IBM and the Holocaust: the strategic alliance between Nazi Germany and America's most powerful corporation

tags: IBM Nazism

Notes

A Dehomag (IBM's German subsidiary) poster, circa 1934. Approximate English translation is, "See everything with Hollerith punchcards."

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ACKNOWLEDGMENTS

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INTRODUCTION

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In the upside-down world of the Holocaust, dignified professionals were Hitler's advance troops.

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Solipsistic and dazzled by its own swirling universe of technical possi- bilities, IBM was self-gripped by a special amoral corporate mantra: if it can be done, it should be done.

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To search generations of communal, church, and governmental records all across Germany—and later throughout Europe—was a cross-indexing task so monumental, it called for a computer.

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in 1933, no computer existed. However, another invention did exist: the IBM punch card and card sorting system—a precursor to the computer.

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Dehomag's top manage- ment was comprised of openly rabid Nazis who were arrested after the war for their Party affiliation.

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The company leveraged its Nazi Party connections to continu- ously enhance its business relationship with Hitler's Reich,

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But how did the Nazis get the lists? For decades, no one has known. Few have asked. The answer: IBM Germany's census operations

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When U.S. law made such direct contact illegal, IBM's Swiss office became the nexus, providing the New York office continuous information and credible deniability.

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My parents are Holocaust survivors, uprooted from their homes in Poland.

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many of the IBM papers and notes were un- signed or undated carbons, employing deliberate vagueness, code words, catchphrases, or transient corporate shorthand.

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the only refusal came from IBM itself, which rebuffed my requests for access to documents and interviews. I was not alone. Since WWII, the company has steadfastly refused to cooperate with outside authors.

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I quote the New York Times not because it was the newspaper of record in America, but because IBM execu- tives, including Thomas Watson, were headquartered in New York.

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I approached this project as a typical if not grandiose investiga- tion of corporate conduct

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the Age of Realization, as we look back and examine technology's wake.

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Only through exposing and examining what really occurred can the world of technology finally adopt the well-worn motto: Never Again.

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PART ONE

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1 NUMBERED PEOPLE

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Cheim was happy for an office assignment working with the Hollerith punch cards and their coded numbers. But as he did, he silently observed through the corner of his eye the SS men admi ni st er i ng the card sorting procedure. For five weeks he look mental notes.

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Gen. Oswald Pohl. Pohl, creator of the "Extermination by Labor" program, ar- dently argued that expeditiously gassing Jews deprived the Reich of an im- portant resource. His idea, "Extermination by Labor," quite simply meant working Jews to death.

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Office D II embraced SS Chief Heinrich Himmler's declaration: "If 10,000 Russian females collapse from exhaustion while digging a tank ditch, it interests me only so far as the tank ditch is completed for Germany."

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They resented reporting the prisoner departures in column 34 of the punch card forms as code 7—escaped.

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His German sub- sidiary, Dehomag, was out of control. More lawyers would be called, more telegrams would be sent, more clever maneuvering with the State Depart- ment would be undertaken—not to stop Dehomag from its genocidal part- nership with the Third Reich, but to ensure that all the proceeds and profits remained with IBM NY. No matter who won, IBM would prosper.

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2 THE IBM-HITLER INTERSECTION

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There were no secrets in Hitler's vision. He broadcast them loudly to the world.

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Hitler's fas- cism resonated with certain men of great vision, such as Henry Ford. Another who found Hitlerism compelling was Thomas J. Watson,

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These men and their philosophies could not have been more dissimilar. Yet as history proved, they could have hardly been more compatible.

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America's rapid industrial growth spurred inventions to automate virtually every manual task.

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In those days, the decennial census was little more than a basic head-count, devoid of information about an individual's occupation, education, or other traits because the computational challenge of counting millions of Americans was simply too prodigious. As it was, the manual counting and cross-tabula- tion process required several years before final results could be tallied.

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experts predicted spending more than a decade to count the 1890 census; in other words, the next census in 1900 would be underway before the previous one was complete.

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Every punch card would become an informational storehouse limited only by the number of holes. It was nothing less than a nineteenth-century bar code for human beings.

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It was a steel, spindle, and rubber-wheeled key to the Pandora's Box of unlimited information.

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His systems saved the Census Bureau some $5 million, or about a third of its budget.

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This important decision to lease machines, not sell them, would dominate all major IBM business transactions for the next century.

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Washington paid Hollerith about $750,000 to rent his machines for the project. Now the inventor's challenge was to find customers for the machines in between the decennial federal censuses.

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He and he alone would control the technology because the punchers, sorters, and tabulators were all designed to be compatible with each other—and with no other machine that might ever be produced.

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the handlebar mustachioed and often surly Hollerith was not well suited for the task. Hollerith could dress in top hat and elegant walking cane when the occasion required. But he lacked patience and finesse, abhorred the commer- cialization such a company required, and continually suspected his customers of planning to steal his designs.

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Hollerith was said to cherish three things: his German heritage, his privacy, and his cat Bismarck.

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his cat Bismarck!

When a neighbor cat would appear threatening Bismarck's privacy, Hollerith would depress a switch, sending an electrical jolt into the animal.

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Hollerith's first major overseas census was organized for the brutal regime of Czar Nicholas II

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SHORTLY AFTER the 1900 census, it became apparent to the federal govern- ment that it had helped Hollerith's Tabulating Machine Company achieve a global monopoly, one based on an invention the Census Bureau had—in a way—"commissioned" from an employee on the Bureau's own payroll,

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Hollerith was gouging the federal gov- ernment.

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American taxpayers, it seemed, were subsidizing the newly ascended Hollerith empire.

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William Merriam, had negotiated lucrative and sometimes inexplicable contracts with Hollerith's firm. Then, little more than a year after Merriam left the Census Bureau, Hollerith hired him as president of Tabulating Machine Company.

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Realizing that Hollerith's patents would expire in 1906, and determined to break the inventor's chokehold on the Census Bureau, North experimented with another machine, and, finally, in July 1905, he booted the Holleriths out of the Census Bureau altogether.

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in 1910, in an unbelievably arrogant maneuver, Hollerith actually tried to stop the United States from exercising its constitutionally mandated duty to conduct the census. Claim- ing the Census Bureau was about to deploy new machinery that in some way infringed his patents,

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Deutsche Hollerith Maschinen Gesellschaft—the German Hollerith Machine Corporation, or Dehomag for short.

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Flint's war profiteering knew no limits.

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Had anyone called him a merchant of death, Flint would have wondered what the fellow had in mind.

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Newspapers of the day dubbed Flint, the "father of trusts." The title made him at once a glamorous legend and a villain in his era.

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Hollerith was willing to make millions, but only on his terms. Flint wanted millions—on any terms.

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Flint wanted CTR's helm to be captained by a businessman, not a technocrat. For that, he chose one of America's up and coming business scoundrels, Thomas J. Watson.

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"making the sale," that calculating one-on-one wizardry that ends as an exhilarating confirmation of one's mind over another's motivation, this was the finesse—the power—that came naturally to Watson.

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Patterson had created a sales manual designed to rigidly standardize all pitches and practices, and even mold the thought processes of selling.

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Watson would report the prospective clients so "intimidation squads" could pounce. The squads would threaten the prospect with tall tales of patent infringement suits

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Watson's fake company never needed to make a profit—only spend money to decimate unsuspecting dealers of used registers.

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Patterson's school for scoundrels was unparalleled in American busi- ness history.

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One day during a pep rally to the troops, Watson scrawled the word THINK on a piece of paper. Patterson saw the note and ordered THINK signs distributed throughout the company.

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On February 22, 1912, Patterson, Watson, and several dozen other Cash executives were indicted for criminal conspiracy to restrain trade and construct a monopoly.

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Most of the men, including Watson, received a one-year jail sentence. Many of the convicted wept and asked for leniency. But not Watson. He declared that he was proud of what he had accomplished.

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NCR organized an immense emergency relief effort.

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the unpredictable and maniacal Patterson rewarded Watson's years as a loyal sales warrior by suddenly subjecting him to public humilia- tion

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Flint be- lieved that the accretion of money was its own nurturing reward,

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Watson understood much more about human motivation than Pat- terson had ever allowed to creep into NCR. Watson wanted to inspire men to greater results, not brutalize them toward mere quotas. His way would imbue a sense of belonging, not a climate of fear.

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Watson was elevating to a higher plane. Newspaper articles began to focus on him personally as much as the company. His pervasive presence and dazzling capitalistic imperatives became a virtual religion to CTR employees.

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"IBM is more than a business—it is a great worldwide institution that is going on forever."

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So penetrating was the Watson father image that employees routinely did ask his permission for ordinary personal decisions.

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"Mr. Watson," declared Phillips, "I have enough money to buy a car, but I would like your permission to do it."

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All of it swirled around the irresistible magnetism, t h e i nt oxi cat i n g command, the charismatic cultic control of one man, Thomas J. Watson, the Leader.

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This attitude has caused me to give public utterance to my impressions and convictions in favor of Germany at a time when public opinion in my country and elsewhere was predominantly unfavorable."

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the world must extend "a sympathetic understanding to the German people and their aims under the leadership of Adolf Hitler."

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Dehomag's debt was $104,000, or the astronomical sum of 450 bil- lion marks. There was no way Dehomag could pay it.

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Heidinger felt "cornered" with no choice: he ceded the German company to Watson, and Dehomag became a CTR subsidiary.

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Heidinger was allowed to retain approximately 10 percent of the stock. Dehomag could then still claim some token German ownership for appearance's sake.

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Heidinger's shares were a virtual ruse

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For all intents and purposes, IBM now controlled the German company.

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In many places, the business names Watson and IBM were synonymous and inseparable.

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the German subsidiary's revenues outshone them all.

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more than half of IBM's over- seas income came from Dehomag alone.

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WHEN HITLER came to power, in January 1933, he made an open promise to create a Master Race, dominate Europe, and decimate European Jewry.

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Hitler's paper pogrom was the dull edge of the knife. The sharp edge was violence.

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On March 20, 1933, a concentration camp for political enemies was established at the pastoral town of Dachau,

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boycotters and protesters noisily made sure that no one was unaware of the atrocities in Germany.

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Commercial interests and labor unions everywhere saw the anti-Nazi movement as one they could eagerly join for both moral and business reasons.

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the risk that highly visible trading might provoke economic retaliation seemed low, especially since Dehomag did not even possess a name suggestive of IBM or Watson.

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Watson had learned early on that a government in reorganization, and indeed a government tighdy monitoring its society, was good news for IBM.

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"businesses all of a sudden had to supply the federal government with infor- mation in huge and unprecedented amounts," recalled an IBM official. Extra forms, export reports, more registrations, more statistics—IBM thrived on red tape.

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The fact that Hitler planned to extend his Reich to other nations only magnified the prospective profits.

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As for the moral dilemma, it simply did not exist for IBM. Supplying the Nazis with the technology they needed was not even debated.

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At the vanguard of Hitler's intellectual shock troops were the statisti- cians.

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Each Hollerith system had to be custom-designed by Dehomag engineers.

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Dehomag needed to understand the most intimate details of the intended use, design the cards, and then create the codes.

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Because of the almost limitless need for tabulators in Hitler's race and geopolitical wars, IBM NY reacted enthusiastically to the prospects of Nazism.

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Just weeks after Hitler came to power, IBM NY invested more than 7 million Reichsmarks—in excess of a million dollars— to dramatically expand the German subsidiary's ability to manufacture machines.

