Maxwell, The Outsider

by Tom Bower

  In 1946, Tonjes Lange believed that Springer's best hopes for recovery lay in the Russian zone. In the pre-Cold War period, travel between the zones was relatively easy and Lange's assistant Paul Hovel began negotiating with the Soviet authorities to start printing a series of journals and books which had been planned during the last year of the war. Simultaneously, Lange personally began discussions with the Soviets for releasing Springer's stocks in Lausitz, which was in the Russian zone. But Ferdinand decided that Berlin's isolation hampered his relations with his authors and he moved near to the home of Karl Jaspers in Heidelberg in the American zone to establish a new editorial headquarters.

  It is not quite clear exactly when Maxwell met Lange and Springer for the first time but Hovel remembers that during 1946 Maxwell was often approached by Ferdinand or Lange at PRISC for help in obtaining allocations, especially paper. Maxwell's duties would have been to judge the assistance Springer should receive and the company's success in securing its share of the rations depended upon the personal relationship developed with Captain Maxwell. Ferdinand and Tonjes Lange, who were both by nature traditional and conservative, were hugely impressed by the handsome, self-confident, German-speaking British captain. By all accounts, by the time Maxwell formally resigned from the Control Commission, his relationship with the two men was quite close, especially that with Tonjes Lange, whom Maxwell would later come to regard as a father-figure and address with fondness as 'Onkel'.

  By October 1947, when Maxwell returned to Berlin, Lange had become desperate. The war had ended more than two years before but his business suffered an insurmountable obstacle. A few new journals were being printed in the Soviet zone and the demand for back issues and antiquarian books was overwhelming not only from libraries but also from astute investors as a hedge against the worthless German currency. Yet he was unable to send the journals and books out of Germany to his customers. An attempt in July to dispatch some parcels had been frustrated by the Allied insistence that all exports had to be in bulk rather than sent as single items. Springer needed someone outside Germany who could distribute the journals to its customers in over twenty countries. On 16 October 1947, with Maxwell's arrival, Springer Verlag was blessed with a golden opportunity denied to its competitors. Maxwell proposed that he should act as their representative abroad. 'Maxwell's arrival and offer', recalled Paul Hovel, 'was at a most opportune moment.' According to Lange, Maxwell's offer was 'the only hope for rebuilding our company'. Others believe that a tentative agreement had already been concluded between Maxwell and Lange in spring 1947 and that this was the cause of his resignation from PRISC to establish the export network. Maxwell's own account is that the initial offer was made by Lange and that his interest in scientific publishing was purely scientific, sparked by the atomic explosion at Hiroshima. Since Hovel's version was recorded shortly after the event, it is likely to be the most reliable.

  Despite all the tension and conflict which would follow, Springer was forever grateful to Maxwell: over the following nine years their joint business was worth DM 20 million. 'Never will the Springer Publishing House', recorded an internal memorandum written in July 1959,

  forget the help which Captain Maxwell gave us. . . .Throughout that time, Captain Maxwell always had good advice, solved the most difficult problems and was the person who was primarily responsible between 1947 and 1949 for re-establishing us as publishers. ... In those terribly difficult times after Maxwell made his first offer, the drastic and successful methods invented by the British Captain (with an MC) produced unimaginably successful solutions to overcome those conditions so we could start exporting again.

  Springer faced three fundamental problems: first, to produce new journals; secondly, to regain control over its huge stocks which had survived the war; and thirdly, to obtain permission to trade outside Germany. On the first problem, as we have seen, Maxwell as a PRISC officer gave Springer help in the course of his duties. It was Maxwell's successful efforts to solve the second and third problems which became controversial.

  The reason why Hovel described Maxwell's arrival as 'opportune' was that Lange had just negotiated with the Russians the release of the valuable stock in Lausitz. Hovel is unclear about the details of transporting the books and journals by truck to West Berlin but it is certain that during the October visit Maxwell and Lange agreed that EPPAC should own the exclusive worldwide distribution rights of Springer's journals and books. Ferdinand, who was always wary of Maxwell, hesitated before endorsing the agreement because he feared Maxwell's total inexperience. The young ex-officer, Ferdinand felt, lacked the staff to wrap and address the packets and lacked the refinement to develop the personal contacts with Springer's traditional and valuable customers. Before signing, he insisted that Lange should try to organise another mass mailing operation of a few copies of its new journals to its most important pre-war customers. With Maxwell's help, a special dispensation was secured to dispatch 369 separate packets from Germany to EPPAC in London for onward shipment. The results, both sides agreed, proved that it was not a realistic, long-term solution. Therefore with Ferdinand's wholehearted support, Lange formally registered the publisher's agreement with Maxwell on 18 November 1947. It fell to Maxwell to secure the crucial export permits and arrange the transport for the contents of the Lausitz warehouse. He launched himself like a whirlwind, desperately keen for his new venture to succeed. 'Undoubtedly,' recalled Hovel, 'it would not have been possible to start exporting on that scale without the influence which Captain Maxwell could exert over key officials.'

