by Edwin Black
From Frankfurt, the trio traveled the next day to Stuttgart, hoping to inspect the vital Dehomag factory in nearby Sindelfingen. In Stuttgart, Chauncey first met with Maj. J. M. Teasdale, the U.S. officer in charge of Dehomag and other commercial property in the area. When Chauncey asked if there was any existing procedure for an American company to regain control of its property, Teasdale replied that none yet existed. But if it would help, Teasdale offered to make Chauncey the custodian. He explained that if Chauncey accepted the custodianship, he would be functioning not in IBM’s interest as much as in the army’s interest. Chauncey was not receptive, feeling, “I think it unwise for any IBM man to be in charge.” In any event, Teasdale declared he would not permit any German to continue working for an American firm against the American company’s wishes. That included Dehomag.49
What’s more, there was business to be done. The U.S. military needed more Hollerith alphabetizers in France and Germany. The army was prepared to sign leases for equipment. Teasdale declared he was more than willing to permit Dehomag to fill those orders. He then assigned a field investigator, Private Schufert, to accompany Chauncey and his escorts to Sindelfingen.50
Dehomag’s Sindelfingen plant was undamaged. No bombs had struck. Chauncey and the three military men were met by Oskar Hoermann. Taut and unfriendly, Chauncey informed Hoermann he would not converse with him except with the permission and within earshot of “the Army people… ac companying me.” Having been authorized to speak, Chauncey stated that the army wished IBM to recover the Holleriths the German Army had removed from France. Hoermann replied, as Chauncey noted in his report, that “Dehomag had little information, since the taking of the machines was done by the German Army and not with the cooperation of Dehomag.” Ironically, few knew more about those transferred machines than Hoermann. Hoermann, of course, was deputy Nazi custodian of CEC, the key Dehomag engineering manager in charge of French equipment, and aware of page after page of CEC billing demands on the Reich. What’s more, Hoermann functioned as the intermediary between CEC and the MB as Fellinger negotiated and finalized all machine-specific lease contracts. Chauncey did not correct Hoermann.51
Instead, Chauncey merely went on to the next order of business. The U.S. Army, said Chauncey, was anxious to obtain German-made alphabetizers, especially the advanced D11-A. Hoermann replied that although five such machines were placed into production, only one was fully assembled and in operation—the machine used at Dachau. Then in the presence of two special military escorts and an army field investigator, Chauncey inspected the Dachau machine. It was partially dismantled. He noticed that the device, which featured a rotary printing mechanism, seemed larger than the Model 405 American alphabetizer. Hoermann asserted that the Dachau machine never worked as well as it should. Captains Kober and Hayter also examined the device. In reporting back to IBM NY about the D11-A, Chauncey wrote, “This machine was used at Dachau, but was sent to the Dehomag at Sindelfingen through the cooperation of Mr. Hendricks.” Sergeant Hendricks was a U.S. Army industry liaison that headed up “a special installation” at Bad Nauheim.52
As Chauncey turned to leave, the gregarious Hoermann tried to ask several questions about his IBM friends. He had openly corresponded with them during the war years. But Chauncey stiffly cut him off, asserting that no personal conversation or other pleasantries could be exchanged. Hoermann demurred.53
That day, the group returned to Frankfurt where they met with Hendricks, who had just returned from Berlin. Hendricks had inspected the damaged Lichterfelde facility, and was carrying an envelope for IBM containing a full report from the German staff there. Lieutenant Colonel Flick had conveyed the report to Hendricks. In the awkward moment that followed, Hendricks pulled the envelope out of his pocket, but Chauncey declined to actually accept it. Instead, Chauncey immediately handed the envelope—without looking inside, to Captain Kober standing next to him. Kober, who read German, skimmed the reports and then granted permission for Chauncey to review it as well. Chauncey did so, but quickly realized the reports “convey no information not previously known.”54
Hendricks told Chauncey some additional information about Dehomag managers. Rottke’s imprisonment by the Russians for Nazi connections was considered a lost cause because Mrs. Rottke was known for pronounced Nazi views. But Hummel was back. After Hummel was released from the Allied prison at Bad Kreuznach, Hendricks saw no harm in transporting him to Stuttgart in a truck.55 Even though Watson had wanted Hummel excised, he had already been restored to the company.