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Most of Heidinger's speech, along with a list of the invited Nazi Party officials, was rushed to Manhattan and immediately translated for Watson. The IBM Leader cabled Heidinger a prompt note of congratulations for a job well done and sentiments well expressed.

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The fifth and uppermost step was chiseled with the heralded theme of the company. It said THINK.

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reminds, ironically, of Banality of Evil, Arendt on the failure to think

3 IDENTIFYING THE JEWS

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the Reich believed otherwise. The Jewish nemesis was not one of religious practice, but of bloodline. Nazis were determined to somehow identify those of Jewish descent, and destroy them.

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Nazi planners wanted all 41 million Prussians processed and prelimi- nary results produced within a record four months. The Prussian government itself was completely incapable of launching such a massive undertaking.9 But IBM's Dehomag was.

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If the government would gather the information, Dehomag would handle every- thing else.

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Dehomag turned to its special consultant for governmental contracts, attorney Karl Koch.

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Moreover, by cross-sorting the Jews revealed in Column 22 row 3 with Polish speakers identified in Columns 26 and 27 row 10, the Reich was able to identify who among the Jews would be its first targets for confiscation, arrest, imprisonment, and ulti- mately expulsion. The so-called Ostjuden, or Eastern Jews, primarily from Poland,

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Through a cun- ning twirl of losses and profits among the four German companies, and then manipulating balances owed by those subsidiaries to IBM NY for so-called "loans," Reich profit taxes would be avoided, despite record earnings in Ger- many. IBM NY would simply apply the incomes to the contrived loans it had extended to its own subsidiaries.

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Despite a highly publi- cized boycott against German ocean liners, he ignored picket lines and sailed on the German ship Bremen.

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The extraordinary arrangement virtually reinvented Dehomag as a de facto "IBM Europe." Subject to IBM NY oversight, the German subsidiary was granted free rein to cultivate its special brand of statistical services to other nearby countries, especially Austria, Czechoslovakia, Poland, Belgium, France, and Holland.

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before the Third Reich advanced across any border, its scientific soldiers would already have a vital outpost.

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Watson committed nothing to paper about his secret territorial agreement with Heidinger. Deniability seemed to be the order of the day.

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Connally sheepishly scribbled under the last sentence, "I think now I shouldn't have said this."

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From the windows of IBM at 270 Broadway, the massive demonstration was an unmistakable message: Don't do business with Hitler. Moreover, boycott leaders promised vigilant retaliation for any American firm that did.

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IBM's economic entanglements with Nazi Germany remained beneath public perception.

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Watson admired the whole concept of Fascism. He hoped he could participate as the American capitalistic counterpart of the great Fascist wave sweeping the Con- tinent. Most of all, Fascism was good for business.

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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.

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

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Roosevelt came to rely on Watson for advice.

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Roosevelt offered to appoint Watson Secretary of Commerce or Ambassador to England. But Watson declined to leave IBM.

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Watson's son remembers, "he served unofficially as Roosevelt's representative in New York."

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Roosevelt once remarked, "I handle 'em in Washington and Tom handles 'em in New York."

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Watson did everything he could to reinforce in Germany his image of special American potency and friendship.

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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.

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Watson would travel to Germany regularly during the thirties for first- hand information about the situation in the Nazi Reich.

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there was no solution IBM would not devise for a Reich willing to pay for services rendered.

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4 THE IBM-NAZI ALLIANCE

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WILLY HEIDINGER HATED THOMAS WATSON. BITTER AND defiant, Heidinger saw Watson as the incarnation of the financial calamity that had befallen Germany after the Great War.

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Watson seized upon Germany's inflation crisis to take possession of Dehomag.

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who would prosper? Would it be the German people? the Aryan race? Heidinger person- ally? No. It would be Watson and IBM. Heidinger roiled at the prospect.

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In truth, the two men desperately needed each other. Watson needed Heidinger's connections to the NSDAP to turn Nazi plans into IBM profits. And he needed Heidinger's cooperation if those profits were to discreetly detour around the Reich payment moratorium.

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To achieve his goals, each man had to cooperate in an international campaign of corporate schizophrenia designed to achieve maximum deniability for both Dehomag and IBM.

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the Reich could not achieve its goals without Hollerith tabula- tors.

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New York executives were advised of a Dehomag request: "in the future, on all machines shipped to them [Dehomag], the following designations are to be omitted: 1) Interna- tional Business Machines, 2) International." A 1934 memo from IBM's Paris managers didn't even want IBM billed for small German registration fees, explaining, "we all should be very careful in exploiting or advertising the name of IBM Corp. in Germany."

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Dehomag by-laws would allow New York to supercede the German board of directors at any time.

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Clearly, the power at Dehomag was wielded by the shareholders. Wat- son and IBM NY owned 90 percent of the stock.

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He hinted that the Nazi Party might feel the need to install two of its own kommissars on the board.

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"Suggest" was never in the document. It was always "request."

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Representing Watson at the event was his personal representative, Walter Jones. Jones was the Paris-based manager of all European operations and a man who would one day become chairman of IBM Canada.

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For IBM and Dehomag both, it was an extraordinary day of Nazi com- munion. Two days later, Jones sent off verbatim translations of the speeches to Watson

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while noisy, outrageous acts of persecution were appalling the world, a qui- eter process was also underway. Germany was automating.

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Hitler's Reich discovered that in its quest for supremacy, it could mechanize, organize, and control virtually all aspects of private and commercial life,

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Work and bread was the theme IBM and Dehomag used again and again to describe their venture—all in support of the National Socialist goal.

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Hollerith technology had become a German administrative way of life, Punch cards would enable the entire Reich to go on a war footing. For IBM, it was a bonanza. Dehomag's client list sparkled.

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There was virtually no business that could not benefit from punch card technology. Dehomag deftly controlled the data operations of the entire Reich.

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Hitler's Germany began achieving undreamed of efficiencies.

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Punch cards made the trains run on time and even evaluated engine efficiency when pulling certain types of freight. Records in some railway operations that previously required 300 people six months to organize could now be computed by a staff of fifteen working for just a week.

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Krupp, Siemens, and the Deutsche Bank were able to reduce their operating costs and clerical staffs by as much as half,

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RACE SCIENCE

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what Dehomag had exposed when it com- puled the 1933 census: not all the Jews could be identified by a mere census.

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Nazi ideology defined Jewishness not as a function of religious prac- tice, but bloodline.

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Nazi raceologists devised a bizarre pseudo-mathematical for- mula that grouped ancestral Jews into a series of grades,

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All of it defied logic

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No one shall ever know how many race track- ing agencies accessed which machines in which locations during those first chaotic years. But this much is known—the Third Reich possessed only one method of cross-tabulating personal information: Dehomag's Hollerith system.

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growing bureaucratic fascination with punch card records,

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"Even though the gathering of statistical material in industrial and commercial businesses has steadily grown in size . . . in administrative archives and because of censuses and other surveys, the interpretation has not kept pace. Due to the lack of manpower … one is limited . . . to sorting out past developments. … This is not always enough… The actual justification for the collection of data in great quantity is the ability to draw conclusions . . . and ensure a safe estimate of future and current occurrences."

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Predictive Analytics

Law for Simplification of the Health System, enacted in July 1934, requiring doctors and other clinicians to fill out detailed forms about the health condition of their patients.

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"The only value of man—and this is a direct object of statistics—is his economic value . . . his human labor productivity,"

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"human beings with a hereditary and irreversible mental attitude, who . . . have repeatedly come into conflict with government agencies and the courts, and thus appear … a threat to humanity."

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People seated in a doctor's office or a welfare line never comprehended the destiny of routine information about their personal traits and conditions.

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Central Health Passport Archive where the information could be retrieved when needed and exchanged with other reg- istries. Archive officials asked for reciprocal exchanges with "health and wel- fare institutions of all kinds, economic welfare, youth and education welfare, court decisions, special foster care, sterilizations . . . and all other sentences where personality evaluations are considered."

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WHEN HERMAN HOLLERITH designed his first punch card, he made it the size of a dollar bill.94 For IBM, information was money.

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punch cards were the precious currency of data processing. Depend- ing upon the market, IBM derived as much as a third of its profit from card sales.

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Punch card profits were enough to justify years of federal anti-trust litigation designed to break the company's virtual monopoly on their sale and manufacture.

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enduring commercial tactic of prolifer- ating a single universal system of hardware and ensuring that he alone pro- duced the sole compatible soft goods.

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Reich currency regula- tions sequestered profits into frozen bank accounts disbursable only within Germany. Heidinger could be paid, but not Watson.

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Heidinger fought back. He went direcdy to the Reich tax authorities, briefed them on IBM's entire complex merger plans, and asked for a formal ruling on the company's tax avoidance strategy.

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Heidinger had positioned himself to "save the day" by negotiating the taxes down to a quarter of their proposed assess- ment. New York began to comprehend the process.

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Minutes of the June 10 exchange were omitted from the meeting's written record.

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When Watson visited Berlin that June, the Reich's forced sterilization program was just ramping up. Everywhere, Jewish misery was evident.

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IBM's only possible rival was Powers. Dehomag didn't own the entire German market for punch cards—only 95 percent of it.

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Dehomag continued the IBM legacy of litigation by suing Powers in Germany. But this time, it was not for patent infringement. It was for not being sufficiendy Aryan.

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popular expectation that genealogical tracing technology would eventually discover all the Jews.

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5 A NAZI MEDAL FOR WATSON

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Hausfraus managing a tight budget commonly sneaked away to Jewish retailers seeking discounts after their dogmatic husbands went off to work.

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too many Germans simply would not or could not comply with the complex confusing strictures to not buy from Jews. Most importantly, too many simply did not know where all the Jews were.

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the Nuremberg regulations would be completely dependent upon Hollerith technology

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Hitler had left behind the well-worn totals of 400,000 to 600,000 German Jews and now pronounced the updated Hollerith tabulated numbers.

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

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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,

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Watson would become a hero in Nazi Germany—both to the common man and to Adolf Hitler himself.

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

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Watson didn't need to read about Aryanization in newspapers. He discovered it personally.

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Nazi thugs ran wild in the streets of Berlin smashing the windows of fashionable Jewish stores. One of those department stores was owned by the Wertheims, family friends of the Watsons.

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None of Germany's statistical programs came easy. All of them required on-going technical innovation.

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never once was a word of restraint uttered by Watson about Dehomag's indispensable activities in support of Jewish persecution.

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Dr. Fels, a key Reich Statistical Office expert who had helped organize the 1933 census. Watson learned that despite Fels' expertise, he had been ousted from his position because he was Jewish. Dehomag delivered a note to Watson's hotel explaining that Fels was now living as an unemployed refugee with his family in New York, "in quite a bit of misery." The note added that IBM in America had declined to give him a job.

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In Germany, some of the devices, such as the IBM Fingerprint Selecting Sorter, were only usable by Nazi security forces.

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IBM WAS MAKING a fortune. Since the day Hitler came to power, the com- pany had been reaping millions from its German operation. How many mil- lions might never be known because the company buried its profits in bizarre inter-company transactions. But the outward manifestations of IBM's growth and prosperity and the "admitted profits" it reported were amazing to a nation struggling to recover from the Depression.

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Watson had become the highest paid executive in Amer- ica. They dubbed him the "thousand dollar per day man." Watson received a bonus of 5 percent of all IBM profits worldwide. So his total salary amounted to $364,432 per year, or nearly as much as the combined salaries of the chairmen of Chrysler and General Motors.

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bureaucrats were convinced that "the machinery … to do the job . . . did not exist."

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Washington awarded I B M an on-going contract so substantial it per- manently boosted IBM into a corporate class of its own.

