by Edwin Black
IBM had almost single-handedly brought modern warfare into the information age. Through its persistent, aggressive, unfaltering efforts, IBM virtually put the “blitz” in the krieg for Nazi Germany. Simply put, IBM organized the organizers of Hitler’s war.
Keeping corporate distance in the face of the company’s mounting involvement was now more imperative than ever. 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 inherently revealed by an omnipresent paper trail: the cards themselves. IBM—and only IBM—printed all the cards. Billions of them.
Since Herman Hollerith invented his tabulators at the close of the nineteenth century, the feisty inventor had fought continuous technologic and legal battles to ensure that no source but his company could print a card compatible with the sorter’s complex mechanisms. Once a customer invested in a Hollerith machine, the customer was continuously tied to the company for punch cards. This exclusivity was nothing less than the anchor of the lucrative Hollerith monopoly.41
Watson vigilantly continued Hollerith’s legacy. During the Hitler years, the Department of Justice litigated IBM’s monopoly, focusing on the firm’s secret pacts with other potential manufacturers, which forbid any competition in punch card supply. Unique presses, extraordinary paper, near clinical storage, exacting specifications, and special permission from Watson were required for any IBM subsidiary to even begin printing cards anywhere in the world. Should any non-IBM entity dare enter the field, Watson would shut them down with court orders. For example, when the German paper manufacturer Euler, associated with the Powers Company, tried to print IBM-compatible punch cards, Watson restrained them with an injunction. For good measure, IBM wrote special clauses into its German contracts prohibiting any client—whether an ordinary insurance company or the NSDAP itself—from utilizing any card other than one produced by IBM. In short, Hollerith cards could only be printed at IBM-owned and -operated printing facilities and nowhere else.42
Until 1935, IBM NY was the sole exporter of punch cards to Hitler’s Germany. Eventually, Watson invested in high-speed presses for Germany so Dehomag could print and export its own throughout Europe. During the next few years, he authorized IBM printing presses in Austria, Poland, Holland, France, and greatly expanded capacity in Germany. Deep into the war, as late as 1942 additional IBM printing facilities were opened in Finland and Denmark. All these plants acted as a coordinated cross-border European supply line. For example, in the first three months of 1939 alone, IBM Sweden sold 1.9 million punch cards to Denmark, 1.3 million to Finland, and 696,000 to Norway. IBM NY sold 1 million cards to Yugoslavia and 700,000 to Fascist Spain. Dehomag sold 261,000 to Hungary. It was all done under the constant supervision of IBM Geneva, which in turn kept in continuous contact with IBM NY. European General Manager Schotte regularly flew back and forth from Switzerland to America conveying reports.43
IBM printed billions of its electrically sensitive cards each year for its European customers. But every order was different. Each set was meticulously designed not only for the singular client, but for the client’s specific assignments. The design work was not a rote procedure, but an intense collaboration. It began with a protracted investigation of the precise data needs of the project, as well as the people, items, or services being tabulated. This required IBM subsidiary “field engineers” to undertake invasive studies of the subject being measured, often on-site. Was it people? Was it cattle? Was it airplane engines? Was it pension payments? Was it slave labor? Different data gathering and card layouts were required for each type of application.44
Once the problem was intimately understood, Hollerith technology was carefully wedded to the specific mission. This process required a constant back and forth between the IBM subsidiary’s technical staff and client user as they jointly designed mock-up punch cards to be compatible with the registration forms, and then ensured that the plug and dial tabulators could be configured to extract the information. Only after careful approval by both IBM technicians and the client did the cards finally go to press.45
Once printed, each set of custom-designed punch cards bore its own distinctive look for its highly specialized purpose. Each set was printed with its own job-specific layout, with columns arrayed in custom-tailored configurations and then preprinted with unique column labels. Only IBM presses manufactured these cards, column by column, with the preprinted field topic: race, nationality, concentration camp, metal drums, combat wounds to leg, train departure vs. train arrival, type of horse, bank account, wages owed, property owed, physical racial features possessed—ad infinitum.46
Cards printed for one task could never be used for another. Factory payroll accounting cards, for example, could not be utilized by the SS in its ongoing program of checking family backgrounds for racial features. Differences in the cards were obvious. Dehomag’s 1942 accounting cards for the Bohlerwerk Company, for instance, featured the manufacturer’s name centered. The card contained only 14 columns preprinted with such headings as hours worked above column 8, pieces produced above column 9, and suggested processing time above column 11. The right hand third of the punch card was empty.47
