IBM and the Holocaust

by Edwin Black

  Working in bureaucratic anterooms and elegant villas, the race scientists tore up version after version until their paper supply ran out. So they finished writing on menus. Finally, at 2:30 a.m. on September 15, armed with the most up-to-date statistical information, the decrees were cobbled into presentable form.17 The scene was set for Hitler’s announcement that evening.

  At 9 P.M., September 15, a grandiose if improvised hall decorated with streamers and ceiling fabrics was convened as a Reichstag for 600 deputies. They gathered for the sole purpose of ratifying the laws their Fuhrer would declare. Hitler outwardly appeared as his usual charismatic self, carefully attired in riding pants tucked into polished jack-boots, a red swastika armband around his left elbow, and a tie neatly buried under a fully buttoned soldier’s jacket. His hair, austerely slicked to one side, bannered above his unmistakable narrow mustache to create Nazism’s emblematic face. But to at least some observing him, der Fuhrer seemed tired from the long debate over Jewish definition. From his seat on the stage, he ascended three steps to a podium overlooking a massive assembly of the devoted stretching dozens of rows back and more dozens left and right of a great center aisle that was empty except for the obligatory photographer and a newsreel cameraman. Behind, a full orchestra and organist sat stilled, their instruments set down. Facing him, thousands waited, rapt with anticipation.18

  Hitler’s speech, revised at the last minute, lasted only twelve minutes. Even though passionate, and at times fiery, his voice sounded weak. He rambled from point to point. Throughout, der Fuhrer tore into a world community that was offending German honor and boycotting German goods. As usual, he blamed the Reich’s one great enemy. “We must notice here,” he accused, “mostly Jewish elements are at work.” He ripped into “international Jewish agitation” and declared, “The time had come to confront Jewish interests with German national interest.”19

  Referring to the population statistics rendered by his raceologists but rounding off the numbers, der Fuhrer cried out, “a nation of 65 million persons has a right to demand that she is not respected less than the arbitrariness of 2 million persons.” For the first time, Hitler had left behind the well-worn totals of 400,000 to 600,000 German Jews and now pronounced the updated Hollerith tabulated numbers.20

  New racial laws, he promised, would immediately strip German Jews of their citizenship, even more severely restrict their activities and outlaw their ability to hoist a German flag. More than once, Hitler remonstrated, “the law is only an attempt at legal regulation. However, should this not work… should Jewish agitation within and without Germany continue, we will then examine the situation again.”21

  Gesturing fanatically, he concluded with this warning: The new law “is an attempt at the legal regulation of a problem, which, if it fails, must be turned over to the Nazi Party for final solution.”22

  The pleasant Nuremberg night and reverberating Sieg Heils suddenly turned to rain. Hitler’s well-photographed smile was now nowhere to be seen, not even as the crowd cheered him all the way from the Reichstag hall to his hotel.23

  Everywhere, the new formulaic approach to Jewish persecution exploded into worrisome headlines. Under a page one banner story, the New York Times lead was typical: “National Socialist Germany definitely flung down the gauntlet before the feet of Western liberal opinion tonight… [and] decreed a series of laws that put Jews beyond the legal and social pale of the German nation.” The paper went on to detail the legal import of the ancestral fractions.24 The news was everywhere and inescapable.

  The League of Nations’ High Commissioner for Refugees Coming from Germany issued all member governments a long, detailed, and scathing report of the Reich’s determination to persecute Jews on an unprecedented basis, all based on tabulating the percentages of their ancestry. The report’s opening page sounded a special alarm: “Even more ominous was the declaration of the German Chancellor: ‘…should, however, the attempt at legal regulation fail, then the problem must be turned over to the National Socialist Party for final solution.’”25

  Ironically, while all understood the evil anti-Jewish process underway, virtually none comprehended the technology that was making it possible.