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The company became quasi-governmental.

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As a result of massive American taxpayer-funded research, more people-managing punch card capabilities than ever before would be available to the Hitler regime.

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IBM agreed to give Heidinger a bonus on losses, but struggled to phrase the arrangement since German taxing authorities would never believe genuine losses could create a bonus.

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Watson needed to invest in German assets that would retain their value. They could be sold later.

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IBM began buying apartment buildings.

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IBM was operating companies that arguably did not quite legally exist for lack of the proper paperwork.

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somehow the Reich always knew the names even if no one quite understood how it knew the names.

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instructed public pros- ecutors to demand more severe punishment for Jewish race defilers—Jews convicted of having had relations with German women.

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But all of the several dozen helping drew upon money and resources that fundamentally did not exist at a time when all nations were suffering from the weight of their own domestic depression. The world's brittle ability to as- sist was cracking.

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Watson never spoke a word of criticism against his customer Nazi Germany. But more than that, he worked to breach the gorge of isolation surrounding the Reich. One of his main venues was the International Chamber of Commerce and its U.S. affiliate, the United States Chamber of Commerce.

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the whole issue of the Hitler menace was sidestepped as Wat- son encouraged all to assume a "business as usual" posture with Germany.

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Watson staunchly urged all to join him in what he promised would be the biggest and most grandiose Congress yet. "We are going … to Berlin,"

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"We believe that as soon as we can have the proper flow of trade both ways across the border, there will not be any need for sol- diers crossing those boundaries."

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It may be possible to prove all that as a matter of logic. But logic has never cured a mental disease.

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When challenged, Watson would insist, "I'm an optimist." Those among friends and family who knew him best later tried to excuse his behavior as "naive."97 But there was none shrewder than Watson. He calculated his words like a carpenter: measure twice, cut once.

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Watson knew war was imminent. So did Heidinger.

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Heidinger sent a memo to IBM NY detailing plans to build bomb shelters for Dehomag

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The bomb shelters were later approved by Watson.100 Thus IBM assured that Hitler's punch card capability would be protected from Allied strikes, even if those included American bombers.

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Hitler would bestow upon Thomas Watson a medal— the highest it could confer on any non-German. The Merit Cross of the German Eagle with Star was created for Thomas Watson to "honor foreign nationals who made themselves deserving of the German Reich." It ranked second in prestige only to Hitler's German Grand

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IBM bad been cultivating a t hr i vi n g business in Japan, helping that nation develop its air force and aircraft carriers.

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no one really ever knew the exact exchange between the men. Whatever Hitler did say, Watson was encouraged and entranced.

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The assemblage of distinctive businessmen, including dozens from the United States of America, in the year 1937, gripped by the moment, awed by the occasion, imbued with the spirit, under the leadership of Thomas J. Watson, jumped to their feet amid roars, cheers, and wild applause, reached for the sky in a loyal salute and chanted back "Heil!"108 Watson lifted his right arm halfway up before he caught himself.

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The eight- pointed gold-framed cross of white enamel embedded with German eagles and Nazi emblems dangled about the neck from a broad red, black, and white ribbon in tandem with a second six-pointed star worn over the left breast. To Watson, it was magnificent. When wearing it, he was draped by two swastikas, one to the right and one to the left.

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PART TWO

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6 WAR CARDS

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No doubt you know the condition of living here and it would be use- less to give any further reasons for my immigration.

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In 1937, the Reich ordered another nationwide census that would prepare the country for military mobilization, and for the Jews would be the final and decisive identification step. Dehomag eagerly agreed to organize the project.

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With stunning precision, the Nazis knew exacdy who in Austria was Jewish.

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In early 1938, in the weeks leading up to the March Anschluss, Adolf Eichmann was dispatched to Vienna as a specialist on Jewish affairs to organ- ize forced Jewish emigration. Once in Vienna, he found an enormous punch card operation working around the clock. The Hollerith program superseded every other aspect of German preparations.

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the turning point for Americans and indeed the world: Kristallnacht—The Night of the Broken Glass. November 10, 1938, on the twentieth anniversary of Germany's sur- render in the Great War, all Germany exploded into a national pogrom of depravity and violence against Jews heretofore not seen. The Reich's pretext was the assassination of a German consular official in Paris by a despondent Jewish refugee.

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Nearly everything Jewish was set aflame. Not just in Berlin. Not just in Vienna. In every town and city of the Third Reich.

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only Vienna synagogue not torched was one "that the authorities have pro tected . . . because it contains records of the Jewish community of Vienna that could not be replaced."

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Jews were collectively fined 1 billion marks for inciting the Kristallnacht riots.

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Watson had visited Germany twice in 1938, once in late May, just after the Anschluss of Austria, and once in early October, during the tense build-up to Kristallnacht.

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Yet, throughout the year, Watson argued passionately for Germany's demands. He barely made an appearance at an international commercial meeting, university commencement ceremony, ribbon-cutting, or press con- ference without reiterating his well-worn Hitleresque appeal that the world "redistribute its raw materials" and lower so-called "trade barriers" as "the path to peace."

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One foreign correspondent in the New York Times reflected the common view when he wrote, "It must be remembered . . . the series of boy- cotts due to worldwide resentment against German domestic policies … play almost as large a part as do the trade barriers." In May 1938, just after the Anschluss and just before sailing to Germany, Watson answered such senti- ments. "Unjust criticism of business is a trade barrier," he lectured his fellow industrialists at an ICC gathering, adding, "Unjust criticism of government is another trade barrier."

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"You know, you can cooperate with a man without believing in everything he says and does," Watson sermonized

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Watson illuminated his steeled indifference this way: "I am an American citizen. But in the IBM I am a world citizen, because we do business in 78 countries and they all look alike to me—every one of them."

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The letter would not be sent.

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upon my recent return to my country after an absence of several months I find a change in public sentiment and a loss of good will to your country,

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Watson's explicit letter to Hitler was . . . misaddressed. Watson could always say it had been mailed. But in truth the Post Office returned it—unopened.

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Deftly, he would mix his mes- sages of subtle advocacy for Reich territorial and economic hegemony with patriotic assertions supporting American defense measures, and almost polly- annaish aphorisms offered to Germany about its brutal anti-Semitism. Wat- son would always be able to point to out-of-context portions of his remarks to satisfy any audience—be it those listening in the Nazi Reich or the United States.

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"World Peace through World Trade" became Watson's official jingo to explain away IBM trading with Nazi Germany.

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Gubelman agreed that the direc- tors' loan provisions and stock options could be incorporated into a formal supplemental employment contract, but the Austrian expansion itself was to be kept as an oral arrangement recorded only by memo.

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in fall 1938 was yet another Reich monetary decree. Germany was nearing bankruptcy. The anti-Nazi boycott had virtually crippled a once-thriving export-dependent Reich economy.

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Without foreign exchange, Hitler could not rearm.

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profits would not only be trapped in German blocked mark ac- counts, other IBM subsidiaries in Europe acting as intermediaries for Deho- mag would have to transfer foreign currency to Berlin

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Local prosecutors could order compul- sory divorces of Jews and Aryans. At the same time, hundreds of thousands of marriages of urban Aryan women to what the Germans termed "virile, hereditary" farmers were required by Nazi demographers to achieve popula- tion health; the authorities began combing factories and offices for state- mandated brides.

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The exponential growth of demand for Dehomag services spurred Wat- son to push his entire organization to manufacture more German machines faster.

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Europe was hurtling toward all-out war. Dehomag would be ready.

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the last-minute Munich Pact of Septem- ber 30, 1938, ceded the Sudetenland to Germany as of the next day. The deal was called appeasement and was foisted upon Czechoslovakia by the European powers without regard for the Czech nation.

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Soon, their overwhelm- ing numbers—as many as 40,000 had either fled or been expelled—were too much for the Czechs. Nor were the Czechs willing to provoke the Ger- mans by seeming to create a refuge for deported Jews. The Czechs refused them entry.

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thousands of expelled Jews were now stranded in slender tracts of no- man's land between border crossings.

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Food ship- ments sent by relief committees were blocked by Czech guards, German sol- diers, or Party stalwarts.

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They survived from moment to moment only on the morsels of food thrown in pity by passersby

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The suicides began. Thirty per day in Prague.

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In an effort to create deniability about the decision, Chauncey added, "under present circumstances it might be unwise for the IBM to make the determination." Written by hand, the sentence appended, "but Dehomag should when time is proper." Thus, IBM NY could claim that Czech activity was undertaken at Dehomag's sole decision—even though no such activity could take place without Watson's permission.

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GERMANY WAS facing economic collapse and began clamping down on tax- payers and profiteers. Watson had refused to declare a profit since 1934, despite record multi-million mark earnings.

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Heidinger offered IBM an ultimatum: either declare a bona fide profit and pay a di vi dend for prior years that would net him RM 250,000—or he would exercise an opt i o n requiring IBM to buy back his shares in the com- pany.

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if Heidinger reduced his holdings below 10 percent that might cause Nazi authorities to re-examine the Aryan nature of Dehomag.

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something will have to be done, because Heidinger needs money and can or will obtain it by other means;

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Heidinger openly conceded his stock was a sham.

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For Watson, this meant that his shares were now actually less valuable than Heidinger's.

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Dehomag was supplying machinery and spare parts to IBM for resale throughout Europe. IBM in turn merely credited Dehomag's loan balance account. Frustrated and defiant, Dehomag managers in mid-December 1938 unilaterally began terming those shipments "exports." This triggered the Reich's rule requiring actual foreign currency payment, which Dehomag obtained by debiting IBM's precious few dollar accounts in Germany.

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He could never afford that without help from the company. Watson understood that, and cut off Heidinger's RM 7,000 monthly advance.

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in fact, insisted Milner, it was Hei- dinger who had insisted that dividends be paid. If now the taxing authority had imposed mandatory loans, that was Heidinger's problem.

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"Considering present changes in the map of Europe don't you consider it best to wait?"122 It was no longer just Austria and Czechoslovakia. Clearly, other nations would soon come under Dehomag's sphere of influence. IBM was trying to plan ahead.

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To IBM's doctrinaire German managers, including Heidinger, Dehomag repre- sented far more than just a profit-making enterprise.

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From Watson's point of view, Germany was on the brink of unleash- ing its total conquest of Europe. IBM subsidiaries could be coordinated by Dehomag into one efficient continental enterprise, moving parts, cards, and machines as the Reich needed them. The new order that Hitler promised was made to order for IBM.

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"Watson now controlled something the Third Reich needed to launch the next decisive step in the solution of the Jewish question, not just in Germany—but all of Europe.

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7 DEADLY COUNT

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ON MAY 17, 1939, GERMANY WAS SWEPT BY 750,000 CENSUS takers, mainly volunteers.

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the same German refugees would be encountered again and again as they fled from nation to nation.

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the more the Reich achieved its territorial goals, the more Jews it encountered. A better solution would be needed.

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Watson's pro-Axis proposal exceeded anything the State Department could have expected. He champi- oned a resolution whereby private businessmen from the three Axis and three Allied nations would actually supercede their governments and negoti- ate a radical new international trade policy designed to satisfy Axis demands for raw materials coveted from other nations. The businessmen would then lobby their respective governments' official economic advisors to adopt their appeasement proposals for the sake of averting war. Ironically, the raw mate- rials were needed by Axis powers solely for the sake of waging war.

