IBM and the Holocaust (38 page)
Now the Reich knew exactly how many Jews were under their jurisdiction, how much nutrition to allocate—as low as 184 calories per person per day. They could consolidate Jews from the mixed districts of Warsaw, and bring in Jews from other nearby villages. The transports began arriving. White armbands with Jewish stars were distributed. Everyone, young or old, was required to wear one on the arm. Not the forearm, but the arm—visible, above the elbow. The Warsaw-Malkinia railway line ran right through the proposed ghetto. It was all according to Heydrich's September 21 Express Letter. Soon the demarcated ghetto would be surrounded by barbed wire. Eventually, a wall went up, sealing the residents of the ghetto from the outside world. Soon thereafter, the railway station would become the most feared location in the ghetto.
83
The Nazi quantification and regimentation of Jewish demographics in War saw and indeed all of Poland was nothing less than spectacular—an almost unbelievable feat. Savage conditions, secrecy, and lack of knowledge by the victims would forever obscure the details of exactly how the Nazis managed to tabulate the cross-referenced information on 360,000 souls within forty-eight hours.
But this much is known: The Third Reich possessed only one method of tabulating censuses: Dehomag's Hollerith system. Moreover, IBM was in Poland, headquartered in Warsaw. In fact, the punch card print shop was just yards from the Warsaw Ghetto at Rymarska Street 6. That's where they produced more than 20 million cards.
WATSON DID NOT
really want Poland until 1934. Why? Because that's when Powers had encroached on IBM business in the Polish market. Watson would not tolerate that.
There were so few potential punch card customers in Poland, in the years before Hitler, that IBM didn't even maintain a subsidiary there. Watson's company was only represented by the independent Block-Brun agency. Since the struggling Powers Company sought its few customers wherever IBM didn't dominate, Powers felt free to operate in Poland. Then, in a 1934 sales coup, Powers convinced the Polish Ministry of Posts to replace its Hollerith equipment with rival Powers' machines.
84
Just as Patterson believed all cash register business "belonged" to the NCR, Watson believed all punch card business innately "belonged" to IBM. When IBM lost the Polish postal service, Watson reacted at once. First, he replaced the Block-Brun agency with a full-fledged IBM subsidiary named Polski Hollerith.
85
But who would run the new subsidiary? Watson wanted J. W. Schotte.
Jurriaan W. Schotte was born in Amsterdam in 1896, just about the time Herman Hollerith incorporated his original tabulating company. Schotte was eminently qualified for the international punch card business. His background included civil engineering and military service. He was fluent in Dutch, French, and German, and could speak some Romanian and Malay. He had traveled extensively throughout Europe, and enjoyed good commercial and governmental connections. After a stint at the Dutch Consulate in Munster, Germany, he was employed by Dutch import-export companies in New York, San Francisco, and the East Indies. He knew manufacturing, having managed a factory in Belgium. Schotte was perfect for another reason: He was Powers' European sales manager. Schotte was the one who had sold the Powers machines to the Polish Post Office.
86
Schotte had worked his way up through the Powers organization. Starting as a factory inspector at its U.S. affiliate, he had risen to maintenance supervisor and instructor throughout Europe. A fierce sales competitor, he had deftly operated out of Powers' offices in Paris, Vienna, and Berlin. Most valuable, Schotte knew all of Powers' customers and prospects throughout the continent.
87
By 1934, however, Dehomag had so thoroughly squeezed Powers in Germany, including its lawsuit for falsely claiming to be an Aryan concern, that Schotte admitted he had "nowhere to go but out." He traveled to New York to meet with J.T. Wilson, the head of IBM NY's Foreign Trade Department. Schotte hoped to salvage his career by becoming a European representative for IBM. Wilson was unsure. Schotte brought a great deal of insider knowledge, but he had been the bitter competition for some time. So Wilson only tentatively hired Schotte, and then cabled the various subsidiaries asking their opinion.
