IBM and the Holocaust by Edwin Black

Author:Edwin Black
Language: eng
Format: epub, mobi
ISBN: 9780914153184
Publisher: Dialog Press

Although five Germans now sat on the Dehomag board, few of them could appear in Berlin for the rush meeting Heidinger planned for September 19—not even Heidinger himself. Heidinger lived in Munich. So did Schulte-Strathaus. Dr. Vogt, Heidinger's brother-in-law, lived in Berlin but was in poor health, and not available on such short notice. Arrangements were made for all three unavailable directors to sign proxies. Each signed on September 16 proxy forms prepared by Hans Mahr, a Dehomag attorney. These proxies empowered either Kiep or Ziegler to vote per specified instructions—to generate a stock split. Kiep was loyal to Watson, but the former German consul in New York was still an official of the German Foreign Ministry. The pressure on him was immense. He would have no choice but to vote as instructed on the proxy by Heidinger and his clique. There was no chance Kiep could cast his personal vote against reinvestment in Germany, so he would have to join with the majority.47

Albert was holding IBM's proxy, conveyed by Woods, but no instructions from Watson. The new German law did not require profit taking; it only offered corporations a window to double their dividends on the condition that more money was reinvested in the Reich. But IBM would have to vote for the stock split for a host of reasons—that seemed clear. Albert needed a decision—fast. If IBM was isolated by its own board, and voted against German economic support, it would only seal the view that IBM was an enemy of the Hitler regime.

Yet, at a time when America was closer than ever to entering the war, Watson was profoundly uncertain how doubling the investment would be perceived. If it could appear that the investment was somehow compulsory, then IBM could simply explain it was required to comply with the law.

Woods could not provide such a statement, since the law was clearly optional. But he was willing to read such a statement from Albert to IBM NY, allowing IBM to transcribe the conversation and in so doing create a record of what appeared to be government coercion. A phone call was arranged.

SEPTEMBER 17, 1941, 10 A.M. NEW YORK TIME

WATSON: Hello, Mr. Woods.

WOODS: Hello, Mr. Watson. I am going to read a message to you from your attorney. This is the message:

"As you know, a special law, enacted June 12, 1941, provides that the dividends of any and all companies organized under German law are from now on restricted to six percent. . . . they can, according to certain detailed descriptions, increase their share capital out of their surplus. This is to be done by the board of directors, not by general [shareholder] meeting. Dehomag intends to increase their share capital out of surplus by 100 percent—RM 15,400,000—and will then be entitled to declare six percent dividends on the 15,400,000 Marks, which is equivalent to 12 percent on the original 7,700,000. The obvious advantages of this are . . . transfer of sur plus . . . without shareholders paying well-known high taxes.

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