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Watson himself summed up the misery and devastation in the world as a mere "difference of opinion." His solution of businessmen conferring to divvy up other nations' resources to avoid further aggression was offered with these words: "We regret that there are unsatisfactory economic and political conditions in the world today, with a great difference of opinion existing among many countries. But differences of opinion, freely discussed and fairly disposed of, result in mutual benefit and increased happiness to all concerned."

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Naujocks' men donned Polish uniforms and staged a fake attack against a German radio station. Drugged concentration camp inmates were dragged into position and smeared with blood to become the "German casualties." This sham provided Hitler with the pretext to launch Operation Case White - the invasion of Poland.

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The 405 could calculate 1.2 million implicit multiplications in just 42 hours. By com- parison, the slightly older model 601 would need 800 hours for the same task —fundamentally an impossible assignment.

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Watson's letter, of course, expressed his incidental approval as a mere stockholder—not as the controlling force in the company—this to con- tinue the fiction that Dehomag was not foreign-controlled.

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Watson was careful. He did not date the letter to Rottke, or even send it directly to Germany. Instead, the correspondence was simply handed to his secretary. She then mailed the authorizing letter to an IBM auditor, J. C. Milner in Geneva, with a note advising, "I have been instructed by Mr. Watson to forward the enclosed letter for Mr. Hermann Rottke to your care. Would you kindly see that the letter reaches him." The undated copy filed in Watson's office, however, was date-stamped "September 13, 1939" for filing purposes.

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Watson had backed down again. Rottke was able to send a letter to Heidinger confirming that Dehomag is "keeping the machines I had asked for until further notice."

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It goes without saying that the tasks in this con- nection cannot be laid down in detail."

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Arlt ruled out permanent emigration, since this would only keep Jews in existence.

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one didn't need a punch card-driven census to identify most of Polish Jewry.

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The Bible itself taught that unless specifically ordered by God, the census is evil

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Now the Reich knew exactly how many Jews were under their jurisdic- tion, how much nutrition to allocate—as low as 184 calories per person per day.

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The Third Reich possessed only one method of tabulating censuses: Dehomag's Hollerith system.

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after adjusting for the effects of the invasion, the subsidiary thrived for years under the murderous Nazi regime. IBM's German or Polish subsidi- aries, separately or in tandem, serviced the occupying Nazi needs through the German military's constandy changing punch card agency,

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During the years of Nazi-overrun Poland, deniability continued to be a precious imperative. IBM NY continued to operate through its intermedi- aries, nominees, and Geneva managers. It would always be able to say it was unaware of Watson Buromaschinen's activities and the paperwork would be nearly impossible to trace.

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Block-Brun's sales on behalf of IBM were often wrongly listed as "consignments," which meant IBM would have owned the devices until sale, paid tax immediately, and assumed all risk for war damage. IBM refused to honor any appearance of consignment.

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8 WITH BLITZKRIEG EFFICIENCY

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By January 1940, nearly 42 million people had come under brutal German subjugation.

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Eastern European countries not yet conquered emulated the pattern as Ger- man sympathizers and surrogates in Romania, Hungary, and Italy undertook Berlin's bidding to destroy local Jewish populations.

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Watson continued to insert corporate distance between himself and all involvement in the affairs of his subsidiaries in Nazi Europe—even as he micro-managed their day-to-day operations.

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Even as Watson was preaching the imperatives of peace, IBM was ecsta- tic about its accomplishments revolutionizing warfare not only for the Third Reich, but also for its Axis allies

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In 1940, IBM NY knew the exact location of its machines in the Reich on an updated basis. Without that tracking, it could not audit IBM Europe's charges and depreciate its equipment.

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Sales to Germany's enemies never bothered IBM's hypersensitive Reich sponsors. Indeed, some in the Nazi hierarchy may have even viewed such sales as a vir- tual "pre-positioning" of equipment in neighboring nations, nations that many throughout Europe and America expected to be invaded imminently.

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IBM had almost single-handedly brought modern warfare into the information age.

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Although deniability was constructed with enough care to last for decades, the undeniable fact was that either IBM NY or its European headquarters in Geneva or its individual subsidiaries, depending upon the year and locale, maintained intimate knowledge of each and every application wielded by Nazis. This knowledge was inherendy revealed by an omnipresent paper trail: the cards themselves. IBM—and only IBM—printed all the cards. Billions of them.

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Hollerith cards could only be printed at IBM-owned and -operated printing facilities and nowhere else.

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It was never clear exacdy how much true profit IBM earned worldwide because of the stealthy way its many subsidiaries classified and reclassified revenues to avoid taxation. Not all that was profitable was declared a profit. However, in mid-1940, even after applying its best accountancy transmogrifi- cations, the New York office was compelled to announce yet another in a string of profit records,

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Indeed, in many ways the war seemed an ideal financial opportunity to Watson. Like many, he fully expected Germany to trample over all of Europe, creating a new economic order, one in which IBM would rule the data domain.

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Watson remained the proud holder of der Fuhrer's Merit Cross of the German Eagle with Star

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IBM itself was coming under scrutiny for its Nazi connections. The company had become a virtual way station for German nationals transit- ing in and out of New York

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A number of German nationals were actually stationed at IBM offices in the United States. Some of them were openly anti- Semitic and pro-Nazi.

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At the end of May 1940, FBI Director J. Edgar Hoover became inter- ested in IBM's Nazi connections.

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"Subject's work was so poor," an FBI report recorded, "that he would have never been allowed to finish the IBM School and go out into the Field as a salesman had it not been for his close relationship to Mr. Watson, President of IBM; that as a matter of fact, Subject had been a con- stant source of trouble to all men in administrative positions who came in contact with Subject. And that Subject was only kept as an employee for the length of time, in view of his relationship to the President of the Company." Farwell added that Ruthe had married Watson's niece.

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Watson returned the medal Hitler had personally granted—and he chose to return it publicly via the media.

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9 THE DEHOMAG REVOLT

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the danger that America may enter the war is somewhat closer. If this should happen we would have to examine the possibility of separating ourselves from [IBM] America

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Spurred by equal parts personal greed and Nazi fervor, Heidinger and Rottke began scheming to completely eliminate IBM NY's influence from Dehomag's realm.

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Heidinger, Rottke, and Hummel now saw Thomas J. Watson and IBM NY as little more than a foreign nemesis—a nemesis they were determined to cast off.

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Hei- dinger forced adoption of the true profits totals: nearly RM 2.4 million for 1938 and almost RM 4 million for 1939. Management bonuses of nearly RM 400,000 were approved for Rottke and Hummel. Heidinger reserved his own bonus for later.

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the strategic alliance with IBM was too entrenched to simply switch off. Since the birth of the Third Reich, Germany had automated virtually its entire economy, as well as most government operations and Nazi Party activities, using a single technology: Hollerith.

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Holleriths could not function without cards. Watson controlled the cards.

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Building new factories might take six months to a year just for the first machine tools to arrive from specialized machine tool works.

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Hollerith systems could not function without machines or spare parts. Watson controlled the machines and the spare parts.

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As it stood in summer 1941, the IBM enterprise in Nazi Germany was hardly a stand- alone operation; it depended upon the global financial, technical, and ma- terial support of IBM NY and i t s seventy worldwide subsidiaries. Watson controlled all of it.

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card indexing is indispensable."

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Reich plan- ners suddenly worried about their entire Hollerith infrastructure. Berlin launched the same struggle for autarky, that is, national self-sufficiency, already underway for armaments and raw materials, such as rubber.

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Nazi engineer and Dehomag-trained punch card specialists from Berlin quickly began pilfering the machines of IBM's French subsidiary,

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Bull, even though dwarfed by IBM, still had a number of machines in opera- tion. And its machinery was considered as good as any Hollerith.

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But Berlin really didn't know what to do.

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All the open undercurrents against Dehomag as an American business with German management were now con- firmed. IBM's subsidiary had been unmasked as a non-Aryan business— something many always knew but begrudgingly overlooked.

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"With or without the entry of the U.S.A. into the war," stressed Hei- dinger, "the danger of the total ruin of the Dehomag is immediately present.

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Whatever Watson did now to enrich its local managers or relinquish control, eventually IBM would be dethroned. At the same time, IBM people understood it was far easier to talk about replacing IBM than to actually do so.

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Since 1933, Watson had refused all opportunities to restrain or disasso- ciate from Dehomag, or even reduce IBM's breakneck expansion program for the Third Reich. Yet now, in August 1940, as never before, Watson was confronted with one genuine last chance—perhaps the most decisive chance—to walk away.

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If IBM did not have a technologic stranglehold over Germany, the Nazis would not be negotiating, they would simply seize what- ever they wanted. For Watson, it was a choice.

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Watson would not detach Dehomag from the global IBM empire. He would not allow Bull and Powers or any other competitor to intrude upon his domain. IBM would not back down from what it considered its rightful commercial place in Nazi Germany's New World Order.

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"What it practically amounts to is the question whether the IBM prefers to hold a secure and safe minority interest in a sound and safe company, [or] . . . the holding of a controlling, but endangered majority in an endangered company."

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the economy that would soon be imposed over an entire subjugated Continent would flow only to those companies Berlin favored. Owning even a minority of that new dominant Dehomag could be vasdy more valuable than the Dehomag IBM owned today.

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the notion of stockholder "control" was actually becoming a passe notion in Germany since the Reich now direcdy or indirectly controlled virtually all business.

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Unlike his managers, however, "Watson did not fear seizure by a German-appointed trustee. He actually preferred it.

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During any war, Germany expected its commercial enterprises in America to be safeguarded, managed properly by a trustee, and then returned intact when the conflict ended. In that same spirit, the Third Reich would in turn safeguard, manage diligently, and return American en- terprises.

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For IBM, war would ironically be more advantageous than existing peace.

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Plausible deniability would be real. Questions—would not be asked by IBM NY. Answers- would not be given by IBMers in Europe or Reich officials.

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Corpo- rate security for these men would be seemingly endless. Even their children would find lucrative association with International Business Machines. In the company's literature, they would be remembered as "heroes."

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from 1933 until the summer of 1940, Watson personally micro-managed virtually every Dehomag decision. From August 1940, IBM NY made sure it did not know most of the gruesome details of Hollerith use. It was better not to know.

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The protection and success of IBM was elevated to a defined "national interest." As such, IBM subsidiaries around the world learned to use American embassies and consulates as strategic partners in their routine business activities.

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Watson understood the deeper fiscal meaning of Heidinger's actions against the subsidiary. Days earlier, IBM had confronted Heidinger with a completely unexpected scenario. If Dehomag was actually endangered because of Heidinger's disloyal actions, then the division's future was in fact worth far less. As such, Heidinger's shares were dramatically reduced in value as well.

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CHAUNCEY: Why was it presented as a gift of Mr. Watson and not of IBM [corporately]? HUMMEL: They identify Watson and IBM as one person,

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Chauncey continued pressing Hummel for payment details, country by country. Throughout, when referring to other subsidiaries in Nazi-dominated lands, he spoke as few words as possible—often speaking no more than the name of the invaded country. Not once in the long questioning of Hummel did Chauncey ever ask what the machines were being used for. Nor did Hummel offer any details. In dozens of pages of notes, reports, and messages sent from Chauncey to New York and back, the question never came up. No one wanted to discuss it.

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some, including Chauncey, began fearing for their safety.

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in spite of its autarkic impulses and collective rage against Watson, the cold fact remained: Nazi Germany needed punch cards. It needed them not next month or even next week. It needed them every hour of every day in every place. Only IBM could provide them.

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In the annals of wartime savagery against the Jews, there was no group as sadistic as the Croatian Ustashi.

