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How IBM helped the Nazis
IBM and the Holocaust By Edwin Black, Little Brown, ISBN
0-316-85769-6, Hardback, £20
Book review by Peter Reydt
27 June 2001
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IBM and the Holocaust tells the story of the involvement of this
major US corporation in the establishment of Hitler’s Third Reich and the
destruction of European Jewry.
Author Edwin Black shows how technology developed in America by Herman
Hollerith—a punch card and punch card sorting system—enabled the Nazis to
organise their war machine and carry through the efficient and systematic
genocide of the Jews. At the time of the Nazi dictatorship, IBM had a near
worldwide monopoly over the technology and the production of its vital
ingredient—the punch cards.
Edwin Black is not new to the subject of the Holocaust. His parents
were both Jews of European decent and survivors of the Holocaust. Black
first encountered the punch card technology at the Holocaust Museum in
Washington, where he saw a Hollerith card sorting machine on exhibition.
He explains that it was then that questions started to nag at him—what
role did this machine play for the Nazis? What was the role of IBM? This
became the starting point for his investigation. In 1998, he began to
pursue these questions vigorously, recruiting a team of researchers,
interns, translators and assistants, until it comprised more than 100
people.
In his introduction, Black explains “I was fortunate to have an
understanding of Reich economics and multi-national commerce from my
earlier book, The Transfer Agreement, [which dealt with the secret
pre-war agreement between Zionism and the Nazis that enabled a limited
number of Jews to leave Germany for Palestine] as well as a background in
the computer industry, and years of experience as an investigative
journalist specialising in corporate misconduct. I approached this project
as a typical if not grandiose investigation of corporate conduct with one
dramatic difference: the conduct impacted on the lives and deaths of
millions.” (p15)
Black explains that ultimately, IBM helped the Nazis carry through
their policy of genocide. Without this assistance, Hitler’s regime would
not have been able to carry through its extermination plan with such
efficiency. IBM’s machines were used at all stages of the persecution of
the Jews. They collected the necessary information to identify the Nazis’
victims, first to enforce the bar on Jews working in certain academic,
professional and government jobs and later to carry out mass evictions
from their homes and into the ghettoes.
IBM technology was used to organise the railways, so that millions of
Nazi’ victims could be transported to the concentration camps, where they
were immediately led into the gas chambers. There were Hollerith
departments at nearly every concentration camp, which registered the
arrival of inmates, organised the allocation of slave labourers, and even
kept tallies on the deaths of prisoners.
IBM was involved in virtually every aspect of the Third Reich’s
operations. The book explains that the company leased, serviced and
upgraded more than 2,000 IBM multi-machine sets throughout Germany, and
thousands more throughout Nazi occupied Europe. IBM developed
custom-designed cards used by the Nazis; with as many as 1.5 billion punch
cards being produced in Germany annually.
The punch card technology first developed by Hollerith, a
German-American living in Washington, was used to enable the US Census
Bureau to count the 1890 census. Decades prior to the development of
computers, Hollerith technology enabled the fastest tabulation of the US
population ever undertaken. Through a series of punch holes, each card
recorded information on an individual’s gender, religion, nationality and
occupation. Processed, and reprocessed, through sorting and counting
machines the cards “could render the portrait of an entire population or
could pick out any group within that population... Every punch card would
become an informational storehouse limited only by the number of holes”.
(p25) Within years, Hollerith’s machines were being used to take censuses
across the world. The technology also developed into an early computing
system, being used for financial accountancy by some of the largest US
corporations.
Hollerith established a near-world wide monopoly, leasing rather than
selling his machines, but sold up in 1911 and the company was merged into
the Computing-Tabulating-Recording Company. Under the stewardship of
ex-sewing machine salesman Thomas Watson, CTR was transformed in the
International Business Machines Corporation. Watson, a ruthless
businessman, established a paternalistic hierarchy in the company. Watson
spoke of the “IBM family” that included not only his workers, but also
their wives and children, who would also be trained in the “IBM spirit”
and would be well looked after and integrated into his empire.
In 1922, with hyperinflation in Germany leading to the collapse of the
currency, Watson took over Dehomag (Deutsche Hollerith Maschinen
Gesellschaft) that had used the punch card technology under licence. This
German subsidiary would later play a crucial role in IBM’s business
alliance with the Third Reich. By 1933, when Hitler came to power, Watson
had transformed the formerly ailing German company into IBM’s flag
ship—producing more than three times above its quota.