In contrast, SS Race Office punch cards, printed by Dehomag that same year, featured a bold Rassenamt SS logo. Rassenamt cards carried custom-labeled columns for years of marriage above column 7, height above column 47, height while seated above column 48, and weight above column 49. A separate grouping on the Rassenamt card listed “ethnic categories,” including sub-divisions such as Nordic printed above column 50, Oriental above column 57, Mongolian above column 59, and Negroid above column 60. SS Race Office cards were crowded from margin to margin with column designations.48
Dehomag’s 1933 Prussian census cards featured a large Prussian Statistical Office label and used only 48 columns in total. The census card bore such preprinted demographic headings as religion over column 24 and mother tongue over column 28; columns 49-60 were left empty. Coal survey cards listed sources, grades, and carloads. Luftwaffe cards listed bombing runs by pilots. Ghettoization registration cards listed Jews block by block. Railroad punch cards listed cities along a route, schedule information, and the freight being hauled—whatever that freight might be.49
Each card bore the distinctive ownership imprimatur of the IBM subsidiary as well as the year and month of issue, printed in tiny letters—generally red—along the short edge of the card. An IBM punch card could only be used once. After a period of months, the gargantuan stacks of processed cards were routinely destroyed. Billions more were needed each year by the Greater Reich and its Axis allies, requiring a sophisticated logistical network of IBM authorized pulp mills, paper suppliers, and stock transport. Sales revenue for the lucrative supply of cards was continuously funneled to IBM via various modalities, including its Geneva nexus.50
Slave labor cards were particularly complex on-going projects. The Reich was constantly changing map borders and Germanizing city and regional names. Its labor needs became more and more demanding. This type of punch card operation required numerous handwritten mock-ups and regular revisions. For example, MB Projects 3090 and 3091 tracking slave labor involved several mock-up cards, each clearly imprinted with Dehomag’s name along the edge. Written in hand on a typical sample was the project assignment: “work deployment of POWs and prisoners according to business branches.” Toward the left, a column was hand-labeled “number of employed during the month” next to another column hand-marked “number of employed at month’s end.” The center and right-hand column headings were each scribbled in: French, Belgium, British, Yugoslavian, Polish.51
Another card in the series was entitled “registration of male and female workers and employees.” Hand-scribbled column headings itemized such conquered territory as Bialystok [Poland], Netherl
ands, Protectorate [Czechoslovakia], and Croatia. Noted in pen near the bottom were special instructions about the left-hand row: “columns 56-59 members of Polish ethnicity go with hole 1” and “columns 56-59 members of Ukrainian ethnicity go with hole 2.”52
Yet another Dehomag mock-up card in MB Project 3090 was hand-titled “registration of male and female foreign workers and employees.” The scrawled column headings included: road worker, miners, textile workers, construction workers, chemists, technicians.53
Cards were only the beginning. All decisions about precisely which column and which row could be punched in order to properly record, tabulate, and sort any portion of data were studiously determined in advance by Hollerith engineers. Making the cards readable by IBM sorters required special settings on the machines that only company engineers could adjust. This involved review of machine schematics to ascertain which adjustments were needed for each data run. Once an assignment was undertaken, the subsidiary or its authorized local dealers would then continuously train the Nazi or other personnel involved to use the equipment, whether puncher, sorter, or tabulator. The delicate machines, easily nudged out of whack by their constant syncopation, were serviced on-site, generally monthly, whether that site was in the registration center at Mauthausen concentration camp, the SS offices at Dachau, or the census bureau in any country.54 Without this abundance of precision planning, assistance, and supply of systems, IBM’s Holleriths just could not work—nor could their benefits be derived.
Naturally, IBM profits boomed. In February 1940, IBM Geneva sent IBM NY a month-by-month review of Dehomag’s record profit increases in the last half of 1939. June profits increased RM 96,680 over May profits. July bettered June’s amount by RM 123,015. August continued to set another record, beating July by RM 98,006, and so on for the rest of the year.55
In April, IBM executives in both Geneva and New York continued to marvel at Dehomag’s unprecedented profit increases, including the unexpected nearly RM 1.8 million boost in December 1939. Auditors could not wait for details, reporting, “we telegraphed to Berlin for further information which we are now awaiting.”56
It was never clear exactly 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 transmogrifications, the New York office was compelled to announce yet another in a string of profit records, this one for the first half of the year. Just less than a $6 million gross profit for the six-month period was conceded, and that was without adding about a million-dollar foreign profit blocked in Germany and elsewhere. That $6 million half-year profit was about a half million higher than the same period a year before. Few in the financial community were surprised. IBM profits had been in a steep climb since the day Hitler came to power.57 Clearly, the war was good to IBM coffers.
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. Like many, Watson expected that America would stay out of the war, and when it was over, businessmen like him would pick up the post-war economic pieces.
