THE TRANSFER AGREEMENT: THE DRAMATIC STORY OF THE PACT BETWE

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PART 1 OF 2

6. April First

No DIRECT WORD about a boycott against Germany was actually mentioned at Madison Square Garden. Neither was the budding Jewish War Veterans' boycott or the Polish boycott encouraged at the rally, even though it was an opportunity to expand those movements vastly. The decision was Stephen Wise's. To those who disagreed, Wise would reply, "We have the means and the will to boycott when we want. But now is not right. Let's wait just a little longer." [1]

What Wise was waiting for -- strong diplomatic action -- was a mirage. President Roosevelt wasn't concerned. And the State Department, B'nai B'rith, and the American Jewish Committee were not going on the offensive. They were simply stalling, hoping the anger on both sides of the Atlantic would dissipate. It wouldn't.

One reason was that the Madison Square denunciations were heard throughout Germany: Der Fuhrer and the NSDAP were termed criminals and barbarians; Germany was accused of rampant tortures and atrocities. As the Nazis saw it, Jewish propaganda was again disabling Germany before she could achieve success, as in World War I.

Although the boycott was not declared then and there as Goering and Hitler had feared, it was threatened indirectly by people with official government titles and authority, by Catholic bishops, and by labor leaders who could start a boycott at the snap of a finger. In the Nazi view, the boycott was already under way. The Congress rally seemed to be the master switch activating a new world movement.

Mass meetings throughout Poland -- coordinated to the Congress' rally -- had voted to expand the Vilna boycott to all of Poland. The three most important Warsaw Jewish commercial organizations -- the Central Association of Merchants, the Central Association of Small Tradesmen, and the Central Association of Jewish Artisans -- passed binding resolutions to "use the most radical means of defense by boycotting German imports." [2]

In London, almost all Jewish shops in the Whitechapel district were displaying placards denying entry to German salesmen and affirming the anti-Nazi boycott. Teenagers patrolled the streets distributing handbills asking shoppers to boycott German goods. And a newsreel showing der Fuhrer was ceremoniously rejected by a London moviehouse. [3]

In the United States, the withholding of the actual word boycott did not dampen the spontaneous grass-roots boycott led by the 15,ooo-man Jewish War Veterans. Within days of the JWV's boycott announcement, the group established a permanent office to raise funds, and even more importantly to connect American merchants with eager alternative suppliers in Czechoslovakia, Rumania, England, France, and of course the United States itself. Thousands of boycott letters were mailed by the JWV to businessmen throughout the East Coast. Pickets were thrown around East Coast stores carrying German goods. And a steady publicity program was being well received by the U.S. media. For example, when two Hoboken, New Jersey, companies, Pioneer Paper and City Chemical, rescinded orders for hundreds of thousands of dollars of machinery and pledged to buy no more German products, the cancellations were accompanied by press conferences and newspaper articles. Such announcements produced a chain reaction, and within days of the JWV's boycott declaration the Veterans showed the press well over $2 million in lost German orders. [4]

Here was the real threat to the Nazis: lost sales. Once lost, many were lost forever. And when enough buyers actually turned to other sources of supply, entire markets could be lost as well. Spoken or unspoken, a mushrooming, even if uncoordinated, anti-German boycott movement was spreading throughout Europe and America. It was only moments from becoming a worldwide economic weapon if only the Congress and the other leading Jewish organizations would give their official support.

Above all of the Nazi dogma, revitalization of the German economy was the single indispensable feature of Hitler's program. Without a strong economy, the Reich could not rearm and could never begin its conquest of Europe. The Nazis were justifiably convinced that if the National Socialist revolution brought more unemployment and economic chaos, the German masses would turn away from the sixty-day Reich. To the Nazis, it seemed that only the Jews and their boycott were now standing between Germany and greatness. No wonder Goering had said that Stephen Wise was one of Hitler's "most dangerous enemies." [5]

Hitler was in his Berchtesgaden retreat Sunday, March 26, 1933, when he learned that efforts to abort the Congress rally were unsuccessful. He summoned Goebbels from Berlin for an emergency conference. The two men held a long discussion of how the boycott and atrocity campaign could be arrested. Goebbels had been working on the problem. He had just finished a denial of the atrocities for The London Sunday Express, but admitted that such articles were "inadequate." [6]

Hitler and Goebbels concluded that a preemptive anti-Jewish boycott was the only answer. Longtime anti-Jewish boycott vanguard Julius Streicher would coordinate the action. The party faithful had long awaited this development. Goebbels excitedly hurried back to his Berlin office to polish a statement declaring that Germany's organized anti-Jewish campaign would now begin. [7]

The morning of the March 27 Madison Square Garden rally, Goebbels released a statement warning that "drastic legal proceedings" lay ahead for the German Jews if the New York- and London-centered anti-Reich campaign continued. Goebbels then wired a short party bulletin to Hitler for approval. In his diary that day, Goebbels admitted, "We work through [newspaper] interviews as much as possible; but only a really extensive movement can now help us out of our calamity." By the end of the afternoon, Hitler had approved Goebbels' party bulletin. The Propaganda Minister released it over German radio even before Rabbi Wise's protest broadcast was complete. The bulletin proclaimed that a national boycott against Germany's Jews was to be organized. [8]

The next morning, March 28, German and Nazi party newspapers carried an expanded declaration. The national anti-Jewish boycott was to commence April 1, in order to halt the accelerating Jewish-sponsored anti- German boycott movement and atrocity campaign. The foreign press was told that Hitler was moving to stymie "the anti-German atrocity propaganda which interested Jews have started in England and the United States." Der Fuhrer held Germany's Jews responsible for the foreign agitation, and these "defensive measures" were only the beginning. Officially mandated economic ousters of Jews would commence as well. [9]

