The Transfer Agreement (32 page)

The same day, May
19,
Arlosoroff finalized his transfer ideas. The grandiose project was outlined in a personal memo marked
TOP SECRET.
The centerpiece of the plan was a "Liquidation Bank." Rutenberg had originally talked of a liquidation
company,
but ownership of the company had become a political issue, and Arlosoroff was now convinced the solution was a publicly supervised transfer, not a privately controlled migration. Arlosoroff's Liquidation Bank would be internationally recognized, probably under the aegis of the League of Nations. Relying on Weizmann's good relations with both the British government and Mussolini, Arlosoroff proposed that the bank's funding be secured by joint British-Italian sponsorship with international Jewish contributions. Merchandise would of course be the nexus between Germany and the Zionists.
⁷

In fact, Arlosoroff's May
I9
transfer plan was essentially the same as Sam Cohen's deal, with two basic improvements. First, German exports would not be limited to agricultural wares. Any German product or commodity would be included. Arlosoroff's memo listed items as varied as automobiles, building materials, dyes, and pharmaceuticals.
⁸
His thought was not just the expansion of orchards, but the creation of a thriving urban and rural society.

Second, Arlosoroff's transfer would not be cashless. Emigrants would receive their
£1,000
entrance money in hand, and then transfer an
additional
sum that would be used in trust by Zionist institutions to develop the country. This additional money was essential. Thousands of Jews could not be suddenly transferred to primitive Palestine without the roads, schools, hospitals, ports, and other fundamentals of a twentieth-century nation. Many of these had to be constructed virtually from scratch. Arlosoroff's Liquidation Bank would take over the blocked assets of German Jews, use them to pay for
German
exports, sell them in Palestine, and give proceeds of the first
£1,000
to the immigrant, minus a small percent for administration.
⁹
Transferred cash beyond the first
£1,000
would be invested in infrastructure. In this way, Palestine would receive the maximum merchandise and investment capital. The Jewish immigrant would receive the maximum cash.

In addition, Arlosoroff's May
19
memo listed Germany's inducements: a gateway to the Middle East market, increased employment, and the foreign-currency opportunities of unhindered exports. Moreover, the Zionist transfer would be seen as the minimum of "fair play" toward German Jewry that Western leaders had publicly called for in recent days. Thus, Hitler could both remove the Jews and be recognized as assisting in their national aspirations.
¹⁰
Arlosoroff's memo demanded all Jewish "sentimentality" about negotiating with the Nazis be rejected. Emotionalism, he argued, would not gain Jews their homeland.
¹¹

But Arlosoroff appended one important stipulation to his memo. German Jewish transfer must be wholly voluntary. This was a mandamus from Herzl. The Jewish State awaited only those who would ascend to it: Emigration was
aliya,
the Hebrew word for ascent. No Jew would be forced to liquidate his German existence.
¹²
Arlosoroff's plan combined the best elements of international law, bribery, and freedom of choice. All his hypothesizing had created a workable transfer, guaranteed by law and motivated by self-interest.

When Arlosoroff completed his top-secret memo on May 19, he was unaware that the Reich had already agreed to Sam Cohen's deal. When apprised of the unexpected development, probably that same day, Arlosoroff did not agree with Landauer's assumption that Cohen's pact was a limited deal. Arlosoroff believed it was
the
deal. But they were all still guessing. Cohen himself could not be located in Berlin to explain, because on May 19 Cohen had suddenly surfaced in London.
¹³

Arlosoroff had to move quickly lest a man and his orchard company supplant the entire international Zionist movement and seize control of the fate of the Jewish nation.

His first task was to circulate word that the official proposal of Zionism was in the hands of Chaim Arlosoroff, head of the Political Department of the Jewish Agency—not Sam Cohen, orchard broker. More important, transfer must provide emigrants with as much of their cash as possible and Palestine with as many building materials as possible. On May
20,
in a wide-ranging interview with Robert Weltsch, editor of the ZVfD's
juedische Rundschau,
Arlosoroff detailed all the proposals of his plan, which only twenty-four hours earlier had been marked
TOP SECRET.
¹⁴

The interview was printed in the
Rundschau's
May 24 edition. In it, Arlosoroff pinpointed the problem for Jews. They no longer needed refuges, asylums, or other temporary solutions to their persecution. Jews needed an endpoint in their quest for self-determination. Palestine was this endpoint. There Jews would find the glory of self-imposed struggle. After the struggle they would find agrarian opportunities if they chose, industrial opportunities if they chose—whatever they chose, for the choosing would now
be
free from anti-Jewish decrees or concessions from on high. Through liquidation, Jews would achieve independence—for the first time in
2,000
years
¹⁵

"This leads me to a central question ... the liquidation of capital and holdings belonging to German Jewish emigrants," Arlosoroff explained in the article. "There appears to be no way out for people whose fortune exceeds the amount of foreign currency normally permitted ... under present laws.
. . . It
makes no sense to ignore it or to think that it can be solved without an agreement with the German government.... The only way out is to ... provide a benefit to both parties."
¹⁶

Nazi censors ordered the newspaper seized. The Reich Press Office routinely suppressed troublesome editions and sometimes closed publications down altogether. In this case, the first for
juedische Rundschau,
the edition was merely confiscated
¹⁷
No reason was given, but that same day, to clarify matters, the Reich Foreign Ministry transmitted a written guideline to the British embassy, ostensibly in response to their earlier inquiries regarding the original currency exemption.
¹⁸
The Reich specified: "The emigrant must first of all give convincing evidence of his serious intention to transfer his domicile abroad
permanently
[Reich emphasis], and must produce a certificate from the Emigrant Advisory Office that his proposals are economically realizable and that the capital which he wishes to take with him is of suitable amount for beginning a new existence abroad."
¹⁹
The reference—without naming it—was to Sam Cohen's cashless or near cashless orchard settlement scheme. An accompanying message warned that publicity be strictly avoided. Whatever cash German Jews were allowed would severely burden monetary reserves, and if too many emigrants applied, the intensified fiscal strain would force a curtailment of the entire arrangement.
²⁰

