Tgk1946's Blog

IBM and the Holocaust (Edwin Black) pp69-74

Why would one of America’s leading businessmen and his premier corporation risk all by participating in a Nazi economy sworn to destroy Jewry, subjugate Europe, and dominate all enterprises within its midst? For one, IBM’s economic entanglements with Nazi Germany remained beneath public perception. Few understood the far-reaching ramifications of punch card lechnology and even fewer had a foreground understanding that the company Dehomag was in fact essentially a wholly-owned subsidiary of International Business Machines.

Boycott and protest movements were ardently trying to crush Hitlerism by stopping Germany’s exports. Although a network of Jewish and non-sectarian anti-Nazi leagues and bodies struggled to organize comprehensive lists of companies doing business with Germany, from importers of German toys and shoes to sellers of German porcelain and pharmaceuticals, yet IBM and Watson were not identified. Neither the company nor its president even appeared in any of thousands of hectic phone book entries or handwritten index card files of the leading national and regional boycott bodies. Anti-Nazi agitators just didn’t understand the dynamics of corporate multi-nationalism.

Moreover, IBM was not importing German merchandise, it was exporting machinery. In fact, even exports dwindled as soon as the new plant in Berlin was erected, leaving less of a paper trail. So a measure of invisibility was assured in 1933.

But to a certain extent all the worries about granting Hitler the technologic tools he needed were all subordinated to one irrepressible, ideological imperative. Hitler’s plans for a new Fascist order with a “Greater Germany” dominating all Europe were not unacceptable to Watson. In fact, Watson admired the whole concept of Fascism. He hoped he could participate as the American capitalistic counterpart of the great Fascist wave sweeping the Continent. Most of all, Fascism was good for business.

Thomas Watson and IBM had separately and jointly spent decades making money any way they could. Rules were broken. Conspiracies were hatched. Bloody wars became mere market opportunities. To a supranational, making money is equal parts commercial Darwinism, corporate ecclesiastics, dynastic chauvinism, and solipsistic greed.

Watson was no Fascist. He was a pure capitalist. But the horseshoe of political economics finds little distance between extremities. Accretion of wealth by and for the state under a strong autocratic leader fortified by jingoism and hero worship was appealing to Watson. After all, his followers wore uniforms, sang songs, and were expected to display unquestioned loyalty to the company he led.

Fascism, the dictatorial state-controlled political system, was invented by Italian Dictator Benito Mussolini. The term symbolically derived from the Roman fasces, that is, the bundle of rods surrounding a ceremonial axe used during Roman times. Indeed, Nazi symbols and ritual were in large part adopted from Mussolini, including the palm-lifting Roman salute. Ironically, Italian Fascism was non-racial and not anti-Semitic. National Socialism added those defining elements.

Mussolini fascinated Watson. Once, at a 1937 sales convention, Watson spoke out in Il Duce’s defense. “I want to pay tribute . . . [to the] great leader, Benito Mussolini,” declared Watson. “I have followed the details of his work very carefully since he assumed leadership [in 1922]. Evidence of his leadership can be seen on all sides. . . . Mussolini is a pioneer . . . Italy is going to benefit greatly.”

Watson explained his personal attraction to the dictator’s style and even observed similarities with his own corporate, capitalistic model. “One thing which has greatly impressed me in connection with his leadership,” conceded Watson, “is the loyalty displayed by the people. To have the loyalty and cooperation of everyone means progress – and ultimate success for a nation or an individual business . . . we should pay tribute to Mussolini for establishing this spirit of loyal support and cooperation.”

For years, an autographed picture of Mussolini graced the grand piano in Watson’s living room.

In defense of Fascism, Watson made clear, “Different countries require different forms of government and we should be careful not to let people in other countries feel that we are trying to standardize principles of government throughout the world.”

Years after der Fuhrer seized power, Watson drafted a private letter to Reich Economics Minister Hjalmar Schacht, in which he argued “the necessity of extending a sympathetic understanding to the German people and their aims under the leadership of Adolf Hitler.” Watson described Hitler’s threatening posture toward other nations as a “dynamic policy.” In referring to the “heroic sacrifices of the German people and the greatest achievements of their present leadership,” Watson declared, “It is the sincere and earnest desire entertained by me and countless other friends of Germany . . . that these sacrifices and achievements should be successful and that the New Germany should reap the fruits of its present great effort to the fullest extent.” Watson concluded the draft with “an expression of my highest esteem‘for himself [Hitler], his country and his people.”

Watson was equally appreciated and admired by Fascists, especially in Germany. In its struggle with the democratic governments and popular, movements that opposed Germany’s anti-Semitic drive, Nazis greatly valued their unexpected and influential ally. To them, it was a subtle green light of quiet approval because Watson seemed, in the Nazi mentality, to speak for more than one American firm – he seemed to represent President Franklin D. Roosevelt and indeed America itself.

The man who began his career as a turn-of-the-century horse-and-buggy peddler had graduated to become America’s number one private, international statesman. Watson used charitable donations to telescope his own importance. The roll call of honorary appointments of power and prestige was long and enviable. He was the chairman of the Carnegie Endowment for Peace, trustee of New York University, and chairman of the American section of the International Chamber of Commerce – and the lengthy gilded list proceeded from there. In fact, in the very days before the Reich awarded Dehomag the census contract, American newspapers prominently reported that Watson had been both nominated unopposed as a director of the Federal Reserve Bank and appointed trustee of Columbia University.