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Pavelich himself was fond of offering wicker baskets of Jewish eyeballs as gifts to his diplomatic visitors.

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…

The planned punch card cartel would then be able to accomplish all the Reich's most important objectives without channeling requests through the IBM corporate bureaucracy or submitting to Watson micro-management.

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Eventually, by mid-1941, the Nazis concluded that connecting Holleriths to other systems was mechanically impossible, and operationally naive. Unlikable as it was, Germany needed an agreement with Watson

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The free flow of informa- tion, instructions, requests, and approvals by Watson remained detailed and continuous for years to come—until well into 1944.

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Periodically, when Chauncey inadvertently raised an issue that came close to the cartel question, the managers at Dehomag would mysteriously comment, "there were concentration camps," and then become completely silent.

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Chauncey wrote to Watson without elaborating, "it is Mr. Kiep's opinion that no shares should be issued to the directors, because of something he has learned." Like the other messages, Chauncey channeled the message through the Embassy.

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IBM wanted both—to remain a commercial part of the Nazi domination in Europe and keep all the profits.

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The Slovakians were reluctant because the war was not going well for Germany and Slovakian leaders could no longer plead ignorance of the genocide.

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Hungarian leaders, although rabidly anti-Semitic, were reluctant to con- tinue their on-again off-again persecution of the Jews. The Allies had already announced that there would be war crime tribunals

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Hollerith made the trains run on time in Nazi Europe.

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Hitler's representative on Dehomag's advisory committee was Dr. Ed- mund Veesenmayer.

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PART THREE

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10 THE STRUGGLE TO STAY IN THE AXIS

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DURING IBM'S day-to-day struggle to stay in the Axis during wartime, the firm relied on the cooperation of the State Department to act as postman. Every message relayed through an American Embassy or Legation was not just blindly passed on.

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That same September 6, Watson personally dispatched copies of Ross' termination and his retraction to a number of senior State Department officials,

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Watson had proved once again that when he wanted in control the people in his organization, he could be mercilessly blunt and ruthless.

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Opinions flagged from day to day on whether the Reich could proceed without IBM. Even with a crash program to build new machines, it would take months before the first machine would roll off assembly lines. Without a source for punch cards, it would be like producing guns without bullets.

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If IBM withdrew and suddenly stopped servicing the Reich, Nazi automation would soon rattle to a halt.

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It was easy to talk about starting a new cartel. The reality was unchanged: "The government at the present time needs our machines.

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in late May 1941, IBM realized that Dehomag was cutting prices to support the German war effort without IBM's permission.

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at a time when America was closer than ever to entering the war, Watson was profoundly uncertain how doubling the investment would be perceived. If it could appear that the investment was somehow compulsory, then IBM could simply explain it was required to comply with the law. Woods could not provide such a statement, since the law was clearly optional. But he was willing to read such a statement from Albert to IBM NY, allowing IBM to transcribe the conversation and in so doing create a record of what appeared to be government coercion.

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Roosevelt Administration had recendy espoused General Ruling 11, an emergency regulation forbidding any financial transactions with Nazi Ger- many without a special Treasury Department license

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Albert's well-structured explanation that what was really an optional profit-taking regulation "can practically be considered compulsory."

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Clearly agitated and pressured, Chauncey demanded the review officer issue the license to authorize the stock split.56 When? Right now. But Mr. Rueffer, the review officer at Treasury, was in no real hurry.

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The Treasury supervisor remained unconvinced. He noted, "His [Chauncey's] explanation of this was somewhat vague and had to do with present German laws about which he was very uncertain."

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No one at IBM NY would authorize it without a Trea- sury license. So Sam Woods authorized it.

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Now it appeared that General Ruling 11 had been violated. General Ruling 11 was essentially a precursor to Trading with the Enemy regulations. It was more than important. Moreover, Chauncey's name was on the proxy that effected the transaction. Everyone began explaining themselves in carefully worded memos and letters.

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"In view of world conditions we cannot participate in the affairs of our compa- nies in various countries as we did in normal times. Therefore you are advised that you will have to make your own decisions and not call on us for any advice or assistance until further notice."

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IBM's cable to all subsidiaries involved with Axis nations was approved. Watson's October 1941 instruction did not order his subsidiaries to stop pro- ducing punch cards for Nazi Germany. It did not order them to cease all operations. It did not set limits on which projects they could participate in. It did not require offices in neutral countries to stop supporting Hitler's pro- gram. It did not proscribe uses in census or registration operations. It did not even demand that spare parts no longer be sent to machines in concentration camps. All that business continued.

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"I had a feeling from Mr. Chauncey's general remarks that he is somewhat perturbed for fear that his company may some day be blamed for cooperating with the Germans."

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The U.S. finally joined the war against Germany. Dehomag and all Watson subsidiaries under Reich control would now be managed by Nazi-appointed trustees. IBM Europe was saved.

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1 1 FRANCE AND HOLLAND

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Germany frequently exploited ethnic antagonism between national groups in Eastern Europe and ignited long simmering anti- Semitism with Fascist surrogates

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In the Netherlands, the population was, with notable exceptions, funda- mentally homogeneous.

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French Jewry was as completely assimilated as many of their coreligionists in Germany.

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the Netherlands chose Hollerith machines to tab- ulate its 1930 census. By 1937, a centralized "machine park" was developed to serve a multiplicity of government clients.

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Unquestionably, Holland automated its data with Holleriths.

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Protracted discussions between Watson and French Bull owners broke down. So IBM purchased the original Bull rights in Switzerland, this to the shock of French Bull. Immedi- ately after closing the deal, Watson went further, hiring Emile Genon, the very Bull manager who had sold IBM the Swiss rights. French Bull voted to dishonor the contract as anti-competitive and even moved to separate from its Swiss sister company. The serpentine Bull acquisition controversy led to years of lawsuits in Switzerland and France as IBM challenged Bull's right to sell its own designs, and Bull sued for unfair competition.

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CEC had been converted into a captive supply source for Dehomag. This was done with IBM NY's full concurrence.

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Certainly, rabid Dutch Nazis were eager to coop- erate with the occupation. But in significant measure, at times citizens of Hol- land demonstrated open solidarity w i t h persecuted Jews and displayed an unwillingness to deliver their neighbors. Repressive measures against Jews provoked a strike by laborers, frequent demands by Christians to be in- cluded with the Jews in their misery, and even some violent riots.

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They found their man in Jacobus Lambertus Lentz. He was not a Nazi. Those who have studied him have not proven his innate anti-Semitism. Instead, Lentz was a population expert, cocooned in his own stacked and tabulated world of ratios, registration programs, and rattling Hollerith machines. Perfection in human cataloging was for Lentz more than a matter of pride, it was a crusade.

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"Theoretically," predicted Lentz, "the collection of data for each person can be so abundant and com- plete, that we can finally speak of a paper human representing the natural human."

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One can only imagine the deep inner satisfaction Lentz derived from indexing one segment of the population after another

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"to record is to serve."

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Lentz first conceived his complex card in 1939 when war in Europe broke out and the government considered foolproof food rationing cards. However, as recendy as March 1940, a Dutch government commission thought that such a card would treat average people like criminals, and was inconsistent with the nation's democratic tradition. But with no one to hold him back, Lentz perfected his original card idea by adding the photograph and fingerprint features.

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As soon as German civil authorities in Holland announced the Jewish commercial registration. the nation erupted in protest. Virtually all Protestant churches, that next Sunday, condemned from the pulpit a Jewish registration they called "un- Christian."

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Jews also understood that resistance was futile because their names had already long been innocently registered as "Jewish" in numerous statistical and registration bureaus throughout the Netherlands, and especially in the new card indices created by Lentz' personal identification program. Even though some Jews rioted in early February 1941, the entire community nonetheless filled out the forms as required.

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many sympathetic Dutchmen actually volun- teered to register alongside their Jewish countrymen.

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Outraged Amster- dam workers had spontaneously called a strike, in large part over repressive measures. Nazi occupiers suppressed the defiance by throwing hand grenades and firing machine guns at crowds of protesters.

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the Nazis simply could not take a Jewish census in Holland. A traditional census or population count required an army of enumerators

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some 483 localities had not a single Jew to report.

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the punch cards for the new alphabetical file could not be printed without a careful design of data. So, the official added, his office would first have to determine exactly which punch card columns needed to be allocated to yield the desired data.70 This was a question only Hollerith engineers could answer. Only IBM could print the cards.

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In early June 1941, anti-Nazi Dutch resistance groups detonated two bombs in Amsterdam. In reprisal, the Germans took action against 300 Dutch Jews, as well as a number of German refugees between the ages of 18 and 30.

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looking for Jews in certain alphabetical groups.

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France lacked a tradition of census taking that identified religion.

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"The stateless Jews who, for the past 15 years have invaded our country do not interest me. But the others, the good old French Jews, are entitled to all the protection that we can give them: I even have some of them in my family." Hence, a long list of special exemptions crept into the official French enforcement of anti-Semitic statutes, on either side of the Vichy line.

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in the aftermath of the MB's technologic ravages, France's punch card infrastructure was simply incapable of supporting the massive series of programs Berlin required.

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Confused officials were on occasion forced to admit they simply had no idea where many of the Jews of France were.

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A fundamental cause of France's profound counting disarray arose from its decentralized, almost anarchic, registration infrastructure.

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It was one thing to count the Jews numerically even if the count was approximate. It was quite another to track them month in and month out, and organize them centrally for either ghettoization or deportation.

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René Carmille, comptroller general of the French Army, had for years been an ardent advocate of punch cards. More than that, he had machines in good working order at his government's Demographic Service. Carmille came forward and offered to end the census chaos. He promised that his tabulators could deliver the Jews of France.

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Carmille had been working for months on a national Personal Identifi- cation Number, a number that would not only be sequential, but descriptive. The thirteen-digit PIN number would be a manual "bar code" of sorts

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Like many French bureaucrats, Vallat was resistant to Carmille's con- traptions. He worried that commencing a punching operation from scratch would delay the reports. Vallat trusted the Tulard system, even though it was manual —and probably because it was manual.

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Only when Vallat's people were confronted with the mountains of forms to be assimilated did they realize that Carmille presented the only hope of efficiendy identifying the Jews.

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Things were going much slower than anyone expected.

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Nazi-allied officials could not be certain exacdy which addresses were accurate and up-to-date. With Carmille's tabu- lations not yet ready, the Germans, in essence, relied on the Jews to turn themselves in. The results yielded only half what the Nazis had hoped for.

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Paris was shocked and outraged because the raids seized both foreign and French-born Jews.134 But for the Germans, it meant the updated data from Tulard was profoundly inefficient.

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the elabo- rate census of June 1941 conducted in both zones was completely nonfunc- tional. A new one was needed.

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In many cases, Nazi agents merely waited to abduct those Jews who ventured to the constandy watched UGIF office.

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The notice was published within the framework of UGIF welfare services that sought to render financial assis- tance to abandoned or orphaned Jewish children.

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if welfare assistance to the displaced children involved produced a list of the families who have taken them in, the UGIF should not bother.

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Eichmann threatened, the Nazi recalled, that perhaps he might "drop France entirely as a country to be evacuated."

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attempts to create a hierarchy of exemptions within the French ultra-conservative mindset, such as for women or chil- dren, or French nationals or war veterans—these all quickly eroded.

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On December 5, 1942, French forces seized the entire National Statistics Service branch office in Algiers. Using Carmille's system of tabulators and punch card files, DeGaulle's people were able to organize a seemingly miraculous rapid mobilization of thousands of Frenchmen and others into specific units.