The decision was technically made by Hitler in his capacity as chief of the Nazi party, not in his capacity as chancellor of the Reich. For appearances, therefore, the boycott was officially unofficial, to be organized and executed by the party and not the government. To emphasize that the action was in response to the failure of Washington and London to halt the protests in their countries, the announcement specified: The German government would not interfere with the party's boycott "so long as foreign governments do not take steps against atrocity propaganda in their countries." [10]

The NSDAP's preemptive boycott would not begin officially until April I, but the announcement itself set off a rash of boycotting and expulsions. German medical and juridical societies immediately expelled their Jewish members. In Darmstadt, Mannheim, and numerous other German cities, local SS contingents surrounded Jewish stores, smashed windows, and lobbed stench bombs. Frequently the police themselves demanded the stores close. [11]

The Jewish community in Germany reacted with terror. Previous outbursts had been sporadic, unorganized acts of intimidation and violence against individual families and businesses. But this boycott would be a systematic economic pogrom that would plague every Jewish business and household. No one would be spared. What professional could survive if he could not practice? What store could survive if it could not sell?

At first, Jews and non-Jews, whether in Germany or outside, could not believe that such an official national outrage could occur. No one seriously distinguished between Hitler's party capacity and his role as chief of state. This, then, was the beginning of the fulfillment of Mein Kampf, Hitler's explicit forecast of Jewish persecution in Germany, the document all believed -- hoped -- would never be put into force. The world was shocked. Hitler was going to keep his promises.

Within hours of the Tuesday-morning proclamation, Nazi party headquarters in Munich had formulated precise plans. Under boycott regulations, "no German shall any longer buy from a Jew." The boycott would commence at 10:00 A.M., April 1, a Saturday morning, and continue until the anti- German boycott protest movement in New York and London "ended." [12]

On March 28, the boycott promised to be a long ruinous confrontation for the Jews. In Munich, a hastily formed Central Committee for Defense Against Jewish Atrocity and Boycott Propaganda issued strict guidelines. All local party units were to be involved in both boycotting Germany's Jews and maintaining Nazi discipline. There was to be no violence, no basis for further atrocity stories. But an anti-Jewish boycott, violent or disciplined, would be disastrous for Germany's fragile economy, and virtually everyone in Germany with realistic business sense knew it. Non-Nazi members of the cabinet -- a majority -- demanded that Hitler cancel the anti-Jewish boycott. He refused. [13]

The next morning, March 30, newspapers in Germany and abroad confirmed that the anti-Jewish boycott proclamation was not just another vague Nazi threat, but a real and organized action. Terrified German Jews now redoubled their panicky campaign to disavow foreign protests and newspaper reports. They pleaded with their New York brethren to cancel any further protest activities, and especially any talk about boycotting German goods. Noted Hamburg banker Eric Warburg cabled his cousin Frederick in New York: "TODAY'S BOYCOTT THREATS AGAINST JEWISH FIRMS IN GERMANY WILL BE CARRIED OUT IF ATROCITIES NEWS AND UNFRIENDLY PROPAGANDA IN FOREIGN PRESS MASS MEETINGS ETC. DOES NOT STOP IMMEDIATELY." [14] Frederick Warburg upon receipt immediately telephoned Cyrus Adler, president of the American Jewish Committee, who composed a paragraph disavowing atrocity stories and any boycott. The statement was forwarded to Committee secretary Morris Waldman for approval. [15]

Waldman quickly approved the statement: "The American Jewish Committee declares that to its knowledge most of the so-called atrocity stories which were reported from Germany to have appeared in the American press did not so appear. No threats of boycott in America have been made by any responsible Jewish bodies. They were irresponsible sporadic outbursts. It is impossible to tell what would happen, however, if the threatened boycott against all Jews in Germany is carried out on April 1st." [16]

In a desperate attempt to mollify the Nazis, the Committee portrayed the Jewish War Veterans and boycott-leaning officials of the Congress as "irresponsible." This deepened the disunity between the Committee and popular Jewish organizations and forced the Committee into an even more isolated antiprotest corner. But the men of the Committee were agonizing over how best to ameliorate the plight of their friends and relatives in Germany. Their legendary judgment and foresight was now narrowed to simply avoiding the calamity of the coming weekend.

To back up the Committee's official statement, Frederick Warburg cabled Eric the following response: "WILL DO AND HAVE DONE MY BEST BUT RECENT GOVERNMENT BOYCOTT ANNOUNCEMENT VIEWED HERE AS CONFIRMATION PREVIOUS REPORTS OF DISCRIMINATION STOP RESENTMENT SO WIDESPREAD NO INDIVIDUAL EFFORTS TO STEM IT LIKELY AVAIL UNLESS GOVERNMENT CHANGES ATTITUDE STOP WILL CONTINUE TO DISCOURAGE MASS MEETINGS AND UNFOUNDED ATROCITY STORIES STOP NO RESPONSIBLE GROUPS HERE URGING BOYCOTT GERMAN GOODS MERELY EXCITED INDIVIDUALS." [17]

The Committee's statements and cables painted the best picture possible for the German authorities. The Nazis, however, convinced that all Jews were part of an international conspiracy, could not understand why the Committee could not control the Jewish organizations of New York and, for that matter, the world. So the Committee's reassurances were ignored. Julius Streicher in his paper Der Sturmer described the Jewish threat: "They agitate for a boycott of German goods. The Jew thus wants to increase the misery of unemployment in Germany and ruin the German export trade. German men and women! The instigators of this mad crime, this base atrocity and boycott agitation are the Jews of Germany. They have called those of their race abroad to fight against the German people." [18]

