by Edwin Black
Zahn called for a “registration of the various risks which threaten the value of productivity… [as a result of]… illnesses, disability, unemployment and non-accomplishment of occupational goals.” Population engineering, he emphasized, would rely upon extensive data analysis, including statistics from a gamut of health bureaus, disability and liability insurers, unemployment offices, and even academic testing data from schools.78
Nazi genetic experts worried about not only those individuals exhibiting undesired traits, but the parents and/or children who might carry those traits and therefore contaminate the gene pool. One census theoretician postulated that the potential for contamination could be set at a 25 percent chance per diseased parent. Hence, once an undesirable person was identified, the parents and offspring, including newborn children, required sterilization as well.79
Quickly, the notion of sterilizing the physically undesirable expanded to include the socially undesirable. So-called anti-socials, that is, misfits who seemed to be unsuited for labor, became special targets. A leading raceologist described anti-socials as “those who, based on their personality, are not capable of meeting the minimum requirements of society, i.e., personal, social, and volkisch behavior.” One official definition cited: “human beings with a hereditary and irreversible mental attitude, who… have repeatedly come into conflict with government agencies and the courts, and thus appear… a threat to humanity.” Included were traitors, race violators, sexual perverts, and “secret Jews.” But, “the numerically largest group consists of ‘the work-shy and habitual parasites.’”80
Compulsory sterilization was aimed principally at those adjudged physically and mentally inferior regardless of their race or nationality. However, the criteria applied not only to general groups exhibiting the proscribed characteristics, but, in the new lexicon of anti-Semitism, to virtually all Jews within Germany.
Dehomag systems compiled nearly all the medical, health, and welfare statistics in Germany, either at the compilation site or through the Reich Statistical Office. Hollerith Nachrichten aggressively proliferated its population-engineering technology to new customers. An article entitled “The Hollerith Punch Card Process in Welfare and Social Security” boasted, “sorting procedures are done by Hollerith machines with such speed and reliability that the directors of the welfare administration are unrestricted in their catalog of questions.” It added, “The solution is that every interesting feature of a statistical nature… can be summarized… by one basic factor. This basic factor is the Hollerith punch card.”81
Questionnaires, although to be filled out by hand, were jointly de signed by Dehomag engineers and Nazi disability or welfare experts for compatibility, since ultimately all information would be punched into Hollerith cards. Yet, as a Dehomag notice to users advised, the questionnaires would have to be adapted to the technical demands of the Hollerith system, not the other way around. A vertical notice printed along the bottom left of typical welfare forms often indicated the information was to be processed “by the punch card office,” generally an in-house bureau.82
People seated in a doctor’s office or a welfare line never comprehended the destiny of routine information about their personal traits and conditions. Question 11 required a handwritten checkmark if the individual was a foreigner. Later, this information was punched into the correlating punch card in columns 29-30 under nationality.83
For many clerks and doctors, coding was a new procedure. Various editions of Hollerith Nachrichten tutored readers on the proper method of filling out Hollerith-compatible forms. In one issue it reminded form processors to code Special Characteristics in the several columns field 12. Anti-social was to be coded 1 in one column. In a second column, diseases such as blindness were coded 1. Mental disease was 2. Cripples were 3. Deaf people were 5. Parents who had already been sterilized were to be noted with an “s” ; children already sterilized “because of a parent’s sickness” were noted “as.” 84
Uniform codes were established for occupations. Factory workers were coded 19, hotel and guesthouse workers were 23, theatre artisans were 26. Unemployed persons received the code number 28. These codes were handwritten into field 8 on the forms.85
Diseases were also coded: influenza was 3, lupus was 7, syphilis was 9, diabetes was 15; they were entered into field 9.86
Once coded and punched, all data was then sorted by machine.