On October 30, 1945, Chauncey returned under escort to Paris to continue the methodical process of reclaiming the German subsidiary. He continued to petition various offices of the occupying authorities in Europe and the State Department in Washington. Even though a complete policy on resumption of corporate control had not yet been defined, as soon as any ad hoc element of the policy was espoused, IBM was ready to swiftly act on it. During late summer and fall 1945, the bureaucratic barriers gradually began to crumble.56
The Berlin and Sindelfingen operations were administered as two distinct entities. During the summer, the military had initially appointed Dehomag Manager H. Beckmann as custodian of the Berlin operation. But he was extremely inefficient and depressed over Germany’s fortunes. His son had been killed in the war. His wife had her teeth knocked out during an alter cation with Russian soldiers. Chauncey called Beckmann “a broken man.” What’s more, he was on bad terms with Fellinger. Beckmann ordered guards to stop Fellinger at the gate. Fellinger complained. So the military replaced Beckmann with another Dehomag manager, W. Cimbal, who was more to Fellinger’s liking. Whoever was appointed to run Dehomag was dependent upon Fellinger for transitional help. After all, Fellinger had been effectively running the subsidiaries since 1943. Nonetheless, occupation authorities, overlooking Fellinger’s Nazi Party connections, designated him a special advisor to Cimbal.57
Although IBM had not regained control of Dehomag, the company was now allowed to resume its normal operations as quickly as possible. Considerable monies were still frozen in bank accounts. An August 1945 review reported that salaries had not been paid since the fall of Berlin. So Cimbal rallied Lichterfelde’s resources, cut expenses and salaries, and re-established monthly leasing patterns. To earn extra cash, toys were produced from scrap metal. Soon Lichterfelde’s tabulators were rattling again. Punch cards were rolling off the presses. By September 1945, more than 320 prior German installations were in operation, including Holleriths at public utilities, insurance companies, and railroads. One plant filling card orders for the French and U.S. armies was already at 75 percent capacity; it had produced 58 million cards from September to November. A military order for 17 million was waiting to be produced. Cimbal was compelled to seek IBM NY permission to order $12,000 in additional machine tools to restart the manufacturing program.58
Before the end of the year, Chauncey would be able to report in a letter to Watson, “Cimbal has done a good job. The territory under him is operating on a cash basis profit. You know already of their manufacture of toys from scrap and novelties from American Army discarded tin cans. The rentals, however, remain the backbone of the revenue.”59
In August 1945, the military instructed Fellinger to prepare comprehensive reports on his command of IBM subsidiaries in Germany, Norway, France, Yugoslavia, Czechoslovakia, and Poland, as well as his knowledge in other territories. In addition to a resume of activities, Fellinger was required to forecast the prospects for each division. Fellinger addressed some reports directly to Watson. But most of the surveys were formally submitted to American military government for IBM’s review.60 These extensive country-by-country summaries, backed up by financial data, contained most of the information IBM NY needed to resume control.
Shortly after the submission, an unidentified branch of the military arrested Fellinger.61 That was end of his involvement with IBM.
On December 3, 1945, the American military government in Stuttgart passed a message for Chau
ncey through an army office in Paris. Firm policies were still unresolved on restoring American property. But Chauncey could again travel to Germany to resume discussions.62
The next day, December 4, Chauncey and another IBM officer, Mr. Warrin, flew from Paris to an airport near Frankfurt. The late connecting flight to Berlin was canceled due to poor weather. They tried again in the morning, but the weather was unimproved. While waiting in Frankfurt, they again called on Captain Hayter, who asked IBM to prepare whatever contract it deemed appropriate to allow the military to begin the widespread leasing of needed Dehomag machines and secure repair services for mobile U.S. machines in the area.63 Chauncey was happy to comply.
