Several dozen Hollerith systems were already in use by a small clique of German industrial firms and government offices.49 But now Hitler’s Reich discovered that in its quest for supremacy, it could mechanize, organize, and control virtually all aspects of private and commercial life, from the largest industrial cartel to the humblest local shopkeeper. Just as people would be categorized and regimented down to the least characteristic, so would all of German business be analyzed to the smallest detail—and then subject to Nazi discipline. The economy could recover. People could go back to work. But it would all be done toward a single, totally coordinated Nazi goal.