by Tom Bower
Elections were due to be held on 20 October 1946 for the city's assembly and each military power was entitled to appoint observers in the other three zones to monitor the voting. Maxwell was chosen as the British representative in the Soviet sector. According to Raymond, Maxwell was found on election day to be ensconced with a Russian colonel completing a three-day alcoholic and gastronomic orgy. When his supervisory task was completed, according to Raymond, Maxwell returned to his standard duties in the British sector. But his relationship with the Russians, according to the KGB, was not simply social.
Apparently, at one stage during his posting in Berlin, either willingly or unwillingly, Maxwell compromised himself with the Russians. The KGB claim that the young officer signed a document which promised to assist the security agency if required. Since everyone involved in the incident is said to be dead, the circumstances are unclear but the existence of a document seems certain, although it was soon forgotten by both sides.
Maxwell in the meantime was laying the foundations for a stable family life. Betty had arrived in Berlin and was living in a requisitioned flat in what was known among the British staff as the 'ghetto' - an area exclusively reserved for Allied officers. Other than work, most of his fellow officers felt there was little more to do than to enjoy the endless succession of parties hosted by the military representatives of one of the four powers and by his fellow British officers. Huijsman remembers seeing Maxwell, 'a very handsome and personally very charming officer', at least twice a week at social and formal gatherings, and the two became quite close. When Maxwell's first child Michael was born, both Scholz and Huijsman became his godfather. At the christening party, Huijsman's subordinate confessed his true ambition: 'He confided to me that he wanted to become a millionaire.' Huijsman was apparently unaware that Maxwell had already made his first steps in that direction.
In July 1946, Maxwell was demobbed from the army, but he had already agreed to continue working for PRISC in Berlin as a Control Commission officer wearing a military uniform and retaining the rank of captain. While in Britain during the summer, completing his formal demobilisation, Maxwell consummated an arrangement he had made months earlier. On 18 September 1945, a small, £100 company had been incorporated in London. It was called Low-Bell Limited, and its founding director was a Czech refugee called Arnos Lobl. The history of Low-Bell is puzzling but it is fitting that the very first company of which Maxwell became a director should be shrouded in a mystery which would be consistently reproduced on so many occasions during his commercial career.
Although Low-Bell was a trading company, during its first year Lobl did not carry out any business. On 22 August 1946, the directors of Low-Bell, notably Arnos Lobl, held an extraordinary meeting and passed two resolutions: first, to double the number of shares issued by the company to two hundred, and then to grant the power to increase the number of shares to a total of 10,000. The following month, on 12 September, Maxwell was formally recorded as owning ninety shares in Low-Bell, while Lobl personally retained a majority of 110 shares. Although Maxwell was still at the time employed by the Control Commission in Berlin and was not living in London, he described himself on the formal document as a merchant who was resident at 21 Stanley Gardens, London Wll. The mystery deepened in
December when three additional shareholders appeared; again this is consistent with the procedure in Maxwell's later business career, with people casually entering and exiting as directors and employees of his companies. On this first occasion, they were a retired bank manager called John Stratton-Ferrier, a family friend, Paul Raque from Paris and Ladislau Skaloud, described as a merchant who lived in Prague. Their object was to start trading between Britain and Europe.
Lobl, like many Jewish refugees in Britain, lacked any professional qualifications, but appreciated the enormous opportunities for earning a living in straightforward business deals. Like continental Europe, Britain was suffering acute shortages and there was a demand for anything which was manufactured, imported or grown. Even a modest entrepreneur could earn a decent income simply by knowing where and how to buy. Selling was never a problem.
Maxwell returned to Germany and Lobl rented tiny premises in Grand Buildings, Trafalgar Square. Low-Bell's office was crowded even with only two people inside. There was no daylight because the window was covered by an advertising hoarding for cinema films. When Low-Bell occupied the office the ad was for Ivor Novello's musical Perchance to Dream - a fitting motto for the shareholder resident in Berlin.
