In the sterilization program’s first year, 1934, more than 84,600 cases brought to the Genetic Health Courts resulted in 62,400 forced sterilizations. In 1935, 88,100 genetic trials yielded 71,700 forced sterilizations.92
Eventually, sterilization was viewed as merely preliminary to more drastic measures for cleansing the Reich. Zahn warned in a statistical journal article: “population politics, according to the principles of racial hygiene, must promote valuable genetic stock, prevent the fertility of inferior life, and be aware of genetic degeneration. In other words, this means superior life selection on the one hand, and the eradication of genetically unwanted stock on the other hand. The ethnic biological diagnosis is indispensable to carry out this task.”93
WHEN HERMAN HOLLERITH designed his first punch card, he made it the size of a dollar bill.94
For IBM, information was money. The more Germany calculated, tabulated, sorted, and analyzed, the greater the demand for machines. Equally important, once a machine was leased, it required vast quantities of punch cards. In many cases, a single tabulation required thousands of cards. Each card was designed to be used only once, and in a single operation. When Dehomag devised more in-depth data processing, the improvements only bolstered card demand. How many punch cards were needed? Millions—per week.95
Punch cards sped through the huffing machines of the Third Reich like tiny high-speed mechanized breaths rapidly inhaled and exhaled one time and one time only. But Hollerith systems were delicate, precision-engineering instruments that depended on a precision-engineered punch card manufactured to exacting specifications under ideal conditions. Because electrical current in the machines sensed the rectangular holes, even a microscopic imperfection would make the card inoperable and could foul up the entire works.
So IBM production specifications were rigorous. Coniferous chemical pulp was milled, treated, and cured to create paper stock containing no more than 5 percent ash, and devoid of ground wood, calk fibers, processing chemicals, slime carbon, or other impurities that might conduct electricity and “therefore cause incorrect machine sensing.” Residues, even in trace amounts, would accumulate on gears and other mechanisms, eventually causing jams and system shutdowns. Electrical testing to isolate defective sheets was mandatory. Paper, when cut, had to lie flat without curl or wrinkle, and feature a hard, smooth finish on either side that yielded a “good snap or rattle.”96
Tolerances necessitated laboratory-like mill conditions. Paper thickness: .0067 inches plus or minus only a microscopic .0005 inch. Width: 3.25 inches with a variance of plus .007 inches or minus .003 inches. Two basic lengths were produced: 5.265 inches and 7.375 inches, plus or minus only .005 inch in either case. Edges were to be cut at true right angles, corners at perfect 60 degree angles, with a quarter-inch along the top and three-eighths along the side, all free from blade creases with the paper grain running the length of the card. Relative humidity of 50 percent and a temperature of 70-75 degrees Fahrenheit was required at all times, including transport and storage.97
Printing of the customer’s name and specific project name was to be legible but not excessively inked and in no circumstances sufficient to dent the card or nudge it out of its plane, which could microscopically alter thickness. Text or numbers had to be printed in precise positions to line up with punching devices and machine gauges. IBM instructions to mills declared, “These specifications are absolutely necessary” and any variation “could distort the result.”98
Only IBM could make and sell the unique punch cards for its machines. Indeed, punch cards were the precious currency of data processing. Depending upon the market, IBM derived as much as a third of its profit from card sales. Overseas sales were even more of a profit center. Punch card profits were enough to justify years of federal anti-trust litigation designed to break the company’s virtual monopoly on their sale and manufacture.99
When Herman Hollerith invented his technology at the close of the previous century, he understood the enduring commercial tactic of proliferating a single universal system of hardware and ensuring that he alone produced the sole compatible soft goods. Hollerith was right to size his card like the dollar. IBM’s punch card monopoly was nothing less than a license to print money.
In the Third Reich’s first years, Germany was completely dependent upon IBM NY for its punch cards. Even after the factory in Lichterfelde opened, German manufactured machines were useless without cards imported from the United States. Card presses would eventually be built in Germany, but until that time, Dehomag was constantly scrambling to import the millions of cards ordered each week by its customers. To guard against sudden shortages, Lichterfelde needed a six-month supply—enough to fill fifty-five railroad cars. Half the stock was stored off-site in leased warehouses, and the rest in the factory.100
So vital was the production of paper products that in May 1934 the Reich Ministry of Economic Affairs sought to regulate mills. An Economics Ministry decree placed an eighteen-month moratorium on establishing, closing, or expanding paper mills without the specific permission of the Reich. Dehomag hoped to have its card presses in operation before the moratorium expired.101
IBM was making so much profit in Germany, it was causing problems. About $1 million profit was suddenly earned by the end of 1933, this at a time when nearly all of German industry was being battered due to the international anti-Nazi boycott. Dehomag had sold an unprecedented 237 percent of its 1933 quota—outpacing all IBM foreign operations combined. Yet Nazi business precepts denounced large corporate profits, especially those earned by foreign corporations. No wonder a nervous IBM auditor in Europe conceded to IBM NY, “Dehomag is in an extremely dangerous position, not only with respect to taxation, but it may be cited as a sort of monopolistic profiteer and, where primarily owned by foreigners, it may be seriously damaged by unfriendly publicity.”102
For Heidinger, IBM profits were good news. His personal bonus, expressed as a stock dividend, would total nearly a half million Reichsmarks. He wanted his share. But Watson was not so inclined. Reich currency regulations sequestered profits into frozen bank accounts disbursable only within Germany. Heidinger could be paid, but not Watson. Moreover, newly enacted decrees taxed profit dividends harshly. If Watson couldn’t receive his money, he saw no reason why anyone else should either. As the chief stockholder, Watson voted that no dividends would be paid.103
Heidinger would not abide Watson first usurping Dehomag and now usurping his share of the profits. Dehomag’s extraordinary growth was an accomplishment Heidinger had personally sculpted by virtue of his Nazi connections. He wanted the financial reward he felt he deserved. The war for control of IBM’s money in Germany only escalated.
Conflict arose in 1933 as soon as IBM announced the merger of its existing German subsidiaries, the million-dollar expansion, and new factory construction. Since Heidinger owned a token share of one of the old minor companies being folded into the new larger Dehomag, he expected his stock to be purchased as part of the consolidation. Watson refused, even though the buyout amounted to only RM 2,000, or about $500.104
On September 25, 1933, IBM’s European Manager, Walter Jones, placed the question squarely with Watson personally. Heidinger, reported Jones, “now thinks IBM should take this [RM 2,000] off his hands and asked that the matter be submitted to you.” A New York auditor acknowledged on Watson’s behalf that IBM did in fact need Heidinger’s shares to effect the merger. But the auditor added, since “the stock at the moment is worthless… [because it has] lost its entire capital through its operations… we do not think it would be fair for IBM to pay him anything for it.”105