The reaction around the world was immediate. Those who had been reluctant to escalate anti-German protests into declared anti-German boycotts now felt compelled to take the step. During the next two days at neighborhood schools, civic auditoriums, synagogues, and churches, ordinary citizens of every religion and heritage assembled to promise or actually threaten boycott resolutions. Three thousand protesters representing over 100,000 orthodox Jews in Brooklyn vowed a comprehensive boycott. Six thousand in Baltimore, drawn from interfaith circles, gathered to protest at the Lyric Theatre. In Chicago, numerous organizations jammed the mailboxes and telephone lines of the German consulate with anti-Hitler declarations. The Chicago campaign was intensified following a mass protest rally at the great Auditorium Theatre that spilled over into adjacent streets. [19]

In Salonika, Greece, the Jewish community organized a boycott of German trade, especially Germany's locally successful film business. In London, boycott activities escalated with a growing number of previously hesitant trade unionists adding their support. In Paris, in Warsaw, in Cairo, in Dublin, in Antwerp, more protesters were becoming active boycotters. [20]

By midday Thursday, March 29, German business and non-Nazi government officials were alarmed about the consequences should the boycott expand. The disjointed worldwide anti-German boycott was causing millions of reichmarks of lost business. German steamship lines, machinery firms, banks, chambers of commerce, chemical concerns, toy manufacturers, fur companies, every form of exporter -- all appealed to the Nazis to halt the anti- Jewish boycott. [21]

There was no time to develop long-range statistics. Forecasting the full damage was impossible because additional thousands were joining the movement each day. Some joined to protect the Jews, some to fight Fascism, some to fight Hitler's anti-union policies, some to fight the party's anti-church activities. And some were joining merely to cut in on lucrative markets Germany had traditionally dominated, such as gloves, toys, cameras, and shipping. But the net result was that jobs and capital would shift from Germany to the economies of other nations -- this as the world struggled to lift itself out of the Depression.

A worldwide purchasing embargo now loomed as Germany's major national economic question. And all of it was inextricably bound up with Hitler's treatment of the Jews and the coming April First boycott action.

Hitler's plane arrived from Munich shortly before noon on March 29, 1933. From Berlin's Tempelhof Field he was shuttled under heavy guard to Wilhelmstrasse for a cabinet meeting. Fresh from April First planning at NSDAP headquarters, Hitler was determined to resist the mounting pressure to cancel the aktion. The anti-Jewish boycott would continue until the anti-Nazi campaign around the world "abated" or until the Nazis dismantled the alleged Jewish "economic grip on the Reich" and instituted occupational quotas for Jews. Unemployed rank-and-file Brownshirts were already jockeying over anticipated job vacancies. [22]

But Hitler's notions about anti-Jewish boycott benefits were rejected by the non-Nazi cabinet majority, which was convinced the April First action would bring economic disaster. The non-Nazis believed that millions of non- Jewish Germans would suffer as well. Every closed Jewish department store would produce dozens of unemployed clerks -- almost all non-Jewish. Every Jewish factory forced out of business would produce hundreds of unemployed laborers -- almost all non-Jewish. It was folly to think that inexperienced and largely uneducated Brownshirts could step in and run efficient moneymaking companies. Even if they could, an "Aryanized" company would surely lose most of its foreign business as a result of anti-Nazi boycotting.

The stock market had been plummeting since the original announcement. Siemens electrical manufacturers, down seven points. I. G. Farben chemical trust, down seven points. Harpener Bergbau mining works, down six points. Most other stocks closed three to nine points off. Bonds closed their lowest in years. The initial excuse -- end-of-month fluctuations -- was no longer believable. [23]

The non-Nazis, led by Foreign Minister Konstantin von Neurath, decided to oppose Hitler's anti-Semitic campaign at the March 29 cabinet meeting. Von Neurath's broad understanding of foreign trade compelled him to defy Hitler -- not to save the Jews, but to save Germany. However, when aides handed out the agenda, the boycott issue was not listed. Unwilling to delay any longer, cabinet opponents raised the matter on their own, demanding Hitler rescind the boycott orders. [24]

Hitler refused and reminded the cabinet that the boycott was a defensive action to fight "atrocity propaganda abroad." Hitler insisted that if the NSDAP had not organized a disciplined anti-Jewish boycott, a spontaneous violent one would have risen from the populace. Under party control, violence would be averted. He argued that only when Jews in Germany felt the full effects of the campaign against Germany would foreign Jewish agitators desist. Hitler rebutted the notion that the Nazi action would provoke an international counterboycott, saying that as far as he was concerned, the anti- German boycott was already well organized and under way. To dramatize his point, der Fuhrer described several telegrams from London reporting automobiles cruising the streets displaying large boycott posters. He added that in the United States, anti-Nazi mass meetings and New York radio broadcasts were continuing to harm the Reich. [25]

Goering told the cabinet that he was doing his part to counter Jewish atrocity articles abroad. Describing the feuding between the Zionists and other Jewish groups during the March 25 conference in his office, Goering stated that Zionists had agreed to use their influence to stop the newspaper accounts; this proved it was Jews who controlled the anti-German agitation. [26] Goering's point: The anti-Jewish boycott was merely a defense against a great enemy threatening the Reich. It could not be canceled.