But there was the promise of even more to come. “Nazi Germany offered
Watson the opportunity to cater to government control, supervisions,
surveillance, and regimentation on a plane never before known in human
history. The fact that Hitler planned to extend his Reich to other nations
only magnified the prospective profits. In business terms, that was
account growth. The technology was almost exclusively IBM’s to purvey
because the firm controlled about 90 percent of the world market in punch
cards and sorters.” (p46)
Black stresses that Watson was not a fascist, but a ruthless profiteer.
The strong German state under an authoritarian leader offered great
potential for moneymaking, and that was what Watson identified with. In
fact, as the chairman of IBM, one of the most prestigious companies in the
USA, Watson was a well-respected businessman, a supporter of Roosevelt and
special advisor to the president. Watson was elected chairman of the
Foreign Department that also made him chairman of the American section of
the International Chamber of Commerce (ICC). This, in essence, made Watson
America’s official businessman to the rest of the world. He became
installed as president of the entire ICC in 1937 and arranged the
organisation’s next conference in Berlin.
Right from the start, IBM developed business solutions for the Third
Reich. In April 1933, the Hitler regime began a census of all Germans,
partly aimed at identifying Jews. The first step was to register data
about the citizens of Germany’s largest state, Prussia, which Dehomag was
commissioned to undertake. The procedure that was established in this
census gives an example of how the co-operation between Dehomag and the
Nazis would work in practice in the fields of statistical and data
collection.
To cater to the specific requirements of Germany’s statistical
programmes, the closest collaboration between Dehomag’s technicians and
the Nazi authorities was necessary. Every project required specific
customized applications. First, Dehomag was specifically informed about
the task to be undertaken. Then mock-ups of punch cards were produced with
pen and pencil marking the columns and holes to carry the needed
information. Production of the punch cards only began if both Dehomag and
the German reporting agencies were happy with the result. The company then
manufactured and sold the cards, often pre-printed with project names.
Once a project was undertaken, the company trained the personal to carry
out the work.
With the expansion of its enterprise, Dehomag needed constant technical
innovations and developments. Far from intervening in its German
subsidiary to halt its collaboration with the Nazi persecution, IBM in New
York carefully supervised the whole process and also would make sure that
all technical requirements were provided. Dehomag technicians were
constantly sent to the US for training.
Whilst IBM was famed in the US, little was known about its German
activities. The internal structure of Dehomag was organised in such a way
that as far as the Nazis were concerned it was a German company, whilst
overall control remained with IBM. This also meant that the mother company
could circumvent the American trading restrictions with Germany, once the
war had begun.
Nonetheless, Watson not only fully exploited the profit making
possibilities offered by Nazi Germany, he also became a political
spokesperson for the German Reich. Black explains that Watson believed the
world should extend “a sympathetic understanding to the German people and
their aims under the leadership of Adolf Hitler”. (p43)
For his role, Watson was awarded the specially created Merit Cross of
the German Eagle with Star to “honour foreign nationals who made
themselves deserving of the German Reich”—a medal ranking second in
prestige only to Hitler’s German Grand Cross. Only when the war started
did it become necessary for Watson to return his medal.
In 1937, the Nazi regime ordered another nationwide census. This one
was decisive for Hitler’s war preparations and “for the Jews it would be
the final and decisive identification step”. (p139) In accordance with the
Nuremberg race laws, it meant tracing any Jewish ancestry. IBM bought in
70 card sorters, 60 tabulators, 76 multipliers and 90 million punch cards
for the 3.5 million Reich Mark contract (worth about $14m today).
In advance of the Nazi annexation of Austria in 1938, IBM’s Viennese
subsidiary, under the supervision of Adolf Eichmann, was working to
collate comprehensive demographic information about the country on punch
cards. This meant the Hitler regime knew exactly where the Austrian Jews
were that were to subject to the forced expulsion programme.
When German troops invaded Czechoslovakia on March 15, 1939, IBM was
already there and was helping to run strategic operations such as the
State Railway, whose system could be easily taken over by the Nazis.
After several postponements, the nation-wide census ordered in 1937 was
finally carried out in May 1939. Some 750,000 census-takers were involved,
covering all of the Greater Reich’s 22 million households—80 million
citizens in Germany, Austria, the Sudentenland, and the Saar.
This was Dehomag’s biggest undertaking. It included a so-called
“supplemental card” to record each household’s racial ancestry. This
enabled the identification of a total of 330,530 so-called “racial Jews”
in the Greater Reich. This was then broken down by gender, and was further
divided between “full-Jews” and other shades of Jewish ancestry, with all
those recorded in this way also being identified by their address.