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During the worst days of Vichy, Carmille was always considered one of the highest-placed operatives of the French resistance, a member of the so-called "Marco Polo Network" of sabo- teurs and spies.

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As for column 11 asking for Jewish identity, the holes were never punched—the answers were never tabulated.155 More than 100,000 cards of Jews sitting in his office—never handed over.156 He foiled the entire enterprise.

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Suspecting he was under suspicion, Carmille nonetheless fearlessly addressed the 1943 graduating class of the Polytechnic School in Paris where his remarks could easily be overheard:

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Carmille went for two days straight under Barbie's hand. He never cracked.

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XII IBM AND THE WAR

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Carter concluded that IBM's cartel and its special leasing practices, as well as its complete control of the punch cards needed to operate Hollerith systems, meant that the company possessed a virtual monopoly on the tech- nology. But far more than that, because of its grip on punch cards and spare parts, and its ownership of all machines, IBM exercised virtual dominion over any Hollerith's day-to-day ability to function. As a result, IBM wielded a crucial continuing impact on Nazi Germany's ability to plan and wage war.

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Carter saw IBM not as a great American company, but a global monster. In Carter's view, Watson was no capitalist luminary but an opportunist to be classed with the Nazis themselves.

NOTER_PAGE: (338 . 0.8563049853372434)

what Hitler has done to us through his economic warfare, one of our own American corporations has also done. In this "arse- nal of democracy," which supplies materiel for over half the warring world, limited production spells our worst enemy. Hence IBM is in a class with the Nazis.

NOTER_PAGE: (339 . 0.625366568914956)

Since Dr. Hollerith was an employee of a branch of our government and since there was a definite connection between his work of computing and his invention, the question might well be raised as to whether the patents belonged to Dr. Hollerith and were his to sell or to the U.S. Government at the time of dieir grant….

NOTER_PAGE: (340 . 0.3064516129032258)

1942, a number of American companies were grandly exposed for extensive dealings with Nazi Germany.

NOTER_PAGE: (341 . 0.23313782991202345)

Farben alone had consummated contracts with more than 100 hundred American firm,

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even though corporate parents, such as IBM, were not permitted to communicate with their own subsidiaries because they were in Axis territory, these companies were deemed American property to be pro- tected. In fact, since IBM only leased the machines, every Dehomag machine, whether deployed at the Waffen-SS office in Dachau or an insurance office in Rome, was considered American property to be protected.

NOTER_PAGE: (342 . 0.3277126099706745)

One confidential memo from the British Embassy regarding the blacklist evoked a handwritten marginal note: "It is only too clear that where U.S. trade interests are involved, these are being allowed to take precedence over 'hemispheric defense,' and . . . over cooperation with us."

NOTER_PAGE: (342 . 0.8636363636363636)

Carter wanted to know about "alpha- betical printers . . . why the sudden interest now." He also wanted the "name of railroads" Dehomag worked with, and the volume of cards it produced and had imported from IBM NY over the years.

NOTER_PAGE: (343 . 0.44868035190615835)

Carter was even able to comprehend IBM's controversial "royalty" agreement.

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Carter returned, this time for a systematic "file search." But he was still hobbled by the lack of a subpoena; his superiors would still not approve one. As such, he was dependent upon the voluntary cooperation of the very people he was investigating.

NOTER_PAGE: (345 . 0.18328445747800587)

cooperation had substantially narrowed. Carter was not permitted to examine the actual file drawers.

NOTER_PAGE: (345 . 0.5960410557184751)

no "application studies" were found for Germany, France, or Japan.

NOTER_PAGE: (345 . 0.7478005865102639)

Because of the meager information contained in the files, especially on the European subsidiaries, it is reasonable to assume that either the important files are in the offices of the European headquarters in Geneva, Switzerland, or IBM has not made full disclosure.

NOTER_PAGE: (346 . 0.6341642228739003)

By 1943, eventually two-thirds of IBM's entire factory capacity had shifted from tabulators to munitions.

NOTER_PAGE: (347 . 0.25439882697947214)

IBM equipment was used to encode and decode for both sides of the conflict.

NOTER_PAGE: (348 . 0.8797653958944281)

War had always been good to IBM. In America, war income was with- out equal.

NOTER_PAGE: (349 . 0.1187683284457478)

"We're by law required to keep confidential information by indi- viduals," Census Director Capt declared at the time. He added, "But in the end, [i]f the defense authorities found 200 Japs missing and they wanted the names of the Japs in that area, I would give them further means of checking individuals."

NOTER_PAGE: (350 . 0.8071847507331378)

IBM was in some ways bigger than the war. Both sides could not afford to proceed without the company's all-important technology. Hitler needed IBM. So did the Allies.

NOTER_PAGE: (352 . 0.5967741935483871)

Since all of Nazi Europe administratively functioned with Holleriths, IBM's help would be crucial to the post-war control of Europe's administrative and economic infrastructure. Simply put: IBM had the keys to Europe—or rather the cards. Now, all its expertise in punch card technol- ogy would be utilized to create an orderly conquest and liberation of the Continent.

NOTER_PAGE: (352 . 0.7390029325513197)

IBM had come full circle. The firm had now become a strategic partner in the war against the Third Reich—even as it continuously supplied the enemy, as before, through its overseas subsidiaries.

NOTER_PAGE: (353 . 0.8365102639296188)

XIII EXTERMINATION

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same five-digit Hollerith number, 44673, was tattooed on his forearm.

NOTER_PAGE: (356 . 0.7639296187683284)

Once the daily death rate at Auschwitz climbed, Hollerith-based numbering simply became outmoded.

NOTER_PAGE: (356 . 0.8900293255131965)

Tattoo numbering ultimately took on a chaotic incongruity all its own as an internal Auschwitz- specific identification system.11. But Hollerith numbers remained the chief method Berlin employed to centrally identify and track prisoners at Auschwitz.

NOTER_PAGE: (357 . 0.15395894428152493)

Hollerith Departments at camps could not be operated by miscellaneous labor whether they used mere coded paper forms, cards, or actual machines. They required so-called Hollerith experts trained by an IBM subsidiary,

NOTER_PAGE: (359 . 0.4750733137829912)

Generally, the murdered inmate itemized on the top line was coded C-3, the Hollerith designation for "natural causes." For convenience, ditto marks signifying "natural causes" would then be dashed next to every inmate number.

NOTER_PAGE: (363 . 0.25513196480938416)

To obliterate all evidence of the mass murders documented by the Hollerith records, Himmler ordered all camp card indices to be destroyed before the Allies arrived.

NOTER_PAGE: (363 . 0.8848973607038123)

slave labor was sold by the SS Economics Administration and managed as a profit center. Enterprises as large as the heavy industries of I.G. Farben, as delicate as Hotel Glasstuben, and as small as a local busi- ness, routinely contracted for slave labor with Department DII,

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Jews were pushed and herded until they reached the corridor end. There, a hole dropped thirteen feet down a concrete shaft and into the Strangling Room. A camp worker recalled, "As they hit the floor they were garroted … by big SS guards and hung on hooks along the side wall, about 6 1/2 feet above the floor… any who were still struggling were stunned with a wooden mallet … An electric elevator … ran [the corpses] up to the incinerator room."

NOTER_PAGE: (367 . 0.7441348973607038)

…

Jews were then forced to douse the hanging men with oil, and ignite them one by one. As the immolating Jews shrieked in pain, the unfortunate audi- ence was compelled to joyously sing the Christinas carol "Silent Night."

NOTER_PAGE: (368 . 0.038856304985337244)

…

the goal of emigration had become essentially curtailed or nonexistent, replaced by a program of "extermination by labor," organized ghetto starvation, and pit massacres.

NOTER_PAGE: (370 . 0.2118768328445748)

Korherr's expertise was so valued, Himmler sided with him even over a prominent SS general.

NOTER_PAGE: (373 . 0.8387096774193549)

It was expensive, but in the Nazi view, a necessary cost

NOTER_PAGE: (375 . 0.6906158357771262)

Nor were any death records transmitted. It was enough to inform Zen- tral Institut that the people had boarded a train.

NOTER_PAGE: (376 . 0.3357771260997067)

comprised not of communal leaders, but of arbitrarily selected Jewish per- sonalities, frequendy engineers. Engineers were chosen because they could relate to the mechanics of the numerical process underway.

NOTER_PAGE: (376 . 0.6282991202346041)

When that point came, their sole means of briefly slowing down the Nazi machine was suicide or suicidal refusal.

NOTER_PAGE: (377 . 0.23313782991202345)

Judenrat resistance never effectively delayed any German action in the ghettos.

NOTER_PAGE: (378 . 0.35043988269794724)

XIV THE SPOILS OF GENOCIDE, I

NOTER_PAGE: (379 . 0.0344574780058651)

it did not matter whether IBM did or did not know exacdy which machine was used at which death camp. All that mattered was that the money would be waiting—once the smoke cleared.

NOTER_PAGE: (379 . 0.5740469208211144)

Official American demands that business be curtailed were often ignored.

NOTER_PAGE: (380 . 0.20967741935483872)

When direct contact was not possible, American legations passed the messages as a courtesy.

NOTER_PAGE: (380 . 0.782991202346041)

IBM's business was never about Nazism. It was never about anti- Semitism. It was always about the money. Before even one Jew was encased in a hard-coded Hollerith identity, it was only the money that mattered. And the money did accrue.

NOTER_PAGE: (381 . 0.4237536656891496)

there was no realm where IBM would not trade, and none where they failed to collect—country by country.

NOTER_PAGE: (382 . 0.06304985337243402)

New York also wanted to know if Romania had made its quota: asking for "points installed and uninstalled to date." This way, the Romanian subsidiary could take its rightful place in IBM's Hundred Percent Club for outstanding performance.

NOTER_PAGE: (388 . 0.23533724340175954)

By late July 1945, IBM had lodged its own compensation claims for war damage. The total of $151,383.73 included $37,946.41 for damaged Hollerith machines. It also called on State Department intermediaries to secure its bank accounts in Romania.

NOTER_PAGE: (388 . 0.3966275659824047)

BULGARIA RELUCTANTLY joined the Axis bloc in March 1941. In exchange, it received German military support for its territorial ambitions in the Balkans. The Bulgarian military occupied Thrace and Macedonia in neigh- boring Greece. But Bulgarian society—from its churches to its government— overwhelmingly rejected German anti-Semitism for the nation's 48,000 well-integrated Jews.

NOTER_PAGE: (388 . 0.5659824046920822)

the government cut off elec- tricity to the factory producing the stars, claiming it was a power shortage.

NOTER_PAGE: (388 . 0.9112903225806451)

the Bulgarian people were so opposed to the deportation plans that farmers had threatened to throw thei r bodies across the railroad tracks

NOTER_PAGE: (389 . 0.04032258064516129)

whatever part of the war or the genocide that ran on track and rail was vitally dependent on IBM.

NOTER_PAGE: (389 . 0.42302052785923755)

authorities also froze the railroad's payments to IBM, forcing the money into a blocked account. By spring, Watson Business Machines Corporation of Sofia was on the verge of bankruptcy.

NOTER_PAGE: (389 . 0.5197947214076246)

The record is unclear exacdy how funds were funneled to the Bulgarian company. But IBM Bulgaria was indeed funded and continued to supply punch card services to Bulgarian Railroads.

NOTER_PAGE: (390 . 0.5989736070381232)

Bulgaria painfully agreed to a terrible choice. It consented to the deportation not of its own Jews, but the 14,000 Jews in the territories occupied by the Bulgarian army - Thrace and Macedonia. Bulgarian Jewry was saved. Greek Jews would go to their death.

