IBM and the Holocaust (49 page)

C
HAUNCEY
: Well, I intend to reserve all our rights . . .

H
UMMEL
: Austria. IBM owes Dehomag nineteen thousand dollars. That was five or six years ago. . . . You agreed . . . to pay us nineteen thousand in cash. But you never paid it and every time we went to the Finance Department it made a serious problem for us.

C
HAUNCEY
: Go ahead and try to offset what you say is held in Austria for us against those items. Vienna Company?

H
UMMEL
: After incorporation of Austria in Germany, the tax people claimed that [with] the existence of that company there, that IBM had business in Germany and thereby [was] subject to the high tax. Every opportunity is taken by the tax authorities to fix liability on IBM for that higher tax. They have always contended that Dehomag is an "organ" of IBM and is subject to the tax. . . .

C
HAUNCEY
: Countries now incorporated into Germany?

H
UMMEL
: Austria, Sudetenland, German Poland, Alsace-Lorraine, Silesia.

C
HAUNCEY
: Bohemia Moravia?

H
UMMEL
: That is treated as a part of Germany.

C
HAUNCEY
: Poland?

H
UMMEL
: Very few customers left, the business is almost destroyed. Besides that they are using all the rentals to pay expenses and the Government will soon close the Company because they will not let it continue to lose money. Dehn [IBM's Polish subsidiary manager] says he can't continue to do business—all the industry [is] now in German hands and they won't do business with a Watson company.

C
HAUNCEY
: Can Dehne come to Berlin?

H
UMMEL
: Yes.

C
HAUNCEY
: Have him come here.

H
UMMEL
: Bohemia-Moravia—last month [the] frontier [was] given up, and since that time they have to buy machines. Geneva can no longer buy machines from us and they have to pay 100 percent for them. It is more or less included in the German territory. Not included
de jure,
but
de facto.

C
HAUNCEY
: Are the employees there still the employees of the Prague Company?

H
UMMEL
: Yes.

C
HAUNCEY
: Silesia?

H
UMMEL
: We have taken over Silesia, which belongs to Germany. An arrangement was made with Schotte for that.

C
HAUNCEY
: What happened to our machines there?

H
UMMEL
: Some were sent to Romania and some to Hungary. Some are still there. Rental on IBM machines that are there still get 75 percent of the rentals—you have no expenses there and get 75 percent.

C
HAUNCEY
: Is the arrangement for Silesia in writing?

H
UMMEL
: Yes, a copy was sent to Geneva and agreed to by the Devisenstelle.

C
HAUNCEY
: Danzig?

H
UMMEL
: Only one customer. There was an agreement between Dehomag and Geneva. You had no customers there as that was always serviced by Dehomag. The people there refused to do business with Poland.

C
HAUNCEY
: Sweden? Are you furnishing machines, parts, or supplies to Sweden?

H
UMMEL
: Yes, if Geneva gives us orders. To every country, if Geneva gives us orders.

C
HAUNCEY
: How are you paid for them?

H
UMMEL
: 75 percent from the country [Sweden] and 25 percent from the goods account.

C
HAUNCEY
: Is there any dollar liability there?

H
UMMEL
: No.

C
HAUNCEY
: Suppose that Sweden should block its money, what would then be the position?

H
UMMEL
: Then you would not get permission to export the products to Sweden. But . . . there is a clearing agreement between Germany and Sweden and there is no possibility that that would happen.

C
HAUNCEY
: Norway?

H
UMMEL
: Just the same as Sweden.

C
HAUNCEY
: Denmark?

H
UMMEL
: Just the same.

C
HAUNCEY
: In those two countries, Norway and Denmark, are you in touch with the IBM people there?

H
UMMEL
: Certainly, we furnish parts and so on to them.

C
HAUNCEY
: Do you bill Geneva or the local company?

H
UMMEL
: We bill Geneva for the 75 percent. Sometimes . . . the authorities don't agree, then we have to bill 100 percent.

C
HAUNCEY
: Holland?

H
UMMEL
: Same condition in Holland.

C
HAUNCEY
: Belgium?

H
UMMEL
: Same condition.

C
HAUNCEY
: France?