The March 29 cabinet meeting ended without compromise, but with Hitler determined to avoid violence. Hitler had not admitted that he was incapable of canceling the boycott. Goebbels, who forcefully lobbied for the original idea, and Goering, who wielded the "rough and ready" Storm Troopers, were both insisting that Jewish economic expulsions commence at once. The opening of vacancies for unemployed Brownshirts could not wait. [27]

Regardless of the Nazi rationales, von Neurath saw the anti-Jewish boycott as the beginning of a diplomatic and economic war Germany was too weak to win. Immediately after the March 29 cabinet meeting, von Neurath conferred with Finance Minister Schwerin von Krosygk, Vice-Chancellor Franz von Papen, and even Hitler's own confidant, Hjalmar Schacht. The three agreed that only President Hindenburg could stop April First. Their aides would provide Hindenburg with reports proving that if Germany boycotted her Jews, the world would launch a retaliatory boycott that would devastate the entire nation. [28]

That night, Goebbels completed a fourteen-point boycott program that stressed the avoidance of ostentatious violence. There was to be no visible breach of any law. But other instructions overturned any concept of law. For example, Jewish store owners were forbidden to discharge their non-Jewish employees and required to pay two months' advance wages in anticipation of closing. All this was to avoid the criticism that the boycott would increase Aryan unemployment. The NSDAP was now issuing binding directives not only to its party members but to Jews as well. [29]

The next morning, March 30, Goebbels' fourteen points were published in newspapers throughout Germany. The separation between party and state was blurring as boycott directives became publicly accepted. The blur became a total merger later in the day when Prussian Justice Minister Hans Kerrl, a Nazi, officially ordered the dismissal by "persuasion" of all Jewish judges. Kerrl's undersecretary issued a formal declaration: "The boycott received the stamp of legality when it was proclaimed by the National Socialist Party as the expression of the supreme right of the people." The statement qualified, however, that the boycott "must proceed within the limits prescribed by the National Socialist Party." [30] The Justice Ministry statement made abundantly apparent that NSDAP edict was now in fact supralegal.

By Thursday, March 30, no one believed that April First was simply a private party matter. Clearly, this was nothing less than the first official step down the road of Jewish economic annihilation. The British and U.S. governments could no longer stay aloof.

Rabbi Stephen Wise, Bernard Deutsch, and Congress legal experts arrived at Undersecretary of State Phillips' office that Thursday. The department had already learned that the "nonviolent" Nazi boycott was indeed likely to include outbursts of physical violence and mass economic expulsions. Earlier in the day, the outgoing German ambassador had paid a courtesy call on Phillips, ostensibly to introduce his interim replacement. Phillips insisted on arguing against the Nazi boycott, but it was fruitless speaking with the outgoing German ambassador, himself out of favor with the current regime. Now, as Wise entered Phillips' office, the situation was acknowledged critical and getting worse. Shortly thereafter, a cable from charge d'affaires Gordon in Berlin was brought in describing a violent mood growing among the unpredictable Storm Trooper units throughout Germany. Renegade Brownshirts on a rampage in Gleiwitz had slaughtered four Jews during the night, and Berlin was trying to suppress the report. Other Storm Troopers, loyal to Goering, not Hitler, were planning "a veritable reign of terror" for April First. [31]

Gordon's cable went on: A moderate-minded industrialist, who enjoyed excellent relations with both the United States embassy and Hitler, was recommending that Gordon pay a private visit to der Fuhrer. According to the industrialist, Hitler would be more receptive to a U.S. diplomat than any other foreign liaison. Gordon agreed to bypass the protocol of consulting the foreign minister first, if the State Department in Washington arranged the meeting with Hitler through the German embassy in Washington. Gordon ended his cable with the warning that "almost any development ... is possible within the near future." Speed was essential. [32]

Phillips had spent much of the day on the telephone relaying news, formulating positions, and doing everything he could to defuse the coming catastrophe. [33] Despite all his efforts, the Nazi boycott was still scheduled to commence Saturday and continue indefinitely as the backdrop for medieval-style rioting, lynching, and plunder throughout Germany. Since the pretext for this rampage was a "defensive" reaction to the Jewish-led, anti-German campaign, Phillips wondered if subduing anti-Reich agitation in the United States could influence the Nazis. But Rabbi Wise and the Congress could not renounce their anti-Hitler protest, nor could they publicly oppose the rapidly expanding independent anti-German boycotts. [34]

These days and nights were a personal hell for Wise as he contemplated what he called his "awful responsibility." Nonetheless, the choice in his mind was clear. "Virtual silence-and silence is acquiescence ... or supporting this tremendous protest. No matter what the Hitlerites do now, it will be nothing more than ... [what] would have been covertly performed, protest or no protest." [35]

When Rabbi Wise and his delegation took leave of Undersecretary of State Phillips on March 30, the rabbi insisted that neither he nor the Congress nor the Jews nor the world could back down. If Saturday was to be Day One, so be it.

But Wise did agree that no comments about their meetings would be released to the press. He was determined to keep the pressure on, but was also willing to allow the diplomats a few days. The American Jewish Committee was quietly but forcefully lobbying the administration to demand that the German government halt organized anti-Semitism in Germany. [36] If the FDR government was going to act, it would be now.

Shortly after Wise left Phillips' office on March 30, the undersecretary discussed the crisis with Secretary of State Cordell Hull. At 7:00 P.M. Washington time, Hull wired a response to Gordon's earlier cable requesting permission to meet with and reassure Hitler personally. Instead Hull instructed Gordon to call formally on Foreign Minister von Neurath. "You should make it clear that it is not the purpose of this government to interfere in ... the domestic concern[s] of Germany," Hull's cable directed, detailing the diplomatic language to be used. "The situation which is now developing, however certainly without the intention of the German government, has assumed an international aspect." Hull's message added, "I am informed that a retaliatory boycott is even now under serious consideration in certain American cities. More important, however, the German Government should appreciate that the human element involved in the situation is such that the friendship of the people of the two countries might not remain unaffected." [37]

Hull had chosen cautious words to convey as strong a statement as the circumstances and his basic philosophy would allow. He was against posing obstacles to foreign trade and meddling in the domestic affairs of another country. But the circumstances demanded this official involvement. Hull ended his cable to Gordon: "You may express to the Minister of Foreign Affairs my deep concern and ask him whether ... there is anything which the two governments might do either jointly or separately to alleviate the situation." [38] Hull's cable arrived in Gordon's office in the middle of Berlin's night. No action could be taken until Friday morning-the day before the boycott.