Whether Maxwell, on his return to Germany, immediately started dealing on Low-Bell's behalf is unknown, but two months later he became the company's majority shareholder, owning three hundred shares over Lobl's two hundred. While Scholz built up his newspaper, Maxwell constantly hunted for opportunities, travelling frequently into the Soviet zone, on one occasion visiting the relaunched Leipzig book fair which in the pre-Hitler period had had the same status as the present annual Frankfurt fair. The trip awakened his interest in the business of books, but when he formally resigned from the Commission on 15 March 1947, he was still unsure how he was to make his fortune.
Maxwell explained his resignation to the Sunday Times in 1969 as having been caused by a clash with his superiors. He claimed that he was opposed to the Soviet dismantling of German industry and consequently allowed the Telegraf to publish anti-Soviet stories which in the period before the Cold War was against Allied laws. His decision, he said, provoked a row with his superiors but Huijsman recalls a friendly parting of the ways occasioned by Maxwell's desire to construct his peacetime career. In any event, Maxwell packed for his return to England armed with his army gratuity and an idea. On the eve of his departure, he telephoned John Kisch, another Czech working for PRISC as the press chief in Diisseldorf. Although the two had never met, they had occasionally spoken on the telephone and Kisch knew Maxwell's reputation as a man with the ability to 'fix the impossible'. Maxwell suggested to his fellow Czech that they might join forces in a business venture when Kisch returned to London. Kisch agreed.
Kisch arrived at Low-Bell's offices in Trafalgar Square in the summer of 1947 to discover that Maxwell had established a new company, the European Periodicals, Publicity and Advertising Corporation. EPPAC's initial business was to import German newspapers to Britain for sale to German prisoners of war anxious for information about their homeland. Maxwell had seen the value of the idea at the beginning of the year when George Houghton, a senior officer in Berlin, had asked him to negotiate the sale of the Telegraf with another London company. But Huijsman had agreed, just before Maxwell left Berlin, that he would be granted the concession, and EPPAC was registered with the military government as an official distributor. Maxwell was in business. Recognising that his future would never be in editing or writing for a newspaper, he had started as a trader.
Using a huge, grey Dodge still bearing its Berlin military registration plates, Maxwell or Kisch regularly collected the newspapers from Victoria railway station and wearily toured around Britain's POW camps, driving as far as Bridgend in South Wales, where the top Nazi generals were incarcerated. Although sales were healthy, both realised that their business suffered the fatal flaw of a diminishing clientele. Maxwell nevertheless applied on EPPAC's behalf to join the Publishers Association, the elite club of British book publishers. His request was promptly rejected.
Kisch noticed that Maxwell regarded the newspaper distribution as just one of several ventures. Every month, as the director of Low-Bell, Maxwell obtained one ton of caustic soda from ICI for £47. Like every commodity, caustic soda was in short supply and Maxwell found no difficulty in reselling his precious allocation in the Far East for £98. That was a monthly income nowadays worth £1,000, ample for a comfortable living.
Maxwell evidently thrived on those first business ventures, applying - it seemed to some eyewitnesses - the same reckless bravery to his pursuit of fortune as had earned him such commendation in wartime. He displayed a natural talent for trading and a bull
-like determination to overcome the confusing multitude of banking and Customs controls which dominated international trade in the post-war era. Yet those who knew him in 1947 are convinced that he was, despite his deals, living way beyond his means. They did not know that his uncle was sending regular payments from America. Nevertheless, Maxwell left Kisch and others in cold fear. Only those who understood that his primitive background excluded any sense of embarrassment or fear of poverty could understand the style. But even they found the pace he set daunting.
In autumn 1947, Maxwell travelled to Berlin. He returned with a new venture which was his key to becoming a millionaire. The business needed new premises and he moved out of Grand Buildings and into 3/4 Studio Place, off Kinnerton Street in Knightsbridge. The annual rent at £350 was more than either Maxwell or his partner had ever possessed. Kisch, his nerves outstripped, bid fond farewell and headed for Fleet Street. Maxwell was unmoved. He had new partners in mind for his fortune-making venture.
