IBM and the Holocaust: The Strategic Alliance Between Nazi Germany and America's Most Powerful Corporation by Edwin Black

Author:Edwin Black
Language: eng
Format: mobi, pdf
Tags: Biography & History, World War II, Business & Investing, Holocaust, Business & Finance, Military, Company Profiles, History
ISBN: 9780914153276
Publisher: Dialog Press
Published: 2012-02-16T05:00:00+00:00

The message was transcribed as coming from Woods and therefore was envel oped in the authority of the commercial attache.48

Joining Watson in the conference call were Nichol and Chauncey. Woods was actually excited to speak to Watson himself. Indeed, Woods immediately had Albert's message typed into a letter to IBM NY, adding, "It was good to hear your voices and I am looking forward eagerly to seeing you when I pass through New York the next time I am at home."49

In the conversation with Woods, Watson told the attache he agreed in principle to the stock split, provided the Germans restricted their new stock as well. But IBM could not yet formally authorize it. Why? General Ruling 11 made it against the law.50 Complying with General Ruling 11 would take time. Time was something Watson did not have.

As America advanced toward the moment it would enter the war, the Roosevelt Administration had recently espoused General Ruling 11, an emergency regulation forbidding any financial transactions with Nazi Germany without a special Treasury Department license involving written justifications. Even certain corporate instructions of a financial nature were subject to the rule. This was something completely new to contend with in IBM's Nazi alliance. IBM would now be required to seek a complicated, bureaucratic approval for each financial instruction it ordered for its overseas subsidiaries under Nazi control. General Ruling 11 would not affect subsidiaries in neutral countries, such as Sweden or Switzerland. Even still, it would severely hamper all communications with Dehomag itself, and open a government window into many of IBM's complex transactions.51

How much time did IBM have?

The board meeting was scheduled in Berlin for late the next day.

New York immediately cabled Woods that it approved Albert's recommendation to double the investment to RM 15.4 million—an increased reinvestment of about $2 million extra. But there was a condition. The new stock issued to the three Germans must be restricted under the existing captive share agreements. That was imperative.52

Quickly, IBM people had to complete the two-page sworn affidavit application to authorize the doubling of stock. It needed to be signed by the corporation's secretary-treasurer, John G. Phillips. But he was not available. No time to waste. Someone signed Phillips' name to both lines where it was required, and then dutifully placed their cursive lowercase initials—aer—under the signature to show it was affixed by a person designated to sign.53

But Phillips' signature had to be executed and certified in the presence of a notary. No problem. Someone found a notary in Queens. He verified the signatures as genuine, stamped his name and commission number just beneath the Phillips signature, and then pressed his embossing seal onto the application. A short transcript of Woods' telephone conversation with Watson was attached to prove the urgency of the transaction. The carefully quoted dialogue fragment included Albert's well-structured explanation that what was really an optional profit-taking regulation "can practically be considered compulsory."54

The application clearly stated that it could only be presented at the Federal Reserve Bank in Manhattan. But by the time the application was signed and sealed, it was just too late.

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