88
The reports were not good. Heidinger curtly dismissed the suggestion, calling Schotte "an unscrupulous price-cutter." IBM's Geneva office was equally unenthusiastic. But Watson thought otherwise—Schotte was just what IBM needed in the new Europe. During a meeting in Watson's office, Watson dramatically painted a tantalizing picture of the future of Europe, one that excited Schotte because he could play a central role in IBM's plans. He could return to Europe as IBM's Manager for Southeast Europe with a handsome compensation package. Schotte was later described as "in awe" and "walking over clouds" as the meeting ended and he stepped to the door of Watson's office. But his euphoria was cut short when Watson abruptly declared, "Mr. Schotte, your employment in IBM depends on your getting IBM machines back into the Polish Postal Service."
89
Schotte sailed back to Europe and, as Watson had insisted, persuaded the Polish Postal Service to switch back to Hollerith machines.
90
Watson would have Poland again.
Hitler also wanted Poland. Nazi doctrine had long called for the conquest of Polish territory, the subjugation of its people as inferiors, and the destruction of its more than three million Jewish citizens that comprised the largest Jewish community in Europe. Moreover, the Reich was determined to confiscate Poland's significant natural resources and industry, including timber, coke, coal, and steel making in Upper Silesia. Upper Silesia was adjacent to the Sudeten region and many
Volksdeutsche
lived in its cities. Hitler considered the area German.
By 1935, the year of the Nuremberg racial laws, Polski Hollerith had opened a card punching service bureau in Warsaw. The next year, IBM opened a second Polish office, this one in the Upper Silesian city of Katowice, and then a card printing facility in Warsaw serving a customer base requiring 36 million cards per year. In 1937, Polski Hollerith signed the Polish Ministry of Railroads. That year, IBM changed its name to Watson Business Machines sp. z. o.o. and appointed an IBM salesman of Polish extraction, Janusz Zaporski, as temporary manager. Ironically, although IBM owned and controlled 100 per cent of the company, as he had done so often before, Watson chose to register the stock not in the company's name, but in the name of his Geneva managers. In this case, it was IBM Europe General Manager John Holt and IBM's Geneva auditor J. C. Milner, as well as a token share—the equivalent of $200—in the name of a Polish national. By the time the company changed names to Watson Business Machines sp. z. o.o in 1937, IBM had garnered only twenty-five customers in Poland. But the list included some of the country's most vital industry giants, such as the Baildon steelworks. More importantly, by this time, the subsidiary had organized the nation's freight cars and locomotives, and through the Polish Postal Service could control access to every address in Poland.
91
After Hitler invaded Poland in September 1939, IBM NY awarded the lucrative Upper Silesia industrial territory to Dehomag, negotiating the disposition of each of the pre-existing machines. Then Watson recast his Polish subsidiary as an Aryan entity by re-incorporating as a German company and affixing a German language name, Watson Buromaschinen GmbH, with the recognizable, German incorporation suffix. The office in war-torn Warsaw was moved to Kreuz 23, and the company appointed a German manager, Alexander von Dehn. Von Dehn was only in charge of the remnant Polish territory, that is, the vanquished and subjugated remainder known in Hitler parlance as the "General Government." All but two of the previous Polish customers of the remnant subsidiary had disappeared, since the Polish infrastructure ceased to exist except as a vassal to the Germans.
92
Yet, after adjusting for the effects of the invasion, the subsidiary thrived for years under the murderous Nazi regime. IBM's German or Polish subsidiaries, separately or in tandem, serviced the occupying Nazi needs through the German military's constantly changing punch card agency, which ultimately became known as
Maschinelles Berichtwesen
(
MB
), or the Office for Auto mated Reporting. The
MB
maintained Polish field offices in Posen, Krakow, Stettin, and Danzig. Each
MB
office was typically equipped with one alphabetical tabulator and duplicator, ten alphabetical punchers and proofers, eight magnetic punchers and proofers, one D-11 tabulator with summary capabilities, and two or three sorters. One or two Wehrmacht officers supervised a typical support staff of several dozen as well as one or two on-site so-called Hollerith experts. Dehomag itself was in charge of all
MB
office training, leasing, upkeep, and custom-printed punch cards and design of specialized applications. The projects were as diverse as a so-called "horse census" of all horses and mules in Poland, which would help move German elements through the harsh Polish winter, to the shipments of coal. IBM Geneva was so proud of the horse census, conducted in spring 1940, that they quickly included it in a special report to IBM's Washington office describing the lucrative war profiteering of the various European subsidiaries.