2
On 16 October 1947 Maxwell arrived at the dilapidated headquarters of the world's largest scientific publishers Ferdinand Springer in West Berlin's Jebenstrasse. At that moment, Ferdinand Springer's business was in ruins, both literally and metaphorically. According to Vernon Baxter, who worked for Maxwell in the early post-war years, it was Arno Scholz who had explained to his prpt6g6 the value of German scientific book exports. 'Schulz told him,' recalls Baxter, 'if you help re-establish the trade, the trade will kiss your feet.' What followed would change Maxwell's life forever.
The origins of the Springer publishing house, which has no connection with the Axel Springer newspaper group, were laid in May 1842 when Julius Springer opened a bookshop in Berlin. By 1907, when Julius' grandson Ferdinand inherited the small family business, the revolution in science and engineering was gathering momentum throughout the world. Perceiving that German scientists lacked a specialist publisher, Ferdinand personally introduced himself to selected leading experts and offered his services. Within twenty years, because of Germany's position as a pathfinder in science, industry and engineering, Springer swiftly developed a very lucrative world market for his books. Among his stars, including several Nobel prize winners, were the first works written by Paul Ehrlich, Karl von Frisch, Max Born, Max Planck and Albert Einstein. But his fortune was earned not only in single volumes, but in publishing whole series of books edited by eminent panels of German experts. Springer's Beilstein series on chemistry, medicine, psychology, mathematics, engineering and physics was purchased by every reputable library throughout the world. For practitioners, Springer's publications on the natural sciences were standard textbooks, and after each regular revision the demand for the books was renewed.
Simultaneously, Springer began publishing a wide range of learned journals containing short articles by doctors, scientists and researchers which described their most recent work and their discoveries. Springer found that the same libraries which subscribed to the books were eager customers for his journals. The economics were also extremely attractive: unlike most business payments, subscriptions to journals were paid in advance of delivery, which guaranteed a healthy and positive cash flow.
As the world's interest in science expanded and the demand for Springer's books and journals grew, the publisher realised another bonus. New libraries and universities opening around the world not only started buying Springer's current books and journals, but also wanted to stock their shelves with their past publications. Known as 'back issues', the older journals were by definition rarer than the current issues and consequently more valuable. The earnings on trading single, rare issues or buying incomplete sets at reduced rates and adding the missing journals for resale as a prestigious investment were high. To capitalise on growing demand, Springer printed more journals than he could immediately sell as a calculated speculation that the surplus stock would be sold in the future at considerable profit. In 1932, the last year of free trade, Springer's sales were bigger than the combined total of the remaining world's scientific publishers.
Hitler's accession to power in January 1933 changed Springer's business overnight. An immediate ban was imposed on sharing Germany's scientific secrets with the rest of the world. Although articles describing experiments and theories would still be written, their circulation would be strictly limited. But Ferdinand and his cousin Julius, who was a partner in the business, had a more pressing problem. Both were part-Jewish. By applying the detailed criteria established by the Nazis to determine a German's racial origins, Ferdinand was deemed a half-Jew and Julius three-quarters. For completely assimilated and loyal Germans like the Springers, the shock of being branded an enemy by one's own countrymen was considerable. Like so many German Jews, Ferdinand immediately sought allies among his Aryan friends to protect himself and his business from the law. Initially, because of his worldwide reputation as a prestige exporter, Ferdinand's efforts were successful and the Nazis granted a special permit for him to continue as before. But in 1935, following the enactment of the Nuremberg Laws which explicitly discriminated against Jews, Julius was forced to sell his shares in his company.
The purchaser was Tonjes Lange, a senior manager in the company who had been exclusively concerned with managing the business while the Springers had maintained direct contacts with their authors. Lange, as Maxwell would discover in 1947, was an exceptionally sensitive and generous person. His arrangement with Julius was that, should they both survive the Nazi era, Julius could repurchase his interest in the company. Soon after, Julius was arrested and sent to Oranienburg concentration camp from which he would later be released. In the meantime, Ferdinand and Lange managed the business. In November 1942, Ferdinand too was finally forced to sell his own shares. He made the same unofficial agreements with Lange as Julius had concluded. At this juncture, Springer's Vienna branch was officially sold to Tonjes's brother Otto Lange for 600,000 marks. Only a fraction of the amount was paid and Otto solemnly promised to return the business to Ferdinand after the war. For a time, while Springer was managed by the two Lange brothers, Ferdinand stayed in Berlin, but in 1944 he fled to a remote farm in Pomerania until he was arrested by the advancing Red Army.