If agencies lacked the manpower to undertake their registrations, or the money to buy the equipment, Dehomag would perform the work for them. Insurers, for example, could send quarterly data directly to the Lichterfelde office for processing. Volume was important. “Since the work is done by Dehomag,” advertised a company solicitation, the approach was recommended for any insurance company carrying “more than 15,000 members.”87
Graphs, organizational charts, and work flow diagrams published by Dehomag bolstered the modern technological feat of its data processing. One work flow diagram showed the complex method by which handwritten forms and questionnaires in any agency’s master personnel file were marshaled through a dozen separate sorting, proofing, resorting, and tabulating stages until results were finalized.88 An individual looking at a plain paper form filled out by pen or pencil might never comprehend the tortuous route that document would take through the Hollerith process.
One of the most aggressive locales implementing Hollerith technology for race science was the city of Hamburg. Doctors there submitted extensive forms on all their patients to a Central Health Passport Archive where the information could be retrieved when needed and exchanged with other registries. Archive officials asked for reciprocal exchanges with “health and welfare institutions of all kinds, economic welfare, youth and education welfare, court decisions, special foster care, sterilizations… and all other sentences where personality evaluations are considered.”89
Raceology was enabled as never before. Statistician Zahn extolled the fact that “registered persons can be observed continually, [through] the cooperation of statistical central offices… [so] other statistical population matters can be settled and regulated.” Zahn proposed “a single file for [the] entire population to make possible an ethnic biological diagnosis [to] turn today’s theory into tomorrow’s practice. Such a file would serve both practical considerations as well as science,” he argued, adding, “Clarified pictures of the volume of genetic diseases within the population… now gives science a new impetus to conduct research… which should promote good instead of bad genetic stock.”90
Genetic denunciations and routine evaluations were adjudicated by the Genetic Health Courts based on a combination of anecdotal evidence and Hollerith data. The accused included parents guilty of no more than the mis-fortune of a birth-defected child, innocent newborns of the statistically suspect, helpless individuals condemned as depressed or psychiatric within a world gone mad, and those who just didn’t fit into the new Nazi milieu.91
In the sterilization program’s first year, 1934, more than 84,600 cases brought to the Genetic Health Courts resulted in 62,400 forced sterilizations. In 1935, 88,100 genetic trials yielded 71,700 forced sterilizations.92
Eventually, sterilization was viewed as merely preliminary to more drastic measures for cleansing the Reich. Zahn warned in a statistical journal article: “population politics, according to the principles of racial hygiene, must promote valuable genetic stock, prevent the fertility of inferior life, and be aware of genetic degeneration. In other words, this means superior life selection on the one hand, and the eradication of genetically unwanted stock on the other hand. The ethnic biological diagnosis is indispensable to carry out this task.”93
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WHEN HERMAN HOLLERITH designed his first punch card, he made it the size of a dollar bill.94
For IBM, information was money. The more Germany calculated, tabulated, sorted, and analyzed, the greater the demand for machines. Equally important, once a machine was leased, it required vast quantities of punch cards. In many cas
es, a single tabulation required thousands of cards. Each card was designed to be used only once, and in a single operation. When Dehomag devised more in-depth data processing, the improvements only bolstered card demand. How many punch cards were needed? Millions—per week.95
Punch cards sped through the huffing machines of the Third Reich like tiny high-speed mechanized breaths rapidly inhaled and exhaled one time and one time only. But Hollerith systems were delicate, precision-engineering instruments that depended on a precision-engineered punch card manufactured to exacting specifications under ideal conditions. Because electrical current in the machines sensed the rectangular holes, even a microscopic imperfection would make the card inoperable and could foul up the entire works.