NOTER_PAGE: (390 . 0.9200879765395894)

Trains were Himmler's most valuable tool—and railroads were among IBM's most lucra- tive clients in Europe.

NOTER_PAGE: (391 . 0.7463343108504399)

Despite any horrors, IBM continued its thriving enterprise in Yugo- slavia,

NOTER_PAGE: (393 . 0.4501466275659824)

Bell added this clear warning to Watson: "You are, of course, aware that any action in connection with such a bank would be illegal

NOTER_PAGE: (396 . 0.6400293255131965)

But when blacklists arrived, Watson's most trusted managers in Sweden and Switzerland would "get strangely busy," as one IBM internal probe termed it. Or managers would ignore New York's lengthy tractates to stop direct trading with Axis nations—sometimes delaying more than a year.

NOTER_PAGE: (397 . 0.1781524926686217)

elaborate docu- ment trails in Europe were fabricated to demonstrate compliance when the opposite was true.

NOTER_PAGE: (397 . 0.37609970674486803)

IBM's own internal reviews conceded that cor- respondence about its European business primarily through its Geneva office was often faked.

NOTER_PAGE: (397 . 0.4706744868035191)

never asked IBM executives to stop trading with the Hitler regime, or place a halt on sales to the camps, the war machine, or any German occupying authority. Watson only asked his companies to stop informing the New York office about their activities.

NOTER_PAGE: (399 . 0.039589442815249266)

IBM NY continued to play a central role in the day-to-day operations of its subsidiaries.

NOTER_PAGE: (399 . 0.12976539589442815)

Six months after Watson declared IBM Headquarters to be cut off from its overseas units, Lier himself defined IBM Geneva's role not as an autonomous, detached office—but as a nexus, which simply implemented the business decisions made by IBM NY.

NOTER_PAGE: (399 . 0.3284457478005865)

this office is a clearing office between the local organizations in the various countries and the New York Headquarters." Lier added that IBM NY made all the decisions. His function was simply to monitor the business and keep the records.

NOTER_PAGE: (399 . 0.4508797653958944)

IBM Brussels executive declared: "It is none of our business to judge the reasons why an American corporation should or would help a for- eign Government, and consequently Mr. Decker and myself have left these considerations entirely out of our line of thought. … we are, as IBM men, interested in the technical side of the application of our machines."

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it is our considered opinion that Mr. Lier's entry into the United States on a temporary visitor's visa would not prove 'detrimental to the public safety,' and it is believed that in your discretion you may act accordingly with respect to Mr. Lier's application for a visa."

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even when U.S. officials agreed to issue a visa, Lier still could not enter French territory to effect his exit from Europe and travel to Amer- ica. Yet sometime in the first two weeks of February 1945, Lier did indeed suddenly disappear.

NOTER_PAGE: (400 . 0.7375366568914956)

What is surprising to us is not only his strange way of eloping, but how he has found his ways and means to cross France since we know for a definite fact that the French transit visa for which he applied . . . was refused to him

NOTER_PAGE: (401 . 0.16202346041055718)

The man in Switzerland who intervened for Lier was America's Military Attache, Brig. Gen. Barnwell Legge, an experienced hand at smuggling people into and out of Switzerland.

NOTER_PAGE: (401 . 0.6429618768328446)

XV THE SPOILS OF GENOCIDE, II

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Dehomag emerged from the Hitler years with relatively little damage and virtually ready to resume business as usual.

NOTER_PAGE: (402 . 0.5095307917888563)

when the war ended, IBM NY was able to recapture its problematic but valuable German subsidiary, recover its machines, and assimilate all the profits.

NOTER_PAGE: (402 . 0.5865102639296188)

the United States government concluded that Hitler's Holleriths were strategic machines to save, not destroy. Dehomag's equipment held the keys to a smooth mili- tary occupation of Germany and the other Axis territories.

NOTER_PAGE: (402 . 0.6642228739002932)

More than just the strategic need to evacuate the equipment to safer ground, Hitler's Holleriths constituted damning evidence.

NOTER_PAGE: (404 . 0.10850439882697947)

With both sides trying to protect the Holleriths, the evidence on exactly where and how thousands of machines were used was all but obscured.

NOTER_PAGE: (404 . 0.5747800586510264)

IBM's money was protected with equal fervor.

NOTER_PAGE: (404 . 0.7382697947214076)

Dehomag was German not American, he argued, and should not be administered for IBM's benefit, but instead completely Aryanized.

NOTER_PAGE: (405 . 0.4237536656891496)

It is not a case of my having become wealthy because of the Americans, but rather of the Americans having become wealthy because of me."

NOTER_PAGE: (405 . 0.6429618768328446)

Fellinger proposed reducing the entire agreement to a punch card but won- dered about the validity of a "punch card signature." Ultimately, the parties relied on traditional written contracts.

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among American forces, there existed a cohesive group of men with a common identification. As former employees of International Business Machines on leave from their company jobs, they affectionately referred to themselves as "IBM Soldiers."

NOTER_PAGE: (409 . 0.6700879765395894)

Reparations from the German commercial sector were being readied. IBM very much wanted to be excluded.

NOTER_PAGE: (422 . 0.5227272727272727)

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.

NOTER_PAGE: (422 . 0.9347507331378299)

there seemed to be a concerted effort to keep Watson and the company out of the reparations discourse.

NOTER_PAGE: (423 . 0.13343108504398826)

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.

NOTER_PAGE: (423 . 0.8856304985337243)

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 account- able 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."

NOTER_PAGE: (424 . 0.03812316715542522)

Belgian court's declaration that the executives had embarked upon a "two- way gamble designed to pay rich dividends either way—if Hitler won the war or lost it."

NOTER_PAGE: (425 . 0.42008797653958946)

feared that while German industrialists were "one of the chief causes of the war," most would never be brought to justice. Jack- son's fellow prosecutors felt the number of defendants would simply be too large

NOTER_PAGE: (425 . 0.5212609970674487)

One company reviewed all the evidence and translated it not only for real time usage at the trial proceedings, but for posterity. That company was International Business Machines. It made the final translated record of all evidence back and forth from French, Russian, German, Polish, and English. Watson offered to under- take the massive evidence handling free of charge.

NOTER_PAGE: (425 . 0.7595307917888563)

IBM WAS MORE than important to the Allies. It was vital.

NOTER_PAGE: (426 . 0.32991202346041054)

A key toward regaining total control was fortifying the argument that Dehomag was not a German company, but an American-owned enterprise.

NOTER_PAGE: (428 . 0.8585043988269795)

The men who headed up the IBM enterprise in Nazi Europe and America became revered giants

NOTER_PAGE: (429 . 0.47287390029325516)

European subsidiary managers were rewarded for their loyalty with top jobs. Their exploits during the Nazi era were lionized with amazing specific- ity in a promotional book entitled The History of Computing in Europe, pub- lished in 1967 by IBM itself. However, an internal IBM review decided to immediately withdraw the book from the market. It is no longer available in any publicly accessible library anywhere in the world.

NOTER_PAGE: (429 . 0.5432551319648093)

AFTERWORD: THE NEXT CHAPTER

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Dehomag technicians were undoubtedly stationed in Dachau almost continuously.

NOTER_PAGE: (433 . 0.03812316715542522)

"Make mine out to Willy Heidinger, Jr." He was the Dehomag chairman's grandson. He and his cousin both congratulated the book for honestly retelling the story of their grandfather's involvement with IBM.

NOTER_PAGE: (435 . 0.8335777126099707)

The Heidingers also insisted my book conservatively understated Watson's true sympathies for Hitler and his true knowledge of the events in Germany.

NOTER_PAGE: (436 . 0.15469208211143695)

Robert Carmille, himself now an elderly although still an eminently lucid man, emotionally declared that the French statistical service did indeed sabotage the Jewish tabulations. We asked him how he could be so certain? Carmille trembled with tears in his eyes and admitted that when he was twenty-two-years old he had been asked by his father to manage the Lyons regional office and that he had personally operated the machines in Toulouse. "We never punched column eleven!" Carmille emotionally declared. "Never."

NOTER_PAGE: (437 . 0.05718475073313783)

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his father's service took pains not to extend the professional census to the occupied zone, thereby denying the Reich information it needed to complete its plan to organize slave labor in France. This instruction was reversed once the elder Carmille was discovered and taken to Dachau. But by then, it was too late to materially undo Carmille's sabotage.

NOTER_PAGE: (437 . 0.9098240469208211)

Despite a highly publicized, months-long public search throughout the world, in which many stepped forward to offer new materials, not a single document was uncovered anywhere in any country indicating that IBM, either in New York or Europe, ever moderated its strategic alliance with the Third Reich. Nor did IBM, in the face of continuous media requests after this hook's release, offer any documents or evidence to explain its conduct. Instead, the company issued an official statement: "IBM does not have much information about this period," and declined to comment.

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REVELATION AND RESPONSIBILITY

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No scholar was off limits, but there was a condition: Each reviewer had to agree to read every page in order, no skipping around.

NOTER_PAGE: (445 . 0.22947214076246333)

IBM and the Holocaust became an extraordinary collaborative effort of international Holocaust and technology expertise.

NOTER_PAGE: (445 . 0.49486803519061584)

In some nations, such as Eng- land, known for its tough publishing laws, the test was more than rigorous. Factual backup—often sentence by sentence—was sought on point after point.

NOTER_PAGE: (446 . 0.08504398826979472)

My files are arranged so that any sentence in the text can be completely documented at the thirty- second pull of a folder.

NOTER_PAGE: (446 . 0.20674486803519063)

Then came the leak—it was exactly the type of vague and misleading message we were hoping to avoid. And it was pervasive. Far from an errant bookstore, or a reporter jumping the gun—the source of the leak was where 1 always expected: IBM itself.

NOTER_PAGE: (448 . 0.25146627565982405)

a steady campaign of misinformation began.

NOTER_PAGE: (448 . 0.499266862170088)

IBM always knew I was working on this book.

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Lasewicz approved my access but needed permission from IBM public relations manager Ian Colley to schedule the exact day. After I had spent weeks of waiting, and numerous conversations with him, Colley still refused to schedule my visit, claiming Lasewicz's archive was "understaffed," in massive disarray after years of neglect, and involved in a time-consuming Internet project.

NOTER_PAGE: (448 . 0.6385630498533724)

Several prominent Holocaust figures also asked IBM to schedule my access.

NOTER_PAGE: (448 . 0.7873900293255132)

The more we inquired, the quieter and more ambiguous IBM became about its intentions to permit a review. Unbeknownst to me, IBM used this time to scour its New York files.

NOTER_PAGE: (448 . 0.8577712609970675)

IBM had hired a group of litigation historians who search government archives worldwide for incriminating corporate links to Nazi Germany, to tackle the company's own 8,400 cubic feet of files. We knew that IBM had a history, going back to the Hitler era, of moving files from obscure place to obscure place, losing critical documents, purging records, and even destroying files.

NOTER_PAGE: (448 . 0.9318181818181818)

IBM did not "lend" this material to any recognized Holocaust or Jewish archive, such as the Holocaust Museum in Washington, D.C., or even the Center for Jewish History in Manhattan. Instead, an IBM public relations manager called the public relations director at New York University,

NOTER_PAGE: (449 . 0.5212609970674487)

For IBM's part, the company could tell the media it had donated the files to a scholar—even though the scholar's exper- tise was in the study of the Dead Sea Scrolls.

