Watson would not transfer the assets or give the Austrian machines to Dehomag without something in return. The exchanges began by a return to the issue of Heidinger’s demand to sell his stock if he could not receive the bonuses he was entitled to. Watson tried to defuse the confrontation by suddenly agreeing to advance Heidinger the monies he needed. Watson wrote Rottke, “When I was in Germany recently and talked to Mr. Heidinger, he gave me to understand that he was in need of some money to meet his living expenses. As a stockholder in your Company, I am writing this letter to advise you that it will be agreeable to us for you to lend Mr. Heidinger such amounts as you think he will require to take care of his living expenses.”47 Watson’s letter, of course, expressed his incidental approval as a mere stockholder—not as the controlling force in the company—this to continue the fiction that Dehomag was not foreign-controlled.
At the very moment Watson was dictating his letter about Heidinger, Germany was involved in a savage occupation of Poland. WWII was underway. So Watson was careful. He did not date the letter to Rottke, or even send it directly to Germany. Instead, the correspondence was simply handed to his secretary. She then mailed the authorizing letter to an IBM auditor, J. C. Milner in Geneva, with a note advising, “I have been instructed by Mr. Watson to forward the enclosed letter for Mr. Hermann Rottke to your care. Would you kindly see that the letter reaches him.” The undated copy filed in Watson’s office, however, was date-stamped “September 13, 1939” for filing purposes.48
But Heidinger was not interested in further advances, as these only deepened his tax dilemma. He wanted the alphabetizers and made that known to J. W. Schotte, IBM’s newly promoted European general manager in Geneva who acted as Watson’s intermediary on the alphabetizer question. On September 27, 1939, the day a vanquished Poland formally capitulated, Schotte telephoned Rottke and a Dehomag management team in Berlin to regretfully explain that Watson refused to transfer the alphabetizers. Instead, Watson merely offered to arrange for Dehomag to take possession of thirty-four broken alphabetizers returned from Russia and lying dormant in a Hamburg warehouse. They could be repaired and rehabilitated back into service.49
An indignant Rottke refused “most energetically on the grounds that these are ‘old junk’ in which we are not the least interested.” Schotte upped the offer, saying Watson wanted Dehomag to take over the entire Russian territory. Rottke thought the prospect in principle seemed rather attractive because Dehomag could then gain foreign exchange. But, thought Rottke, all the benefits of Russian sales would be negated if the German subsidiary was still compelled to pay IBM NY a 25 percent royalty. Preferring not to verbalize any of that, Rottke simply replied to Schotte that any ideas on servicing the Russian market should be expressed in writing.50
Returning to the alphabetizers, Rottke repeatedly insisted Schotte call Watson to recommend that he “let us have these few machines.” Schotte would not budge, saying they had been “set aside for urgent needs.” From Rottke’s view, the machines were in Nazi-annexed Austria, a territory now granted to Dehomag, and Watson would not let the Germans deploy the existing machines? Incensed and threatening, Rottke told Schotte, “IBM is big enough to take care of its customers,” adding, “depriving us of these few machines might later be regretted.” Schotte saw that Rottke’s limit was being reached. He promised to call Watson again and convey the sentiment in Berlin.51
Schotte called Rottke the next morning, September 28, in friendly spirits. It was all just a mistake on Watson’s part, he was happy to say. Watson, claimed Schotte, thought the machines had never even been delivered to Austria. Watson had backed down again. Rottke was able to send a letter to Heidinger confirming that Dehomag is “keeping the machines I had asked for until further notice.”52
Dehomag’s paperwork was quickly finalized:
Just a week before, on September 21, 1939, Reinhard Heydrich, Chief of Himmler’s Security Service, the SD, held a secret conference in Berlin. Summarizing the decisions taken that day, he circulated a top secret Express Letter to the chiefs of his Einsatzgruppen operating in the occupied territories. The ruthless Einsatzgruppen were special mobile task forces that fanned out through conquered lands sadistically murdering as many Jews as they could as fast as they could. Frequently, Jews were herded and locked into synagogues, which were then set ablaze as the people inside hopelessly tried to escape. More often, families were marched to trenches where the victims, many clutching their young ones, were lined up, mercilessly shot in assembly line fashion, and then dumped into the earth by the hundreds.54 But these methods were too sporadic and too inefficient to quickly destroy millions of people.
Heydrich’s September 21 memo was captioned: “The Jewish Question in the Occupied Territory.” It began, “With reference to the conference which took place today in Berlin, I would like to point out once more that the total measures planned (i.e., the final aim) are to be kept strictly secret.” Heydrich underlined the words “total measures planned” and “strictly secret.” In parentheses, he used the German word Endziel for “final aim.”55
His memo continued: “A distinction is to be made between 1) The final aim (which will take some time) and 2) sections of the carrying out of this goal (which can be carried out in a short space of time). The measures planned require the most thorough preparation both from the technical and the economic point of view. It goes without saying that the tasks in this connection cannot be laid down in detail.”56
The very next step, the memo explained, was population control. First, Jews were to be relocated from their homes to so-called “concentration towns.” Jewish communities of less than 500 persons were dissolved and consolidated into the larger sites. “Care must be taken,” wrote Heydrich, “that only such towns be chosen as concentration points as are either railroad junctions or at least lie on a railway.” Addressing the zone covered by Einsatzgruppe I, which extended from east of Krakow to the former Slovak-Polish border, Heydrich directed, “Within this territory, only a temporary census of Jews need be taken. The rest is to be done by the Jewish Council of Elders dealt with below.”57
Under the plan, each Jewish ghetto or concentration town would be compelled to appoint its own Council of Elders, generally rabbis and other prominent personalities, who would be required to swiftly organize and manage the ghetto residents. Each council would become known as a Judenrat, or Jewish Council. “The Jewish Councils,” Heydrich’s memo instructed his units, “are to undertake a temporary census of the Jews, if possible, arranged according to sex [ages: (a) up to 16 years, (b) from 16 to 20 years, and (c) over], and according to the principal professions in their localities, and to report thereon within the shortest possible period.”58