  Under the Allied laws of the occupation, all Germany's trade was controlled by the Anglo-American Joint Export -Import Agency (JEIA), based in Frankfurt. As part of the Allies' rigorous control of the German economy, everything which was bought and sold abroad had to be filtered through British and American officials at JEIA. The agency regularly published details of Germany's import needs and awaited tenders for their supply from Allied industrialists and businessmen. Similarly, nothing could be exported without JEIA's permission and at an agreed price. Since the only credible currency in Germany was cigarettes or chocolate, JEIA had to ensure that German industry obtained a fair price for its exports and, similarly, that its Allied competitors were not undercut. Consequently the true price depended upon the exchange rate between the discredited Reichsmark and the pound or dollar. The rates in 1947 were not officially fixed, but JEIA's normal rate was thirteen marks to one pound. Although the details of Maxwell's negotiations are no longer available, it is indisputable that Maxwell, after obtaining JEIA permission to export Springer's journals, obtained in early December 1947 the exchange rate of twenty-one marks for each pound, a 60 per cent advantage which would substantially increase Maxwell's profits. As later episodes demonstrate, Maxwell probably used the contacts which he had forged as a Control Commission officer to obtain the satisfactory terms. He most likely convinced officials that since it was Allied policy rapidly to disseminate German scientific knowledge, the journals' prices should be kept quite low. On the export licence itself, an official noted that the special rate was agreed 'after discussion'. But Springer would not get any of the benefits of that exchange rate. Nor their customers. 'Captain Maxwell', commented an astounded Hovel, 'obtained an extraordinarily favourable exchange rate.'

  Within days of Maxwell's coup, a formal protest about Springer's contract was sent from a Dutch publisher to PRISC's director Kenneth Kirkness at his headquarters in Berlin. Frans von Eugen, the owner of Excerpta Medica of Amsterdam, had been granted by UNESCO the rights to publish medical abstracts for specialists and among them were Ferdinand's new journals officially published in Heidelberg, in the American zone. Maxwell's exclusive deal destroyed the Dutch hopes for a monopoly. 'I sincerely hope', von Eugen wrote to Kirkness, 'that you will use all your influence to frustrate this agreement and any such agreements which would be made in the future as they are ill suited for turning the intercourse between nations in the right channels.' Following his letter, vo
n Eugen arrived in Berlin armed with the claim that even the American authorities condemned both the agreement and the exchange rate. Kirkness evidently was unimpressed since less than one month later Maxwell and the Germans formalised and registered their new deal. By January 1948, it would be worth £2,387. By the end of the year, EPPAC had purchased books and journals valued at over one million marks which, converted at the special rate, equalled

  £47,750. Converted at present-day values, Maxwell had secured a contract worth over half a million pounds.

  By early 1948, Springer's journals and books were arriving in London, transported, according to Hovel and Henrik Salle, another veteran Springer employee, by train from Berlin to Bielefeld and from there by truck. To ensure the transport of 150 tons of journals and 150 tons of books, and to provide for future production, Maxwell had negotiated with the British authorities that Springer should be allocated 200 kilowatt hours of electricity, 20,000 kilos of coal for heating, 150,000 sheets of paper, 500 wooden crates and 50 kilos of nails. Springer was back in business and fast moving ahead of its competitors.

  Distribution in London was the responsibility of Vernon Baxter, a German refugee whose original name was Blumenfeld and whom Maxwell had recruited on his return from Berlin in October 1947. When Baxter reported for work on his first day Maxwell had forgotten why he had been hired. 'Maxwell asked me whether I could set up a book department,' says Baxter. 'With great cheek I said that I could, but I had no idea.' Maintaining an accurate mailing list and sending accounts punctually required considerable organisation, and more staff were hired. Most of the employees were Jewish refugees from central Europe, some of them successful professionals before the war and thus over-qualified, but nevertheless grateful for employment despite the low rates of pay and the spartan conditions. Maxwell felt comfortable surrounded by people who shared a similar background and it was important to have German-speakers to handle German publications. 'We were bursting at the seams,' recalls Baxter, 'and then a new recruit arrived. He or she was expected to find a plank of wood and a chair and begin to work.' Over the babble of German, Polish and Yiddish, the young Maxwell ruled serenely, nonchalantly ignoring the blatant improvisation. Sooner rather than later, all his employees recognised that Maxwell would brook no challenge. 'He was the sun,' commented an early transgressor, 'and we were either planets or had to leave.' The only exception was his partner, Peter Orton.

  In contrast with Maxwell's extravagant character, Orton was a quiet spoken intellectual who in Berlin before the war had been a member of the Communist Party. Peter Oppenheim, as he was then called, had gained comical notoriety as the cadre who had successfully robbed a cake shop to fill the party funds only to be arrested on a tip-off from the taxi driver who had driven him to the shop. He had met Maxwell in the Queen's Regiment, where Orton had been the sergeant to Second Lieutenant Maxwell. Their relationship would never change. 'Orton hero-worshipped Maxwell,' recalls another Berliner who worked in the office. Tor Orton, as for everyone else, Maxwell was a born leader.' But behind Maxwell's back, Orton often voiced dislike and criticism of his senior partner's brash gambles. Long before his first major crisis, Orton compared Maxwell to Eva Kreuger, the Swedish match king whose empire had collapsed amid bloodshed. Orton would die in a car crash before he saw his prophecy come true. Yet together they made a good team. 'The difference between the two', recalls Baxter, 'was that Maxwell recognised the advantage of holding someone's coat.' While Maxwell addressed himself to the strategic decisions, alternately blustering or charming officials while wheeler-dealing, Orton tried to fashion the sales organisation which Springer needed.