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an IBM employee group in Germany had separately agreed to allow me access to their files

NOTER_PAGE: (449 . 0.7881231671554252)

I flew to Stuttgart in September 1999 for my scheduled visit. But Col- ley learned of the visit and at the last minute instructed the Klub's amateur historian to deny me access. On a gray, rainy afternoon, I stood in front of the museum door at the appointed hour, hoping to be let in. But the museum was instructed to shut down that day.

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Later, Colley warned me, "You won't get access to any IBM facility in the world, no IBM archive, no IBM library."

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As an archivist of decades of experience, I am taken aback at such a cavalier denial of access to a project of such potential historic, humanitarian and moral significance.

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At one frustrated and emotional point, I asked if Colley would search the archives for a copy of my mother's punch card. He coolly replied, "I'm not going to get drawn into that question."

NOTER_PAGE: (451 . 0.5476539589442815)

After about one hundred such calls, I simply gave up. IBM would never cooperate.

NOTER_PAGE: (451 . 0.593841642228739)

IBM had known for two years that my book was coming. During those two years, I and others had been asking for access and answers, and during the seven years their logo-emblazoned machine had been prominendy dis- played at the Holocaust Museum in Washington, D.C., prompting enormous speculation, IBM claimed it had never tried to look into its own records and document its own past.

NOTER_PAGE: (452 . 0.15395894428152493)

When press inquiries made it clear that the book was just days away, IBM pre-empted with its own global press release—essentially, the only official statement it has issued.

NOTER_PAGE: (452 . 0.30131964809384165)

IBM's statement reiterated that the company had no information about the period or its own documents.

NOTER_PAGE: (452 . 0.3497067448680352)

The company added the first of a series of well-parsed phrases, and what can only be seen as conscious misinformation.

NOTER_PAGE: (452 . 0.374633431085044)

Only the profits were temporarily blocked as in any receivership. After the war, IBM fought to recover all those Nazi-blocked bank accounts, claim- ing they were legitimate company profits.

NOTER_PAGE: (452 . 0.8585043988269795)

IBM, through spokeswoman Makovich, remains consciously silent about the numerous other European subsidiaries

NOTER_PAGE: (452 . 0.9310850439882697)

Nor will Makovich make any mention of the Hitler-era documents still held by IBM subsidiaries in Poland, Argentina, France, Italy, Holland, and many other countries.

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thankful current or former IBM employees who admit that rumors circulated around the company for years.

NOTER_PAGE: (453 . 0.7624633431085044)

It seems that the most important thing for IBM is not clarity, but confusion about its activities. The more con- fusion IBM engenders, the more ambiguous its role might become.

NOTER_PAGE: (454 . 0.27785923753665687)

"Unless Wat- son was prepared to write off his assets in Germany … he had little choice

NOTER_PAGE: (455 . 0.5425219941348973)

Perhaps it is embarrassing that most Holocaust experts (with the notable exception of the late Sybil Milton) missed the role of punch-cards

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Notes

A Dehomag (IBM's German subsidiary) poster, circa 1934. Approximate English translation is, "See everything with Hollerith punchcards."

ACKNOWLEDGMENTS

INTRODUCTION

In the upside-down world of the Holocaust, dignified professionals were Hitler's advance troops.

Solipsistic and dazzled by its own swirling universe of technical possi- bilities, IBM was self-gripped by a special amoral corporate mantra: if it can be done, it should be done.

To search generations of communal, church, and governmental records all across Germany—and later throughout Europe—was a cross-indexing task so monumental, it called for a computer.

in 1933, no computer existed. However, another invention did exist: the IBM punch card and card sorting system—a precursor to the computer.

Dehomag's top manage- ment was comprised of openly rabid Nazis who were arrested after the war for their Party affiliation.

The company leveraged its Nazi Party connections to continu- ously enhance its business relationship with Hitler's Reich,

But how did the Nazis get the lists? For decades, no one has known. Few have asked. The answer: IBM Germany's census operations

When U.S. law made such direct contact illegal, IBM's Swiss office became the nexus, providing the New York office continuous information and credible deniability.

My parents are Holocaust survivors, uprooted from their homes in Poland.

many of the IBM papers and notes were un- signed or undated carbons, employing deliberate vagueness, code words, catchphrases, or transient corporate shorthand.

the only refusal came from IBM itself, which rebuffed my requests for access to documents and interviews. I was not alone. Since WWII, the company has steadfastly refused to cooperate with outside authors.

I quote the New York Times not because it was the newspaper of record in America, but because IBM execu- tives, including Thomas Watson, were headquartered in New York.

I approached this project as a typical if not grandiose investiga- tion of corporate conduct

the Age of Realization, as we look back and examine technology's wake.

Only through exposing and examining what really occurred can the world of technology finally adopt the well-worn motto: Never Again.

PART ONE

1 NUMBERED PEOPLE

Cheim was happy for an office assignment working with the Hollerith punch cards and their coded numbers. But as he did, he silently observed through the corner of his eye the SS men admi ni st er i ng the card sorting procedure. For five weeks he look mental notes.

Gen. Oswald Pohl. Pohl, creator of the "Extermination by Labor" program, ar- dently argued that expeditiously gassing Jews deprived the Reich of an im- portant resource. His idea, "Extermination by Labor," quite simply meant working Jews to death.

Office D II embraced SS Chief Heinrich Himmler's declaration: "If 10,000 Russian females collapse from exhaustion while digging a tank ditch, it interests me only so far as the tank ditch is completed for Germany."

They resented reporting the prisoner departures in column 34 of the punch card forms as code 7—escaped.

2 THE IBM-HITLER INTERSECTION

There were no secrets in Hitler's vision. He broadcast them loudly to the world.

Hitler's fas- cism resonated with certain men of great vision, such as Henry Ford. Another who found Hitlerism compelling was Thomas J. Watson,

These men and their philosophies could not have been more dissimilar. Yet as history proved, they could have hardly been more compatible.

America's rapid industrial growth spurred inventions to automate virtually every manual task.

experts predicted spending more than a decade to count the 1890 census; in other words, the next census in 1900 would be underway before the previous one was complete.

Every punch card would become an informational storehouse limited only by the number of holes. It was nothing less than a nineteenth-century bar code for human beings.

It was a steel, spindle, and rubber-wheeled key to the Pandora's Box of unlimited information.

His systems saved the Census Bureau some $5 million, or about a third of its budget.

This important decision to lease machines, not sell them, would dominate all major IBM business transactions for the next century.

Washington paid Hollerith about $750,000 to rent his machines for the project. Now the inventor's challenge was to find customers for the machines in between the decennial federal censuses.

He and he alone would control the technology because the punchers, sorters, and tabulators were all designed to be compatible with each other—and with no other machine that might ever be produced.

Hollerith was said to cherish three things: his German heritage, his privacy, and his cat Bismarck.

When a neighbor cat would appear threatening Bismarck's privacy, Hollerith would depress a switch, sending an electrical jolt into the animal.

Hollerith's first major overseas census was organized for the brutal regime of Czar Nicholas II

SHORTLY AFTER the 1900 census, it became apparent to the federal govern- ment that it had helped Hollerith's Tabulating Machine Company achieve a global monopoly, one based on an invention the Census Bureau had—in a way—"commissioned" from an employee on the Bureau's own payroll,

Hollerith was gouging the federal gov- ernment.

American taxpayers, it seemed, were subsidizing the newly ascended Hollerith empire.

William Merriam, had negotiated lucrative and sometimes inexplicable contracts with Hollerith's firm. Then, little more than a year after Merriam left the Census Bureau, Hollerith hired him as president of Tabulating Machine Company.

Realizing that Hollerith's patents would expire in 1906, and determined to break the inventor's chokehold on the Census Bureau, North experimented with another machine, and, finally, in July 1905, he booted the Holleriths out of the Census Bureau altogether.

in 1910, in an unbelievably arrogant maneuver, Hollerith actually tried to stop the United States from exercising its constitutionally mandated duty to conduct the census. Claim- ing the Census Bureau was about to deploy new machinery that in some way infringed his patents,

Deutsche Hollerith Maschinen Gesellschaft—the German Hollerith Machine Corporation, or Dehomag for short.

Dehomag simply leased Hollerith technology in Germany. Tabulating Machine Company received a share of Dehomag's business, plus patent royalties.

Flint's war profiteering knew no limits.

Had anyone called him a merchant of death, Flint would have wondered what the fellow had in mind.

Newspapers of the day dubbed Flint, the "father of trusts." The title made him at once a glamorous legend and a villain in his era.

Hollerith was willing to make millions, but only on his terms. Flint wanted millions—on any terms.

Flint wanted CTR's helm to be captained by a businessman, not a technocrat. For that, he chose one of America's up and coming business scoundrels, Thomas J. Watson.

"making the sale," that calculating one-on-one wizardry that ends as an exhilarating confirmation of one's mind over another's motivation, this was the finesse—the power—that came naturally to Watson.

Patterson had created a sales manual designed to rigidly standardize all pitches and practices, and even mold the thought processes of selling.

Watson would report the prospective clients so "intimidation squads" could pounce. The squads would threaten the prospect with tall tales of patent infringement suits

Watson's fake company never needed to make a profit—only spend money to decimate unsuspecting dealers of used registers.

Patterson's school for scoundrels was unparalleled in American busi- ness history.

One day during a pep rally to the troops, Watson scrawled the word THINK on a piece of paper. Patterson saw the note and ordered THINK signs distributed throughout the company.

On February 22, 1912, Patterson, Watson, and several dozen other Cash executives were indicted for criminal conspiracy to restrain trade and construct a monopoly.

Most of the men, including Watson, received a one-year jail sentence. Many of the convicted wept and asked for leniency. But not Watson. He declared that he was proud of what he had accomplished.

NCR organized an immense emergency relief effort.

the unpredictable and maniacal Patterson rewarded Watson's years as a loyal sales warrior by suddenly subjecting him to public humilia- tion

Flint be- lieved that the accretion of money was its own nurturing reward,

Watson understood much more about human motivation than Pat- terson had ever allowed to creep into NCR. Watson wanted to inspire men to greater results, not brutalize them toward mere quotas. His way would imbue a sense of belonging, not a climate of fear.

Watson was elevating to a higher plane. Newspaper articles began to focus on him personally as much as the company. His pervasive presence and dazzling capitalistic imperatives became a virtual religion to CTR employees.

"IBM is more than a business—it is a great worldwide institution that is going on forever."

So penetrating was the Watson father image that employees routinely did ask his permission for ordinary personal decisions.

"Mr. Watson," declared Phillips, "I have enough money to buy a car, but I would like your permission to do it."

All of it swirled around the irresistible magnetism, t h e i nt oxi cat i n g command, the charismatic cultic control of one man, Thomas J. Watson, the Leader.

This attitude has caused me to give public utterance to my impressions and convictions in favor of Germany at a time when public opinion in my country and elsewhere was predominantly unfavorable."

the world must extend "a sympathetic understanding to the German people and their aims under the leadership of Adolf Hitler."

Dehomag's debt was $104,000, or the astronomical sum of 450 bil- lion marks. There was no way Dehomag could pay it.

Heidinger felt "cornered" with no choice: he ceded the German company to Watson, and Dehomag became a CTR subsidiary.

Heidinger was allowed to retain approximately 10 percent of the stock. Dehomag could then still claim some token German ownership for appearance's sake.

Heidinger's shares were a virtual ruse

For all intents and purposes, IBM now controlled the German company.

In many places, the business names Watson and IBM were synonymous and inseparable.

the German subsidiary's revenues outshone them all.

more than half of IBM's over- seas income came from Dehomag alone.