IBM and the Holocaust: The Strategic Alliance between Nazi Germany and America's Most Powerful Corporation
Edwin Black
 Author Edwin Black describes the thesis of his book IBM and the Holocaust: The Strategic Alliance between Nazi Germany and America's Most Powerful Corporation in the following way: "[The book] tells the story of IBM's conscious involvement — directly and through its subsidiaries — in the Holocaust, as well as its involvement in the Nazi war machine that murdered millions of others throughout Europe. "Mankind barely noticed when the concept of massively organized information quietly emerged to become a means of social control, a weapon of war, and a roadmap for group destruction.... Hitler and his hatred of the Jews was the ironic driving force behind this intellectual turning point. But his quest was greatly enhanced and energized by the ingenuity and craving for profit of a single American company and its legendary, autocratic chairman. That company was International Business Machines, and its chairman was Thomas J. Watson." Black begins his study with the origins of IBM. In the early 1880s, Herman Hollerith (1860-1929), a young employee at the U.S. Census Bureau, conceived of the idea of creating readable cards with standardized perforations, each representing specific individual traits such as gender, nationality, and occupation. The millions of cards created for each individual counted in the national census could then be sorted and resorted on the basis of specific bits of information they contained — thereby providing a quantified portrait of the nation. Hollerith built a prototype of his counting machine in 1884 and later won a contest for the best automated counting device conducted by the Census Bureau in conjunction with its 1890 census. The Census Bureau saved $5 million through use of Hollerith counting machines — about one-third of its annual budget — and Hollerith and his patented invention gained international renown and customers around the world. By the turn of the 20th Century, Hollerith and his Tabulating Machine Company had achieved near-monopoly status. A rival arose in the next decade, however, and the U.S. Census Bureau abandoned its use of the more costly and slower Hollerith machines for its 1910 census. A disconsolate Hollerith licensed out his patents abroad. In 1910, the German licensee Willy Heidinger established the Deutsche Hollerith Maschinen Gesellschaft (German Hollerith Machine Corporation), commonly known by the acronym &#34;Dehomag.&#34; The next year, Hollerith sold his American business to industrialist Charles Flint (1850-1934) for $1.41 million. The counting machine operation was made part of a new conglomerate called the Computing-Tabulating-Recording Company (CTR). To head this massive new enterprise, Flint chose Thomas J. Watson (1874-1956), the star salesman of the National Cash Register Corporation. Watson was initially paid $25,000 per year — a substantial salary in the day — plus 1200 shares of stock and a commission of 5% of CTR&#39;s after-tax, after-dividends profits. The German hyperinflation of 1922-1923 made it impossible for Dehomag, the German licensee of CTR&#39;s technology, to make its scheduled royalty payments to America, with its balance in arrears topping the $100,000 mark. Threatened with bankruptcy and complete loss of his investment, Dehomag chief Willy Heidinger agreed to transfer 90% of the stock in his company to Watson&#39;s CTR as a means of settling his debt. The German licensee Dehomag thus became a direct subsidiary of the American corporation CTR. In 1924, following the death or departure of several key figures in the company, Watson assumed the role of Chief Executive Officer of CTR and renamed the now-focused company International Business Machines (IBM). The bulk of Black&#39;s book details the ongoing business relationship between Watson&#39;s IBM and the emerging German regime headed by Adolf Hitler and his National Socialist German Workers Party (NSDAP). Hitler came to power in January 1933; on March 20 of that same year he established a concentration camp for political prisoners in the Bavarian town of Dachau, just outside the city of Munich. Repression against political opponents and the country&#39;s substantial ethnic Jewish population began at once. By April 1933, some 60,000 had been imprisoned. Despite the violent and repressive climate emerging in the new ultra-nationalist Germany, business relations between IBM and the Hitler regime continued uninterrupted in the face of broad international calls for an economic boycott. Indeed, Willy Heidinger, who remained in control of Dehomag, the 90%-owned German subsidiary of IBM, was an enthusiastic supporter of the Hitler regime. On April 12, 1933, the German government announced the plans to immediately conduct a long-delayed national census. The project was particularly important to the Nazis as a mechanism for the identification of Jews, Gypsies, and other ethnic groups deemed undesirable by the regime. Dehomag offered to actively assist the German government in its task of ethnic identification, concentrating first upon the 41 million residents of Prussia. This activity was not only countenanced by Thomas Watson and IBM in America, Black argues, but was actively encouraged and financially supported, with Watson himself traveling to Germany in October 1933 and the company ramping up its investment in its German subsidiary from 400,000 to 7,000,000 reichsmarks — about $1 million. This injection of American capital allowed Dehomag to purchase land in Berlin and to construct IBM&#39;s first factory in Germany, Black charges, thereby &#34;tooling up for what it correctly saw as a massive financial relationship with the Hitler regime.