By then Lange, with Ferdinand's agreement, had organised the physical survival of Springer's business. As the Allied bombing of the capital intensified, sixty-three thousand books, the tens of thousands of handbooks and invaluable antiquarian series and journals, together worth in pre-war prices £6 million, had been transported out of the city for safe-keeping. Some went by road to a huge warehouse one hundred kilometres south of Berlin in Lausitz and, to spread the risk, the remaining stock was sent to several other sites, especially to Vienna, where under Otto's supervision the 'iron reserves' were safely hidden in Starein for the remainder of the war.
By the end of the war, Lange's efforts had proved invaluable. Not only had Springer's warehouses in Berlin suffered like most of the city from bombs, fire and flooding, but the publishing headquarters in the Linkstrasse, which had, although damaged, miraculously survived, was sited precisely on the border between the Soviet and British sectors. The building was located in Soviet territory while the front door opened on to the pavement in the British sector. Diplomatic niceties were irrelevant during the first weeks of peace when the Red Army exclusively occupied Berlin, and Lange watched helplessly as a specialist Soviet plunder squad arrived to load £1 million worth of books on to a convoy of trucks for shipment to Moscow. By the time the western Allies arrived, little of Springer's stock in Berlin remained to be looted.
The Allies' interest in Springer's books was not surprising. At the beginning of the war, both British and American soldiers, sailors and airmen had suffered serious disadvantages because the military chiefs' chauvinism had falsely convinced them of the superiority of their own weapons. Yet with the possible exception of radar, German scientists and engineers had outclassed their Allied competitors in the design of military hardware from airframes, jets and tanks to submarines, guns and rockets.
German superiority was reflected not only in the new weapons thrown against the Allies, but also in the revolutionary new chemicals, metals, fuels and gases which German industry had invented. In the period between Montgomery's victory at Alamein and the invasion of France, an Anglo-American plan was conceived to plunder German science and industry. Hence, following close behind the waves of Allied soldiers who landed on the Normandy beaches were the first of thousands of specialists whose principal task over the next three years was to investigate the wealth of Germany's scientific secrets. Naturally, Springer's old customers also wanted to know what progress German experts in their particular areas had covered during the twelve years of the Third Reich and Springer was understandably keen to satisfy their demands.
Ferdinand returned to Berlin as a Russian prisoner in April 1945 but he was released one month later. Reunited with Lange, he agreed that they should divide the ownership of the business. Both quickly realised the gigantic hurdles they faced to restart their business. The chaos and devastation in Berlin were overwhelming and everything was tightly controlled by the occupying armies. The Allies, as General Eisenhower proclaimed, were conquerors. They felt little compassion for the Germans and officially none whatsoever for those who had prospered under the Nazis. Nevertheless, Allied policy was to encourage the reopening of non-military industries to prevent Germany becoming a heavy financial burden on the Allies themselves. Springer's new headquarters, in the Reichpietschufer, were located in the British sector, but their initial application for a licence to PRISC in summer 1945 was unsuccessful. Some Springer executives believed that the British were suspicious that Ferdinand, despite his Jewish background, must have collaborated at a high level with the Nazis to survive in Berlin until 1944. There were even suggestions that Lange had made a serious attempt to obtain a testimonial from a Vatican bishop that Springer was not a Nazi sympathiser. But in this case, since it was British policy to encourage scientific publishing, for both Britain's and Germany's benefit, PRISC was ordered to ignore the past and Springer was awarded a licence on 24 October 1945. In practice the licence meant very little. Without telephones, petrol, paper or access to printing presses, Springer's business remained paralysed. Yet orders were beginning to arrive from all over the world for Springer's back issues and new journals. In November 1946, when Maxwell was still an officer in Berlin, the Control Office in London had telexed that there was 'concern about the lack of scientific learned journals coming from Germany to UK. We consider that this should be pressed forward vigorously.' However hard Maxwell attempted to implement that directive, he failed because the resources were unavailable. But he had registered the implications of the urgent messages.