The Embassy was surely confused because shortly thereafter it sent back a message for clarification. A week later, Chauncey replied to the Embassy, “Re: your cable of September 29, representative may not act in absence of license… and permission requested therefore is denied.”73
General Ruling 11 would make it impossible for IBM to continue doing business in the freewheeling cross-border fashion it was accustomed to. The company could not wait weeks for every instruction to be approved by the Treasury Department. Indeed, just after Dehomag doubled the capitalization, two of Watson’s confidants were to meet with Lier from IBM Geneva, undoubtedly to discuss how to deploy the additional investment. That would only further the appearance of IBM ratification. On September 22, the Embassy cabled Chauncey one of many cryptic messages: “Your two friends wish Swiss representative to meet Dehomag people. Do you agree?”74
Chauncey tried to stop Lier from traveling from IBM Geneva to Germany. An immediate cable was sent to the Geneva office. But it was too late. The office replied, “Already en route. Left Saturday morning. Tried reach him border without success…. Only Bachofen [Lier’s assistant] can reach him safe discreet way.” Lier arrived in Berlin anyway and began working on vital Dehomag projects such as moving Dehomag machines from Poland into Romania where they were urgently needed for a census.75
On October 9, 1941, Milner in the New York office sent a memorandum to Chauncey regarding “Shipment of Dehomag Machines to Various Countries.” Milner worried that it might have become too difficult to continue business as usual with the Hitler regime. “As you know, on June 15, 1941 we cabled the Geneva office regarding the President’s [Franklin D. Roosevelt’s] proclamation, and instructed them not to make any move involving IBM assets without securing advice from the American Consulate. This was to avoid their unintentionally violating any provision of the President’s decree. I am wondering whether you would deem it advisable to definitely instruct Geneva that none of the European countries which can be controlled should order any goods from Dehomag. This, of course, is a serious step, as some of the countries are using Dehomag machines and currently require repair parts. It might be well for us to discuss this subject at your convenience.”76
IBM would not place a stop on any of its Dehomag business, or any subsidiary’s interaction with it. IBM filed another request with the Treasury Department, this time to send an instruction to all of its European subsidiaries and agencies, as well as its divisions in Japan. The instruction: “In view of world conditions we cannot participate in the affairs of our companies in various countries as we did in normal times. Therefore you are advised that you will have to make your own decisions and not call on us for any advice or assistance until further notice.” It was sent to the State Department on October 10, 1941, with a request for comment.77
A State Department official replied some two weeks later, “While this Department is glad to be informed of your intentions in this matter, it has no specific comment to make at this time.” To this perfunctory response, Chauncey very cautiously answered, “Thank you very much for your letter of October 23, 1941.”78
IBM’s cable to all subsidiaries involved with Axis nations was approved. Watson’s October 1941 instruction did not order his subsidiaries to stop producing punch cards for Nazi Germany. It did not order them to cease all operations. It did not set limits on which projects they could participate in. It did not require offices in neutral countries to stop supporting Hitler’s program. It did not proscribe uses in census or registration operations. It did not even demand that spare parts no longer be sent to machines in concentration camps. All that business continued. The cable merely directed managers not to “call on us for any advice or assistance until further notice.”
On October 21, 1941, the Treasury Department finally issued IBM a license to communicate the authorization to split the stock—more than a month after the fact.79 A week later, long after IBM submitted its license to instruct all subsidiaries to stop communicating, Chauncey spoke again to Commercial Attache Woods.
CHAUNCEY: We have received a license from the Treasury Department for the increase in the Dehomag stock and are sending out a cable to that effect.
WOODS: It has been done. Your attorney here had it done the next day after my telephone conversation with Mr. Watson because Mr. Watson had said that it would be all right.
CHAUNCEY: Was the stock issued proportionately?
WOODS: Yes, you have received your full share….
CHAUNCEY: But the stock at present has been issued so that IBM is [the] owner of its proportionate amount of the increase?
WOODS: Yes.
CHAUNCEY: What I called you for was to explain that in authorizing this increase we wish to be sure that the additional shares to the other stockholders were included in their existing agreements and their agreements made to conform to the present circumstances.
WOODS: I do not know about that.
CHAUNCEY: Will you see Dr. Albert and have him arrange accordingly? Also, have Dr. Albert return to you the power of attorney which I gave him because of my personal liability for any act which I might commit under it. If, in the future, anything is required to be done we can release the power with specific instructions provided we have a license from the Treasury Department.
WOODS: I will see the attorney in a few minutes and tell him. Do you want me to destroy the power of attorney when it is returned?
CHAUNCEY: No, you keep it.
WOODS: Well, you know it is possible that we may leave here [in the event war is declared], and then do you want me to destroy it?
CHAUNCEY: Yes.
WOODS: Dr. Kiep and the others send their regards to all of you.
CHAUNCEY: We, in turn, send our regards to them.80
IBM faced countless additional emergencies throughout fall 1941, large and small, as it sought to protect its profits and control of its extended Dehomag subsidiary. In one such crisis, Heidinger was waging yet another voting putsch. On December 3, as America sensed it stood at the brink of war, a clearly nervous Chauncey again appeared at the State Department with yet another emergency message to be conveyed to Berlin. Mr. Luthringer was the officer on duty. Chauncey gave his IBM business card to the clerk. The card had no address, title, or phone number on it, just the imprint “Harrison K. Chauncey, International Business Machines Corp., New York.”81
The clerk wrote on the card, “Do you want to see[?]” and drew an arrow to Chauncey’s name. Luthringer agreed to see him.82
Chauncey was carrying a message, and again there was no time to secure a Treasury License. Would the State Department object to sending it? This way, the U.S. government would be sending the message, not IBM. IBM’s message was intended for Dehomag through the Geneva office. It read: “Resolution of Executive and Finance Committee of Board of Directors that we will not consent to any change in authority to vote our stock in Dehomag. Dehomag is owned by IBM to the extent of approximately 84 percent and IBM cannot consent to any change in voting control or any other changes until emergency is over. Please inform Albert and Kiep.”83
Luthringer kept notes on his conversation with Chauncey, whom he had met before. “During a previous visit,” Luthringer wrote, “he had referred to the fact that the German army used quantities of his company’s accounting machinery. Apparently, the Germans move such machinery along with the army in the field.” Luthringer added, “I had a feeling from Mr. Chauncey’s general remarks that he is somewhat perturbed for fear that his company may some day be blamed for cooperating with the Germans.”84