In fact, Watson began planning for the post-war boom and a complete reorganization of the world’s economic system almost as soon as the war began. By late April 1940, he had convened a stellar Committee for Economic Reconstruction jointly sponsored by the two organizations he dominated, the ICC and the Carnegie Endowment for Peace. This group planned to rewrite the rules of international trade and economic sovereignty, essentially parceling out the world’s resources when the war concluded. Watson introduced the plan to his fellow industrialists attending an April 29, 1940, ICC dinner in Washington D.C. “Our program,” asserted Watson, “is for national committees in the individual countries to study their own problems from the standpoint of what they need from other countries and what they have to furnish other countries.” It was the same Hitleresque message Watson had been preaching for years. Some countries, both men believed, were simply entitled to the natural resources of another. War could be avoided by ceding these materials in advance.58
No time was wasted in making plans. “We are carrying on just as though there wasn’t any war, if you can believe it, and probably you don’t,” declared Eliot Wadsworth, chairman of the ICC’s American Committee, when he convened the April 29, 1940, meeting. Wadsworth, a Watson confidant, revealed that “already two meetings have been held among representatives of the sections of the International Chamber in spite of the fact that it is contradictory to the regulations of the belligerent countries…. England, France and Germany have allowed the representatives of their sections to meet in friendly discussion at The Hague to consider the… future program.”59
Just days after the ICC’s dinner, Hitler launched his savage Blitzkrieg invasions overrunning Luxembourg, Holland, and Belgium. An outraged public could turn nowhere without seeing German atrocities depicted on newsreel screens or the front pages of newspapers. Horror stories from refugees, governments-in-exile, diplomats, and journalists alike would not stop. Although the nation was divided on the wisdom of entering the war, many nonetheless felt certain America would soon join the battle against Germany. Anti-Nazi sentiment intensified. A Gallup poll taken shortly after the Reich’s spring offensive began showed only 2 percent of Americans felt Hitler’s invasion of Belgium or Holland could be justified.60
As the public mood swelled against all things Nazi, Watson was now confronted with one major public relations problem: his medal.
Despite all the persecutions, atrocities, plunder, and invasions, Watson remained the proud holder of der Fuhrer’s Merit Cross of the German Eagle with Star bestowed in 1937 at the ICC Congress in Berlin. Hitler’s medal was a very public link. Holding it in the face of daily aggression was inherently an acceptance of Hitler’s actions.
At the same time, Watson had avoided virtually all criticism of the Hitler regime beyond offering boyish aphorisms to observe the Golden Rule, and calling the invasion of Poland “a difference of opinion.” He could not afford to offend his second-biggest customer, a customer that would soon emerge as the new dictatorial ruler of Europe. On the other hand, Watson would never allow his legendary and patriotic position in the United States to be compromised.
Events were squeezing Watson.
On May 16, 1940, the day after Holland capitulated, Watson did as he always did: he reached out to his friends in the White House and State Department for political cover. That day, he dispatched a note to Secretary of State Cordell Hull asking if the United States government wanted him to return the medal. Watson could then attribute his return or refusal to return the decoration to Hull’s specific counsel. Now, however, the American government was openly anti-Nazi.61
Hull would not even become involved. The Secretary immediately wrote back: “I feel that this is a matter upon which the decision will have to rest entirely with you, and is not one upon which this Government would be able to take a position.” Hull penned a personal regret in the margin, “I would offer advice to no person sooner than you.”62
Four days later, on May 24, Watson took his first overt step of identification with the victims of Nazi aggression. He agreed to chair an emergency committee to raise $3 million for the relief of Dutch refugees.63
But now, IBM itself was coming under scrutiny for its Nazi connections. The company had become a virtual way station for German nationals transiting in and out of New York for training, meetings, and conferences. Some of these men were now moving with the vanguard of the German destruction machine in Austria, Czechoslovakia, Poland, and Holland. Others had been transferred to South America. 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. To even express pro-Nazi opinions was now considered anti-American.64 Beyond the vau
nted publicity stunts and symphonies, IBM’s Nazi alliance was quietly emerging from the haze.
At the end of May 1940, FBI Director J. Edgar Hoover became interested in IBM’s Nazi connections. Suspecting the company of hosting a hotbed of Nazi agitation, the Federal Bureau of Investigation, in late May, launched wide-ranging investigations on at least four German nationals employed by IBM and suspected of espionage or other subversive conduct. Although no charges were ever brought, more probes would follow and they would continue for years. Assistant Secretary of State Adolf Berle became the State Department’s point man for espionage concerns at IBM. Berle and Hoover began to regularly trade information on the suspected spies at IBM. In short order, federal agents and local police intelligence officers were dispatched to IBM offices in Manhattan, Endicott, Albany, Cincinnati, and Milwaukee asking probative questions.65
Eventually, the FBI interviewed senior company executives in their IBM offices, including the executive secretary, sales manager, education department director, and even Executive Vice President and General Manager Frederick Nichol. The field investigations soon came to the door of several IBM clients. Customers were asked about any pro-Nazi remarks overheard from at least one suspect IBM salesman in Milwaukee. The postmaster in Darien, Connecticut, was asked about rumors involving a leading IBM technical editor, a German national working in New York who was said to be part of an anti-Jewish society and expressing pro-Reich feelings.66
As soon as Watson learned of the FBI’s interest, indeed even before the agency could organize its investigations, he went into action. Watson and Nichol visited Undersecretary of State Sumner Welles on June 6 to volunteer personal details about potentially suspect IBM employees in the U.S. and Latin America. Watson made it clear he would cooperate in any way, and take immediate steps to sever corporate relations with any individual the government thought questionable, including several specifically discussed in the Colombia and Mexico City offices. Welles referred the information Watson proffered to Berle, who in turn forwarded it on to J. Edgar Hoover. Ironically, when Watson and Nichol met with Welles at the State Department on June 6, the two IBM executives forgot to mention one particular salesman by the name of Karl Georg Ruthe.67