  Ferdinand was at first delighted by Maxwell's efficient transport of the stock to Britain but soon felt that his original misgivings were justified. Whereas the Springers had, over a century, meticulously cultivated a venerable style befitting the publishers of the famous and had constructed a fastidious distribution system, EPPAC's staff and its management, complained Ferdinand, were 'amateur' and their inexperience was provoking Springer's old customers to complain that deliveries were too slow. Maxwell, Ferdinand complained to Lange, did not love books and authors like a traditional publisher but was a trader: he happened to be dealing in books but it might as well have been cattle. Maxwell's system for their distribution was 'inadequate', he told Lange. 'He seems to believe that forwarding a bundle of journals is nothing more than acting as a postman.' Lange did not share his partner's anger.

  In summer 1948, when Maxwell arrived again in Berlin, his blooming exuberance and self-importance reinforced Tonjes Lange's favourable impression. His young benefactor reported that he had secured orders from the British government and British universities to buy German scientific journals from EPPAC and had also arranged that Lord Pakenham, the Foreign Office minister responsible for Germany, would open an exhibition of German books in London which Maxwell had organised. Lange, who knew the details of Maxwell's impoverished youth, could not fail to be overwhelmed. In the midst of the Soviet blockade of Berlin which cut the city's road and rail connections to the West, and the Cold War, he was sure that Springer's future depended upon the Englishman. Uncertainty prevailed and he could not possibly have envisaged the prosperity which would explode in the new Federal Republic just one year later. Consequently, during that visit, Lange offered Maxwell another huge slice of Springer's assets. He explained that his brother Otto Lange had successfully recovered control over Springer stock stored in Austria, which could be exploited to expand the publisher's exports.. But there was a problem. When the books had arrived in 1944 from Berlin, Austria had been part of the German Reich. At the end of the war, Allied laws banned commercial contacts between Austria and Germany as a criminal offence. Legally, Springer was denied control over what they had called their 'iron reserves'. Lange believed that Maxwell was a possible saviour. If the Austrian company would sell the books to Maxwell in pounds sterling, Springer in Germany could eventually recoup its money. Understandably, Maxwell readily agreed to Lange's plan that the Austrian stock be officially sold to EPPAC, transported to London and resold on Springer's behalf to the rest of the world.

  In September 1948, the arrangement was formalised when Ferdinand and the two Langes came to London to sign the agreement with EPPAC. On the same day, EPPAC moved again to larger premises - above a rat-infested banana warehouse in Neal Street, Covent Garden. Within two years Neal Street was to be a mini-empire of fifty employees, and still growing.

  Both Otto and Ferdinand were soon unhappy about the proposed deal. Otto feared that he might lose the financial benefits of his legal ownership and be tarnished as a criminal while Ferdinand had become still more upset about EPPAC's incompetence. Throughout the year, as world trading gradually normalised, inquiries and subscriptions had increased, but simultaneously, according to a Springer executive, 'The difficulties and the continuous stream of complaints about EPPAC's methods did not stop.' EPPAC was certainly not the sole cause of all the problems. Both the Bank of England and British Customs succeeded in injecting obstructions at every level; in any case, some foreign customers were jealous that an upstart like Maxwell had secured a valuable monopoly. But, in Ferdinand's view, Maxwell was much to blame. Instead of remaining in London to smooth out any problems, he had dashed around Europe opening subsidiary offices in Paris, Brussels and Basle, so compounding the difficulties. In addition, he had approached Springer's competitors and offered similar deals to distribute their journals and books. His restless ambitions irritated Ferdinand all the more because Maxwell had inherited Springer's invaluable mailing list, which had been carefully compiled in the course of one century and had targeted sixty thousand individuals in universities, institutes and industry. Overnight, Maxwell could use it for the benefit of Springer's competitors. Yet, despite his reservations, Ferdinand acknowledged that he had no option but to signal his agreement if the stocks in Vienna were to be sold.

  The 'iron reserves' in Vienna were worth in 1945 prices about £100,000. Springer knew tha
t if the true value were disclosed to the authorities, their export would be banned. At the meeting in London, the three Germans told Maxwell they had decided to undervalue the stock. Springer's contract with EPPAC dated 16 September shows an invoiced price as £4,000 which was later increased to £12,000.

  Two weeks later, Maxwell reported that he had removed every bureaucratic obstacle between Vienna, Berlin, Frankfurt and London and was waiting for the first shipment. On 7 October about seventy boxes of books and journals were loaded into a railway wagon destined for London. Among the titles were books on atomic physics, pharmacology, jet engines and medical specialities. But even before the wagon crossed the