While the United States government was trying to avert the April First boycott, the British were also active that Thursday, March 30. The British government earnestly wanted to avoid any involvement unless British citizens were concerned. They felt they were all too often pinpointed as the "guardian angel" of the Jews because of their Palestine mandate. Viscount Hailsham, Secretary of State for War, said as much in Parliament that day: "I assure you ... [no] British subjects of Jewish descent have been ill-treated in Germany, and the government does not think it has any right to make representations in Germany regarding German citizens." [39]

Nevertheless, in a meeting that March 30 with German Ambassador Leopold von Hoesch, Foreign Secretary John Simon strongly hinted that Britain's official disinterest might not last much longer, especially since the British public and Parliament members -- Jewish and non-Jewish -- were strongly against Nazi anti-Semitism. Ambassador von Hoesch answered that he had already met with leaders of British Jewry to argue against continued anti-Nazi protest measures, especially a British boycott of German goods. He tried to explain the anti-Jewish boycott as a reaction to economic threats against the Reich, especially American threats. But, added von Hoesch, even if calmer minds prevailed and the anti-Jewish boycott was canceled, Jewish expulsions in Germany were imminent. Simon answered that he could only hope that the anti-Jewish excesses would not push Great Britain and Germany into a public confrontation neither government wanted. [40]

The British government's publicly neutral attitude outraged Lord Reading, a prominent Jewish member of the House of Lords, and president of the Anglo-German Association. That morning, Lord Reading made a strong appeal before Parliament declaring that he could no longer remain silent and that popular sentiment favored an official British protest about the impending anti-Semitic boycott. The House echoed with cheers of encouragement. Later, the Archbishop of Canterbury, among others, endorsed the appeal. [41]

Even as Lord Reading denounced the Nazi regime, senior German Foreign Ministry official Hans Dieckhoff convened an emergency interministerial conference to discuss the accelerating protest and boycott movements around the world. Attending were representatives of the ministries of Economics, Interior, Propaganda, and Transport. Dieckhoff told his colleagues that the latest consular dispatches showed no "organized boycott movement," but rather an un coalesced gamut of actions by individuals and small groups. More alarming to Dieckhoff, however, was the fact that many of these boycott agitators were non-Jewish, "particularly Anglo-Saxon competitors" who were enthusiastically backing a popular ban on German goods to achieve a lasting competitive edge. [42]

The German officials admitted that nothing could be done to stem the anti-Reich boycott movement except to propagandize against "the horror stories" and avoid anti-Semitic incidents that would "feed the boycott." They agreed that April First was precisely the sort of action that would escalate the popular refusal of German exports. Unless it was canceled, German trade would suffer "far-reaching and serious consequences." [43]

But the men conceded that there was no way of stopping the Nazi boycott against the Jews unless somehow all anti-German agitation abroad ceased at once, and unless German fears of Jewish-led economic punishment dissipated. This they knew was becoming impossible. Party leaders were keeping the rank and file in an emotional state. That day's issue of Volkischer Beobachter continued to warn of Jewish economic moves to wreck Germany's new regime. Page one's banner headline claimed that the Jewish boycott against Germany was actually organized by the Communist party. Elsewhere in the paper, commercial leaders denied anti-Semitic actions and pleaded for an end to Jewish-led economic reprisals. Nazi press articles describing real or exaggerated anti-German protests instigated by Jews solidified the resolve of the rank and file to execute the April First aktion, and intensified daily Jew-baiting and random violence. In turn, each such incident only convinced more foreigners to refuse German goods. Goebbels' own newspaper bristled that March 30 because it saw "no visible effect" on anti-Nazi agitation. "On the contrary," Der Angriff complained, "Germany's countermeasures are being answered with a renewed demand for a boycott of German goods." [44]

Dieckhoff adjourned the March 30 conference on a desolate note, anticipating an economic calamity unless the April First campaign was canceled. But each man left hoping something could be done to change Hitler's mind and forestall the crisis.

A few hours later, Hitler agreed to meet with Reich Savings Commissioner Friedrich Saemisch and Hjalmar Horace Greeley Schacht, Reichsbank president. Hitler trusted few of his associates. But one he did trust was the economic wizard Schacht.

Born in a northern German province of a naturalized American father, Schacht, despite his American roots, was seen by Hitler as a good Aryan and a devoted Nazi. He had served Germany during the pre-Hitler era in several key banking positions, including Reichsbank president. But in 1930 he resigned from the Reichsbank to protest government approval of the Young Plan for finalizing war reparations. Overnight Schacht became a controversial exponent of political economics highly attractive to the rising Adolf Hitler. In a 1931 meeting, the two became enamored with one another. Schacht pledged himself to boost Hitler to the chancellorship by introducing him to the money powers of Germany and by successfully managing the NSDAP's destitute finances. He signed "Heil" to his earliest letters to Hitler. It was Schacht who had coaxed millions of reichmarks in desperately needed campaign support from leading industrialists just before the Reichstag fire. It was Schacht who now pledged to his Fuhrer to reestablish Germany's financial integrity and build a war economy designed for territorial and racial aggression.45 Schacht was a polished gentleman with a fine German education, who in later decades would fool many into thinking he was just caught up in the Hitler regime, not a real Nazi. Yet in truth, Hjalmar Schacht was the indispensable, enthusiastic player without whom the Reich could not have commenced its genocidal conquests.