  The mechanics were less than a mystery, they were transparent. In 1935, while the world shook at a rearmed Germany speeding toward a war of European conquest and total Jewish destruction, one man saw not revulsion, but opportunity—not horror and devastation, but profit and dividends. Thomas Watson and IBM indeed accelerated their breakneck alliance with Nazism. Now Thomas Watson, through and because of IBM, would become the commercial syndic of Germany, committed as never before to global advocacy for the Third Reich, helping his utmost to counteract Hitler’s enemies and further der Fuhrer’s military, political, economic, and anti-Semitic goals. Even as he continued as a statesman of American capitalism and a bulwark of international commerce, Watson would become a hero in Nazi Germany—both to the common man and to Adolf Hitler himself.

  * * *

  NAZI GERMANY was IBM’s second most important customer after the U.S. market.

  Business was good. Hitler needed Holleriths. Rigid dictatorial control over all aspects of commerce and social life mandated endless reporting and oversight. What’s more, Germany’s commercial isolation and preparation for war compelled the National Socialist regime into a frenzied campaign of autarky that necessitated upward spirals of surveillance and bureaucratic meddling into the smallest industrial details. Nazi planners wanted every object in daily life—from trucks to paper clips—coded, inventoried, and regimented. But no matter how preoccupied with economic and armament drives, the Reich inculcated every program with its maniacal desire to eradicate the Jewish presence.

  IBM was guided by one precept: know your customer, anticipate their needs. Watson stayed close to his customer with frequent visits to Germany and continuous daily micro-managed oversight of the business.

  Everywhere one turned in America or Germany in 1935, it was clear that identification and exclusion of the Jews was only the beginning. The next step was confiscation and Aryanization. During the two previous years, most Aryanizations were disorganized. Jews were forced from their business or profession and then pressured to sell their enterprises to Aryans for a fraction of the value. Thousands of others fled the country as refugees with their portable possessions worriedly stuffed into bulging suitcases. Homes, vehicles, and chattels were left behind, often to be seized in satisfaction of trumped-up juridical penalties or simply taken over as abandoned property.26

  Jewish presence in smaller towns now became the most precarious. Once identified, Jews were unable to earn a living, then unable to even purchase food or medical supplies. Local shopkeepers, kept in line by neighborhood anti-Jewish boycott vigilantes, prominently displayed signs forbidding Jews to shop within. Pointed threats and a late night visit from hooligans usually sealed the family’s departure decision. During 1935, dozens of localities were able to post signs on their outskirts declaring that they were Jew-free and/or Jews were no longer permitted to purchase lands or even enter the town limits. As Jews were methodically driven to lodge with friends and family in larger cities, they left behind their real estate and often much of their goods. Now the body of unattended Jewish property was growing.27

  When a town became Jew-free, it became a publicized event. In Germany, the town administration or local Nazi groups would eagerly advertise the accomplishment. Foreign newspaper and radio broadcasts chronicling Nazi oppression frequently reported the development as well. Typical was an article in the New York Times, May 28, 1935, headlined “All Jews Quit Hersbruck.” The article reported, “A swastika flag has been hoisted over a house in Hersbruck, near Nuremberg, which has been the home of the last remaining Jewish resident in the district.”28

  But Watson didn’t need to read about Aryanization in newspapers. He discovered it personally. In July 1935, Watson visited Berlin. That July, Nazi thugs ran wild in the streets of Berlin smashing the windows of fash
ionable Jewish stores. One of those department stores was owned by the Wertheims, family friends of the Watsons. The Watson family learned that to protect the store, Mr. Wertheim first transferred the property to his Aryan wife, but then ultimately decided to sell “for next to nothing” and escape to Sweden. On another visit to Berlin, the Watsons and other IBM executives were invited to an elegant reception at the Japanese embassy. While sipping tea in the garden, a German diplomat boasted that the exquisite home formerly belonged to a Jew who fled the country. Such new ownership of greatly discounted homes was now common in Berlin.29