With the weather still difficult, Chauncey and Warrin resorted to an overnight train. Purchasing tickets at the last minute, they were required to travel all the way to Berlin in regular seats instead of first-class berths. Once in Berlin, they sought out Major Curry at the local Property Control Office. He authorized Chauncey to finally inspect the Lichterfelde facility. No escort would be necessary and any useful discussion could take place.64
When Chauncey and Warrin arrived at Lichterfelde, December 6, 1945, an American flag was flying atop the Dehomag factory roof. They were met by Cimbal and a delegation of Dehomag employees. From the outset, Chauncey announced, as before, no “friendly discussion” could take place, but only an exchange of business information required by IBM NY.65
The next day, Chauncey received a message to come to Cimbal’s home to speak to Major Curry. That evening, Chauncey and Warrin arrived at Cimbal’s home as requested, and met Curry. But when they walked in a bit further, they saw a beautifully set dinner table. It was nothing like the grandiose banquets IBM had staged during the war, but Mrs. Cimbal had spent some time trying to be hospitable with the little they had. Abruptly, Chauncey stopped and harshly demanded that no party-like atmosphere could ensue. Adhering to a strict non-fraternization ethic, he insisted only business in a business-like setting could be discussed.66
Just then, Lieutenant Colonel Flick entered the dining room. In a few days, Flick was due to return home. But for now he was still in authority. He berated both Chauncey and Warrin for their unfriendly attitude toward the Cimbals. At that, Chauncey retorted: had he known he was being invited to a party, he would have refused. The two IBM men turned around and abruptly left.67
After first checking with several ranking occupation officers, Chauncey softened his manner with Cimbal. In subsequent contacts, he was able to extract the key information about Dehomag’s Berlin operation, including its customer list, financial condition, a review of blocked bank accounts, and the prospects for profitable continuation. Eventually, he learned that the Sindelfingen plant alone had produced some $3.07 million in cards and equipment during the war years. One site alone, Plant II, averaged 39 million cards per month. At the cessation of hostilities, the Berlin factory controlled about 1,000 total installations, representing as many as 6,000 machines, worth $2.34 million. Some 1,314 punches, verifiers, sorters, and tabulators were dam aged at user sites, representing an approximate loss to IBM of $1.61 million.68
Dehomag machines were located throughout what had been known as the Greater Reich and adjacent occupied territories. In Poland: 444 punches and verifiers, 144 sorters, 124 tabulators, and 74 auxiliary machines. In Austria: 447 punches and verifiers, 117 sorters, 91 tabulators, and 53 auxiliary machines. In Czechoslovakia: 108 punches and verifiers, 37 sorters, 26 tabulators, and 17 auxiliary machines. All tolled, some 2,348 Holleriths were identified for recovery.69
Chauncey sought out IBM attorney Heinrich Albert. Albert was now functioning as custodian for Ford Motor Company’s operation in Berlin. Although many of the records relating to Dehomag were lost, Albert was able to sign enough affidavits and certificates to document that IBM NY was in fact the lawful owner of Dehomag and all its Holleriths.70
Machine by machine, office by office, IBM NY began recouping the proceeds of Dehomag’s service to the Third Reich. In doing so, the utmost care was taken to walk the thin green line between conquest and commerce. Chauncey summarized his own conduct in a report to New York. Uppermost in his mind, was the “desire that neither I nor IBM should be in any way criticized.”71
Chauncey was completely successful. Endless additional meetings en sued with the many transient bureaucratic faces of what was known as OMGUS (Office of the Military Governor-U.S.), as well as its counterparts in the Russian occupying administration. IBM was cautious, persistent, and consistently above reproach. This perception was indispensable because with the horror of 6 million murdered Jews, and perhaps an equal number of other Europeans, as well as billions of dollars, francs, and crowns in plunder and devastation, war crime trials were being organized. Reparations from the German commercial sector were being readied. IBM very much wanted to be excluded.
* * *
MILITARY LAW NO. 52 was a problem.