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PART 2 OF 2

Now Schacht, along with Savings Commissioner Saemisch, would argue that the April First boycott threatened all economic recovery. Schacht warned Hitler that the economic damage would be severe, perhaps lasting. If the anti-Jewish boycott and a counter anti-German boycott continued for just thirty days, said Schacht, at least 1 million non-Jewish Germans would be forced out of work by the economic disruption. Moreover, the drop in exports, the disappearance of dependable daily Jewish bank deposits, and the ensuing downward spiral would place a wholly intolerable burden on the nation's finances, especially foreign exchange. [46] Foreign currency for raw materials was the key to rearming the German war machine. So whatever short-term satisfaction would be derived from economic war against Germany's Jews would quickly frustrate overall Nazi ambitions.

It was hard to resist the economic advice of Schacht, but Hitler would not yield. Nor could he. There was now a question of whether greater spontaneous violence might be unleashed if the bloodthirsty Storm Troopers were deprived of the chance to strike German Jewry and muscle their way into the Jewish economic niche. [47]

The only hope now seemed to lay in the presidential palace. President Hindenburg summoned Hitler to an urgent conference. Whether feigned for public consumption or real, Hitler was known to greatly respect the aging war-horse Hindenburg. For sixty minutes, Hindenburg pleaded and demanded that Hitler call off the April First action. Hindenburg's arguments were supported by Schacht, von Papen, and von Neurath, but Hitler held fast. But the anti-German boycotts abroad were accelerating unabated. Der Fuhrer still held the German Jews responsible for an international economic plot against the Reich. In Hitler's view, the anti-Jewish campaign was still self-defense. Hindenburg refused to accept Hitler's obstinacy. The fate of Germany rode with the ultimate decision. Nonetheless, despite what German diplomats would later call a near "presidential crisis," this meeting also ended in a stalemate. [48]

Friday morning, March 31, Foreign Minister von Neurath and the other seven non-Nazi members of the German cabinet were confronted with a frightening situation. Within twenty-four hours, the Nazis would unleash a total national boycott that within months would force Germany's Jews into pauperism. The action would be accompanied by mob violence that would perpetuate the image of a barbaric Germany. A Leipzig newspaper had already warned Jews against defiance or provocative self-defense. "Should a shot be fired at our beloved leader, all Jews in Germany would immediately be put against the wall, and bloodshed would result which, in its ghastliness, will exceed anything the world has ever seen." [49]

Economic vacancies would be created, but they would be filled by unqualified rank and file Nazis. For example, in Berlin alone, about 75 percent of the attorneys and nearly as many of the doctors were Jewish. [50] Who would take their place? Most importantly, the worldwide retaliation for Germany's anti-Jewish boycott was clearly to be a massive counter-boycott pursued by millions of people who would otherwise limit their protests to petitions and marches. Governments themselves might even be dragged into trade sanctions by popular demand for higher tariffs on German goods and even outright bans. Such initiatives were already under way in the U.S., Poland, and France.

Intervention by the Allied powers for Versailles Treaty violations was even a possibility. Polish anti-Nazi boycott groups were urging military action at that moment to preclude Hitler's threat to occupy the Versailles-guaranteed corridor to the Danzig area. And British groups were talking about a League of Nations petition to enforce the minority guarantees Germany had agreed to. [51]

Waiting for von Neurath the morning of March 31 was an urgent message from U.S. charge Gordon. A host of other embassies were lodging messages of concern or protest. Fearful German industrialists and bankers were hoping von Neurath and other cabinet moderates could avert the economic consequences the· Nazi action would trigger.

The entire cabinet and numerous senior officials were on hand for the fateful March 3 I emergency session. Of the eleven cabinet members, only Chancellor Hitler, Interior Minister Frick, and Minister Without Portfolio Goering were Nazis and in favor of the anti-Jewish boycott despite the risks. The remaining eight, led by von Neurath and von Papen, were vehemently opposed. The debates ensued, with tempers rising and accusations flying. The Justice Ministry warned that the boycott was patently illegal and that the courts might enjoin the entire affair. Finance Minister Schwerin von Krosygk complained that the closure of Jewish enterprises would produce a ruinous loss in sales tax. Hitler answered that the tax revenues would be made up from other sources, Christian sources. Minister of Transport Paul von Eltz-Rubenach told of German ships, such as the Bremen and Europa, sailing nearly empty because of Jewish-led retaliation. Von Neurath warned of massive diplomatic and economic reprisals, many of which were already under way. Schacht and von Papen supported the ministries, but were unable to convince the Chancellor of the disaster that would follow. Hitler simply continued assuring that the boykottaktion would be conducted under the strictest discipline and without violence. [52]

No one believed the assurances. None of the spontaneous boycotts and professional expulsions already sweeping Germany could be characterized as "disciplined." In one case, no more than a letter from a German-American claiming that the founder of the Woolworth's department store chain was a Jew, prompted SA troops to surround six of the stores in Germany and prohibit customers from entering. Even as the cabinet was convening on March 3 I, Munich Nazis unilaterally declared that their boycott would begin at once. Brownshirts armed with carbines took up positions outside the city's Jewish stores. [53]