  By late 1935, however, the Nazis envisioned a more systematic and state-controlled process to expropriating Jewish property. Just after the enactment of the Nuremberg Laws, the Nazis began floating plans for a clearinghouse to gobble up all Jewish holdings for a pittance. This plan was no secret. It was widely promoted in Germany through the Party’s Economic Information Agency. And the news traveled abroad. A New York Times article on September 24, 1935, was headlined “Nazis Plan to Buy Out All Jewish Firms; Stress Bargains Resulting from the Boycott.” The article reported, “The plan calls for the purchase of Jewish firms by a central corporation, and their redistribution among ambitious Aryan businessmen. It is suggested that such businesses can be obtained cheaply…. The Nazi organ responsible for this ‘solution of the Jewish problem’ makes startling guesses as to what the prices would be. It says, ‘some fairly large Jewish firms can be purchased for 40,000 marks.’ Evidently… the Jews can be induced to feel a very pressing desire to sell.” The newspaper noted that under such conditions, Jews might then be faced either with the prospect of “emigration or semi-starvation.”30

  As part of the drive to liquidate Jewish assets, Nazis began visiting Jewish homes and invalidating their passports. Now Jews could not even become refugees without paying a confiscatory flight tax of 25 percent of their holdings in Germany.31 Identifying Jewish possessions was the next step.

  Banks, financial institutions, and pension funds were among Dehomag’s most important clients. Indeed, Dehomag maintained an entire department for the banking industry. IBM designed highly specialized tabulating equipment for banks, including the BK and BKZ models, which were capable of producing customer statements and recording specific transactions. On August 12, 1935, savings banks were suddenly required to provide the Reichsbank with detailed information about all their depositors. Some banks used the Hollerith process by coding accounts into one of ten professional categories Dehomag had established. Hollerith Nachrichten published a notice for those institutions that did not yet own sorting machines, advertising that Dehomag could do the sorting in-house for a fee. The company bragged that it possessed the ability to cross-reference account numbers on bank deposits with census data, including grouping by profession or industry.32

  Dehomag’s financial documentation capabilities soared when it un veiled a powerful new model dubbed the D-11, which could process numerous account developments, compute interest, and help create detailed customer records. Within months, the new D-11 would allow high-speed data management of bank accounts at dazzling levels.33

  At the same time, the human identification process proliferated. Local and regional statistical offices registered new births on Hollerith cards, carefully noting the religion of both parents. Marriages were also registered on punch cards, again noting the religion of both partners. These cards were then forwarded to regional Dehomag service bureaus, such as the one in Saarbrucken at Adolf Hitlerstrasse 80. More than half the local regional statistical offices operated card punchers, but could not purchase their own sorters because of the backlog and expense of the machines. So Dehomag conducted the sorts on its own premises, just as it did for so many tabulations. Once Dehomag completed its work, the data was sent on to the Reich Statistical Office where it was combined with a confluence of other data streams.34

  Personal information about Jewish people in Germany was always changing—precisely because of the innumerable dislocations Jews suffered. For this reason, starting in 1935, the authorities required Jewish communal leaders to report their members by age and gender no longer annually, but quarterly.35 Such data was just one more trickle comprising the river of cross-indexed information Hitlerites processed to isolate the Jewish nemesis.

  Eventually, the Hitler regime felt statistically ready to espouse regulations defining just what constituted a Jewish business.

  A firm was labeled “Jewish” if the owner or a partner was Jewish, if even a single Jew were in management or on the board of directors. If a quarter of its shares or votes were held by Jews, or under Jewish influence through nominees or agents, the company was classed Jewish; this regulation made it increasingly difficult and dangerous to mask ownership. A company could be owned and operated by undisputed Aryans, but if it maintained a branch managed by a Jew, that branch would be declared Jewish.36

  Naturally, it would be impossible to certify a company as being Jewish unless denouncers knew the identities of all business principals and were profoundly certain which of those individuals qualified as Jewish under the Nuremberg Laws. But fewer Jews could hide from the dragnet IBM had helped the Reich construct. This forced companies to quickly identify and terminate, even if reluctantly, any of its Jewish management, and even its own Jewish ownership.