So IBM production specifications were rigorous. Coniferous chemical pulp was milled, treated, and cured to create paper stock containing no more than 5 percent ash, and devoid of ground wood, calk fibers, processing chemicals, slime carbon, or other impurities that might conduct electricity and “therefore cause incorrect machine sensing.” Residues, even in trace amounts, would accumulate on gears and other mechanisms, eventually causing jams and system shutdowns. Electrical testing to isolate defective sheets was mandatory. Paper, when cut, had to lie flat without curl or wrinkle, and feature a hard, smooth finish on either side that yielded a “good snap or rattle.”96
Tolerances necessitated laboratory-like mill conditions. Paper thickness: .0067 inches plus or minus only a microscopic .0005 inch. Width: 3.25 inches with a variance of plus .007 inches or minus .003 inches. Two basic lengths were produced: 5.265 inches and 7.375 inches, plus or minus only .005 inch in either case. Edges were to be cut at true right angles, corners at perfect 60 degree angles, with a quarter-inch along the top and three-eighths along the side, all free from blade creases with the paper grain running the length of the card. Relative humidity of 50 percent and a temperature of 70-75 degrees Fahrenheit was required at all times, including transport and storage.97
Printing of the customer’s name and specific project name was to be legible but not excessively inked and in no circumstances sufficient to dent the card or nudge it out of its plane, which could microscopically alter thickness. Text or numbers had to be printed in precise positions to line up with punching devices and machine gauges. IBM instructions to mills declared, “These specifications are absolutely necessary” and any variation “could distort the result.”98
Only IBM could make and sell the unique punch cards for its machines. Indeed, punch cards were the precious currency of data processing. Depending upon the market, IBM derived as much as a third of its profit from card sales. Overseas sales were even more of a profit center. Punch card profits were enough to justify years of federal anti-trust litigation designed to break the company’s virtual monopoly on their sale and manufacture.99
When Herman Hollerith invented his technology at the close of the previous century, he understood the enduring commercial tactic of proliferating a single universal system of hardware and ensuring that he alone produced the sole compatible soft goods. Hollerith was right to size his card like the dollar. IBM’s punch card monopoly was nothing less than a license to print money.
In the Third Reich’s first years, Germany was completely dependent upon IBM NY for its punch cards. Even after the factory in Lichterfelde opened, German manufactured machines were useless without cards imported from the United States. Card presses would eventually be built in Germany, but until that time, Dehomag was constantly scrambling to import the millions of cards ordered each week by its customers. To guard against sudden shortages, Lichterfelde needed a six-month supply—enough to fill fifty-five railroad cars. Half the stock was stored off-site in leased warehouses, and the rest in the factory.100
So vital was the production of paper products that in May 1934 the Reich Ministry of Economic Affairs sought to regulate mills. An Economics Ministry decree placed an eighteen-month moratorium on establishing, closing, or expanding paper mills without the specific permission of the Reich. Dehomag hoped to have its card presses in operation before the moratorium expired.101
IBM was making so much profit in Germany, it was causing problems. About $1 million profit was suddenly earned by the end of 1933, this at a time when nearly all of German industry was being battered due to the international anti-Nazi boycott. Dehomag had sold an unprecedented 237 percent of its 1933 quota—outpacing all IBM foreign operations combined. Yet Nazi business precepts denounced large corporate profits, especially those earned by foreign corporations. No wonder a nervous IBM auditor in Europe conceded to IBM NY, “Dehomag is in an extremely dangerous position, not only with respect to taxation, but it may be cited as a sort of monopolistic profiteer and, where primarily owned by foreigners, it may be seriously damaged by unfriendly publicity.”102
For Heidinger, IBM profits were good news. His personal bonus, expressed as a stock dividend, would total nearly a half million Reichsmarks. He wanted his share. But Watson was not so inclined. Reich currency regulations sequestered profits into frozen bank accounts disbursable only within Germany. Heidinger could be paid, but not Watson. Moreover, newly enacted decrees taxed profit dividends harshly. If Watson couldn’t receive his money, he saw no reason why anyone else should either. As the chief stockholder, Watson voted that no dividends would be paid.103
Heidinger would not abide Watson first usurping Dehomag and now usurping his share of the profits. Dehomag’s extraordinary growth was an accomplishment Heidinger had personally sculpted by virtue of his Nazi connections. He wanted the financial reward he felt he deserved. The war for control of IBM’s money in Germany only escalated.