Still, Hitler refused to stop the action, now claiming that it had gone too far to be canceled -- whether or not the foreign agitation was suspended. Von Neurath exploded and demanded that Hitler as head of the Nazi party call off the boycott. If not, von Neurath would resign. Hitler would not change the plans, and with that von Neurath formally resigned. [54]

At that moment it appeared that the brittle coalition running Germany would collapse. Von Neurath was Germany's last respectable link to the outside world. Von Papen and Hindenburg's personal representative both pleaded with the foreign minister to rescind his resignation. [55]

Von Neurath was despondent and physically weakened over the crisis. He saw his Germany approaching another abyss. He had always felt it his duty to elevate his nation while abiding by a personal moral code. He could no longer be part of a government that would countenance April First. He refused to withdraw his resignation. It was known around Berlin that if von Neurath left, in all likelihood Hindenburg would resign as well. He was the president's favorite and for Hindenburg, perhaps the only redeeming factor in the entire Hitler cabinet. [56]

Without Hindenburg, what? Would the generals take over? Would Hitler and the Nazis be deposed or thrown into civil war? No one could predict. Therefore, it was unacceptable that von Neurath leave the government. Some compromise was necessary. True to form, Hitler agreed not to a compromise, but an ultimatum. He would cancel the Nazi party's boycott if von Neurath could supply explicit public assurances by Jewish leaders and the governments of the United States, France, and England that they would not participate in any anti-Reich boycott. [57]

The German foreign minister accepted the compromise cum ultimatum. He took back his resignation and promised to provide the official foreign assurances Hitler demanded. What was the deadline for producing the statements?

Hitler specified midnight, less than twelve hours away. [58]

The rush began. Von Neurath hurriedly explained the crisis to his senior staff, who set about to secure the impossible. Senior official Hans Dieckhoff was to meet shortly with U.S. charge Gordon to receive Hull's carefully worded protest of the night before. When they did meet, Gordon dutifully relayed Hull's message threatening a rupture in German-American relations. As instructed, Gordon stressed Hull's desire to do anything diplomatic that might ease the crisis. Dieckhoff immediately answered that an official U.S. statement, published in the American press, repudiating the atrocity reports and denouncing any anti-Nazi boycott could stop April First -- if issued in time to meet Hitler's deadline. [59]

Gordon quickly telephoned Undersecretary Phillips in Washington and passed on Dieckhoff's request. The charge recommended that Hull formulate such a statement. He emphasized that all speed was necessary, that the chances of calling off the Nazi campaign were diminishing with each minute, and that "an eleventh hour breakdown" would be tragic. [60]

Even as charge Gordon was speaking to Washington, German officials were telephoning their embassies in London, Washington, and Paris, urging similar declarations from Jewish leaders as well as the governments of England and France. [61] The diplomatic telephone and telegraph lines in Washington, London, Paris, and Berlin stayed busy for tense hours. Additional emergency German cabinet meetings assessing the progress were convened throughout the day. But most Reich officials were doubtful. Hitler was demanding the very sort of domestic control that the Western democracies were not empowered to engage in.

As the French, British, and American governments struggled to compose public statements that would not outrage their citizenry and yet satisfy Hitler, popular Jewish leaders were escalating their calls for economic confrontation. In Paris, the newly formed International League Against Anti-Semitism was consolidating French protest groups and announced a unified anti-German boycott to commence at 10:00 A.M., the moment Germany's boycott against Jews started. Merchants throughout France had pledged their cooperation, and efforts were under way during those very hours to force French ministries to join the effort. [62]

In London, the antiboycott placards in shops became more numerous. And trade unionists began to target crucial industries, especially big foreign-currency earners, such as the German fur industry. One estimate projected Germany's total 1933 loss from this lucrative industry alone at $100 million. [63]

Eleven of the world's leading musicians began drafting a cable to Hitler announcing a boycott of Germany's lucrative cultural enterprises. Led by Arturo Toscanini and Fritz Reiner, the musicians threatened a business that would hurt not only Germany's pocketbook but, perhaps more importantly, her pride. Toscanini, who demanded his name be placed at the top of the protest list, targeted the upcoming Wagner Festival as the first casualty. German tourism, a big foreign-currency earner, was already suffering drastically, because of sympathy with the Jews and the public fear of traveling in a nation besieged by street hooligans. Cancellations had emptied German ocean liners and hotels. Even the great German spas were bemoaning the loss of an elite clientele who were switching summer reservations en masse to rival spas in Czechoslovakia and France. And leaders of the German fur industry, centered in Leipzig, were already nervously discussing an appeal to convince foreigners to halt the cutoff of purchases. [64]

By the close of business, March 31, 1933, German stocks had again tumbled badly. Die Trust fell 10 percent in value. Siemens had dropped 12 percent in value the day before. [65]

Now frenzied, the anti-Jewish boycott machine in Germany continued to make ready. Boycott coordinator Julius Streicher's posters were hurriedly pasted all over Berlin. The posters again cried out for Germans to refrain from buying or associating with Jewish business people because the Jews "excite the world against Germany .... They agitate for a boycott of German goods. The Jew thus wants to increase the misery of unemployment in Germany and ruin the German export trade." New orders circulated calling for all Aryan employees of Jewish firms in Berlin to walk off their jobs at precisely 3:00 P.M. on April First and picket their own establishments in protest of the international anti-German boycott. [66]

By the end of the afternoon, the Nazi leadership began to look forward to the next day with increasing desperation and fear. Germany might begin to disintegrate, perhaps even by fire, if Jewish political agitation provoked international military intervention. In the privacy of his diary, Goebbels felt compelled to write, "Many are down-hearted and apprehensive. They believe that the boycott might lead to a war. We can gain nothing, however, but universal esteem by defending ourselves." [67]

As the sun set, the prospects were increasingly dangerous. Someone had to stop the anti-Jewish boycott. So Benito Mussolini stepped in.

