Soon, Roosevelt came to rely on Watson for advice. White House staffers would occasionally ask for Watson’s schedule in case the President needed to contact him quickly. Watson visited Hyde Park for tea several times and even stayed overnight at the White House. Eventually, Roosevelt offered to appoint Watson Secretary of Commerce or Ambassador to England. But Watson declined to leave IBM.73
Instead, Watson’s son remembers, “he served unofficially as Roosevelt’s representative in New York.” If a foreign dignitary arrived, the White House might ask Watson to stage an honorary luncheon. “All Father had to do was press a button,” his son remembers. “He had a whole department that did nothing but set up company dinners and other functions… all at IBM expense.” Indeed, Roosevelt once remarked, “I handle ’em in Washington and Tom handles ’em in New York.”74
Watson leveraged his position with the Administration to develop extensive contacts with Secretary of State Cordell Hull, numerous ambassadors and consuls, and the State Department in general. Cloaked in officialdom, Watson never failed to undertake the often months-long process of formally soliciting official greetings to private functions from Roosevelt, Hull, or other Administration luminaries. These letters, often gratuitous, broadcast arcs of power to those observing overseas, especially in a Reich that believed in bigger-than-life personages.
No wonder Nazi Germany considered Watson a very powerful friend. Indeed, when in October 1933 Dehomag encountered unexpectedly high customs duties on IBM machinery it hoped to import as part of its new expanded portfolio, Heidinger wrote a thinly veiled threat to Reich Customs bureaucrats. “The president of our American co-associate, the International Business Machines… Mr. Watson, is one of the most prominent American personalities,” asserted Heidinger. “Among other things, he is one of the well-known 25 intimate counselors of President Roosevelt, president of the New York Chamber of Commerce… he also holds many, many other positions of honor in the United States. In keeping with his friendliness for Germany, proven at all times, he has up to now done everything possible which appeared to be to the interest of Germany. I am quite sure that Mr. Watson would never understand… a country to raise supplementary customs… on his machines.” Heidinger added, “I do not know what the attitude of the above-named would be if the customs increase were permitted. I am recommending,” Heidinger concluded, “that the above facts be placed to the knowledge of the two gentlemen [customs officers] examining the situation.”75
Watson did everything he could to reinforce in Germany his image of special American potency and friendship. The German consul in New York was a houseguest at Watson’s home, and Watson insisted on arranging for him complimentary country club privileges at the IBM Country Club. His socializing with the German Ambassador was equally robust, making certain that special invitations for luncheons and dinners were regularly circulated to German diplomats, and punctual acceptance or gracious regrets were sent in response to theirs.76
So a happy medium was found between Watson’s desire to maintain deniability in IBM’s lucrative relations with Germany and his personal desire to hobnob with Third Reich VIPs. But, the demands of the growing business in Germany would not be free of Watson’s famous micro-management. Too much was at stake.
Watson would travel to Germany regularly during the thirties for firsthand information about the situation in the Nazi Reich. These visits would be augmented by his personal New York representatives who would monitor Dehomag on-site for months at a time. Verbatim translations of Dehomag’s voluminous memos, correspondence, even routine bureaucratic forms and applications, were continuously transmitted to IBM in New York for review and comment.
Watson had created the IBM Europe office, headquartering it in Paris and then Geneva, to function as the eyes and ears of the New York office in Europe. When Watson’s personal representatives were not in Germany, continuous supervision of Dehomag was effected by executives in the Swiss branch of IBM, and often the Paris office. More than just routine oversight of the German operation, the Swiss office of IBM would become the all- important nexus for instructions, profit funneling, and continent-wide coordination in support of Dehomag’s technologic activities throughout Europe. The combination of Watson’s micro-management from afar and persistent Swiss examination gave IBM an ever-present hour-to-hour grasp of the small est operational details at Dehomag, from miniscule bank discrepancies amounting to just a few dollars to the most vital issues facing the subsidiary’s relations with the Nazi regime.
From the very first moments and continuing throughout the twelve-year existence of the Third Reich, IBM placed its technology at the disposal of Hitler’s program of Jewish destruction and territorial domination. IBM did not invent Germany’s anti-Semitism, but when it volunteered solutions, the company virtually braided with Nazism. Like any technologic evolution, each new solution powered a new level of sinister expectation and cruel capability.
When Germany wanted to identify the Jews by name, IBM showed them how. When Germany wanted to use that information to launch programs of social expulsion and expropriation, IBM provided the technologic wherewithal. When the trains needed to run on time, from city to city or between concentration camps, IBM offered that solution as well. Ultimately, there was no solution IBM would not devise for a Reich willing to pay for services rendered. One solution led to another. No solution was out of the question.
As the clock ticked, as the punch cards clicked, as Jews in Germany saw their existence vaporizing, others saw their corporate fortunes rise. Even as German Jewry hid in their homes and wept in despair, even as the world quietly trembled in fear, there was singing. Exhilarated, mesmerized, the faithful would sing, and sing loudly to their Leaders—on both sides of the Atlantic.
Some uniforms were brown. Some were blue.
IV. THE IBM — NAZI ALLIANCE
WILLY HEIDINGER HATED THOMAS WATSON. BITTER AND defiant, Heidinger saw Watson as the incarnation of the financial calamity that had befallen Germany after the Great War. Heidinger had possessed the vision in 1910 to introduce Hollerith’s contraption into Germany. He founded a company, Dehomag, to bring data processing to his country. But for the monetary manipulations that arose after World War I, the Diktat of the Versailles Treaty, and the wild ensuing hyperinflation of the twenties, Heidinger would still own that company.1
Back in 1922, worthless German currency was devalued by the hour. Heidinger was unable to remit some $104,000 in royalties to CTR, the IBM predecessor company, because it amounted to trillions of inflated Reichsmarks that were impossible to obtain. Wat son seized upon Germany’s inflation crisis to take possession of Dehomag. During contentious negotiations, Watson first offered to demur on the royalty debt in exchange for 51 percent of the company. Heidinger felt it was better to own nearly half of a going concern than all of a bankrupt one. So he agreed to yield half of Dehomag. But then Watson abruptly upped the demand from 51 per cent of Dehomag to 90 percent. Heidinger felt “cornered” by his own private Diktat. Under Watson’s new terms, Heidinger would own 10 percent—or nothing. Watson had outmaneuvered Heidinger.2
It was more than a decade earlier. But Heidinger never forgot it. He spent the rest of his career biting back.