Article I stated: “All property in occupied territory is subject to seizure of possession or title of management, supervision or otherwise, which is owned or controlled in any way by: (a) The German Reich or any sub division or agency thereof; (b) any Governments or nationals at war with the United Nations at anytime since September 1, 1939; (c) the outlawed NSDAP… or its agencies; (d) persons held by Military Government under detention.” Dehomag qualified on all accounts. It was controlled by known Nazis, Heidinger and Rottke, who also owned 10 percent of the shares. Rottke and Hummel had been arrested for their Nazi affiliations. The company’s Board of Directors since 1941 was completely Nazified. As part of the war machinery, Dehomag was under the jurisdiction of the Maschinelles Berichtwesen, a wartime agency.72
Chauncey had reviewed a summary of Military Law No. 52 and other Allied decrees as early as May 21, 1945.73 IBM sought to be carved out of the sphere of culpability and absorbed into the apparatus of victory. It wanted restitution for its war-damaged property, not to become a candidate for reparations. IBM did not want to join the roster of all those deemed part of what was termed “Nazi conspiracy and aggression.” Fortunately for IBM, there seemed to be a concerted effort to keep Watson and the company out of the reparations discourse.
On October 16, when Assistant Secretary of State Clayton first wrote to the Pentagon about the troublesome Lieutenant Colonel Flick and Dehomag, the third paragraph originally referred to the issue of potential reparations. “As you know,” Clayton initially asserted, “this Government’s policy towards German reparations, external assets, and combines is not fully implemented and it is my belief that for these and other reasons it is undesirable at this time to foster or support the restoration of private business relationships.” But a State Department policy review of the proposed draft objected to the paragraph. “Attached is a redraft version of the Clayton-Hilldring letter concerning the activities of Lt. Colonel Flick,” wrote Walt Rostow. “As you will note, I have simply removed the offending paragraph.” A large X was drawn across the draft, and a shorter version mailed.74
On Chauncey’s first post-war visit to occupied Stuttgart, in October 1945, Major Teasdale indicated that all the corporate enterprises in the heavily industrial Sindelfingen area were slated to be liquidated for reparations. Chauncey’s report back to New York confirmed, “He [Major Teasdale] stated that all of the property in the American zone belongs to the American government for reparations, and that if and when property owned by an American was turned over to him, it would reduce the reparation claim of the United States and consequently the reparation claim of the American owner.”75
On his second trip, Chauncey arranged for a personal visit to Deputy Military Governor Clay’s office where he was introduced to General Clay’s assistant, Gen. William Draper. Draper, a friend of Watson’s, headed up OMGUS’ Economic Branch. Draper, in turn, introduced Chauncey to Col. John A. Allen, the man in charge of the Restitution Branch. Chauncey argued IBM’s case “that the American viewpoint would be the restoration of American-owned concerns to their owners, and that
it would not be… that such companies would be used for general reparations, as has been proposed.” Chauncey was told that no decision had yet been formulated.76
IBM’s view held that even if their machinery and corporate acumen had helped organize and optimize the Third Reich’s aggression, they should be held exempt—ipso facto—by virtue of its American ownership. The company contended that its Nazi payments were protected revenues.
However, the prevailing thought among the Allies and those who demanded justice was that all in government and the private sector who helped Hitler destroy Europe and commit genocide should be held accountable in war crimes. Their war gains and economic wherewithal were not sacrosanct. Rather, they should be sacrificed as reparations to the victims—nations and individuals both. Whether dressed in jackboots and swastikas, or suit and tie, accountability was demanded. Indeed, the world understood that corporate collusion was the keystone to Hitler’s terror. Businessmen who cooperated with Hitler were considered to be war criminals or “accessories to war crimes.”77
OMGUS established a Division of Investigation of Cartels and External Assets to identify those responsible for the financing and corporate support of Nazi Germany. By November 1, 1945, twenty-one major bankers were arrested for their role in helping German rearmament and the plunder of occupied nations. Twenty more bankers were targeted. The financial institutions identified included Germany’s most respected: Deutsche Bank, Dresdner Bank, and Commerzbank.78