His access to Secretary of State Cordell Hull, and more importantly to President Franklin D. Roosevelt, was unparalleled. While the Hoover Justice Department was at the height of its anti-trust investigation of IBM in 1932, Watson donated large sums to the Roosevelt campaign. Roosevelt’s election over Hoover was a landslide. Watson now had entree to the White House itself.

Watson carefully curried favor with Roosevelt by publicly supporting some of his more controversial policies. Soon, Watson was sending policy suggestions to the President. The two men began to correspond regularly. Watson was so proud of the letters, some of them mere presidential tokens, he would carry them around in a pocket, showing them off when the moment would permit.

Soon, Roosevelt came to rely on Watson for advice. White House staffers would occasionally ask for Watson’s schedule in case the President needed to contact him quickly. Watson visited Hyde Park for tea several times and even stayed overnight at the White House. Eventually, Roosevelt offered to appoint Watson Secretary of Commerce or Ambassador to England. But Watson declined to leave IBM.

Instead, Watson’s son remembers, “he served unofficially as Roosevelt’s representative in New York.” If a foreign dignitary arrived, the White House might ask Watson to stage an honorary luncheon. “All Father had to do was press a button,” his son remembers. “He had a whole department that did nothing but set up company dinners and other functions . . . all at IBM ex- pense.” Indeed, Roosevelt once remarked, “I handle ‘em in Washington and Tom handles ’em in New York.”

Watson leveraged his position with the Administration to develop extensive contacts with Secretary of State Cordell Hull, numerous ambassadors and consuls, and the State Department in general. Cloaked in official- dom, Watson never failed to undertake the often months—long process of formally soliciting official greetings to private functions from Roosevelt, Hull, or other Administration luminaries. These letters, often gratuitous, broadcast arcs of power to those observing overseas, especially in a Reich that believed in bigger—than-life personages.

No wonder Nazi Germany considered Watson a very powerful friend. Indeed, when in October 1933 Dehomag encountered unexpectedly high customs duties on IBM machinery it hoped to import as part of its new expanded portfolio, Heidinger wrote a thinly veiled threat to Reich Customs bureaucrats. “The president of our American co-associate, the International Business Machines . . . Mr. Watson, is one of the most prominent American personalities,” asserted Heidinger. “Among other things, he is one of the well-known 25 intimate counselors of President Roosevelt, president of the New York Chamber of Commerce . . . he also holds many, many other positions of honor in the United States. In keeping with his friendliness for Germany, proven at all times, he has up to now done everything possible which appeared to be to the interest of Germany. I am quite sure that Mr. Watson would never understand . . . a country to raise supplementary customs . . . on his machines.” Heidinger added, “I do not know what the attitude of the above-named would be if the customs increase were permitted. I am recommending,” Heidinger concluded, “that the above facts be placed to the knowledge of the two gentlemen [customs officers] examining the situation?”

Watson did everything he could to reinforce in Germany his image of special American potency and friendship. The German consul in New York was a houseguest at Watson’s home, and Watson insisted on arranging for him complimentary country club privileges at the IBM Country Club. His socializing with the German Ambassador was equally robust, making certain that special invitations for luncheons and dinners were regularly circulated to German diplomats, and punctual acceptance or gracious regrets were sent in response to theirs.

So a happy medium was found between Watson’s desire to maintain deniability in IBM’s lucrative relations with Germany and his personal desire to hobnob with Third Reich VIPs. But, the demands of the growing business in Germany would not be free of Watson’s famous micro-management. Too much was at stake.

Watson would travel to Germany regularly during the thirties for first-hand information about the situation in the Nazi Reich. These visits would be augmented by his personal New York representatives who would monitor Dehomag on-site for months at a time. Verbatim translations of Dehomag’s voluminous memos, correspondence, even routine bureaucratic forms and applications, were continuously transmitted to IBM in New York for review and comment.

Watson had created the IBM Europe oflice, headquartering it in Paris and then Geneva, to function as the eyes and ears of the New York office in Europe. When Watson’s personal representatives were not in Germany, continuous supervision of Dehomag was effected by executives in the Swiss branch of IBM, and often the Paris office. More than just routine oversight of the German operation, the Swiss office of IBM would become the all-important nexus for instructions, profit funneling, and continent-wide coordination in support of Dehomag’s technologic activities throughout Europe. The combination of Watson’s micro-management from afar and persistent Swiss examination gave IBM an ever-present hour-to-hour grasp of the smallest operational details at Dehomag, from miniscule bank discrepancies amounting to just a few dollars to the most vital issues facing the subsidiary’s relations with the Nazi regime.

From the very first moments and continuing throughout the twelve- year existence of the Third Reich, IBM placed its technology at the disposal of Hitler’s program of Jewish destruction and territorial domination. IBM did not invent Germany’s anti—Semitism, but when it volunteered solutions, the company virtually braided with Nazism. Like any technologic evolution, each new solution powered a new level of sinister expectation and cruel capability.

When Germany wanted to identify the Jews by name, IBM showed them how. When Germany wanted to use that information to launch programs of social expulsion and expropriation, IBM provided the technologic wherewithal. When the trains needed to run on time, from city to city or between concentration camps, IBM offered that solution as well. Ultimately, there was no solution IBM would not devise for a Reich willing to pay for services rendered. One solution led to another. No solution was out of the question.

As the clock ticked, as the punch cards clicked, as Jews in Germany saw their existence vaporizing, others saw their corporate fortunes rise. Even as German Jewry hid in their homes and wept in despair, even as the world quietly trembled in fear, there was singing. Exhilarated, mesmerized, the faithful would sing, and sing loudly to their Leaders – on both sides of the Atlantic.

Some uniforms were brown. Some were blue.