93
During the years of Nazi-overrun Poland, deniability continued to be a precious imperative. IBM NY continued to operate through its intermediaries, 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.
For example, the subsidiary's account at Handlowy Bank in Warsaw, referred to as "number 4B," was actually an IBM account, controlled from Geneva. An administrator later described the arrangement in these words: "In this manner, the IBM's account was at the same time the business capital of the Warsaw company, as Herr von Dehn was entitled to take sums from the account for the purposes of the Warsaw company." Despite the horrific conditions in Warsaw, IBM maintained close control of the account after the invasion. On February 10, 1940, IBM gave von Dehn written authority to receive customer payments, that is, physically "receive" them. The actual permission for von Dehn to deposit the payments in IBM's account, "after deduction of the sums necessary for the conduct of the management," was only oral.
94
In summer 1940, long after Hitler had invaded numerous other countries in Europe, and after the Warsaw Ghetto was being sealed, Watson wanted his Polish operation to stay intact. On July 29, 1940, a key official of the IBM Geneva office, known as P. Taylor, had written to von Dehn conveying Watson's instruction that the families of all married men who had worked for the subsidiary prior to the invasion should be given special financial assistance. This subvention was to be paid from the company account. Initially, the gesture was prompted by confiscatory Nazi economic decrees and labor restrictions, which canceled the expected Christmas 1939 bonus. Two months pay was offered as a so-called "loan," and, as an administrator later explained, "in order to keep up the appearance of the loan, the recipients paid back minimal amounts each month." Von Dehn was included in the company welfare, which exemplified the IBM ethic of taking care of "the company's own." Such assistance encouraged loyalty from employees even during the war. The company also granted food loans. Soon, the loan policy was extended to unmarried employees as well. Eventually, the employee loan program, which was similar to programs Watson had declared in other countries, amounted to more than 135,000 zlotys or approximately $27,000. IBM Geneva also authorized small loans to its war-devastated suppliers totaling more than 8,000 zlotys.
95
IBM machinery was placed throughout the General Government, including two alphabetizers and accessory machines, which had been brought in by the invading German army. Dehomag rented them to the Polish users, retaining 25 percent of the income. The remainder went to Watson Buromaschinen. Among the few remaining clients were Polish Railways and the Krakow Statistical Office.
96
The subsidiary's machinery in occupied Poland was insured in the United States. In 1940, von Dehn asked IBM to increase the insurance in view of wartime conditions. But this would have involved paperwork. IBM declined to do so.
97
As for Block-Brun, IBM's former agency, it was excluded from nearly all of IBM's expansion in Poland. Block-Brun switched to Powers, the only minor competitor left in punch card technology. But the residual Powers business was paltry. So Block-Brun was eager to retain a tertiary role as a local supplier of IBM control mechanisms. An administrator who later looked for a written contract with Block-Brun could never find one. This relationship also appeared to be oral. Under the cloudy arrangement, IBM sold the control mechanisms at Block-Brun's own risk, requiring the Polish agency to pay the import freight to Warsaw. These parts were not sold into Poland by Dehomag, but directly by IBM either in New York or Europe. Watson required Block-Brun to pay the import fees. All sales were final with Block-Brun immediately assuming ownership once the apparatuses were ordered. But IBM's terms often allowed the agency to pay into the Bank Handlowy account only after the merchandise was sold, generally six to fifteen months after receipt.
98
IBM was receiving the money for years after the invasion.