  Once a company was deemed to be Jewish, as defined under the special regulations, its inventory and assets would ultimately be registered. Hollerith systems that could inventory people could inventory merchandise as well. Among Dehomag’s most important customers were the Trade Statistics Office in Hamburg, the Reichspost, and various national and local taxing offices. Decrees of the Reich Economics Ministry’s Kommissar for Price Control, beginning in 1936, required uniform reporting procedures by key industries. In most cases, the installation of IBM machinery was mandatory in order to comply. Government statisticians and Dehomag had developed coding systems for virtually all raw materials and finished goods. Eventually, the coding system would make it possible for the Nazis to organize its seizures with stunning specificity.37

  None of Germany’s statistical programs came easy. All of them required on-going technical innovation. Every project required specific customized applications with Dehomag engineers carefully devising a column and corresponding hole to carry the intended information. Dummy cards were first carefully mocked-up in pen and pencil to make sure all categories and their placement were acceptable to both Dehomag and the reporting agency. No information could be input unless it conformed to Dehomag specifications. Therefore, the Reich tailored its data collection to match Hollerith requirements. Moreover, there was only one source to purchase the cards: Dehomag. The company sold them, generally in lots of 10,000, often preprinted with project names. Of course, once Dehomag approved the formats, it trained the reporting agency’s personnel to execute the work.38 Dehomag was Germany’s data maestro.

  During the frenetic rush to expand business with the Nazis and automate more and more Reich projects, never once was a word of restraint uttered by Watson about Dehomag’s indispensable activities in support of Jewish persecution. No brakes. No cautions. Indeed, to protest Germany’s crusade against Jewish existence would be nothing less than criticizing the company’s number two customer. Despite the innumerable opportunities to disengage or decline to escalate involvement in the war against the Jews, IBM never backed away. In fact, the opposite occurred.

  Watson became intensely proud of the German subsidiary’s accomplishments. In late November 1935, two months after the Nuremberg Laws were espoused, and just days after more headlines were made when the Reich issued highly detailed genealogical dicta defining just who was Jewish under the decree, Watson traveled to Berlin to celebrate Dehomag’s twenty-fifth anniversary. A lavish company banquet was scheduled for November 27 at the exclusive Hotel Adlon. More than 150 invitations were distributed. IBM offices in New York, Switzerland, Italy, France, and Norway were represented by their top executives. Dignitaries such as U.S
. Ambassador to Germany, William E. Dodd, Hitler’s press attache, Ernst Hanfstaengl, former German consul in New York, Otto Kiep, and Reich Economics Minister, Hjalmar Schacht were invited. Important industrial contacts were on the list. Even if some, such as Schacht, could not attend, most did.39

  Sumptuous food was served in the Watson tradition of elaborate dinner events. The Heidingers, Rottkes, and Watsons toasted their success. But even as the precious crystal glinted and ornate silverware gleamed, the utilitarian machine rooms of Lichterfelde and countless other data processing offices throughout Germany continued their own demographic clatter. The machines never slept.

  Not everyone could be as jubilant and splendid as the Watson revelers at the Hotel Adlon. Unseen and unheard were Jews, cowering in their homes, fearing visibility. Goebbels had already warned them. “We have spared the Jews,” asserted Goebbels, “but if they imagine they can just stroll along the [fashionable] Kurfurstendamm as if nothing at all had happened, let them take my words as a last warning.” In another warning, Goebbels demanded, “Jews must learn to break with their past behavior and leave public places in Germany to the Germans.” These were not quiet comments murmured at obscure party meetings but public threats reprinted worldwide, including in the New York Times under headlines such as “Nazi Warns Jews to Stay at Home.”40

  Now Watson eagerly launched a program to expand Dehomag’s capability. Ten more boxes of machinery had been shipped from New York to Hamburg in November 1935 on the SS Hansa. Millions of additional punch cards would be rushed across the ocean until Dehomag could produce them in Germany. Branch offices were opened throughout the Reich, the Lichterfelde factory was enlarged, and a second factory was established to manufacture spare parts.41