The Nazis had effectively muffled Arlosoroff. So Arlosoroff left the country to promote the position that a Jewish exodus from Germany should guarantee as many emigrant assets as possible. Arlosoroff went to Prague, where on May 25 he urged an audience to act unemotionally for the benefit of Germany's Jews and indeed the entire Jewish people. The most pressing issue, he told them, was the immediate transfer of German Jewish youth. "We do not want them to become psychic cripples." Second in line, Arlosoroff said, should be laborers from ages seventeen to twenty-two, who would build and cultivate for a dramatic national expansion. Then would come the settlers, rural and urban. These new settlers, the commercial and agrarian lifeblood of the nation-to-be, should not be exploited by competitive and unviable programs—a reference to Sam Cohen's deal. Instead, Jews should pool their resources in a single
officially sanctioned
program. That program would have to include German merchandise. Undoubtedly, many in the crowd were boycott advocates, but he urged them to be realistic and understand that Jewish assets must be made liquid and transferable. And this would require an understanding with the German government that would hinge on exports. This theme was repeated in a public address in Warsaw on May
27
and in newspaper interviews published in Europe and Palestine that week.
²¹

Arlosoroff tried to circulate his notions as the true position of the Zionist movement. But with a secret deal already ratified by the German government, Sam Cohen was far ahead of him. And Cohen was now in England, making arrangements with the rest of the Zionist hierarchy. Enough speeches had been made. Arlosoroff hurried to London.

In London, Mr. Sam Cohen had been very busy. On May
19,
shortly after his arrival, Cohen telephoned Martin Rosenbluth, the German Zionist dispatched to London by Goering to stop the anti-Hitler movement. Rosenbluth was now stationed in London as the Zionist Organization's liaison with the ZVfD. Cohen briefed Rosenbluth on the deal and asked for an immediate meeting to discuss its implementation, but warned that Landauer and company were extremely dissatisfied with the arrangement. However, after hearing Cohen's preliminary explanations, Rosenbluth was convinced that Landauer must be sorely mistaken. Cohen's deal seemed fine, especially in light of the Jewish Agency quarrels and sniping, which prevented any decisive action in April. So just after he hung up, Rosenbluth dashed oft' a short note to Landauer reminding him that German Zionists had received reports of the squabbling in Jerusalem and London, and perhaps Cohen's deal was not so bad.
²²

During the next several days, Cohen explained the lucrative potential of his deal to the Zionist Executive Committee in London. Seeking to broaden the benefits, the Zionist Executive urged him to submit his private agreement to "national control." That would mean sharing the agreement with the official land-settlement firms such as Yakhin, owned by the Mapai-controlled Histadrut workers organization. Cohen agreed. The Executive then asked him to return at once to Palestine to personally handle negotiations between Hanotaiah, Yakhin, and other companies. They promised the Jewish Agency's full support and gave him a letter of authority dated May
30, 1933:
"The Executive Committee has taken note of your agreement with the German Ministry of Economics and would be gratified if you were successful in bringing about an agreement for joint implementation of the plan between Hanotaiah, Yakhin, and other appropriate societies. We are pleased that you agree with the idea of national supervision for this project."
²³
By relying on Cohen, the Zionist Organization preserved its own deniability.
If
tumult arose over any deal with Hitler, they could just blame a private citizen acting alone.

Frustrated and travel-weary, Arlosoroft' arrived in London on June
1
, almost two weeks after Sam Cohen. The challenge facing Arlosoroft' was to unravel the complicated arrangements Cohen had woven. At stake was a nearsighted business deal that would squander Zionism's one great chance, probably its last great chance, to bring the Jewish people en masse to Palestine.

Upon arrival, Arlosoroft' went to Zionist headquarters at Great Russell Street for a conference with Nahum Sokolow, president of the Zionist Organization, Berl Locker of the Zionist Executive, David Werner Senator of the Jewish Agency Executive, and Martin Rosenbluth and Leo Herrmann of the ZVfD. Arlosoroft' made his appeal. He began with an analysis of Zionism's precarious status in Germany and claimed the future was in the hands of young German Jewish leaders. The older leaders, such as Landauer, would be emigrating to Palestine in the near future. Arlosoroft' called their abandonment of the work in Germany "deplorable," adding that they would be hard to replace.
²⁴

As to transfer, there was only one solution, argued Arlosoroft': an internationally guaranteed Liquidation Bank. Without it, Jewish assets in Germany would soon dwindle to nothing. Only personal savings and reserves were buffering the present misery. With those depleted, the narrow Jewish employment possiblities remaining in Germany would utterly pauperize the community. Moreover, German currency was so weak that the absence of international guarantees could collapse any system limited to reichmarks.
²⁵

Arlosoroff was sure that when German Jews discovered they could not remove large amounts of their money through Sam Cohen's deal, they would postpone emigrating to Palestine until they were destitute. In that case, their indispensable capital contribution would be squandered. Or they would resort to widespread smuggling. The Nazis would invariably catch many of the smugglers, and the Jews would suffer even worse. Without larger cash permits, the overwhelmingly non-Zionist German Jewish population would simply reject Palestine as a realistic option.
²⁶

The Executive Committee and the German Zionists heard Arlosoroff's compelling explanations. It was now a choice between Sam Cohen's deal or Chaim Arlosoroff's transfer. A long discussion ensued. Arlosoroff answered the questions persuasively. By meeting's end the decision was made: in favor of Arlosoroff.
²⁷