H
UMMEL
: We have to bill direct to the French [IBM] company [in occupied France]. There is some exchange of goods. I don't think under present conditions we can bill Geneva. We sent them in exchange against parts for alphabetic machines. . . . eight kilos of paper. They . . . said they wanted to buy paper and we did not want to mix in that business. They buy direct from the German paper mill.

C
HAUNCEY
: Alsace-Lorraine. Have you taken over the territory?

H
UMMEL
: No, we have been called once for service.

C
HAUNCEY
: Who called you?

H
UMMEL
: The customers called on us only once.

C
HAUNCEY
: [Un]occupied France?

H
UMMEL
: We have no contact with that part of the country.

C
HAUNCEY
: You have not furnished anything for that part of the country?

H
UMMEL
: No. We helped [Roger] Virgile [director of CEC, the IBM subsidiary in France] get permission to go to both parts. This territory is taken care of by Virgile himself.

C
HAUNCEY
: Is the factory in operation?

H
UMMEL
: As far as I know, a little bit.

C
HAUNCEY
: Italy.

H
UMMEL
: We made an agreement with Geneva with consent of New York that in exchange for alphabetical tabulators which we received from IBM, we gave four used American multiplying punches . . . the first are delivered and the second will . . . be delivered in January. He [the Italian manager] is in great need for these machines. We pack the machines and send them back to Milan. . . . twelve multipliers equal to three alphabetic machines. He [is] still manufacturing but very limited.

C
HAUNCEY
: Romania?

H
UMMEL
: If Geneva gives us an order for Romania, we will fill it [under the] same conditions, 75 percent and 25 percent. We have not furnished any to Romania [directly]. Few machines sent from Silesia.

C
HAUNCEY
: Do you have to get a separate permission for each time you send a machine out?

H
UMMEL
: No, we have a general permission.

C
HAUNCEY
: Bulgaria?

H
UMMEL
: Same condition.

C
HAUNCEY
: Have you furnished any machines?

H
UMMEL
: No

C
HAUNCEY
: Yugoslavia?

H
UMMEL
: Nothing furnished.

C
HAUNCEY
: Would you be able to furnish machines?

H
UMMEL
: Yes, except for transportation.
⁹⁵

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.

SECRECY, CONFUSION
,
and crisis continued to surround Chauncey's negotiations throughout November and December 1940 as he and IBM attorneys in Germany conferred with various influential personalities in the business community, German military, and Nazi Party. The tension was building as some, including Chauncey, began fearing for their safety.
⁹⁶

IBM attorney Albert had created a nine-page legal opinion with staunch recommendations. In his written opinion, Albert openly conceded that most German military agencies relied upon IBM machinery, and that the Reich was rightly worried that IBM knew the details of secret projects. The Reich's fear, Albert later wrote, "is not quite as unfounded as it might appear," based on the intimate knowledge Dehomag engineers required to create and service Hollerith punch card systems. He added, "It is no use to argue that this fear is absolutely theoretical." Nonetheless, Albert urged Watson to resist efforts to force IBM to relinquish its majority ownership.
⁹⁷

Chauncey was originally going to cable Albert's supportive opinion to New York, together with a six-page personal report. But at the last minute, he retreated to the Embassy, "for my own protection," where he typed his letter. "It is important," warned Chauncey, "that any reply you send me be sent in code and no reference made to this communication whatsoever." He added that he had shared its contents with no one except the Embassy staff. Embassy people in turn made copies for review by senior officials of the State Department in Washington, D.C., before they in turn delivered the correspondence to IBM.

Albert's nine-page opinion itself was undated. Chauncey was to destroy it after reading. But with the assistance of the Embassy, Chauncey elected to send it to Watson anyway, by diplomatic courier, writing, "Dr. Albert's [opinion] is contained in the enclosed memorandum, which I am sending to you, notwithstanding that I am supposed to return it to him for destruction." Before enclosing it, Chauncey, for extra measure, removed the first page of the opinion, which undoubtedly included identifying letterhead from Albert's law office. Chauncey shared his worry: "Our people must report their conversations with me, and in some respects they may be under the instruction of the military authorities."
⁹⁸