&#34; Black also asserts that a &#34;secret deal&#34; was made between Heidinger and Watson during the latter&#39;s visit to Germany which allowed Dehomag commercial powers outside of Germany, enabling the &#34;now Nazified&#34; company to &#34;circumvent and supplant&#34; various national subsidiaries and licensees by &#34;soliciting and delivering punch card solution technology directly to IBM customers in those territories.&#34; As a result, Nazi Germany soon became the second most important customer of IBM after the lucrative US market, Black notes. The 1933 census, with design help and tabulation services provided by IBM through its German subsidiary, proved to be pivotal to the Nazis in their efforts to identify, isolate, and ultimately destroy the country&#39;s Jewish minority. Black describes the situation faced by German Jews: "Since the advent of the Third Reich, thousands of Jews nervously assumed they could hide from the Aryan clause. "But Jews could not hide from millions of punch cards thudding through Hollerith machines, comparing names across generations, address changes across regions, families trees and personal data across unending registries. It did not matter that the required forms or questionnaires were filled in by leaking pens or barely sharpened pencils, only that they were later tabulated and sorted by IBM's precision technology." On September 13, 1935, Hitler demanded the immediate implementation of a &#34;Law for the Protection of German Blood&#34; which deprived Jews of German citizenship and prohibited them from having sexual relations with or from marrying Aryans. Machine-tabulated census data greatly expanded the estimated number of Jews in Germany by identifying individuals with only one or a few Jewish ancestors. Previous estimates of 400,000 to 600,000 were abandoned for a new estimate of 2 million Jews in the nation of 65 million. Another German census was conducted on May 17, 1939, when 750,000 census takers conducted interviews with the country&#39;s 22 million households, and also millions of factories. The purpose of the census was to identify the number of Jews in Germany and its newly expanded territories and to precisely locate each individual so that the Jewish population could be effectively ghettoized. Ancestral lines had to be documented by each head of household as part of the national census, which dwarfed in size and detail the 1933 Prussian census. As the Nazi war machine spread occupied the nations of Europe, capitulation was followed by a census of the population of the subjugated nations, with an eye to the identification and isolation of Jews and Gypsies. For example, the September 1, 1939 invasion of Poland was followed by an October 14 order of the Special Operations unit of the German Secret Police for a full census of the Jewish population, information which supplemented published information from the 1931 general Polish census. These census operations were intimately intertwined with technology and cards supplied by IBM&#39;s German and new Polish subsidiaries, which were awarded specific sales territories in Poland by decision of the New York office following Germany&#39;s successful Blitzkrieg invasion. In the case of Poland, the ordered census took place over several days, from December 17 to December 23, 1939. The census was both meticulous and cold-blooded, as Black notes: "Each person over the age of twelve was required to fill out census and registration in duplicate, and then was fingerprinted. Part of the form was stamped and returned as the person's new identification form. Without it, they would be shot. With it, they would be deported." Data generated by means of counting and alphabetization equipment supplied by IBM through its German and other national subsidiaries was instrumental in the efforts of the German government to concentrate and ultimately destroy ethnic Jewish populations across Europe, Black demonstrates. He also notes, in an understated aside, that fully half of IBM&#39;s German subsidiary&#39;s annual profit — RM 1.8 million — was suddenly generated in December 1939. Black also reports that every Nazi concentration camp maintained its own Hollerith Abteilung (Hollerith Department), assigned with keeping tabs on inmates through use of IBM&#39;s punchcard technology. In his book, Black charges that &#34;without IBM&#39;s machinery, continuing upkeep and service, as well as the supply of punch cards, whether located on-site or off-site, Hitler&#39;s camps could have never managed the numbers they did. Each of the major concentration camps was assigned a Hollerith code number for paperwork purposes: Auschwitz — 001; Buchenwald — 002; Dachau — 003; Flossenbürg — 004; Gross-Rosen — 005; Herzogenbusch — 006; Mauthausen — 007; Natzweiler — 008; Neuengamme — 009; Ravensbrück — 010; Sachsenhausen — 011; and Stutthoff — 012. Upon arrival at the camps in 1943, incoming prisoners would be examined for fitness to work, physical information would be recorded on a medical record, names would be cross-checked with data from the Political Section to determine whether the prisoner was additionally wanted for political offenses.