This pattern would be repeated over and over again. In virtually every
country that the Nazis occupied, an IBM subsidiary—normally already doing
business there—would collect national and racial statistical information
for the Nazis, which could then be used to identify Jews and other
undesirables.
Dehomag even knew in advance that Hitler was preparing for war, as the
company had been approached on how to protect its functioning in the event
of an attack. With the outbreak of World War II in September 1939, IBM
profits leapt as a result of Germany’s activities—especially with the
roundups in Poland and the East.
Whether it was in Czechoslovakia, Poland, Hungary, Bulgaria, Romania,
Scandinavia, Sweden, Belgium, the Netherlands or France the Nazi war
machine relied upon IBM technology. It helped to organise the allocation
of military equipment and personnel just as efficiently as it assisted in
identifying Jews and facilitated their transportation to the death camps
by train. Although it is true that even without the collaboration of IBM,
Hitler fascism would still have carried through its policy of genocide, it
is equally true that without it, the Nazis could not have proceeded with
such ruthless efficiency.
After the war, IBM was able to retrieve its German assets, machines and
profits alike with astonishing ease. At the end of 1946, Dehomag was
valued at more than 56.6 million Reich Marks ($230m today) with a gross
profit of 7.5 million Reich Marks ($30m). Its machines had been salvaged,
its profits preserved and its corporate value protected.
The reasons for this were threefold. Firstly, Dehomag’s interests were
well looked after by the Nazi policy of custodianship of enemy property.
That meant that a custodian was designated by the Reich Economics Ministry
to run foreign businesses, so as to keep the companies profitable and
productive. Since it was forbidden to transfer money out the country,
Dehomag’s profits were kept in the company bank accounts, where they
remained frozen during wartime but were easily collected thereafter.
Secondly, the Hollerith technology continued to be used by the Nazis,
even after their military fortunes began to change. Since the cards could
provide damning evidence of the Nazis’ atrocities, when the Allies
advanced and German positions in the occupied territories, the Nazis would
destroy them. But they transported the machines out of reach of the
advancing armies.
Thirdly, the Allied powers also had an interest in keeping the machines
intact. Already in December 1943, the United States government concluded
that strategically it should save Hitler’s Hollerith machines because they
held the keys to a smooth military occupation of Germany. To this end, all
the Allied powers used Dehomag to conduct economic surveys, collect
industrial statistics and carry out censuses.
“Dehomag emerged from the Hitler years with relatively little damage
and virtually ready to assume business as usual. Hence, when the war
ended, IBM New York was able to recapture its problematic but valuable
subsidiary, recover its machines, and assimilate all the profits”. (p398)
In 1949, Dehomag’s name was changed to IBM Germany.
Whilst Black received co-operation from many sources, IBM rebuffed his
requests to conduct interviews and denied access to its documents. Black
says that since World War II, the company has refused to co-operate with
anyone researching its involvement with the Nazi regime. However, he did
obtain hundreds of IBM documents via an academic archive.
IBM has attempted to dismiss Black’s allegations, insinuating that they
are a type of black propaganda, published as part of a “coordinated
campaign” by Holocaust survivors. Publication of “IBM and the Holocaust”
coincided with a class-action lawsuit, filed in a New York in February
this year, which accuses the company of being an accomplice in the
Holocaust, and demands that IBM open its archives and pay compensation.
The company continues to deny any responsibility, claiming that its German
subsidy was taken over by the Nazis before the war.
Black rejects these assertions and shows, moreover, that IBM did not
lose administrative control of Dehomag until 1942. “We’ve gone after the
men in the camps, we’ve gone after the German companies. The final
frontier of Holocaust accountability is the United States,” Black has
stated.
I highly recommend the reading of the book. Not because it gives new
insights into the political reasons for the establishment of fascism in
Germany, Black does not attempt to make such an appraisal, nor does he
claim to, largely attributing IBM’s involvement with the Third Reich to
the unscrupulous nature of Watson as an individual.
Nevertheless, Black’s research into the involvement of such a major
corporation does help in understanding how the Nazis were able to carry
through their genocide. In doing so, he sheds more light on the role of
international capital in one of the greatest crimes of the 20th
century.
See Also:
An assessment
of Peter Novick’s The Holocaust in American Life
[29 June
2000]
Fascism and the
Holocaust
[WSWS Full Coverage]
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