Conflict arose in 1933 as soon as IBM announced the merger of its existing German subsidiaries, the million-dollar expansion, and new factory construction. Since Heidinger owned a token share of one of the old minor companies being folded into the new larger Dehomag, he expected his stock to be purchased as part of the consolidation. Watson refused, even though the buyout amounted to only RM 2,000, or about $500.104
On September 25, 1933, IBM’s European Manager, Walter Jones, placed the question squarely with Watson personally. Heidinger, reported Jones, “now thinks IBM should take this [RM 2,000] off his hands and asked that the matter be submitted to you.” A New York auditor acknowledged on Watson’s behalf that IBM did in fact need Heidinger’s shares to effect the merger. But the auditor added, since “the stock at the moment is worthless… [because it has] lost its entire capital through its operations… we do not think it would be fair for IBM to pay him anything for it.”105
Heidinger knew his stock had become worthless only by virtue of the losses engineered by Watson to avoid taxes.
Heidinger fought back. He went directly to the Reich tax authorities, briefed them on IBM’s entire complex merger plans, and asked for a formal ruling on the company’s tax avoidance strategy. If Heidinger couldn’t get his $500, it would be costly for the parent company. Quickly, IBM learned it was very expensive to fight the feisty Heidinger.106
Tax officials proposed an assessment as high as a half million dollars. Protracted negotiations ensued with the tax boards. Streams of letters and cables crisscrossed the Atlantic. Numbers, from the ferocious to the moderate, bandied between IBM offices. Heidinger had positioned himself to “save the day” by negotiating the taxes down to a quarter of their proposed assessment. New York began to comprehend the process. IBM auditor Connolly at one point understated the predicament: “I should not be surprised if he [Heidinger] set up scares [with government officials] and talked them off for the sound of it.”107
Financial battling between Berlin and New York seemed endless. Heidinger continuously tried to extract bits of compensation and sometimes trivial sums of expense money. IBM would block him through its controllers, managers, and attorneys. Heidinger would then retaliate by aggressively “consulting” Reich bureaucrats, which invariably led to added costs. Connolly openly asked in one letter if Dehomag could just pursue its corpo
rate business without Heidinger “running to the German government every time for approval.”108
One conflict came to a head at the June 10, 1934, Dehomag board meeting. Heidinger wanted IBM NY to pay his dividend taxes resulting from the merger. He also resented the highly detailed financial reports required each month by IBM auditors. Watson refused to pay Heidinger’s dividend taxes and his auditors would not relent on their micromanaging oversight. At the board meeting, Heidinger angrily threatened that if his view did not prevail, than Dehomag was no longer an independent German company, but a foreign-dominated firm. As such, he would notify authorities in Berlin. Dehomag would then be assessed an extra quarter-million in special taxes and “prohibited from using… the wordDeutsche “ in its name, since that term was reserved for Aryan businesses. Without the word Deutsche in Dehomag, he warned, government and commercial contracts would be lost. Minutes of the June 10 exchange were omitted from the meeting’s written record. Details, however, were summarized in a separate letter to New York.109
Ironically, when it came time to making capital investments, Heidinger took a completely opposite approach. In a memo asking IBM NY to undertake an expensive expansion of facilities, Heidinger asserted, “The management can merely submit proposals; the decision as to whether something should be done about it, is the responsibility of the owners.”110
Ultimately, IBM and Heidinger forged one battle-scarred compromise after another, howsoever transient. But no matter how insolent or disruptive Heidinger became, Watson refused to disengage from Dehomag’s lucrative partnership with Nazi Germany. In fact, Watson was determined to deploy as many lawyers, accountants, and managers as necessary—and personally visit Berlin as often as required—to make sure IBM received all the profit—frozen or not. The fight with Dehomag would continue—not to reign in its technologic alliance with the Third Reich, but rather to ensure that the profits continued and remained unshared.