Mussolini was the man Hitler mimicked from the beginning even though Mussolini's Fascism was not fundamentally racist or anti-Semitic. Italian Jews were, in fact, influential in Mussolini's philosophical development. Five Jews were among the founders of the original Fighting Fasci in March 1919. Three other Jewish activists were commemorated in Fascist history as "martyrs." Mussolini certainly believed in many of the commonly held Jewish conspiracy theories, but he considered the Jewish presence in Italy an asset, assuming all the stereotypical traits in Jews would accrue to the state. As such, several Jews were among his closest advisers. [68]

Hitler deliberately overlooked Mussolini's relationship with Italian Jewry when he patterned National Socialism after Italian Fascism. Hitler's aborted rebellion of 1923, the Beer Hall Putsch, was in fact a bad imitation of Mussolini's successful 1922 takeover by threatening Rome with a nonexistent Revolutionary Legion. And in 1926, Hitler required his followers to give the Roman salute, the trademark of Nazism that was again just an emulation of Mussolini. [69]

Yet Mussolini had repeatedly ridiculed Hitler's anti-Semitic and racist orientation. On March 30, Mussolini had ordered Vittorio Cerruti, the Italian ambassador in Berlin, to register a strong complaint with the Foreign Ministry about the coming April First boycott. [70] Now, with precious few hours remaining, Mussolini instructed Cerruti to try again, this time by going directly to der Fuhrer. Hitler granted an immediate interview to Cerruti, who beseeched him in the name of Mussolini to call off the April First aktion and halt Nazi anti-Semitism forever. To make certain der Fuhrer understood Il Duce's feelings precisely, Cerruti read a long telegram from the Italian dictator. Hitler was devastated that Il Duce could take so pro-Jewish a stance. He flew into a rage, screaming, "I have the most absolute respect for the personality and the political action of Mussolini. Only in one thing I cannot admit him to be right and that is with regard to the Jewish question in Germany, for he cannot know anything about it." Hitler continued that he alone was the world's greatest authority on the Jewish question in Germany, because he alone had examined the issue for "long years from every angle, like no one else." And, shouted Hitler, he could predict "with absolute certainty" that in five or six hundred years the name of Adolf Hitler would be honored in all lands "as the man who once and for all exterminated the Jewish pest from the world." [71]

While the diplomats struggled to appease Hitler late on March 31, important Jewish protest leaders were likewise struggling with the emotional question. After much agonizing, two Anglo-Jewish leaders finally agreed to accede to the urgent pleading of the Zionist delegation dispatched to Great Britain several days before. The first was Lord Reading, who one day earlier had lashed out in Parliament at German atrocities. The second was Lord Herbert Samuel, former British high commissioner of Palestine and a great friend of the Zionist movement. Together, they would release a declaration that read: "While sharing ... the deep feeling aroused in this country at the announcement of the discriminatory action intended to be taken in Germany against Jewish professional men, tradesmen, and others, we deprecate exaggerated reports of occurrences there or any attempts to boycott German goods. Such attempts hitherto made have been unauthorized and spasmodic, and their cessation would in our view conduce to the alleviation of the situation in Germany." British Foreign Secretary John Simon agreed at the same time to hand the German ambassador in London a letter endorsing the Jewish declaration. [72]

Popular protest leaders in America, led by Stephen Wise, however, were unwilling to accede to Germany's threats. Wise's silence, originally intended to allow the State Department to negotiate unhampered, now became a strong refusal to appease Hitler. Even hostile messages from fellow Jews in Germany would not force him to acquiesce. One cable in particular sent that day struck a nerve. Sent by the editors of a prominent Jewish newspaper in Hamburg, it declared: "GERMAN JEWS ACCUSE YOU AND ASSOCIATES TO BE TOOLS OF OUTSIDE POLITICAL INFLUENCES STOP YOUR SENSELESS OVERRATING OF OWN INTERNATIONAL IMPORTANCE AND LACK OF JUDGEMENT DAMAGE LARGELY THOSE YOU PRETEND TO WANT TO PROTECT ... BETTER SHUT OFF YOUR OWN LIMELIGHT AND USELESS MEETINGS AS SUREST MEANS AGAINST ANTI-SEMITISM ... THIS IS YOUR MOST IMPORTANT DUTY TO REPAIR YOUR CRIMES AGAINST US." Wise was certain such cables were written under great duress and obviously for NSDAP consumption. [73]

Although popular Jewish leaders refused to appease, the American Jewish Committee was willing. Committee president Cyrus Adler received an impassioned plea the night before from his friend Oscar Wasserman, a prominent banker, informing: "THERE IS NO DOUBT THAT THREATENED BOYCOTT AGAINST ALL JEWS WILL BE CARRIED THROUGH WITH FULL SEVERITY IF SOMEWHERE PROTEST MEETINGS WILL BE HELD OR BOYCOTT AGAINST GERMAN GOODS WOULD BE RECOMMENDED BY JEWS OR WITH JEWISH ASSISTANCE STOP AS GERMAN JEWS ARE FACED WITH UTMOST POVERTY AND DISTRESS IF JEWS IN FOREIGN COUNTRIES CONTINUE TO INTERFERE I REQUEST YOUR HELP SO FAR AS YOU CAN." [74]

On March 31, as the Third Reich was eagerly awaiting a public assurance that American Jews would not fight back with economic weapons or even verbal protests, Adler issued just such a statement, emphasizing his position of authority: "The American Jewish Committee, of which I am president, has taken no part in protest meetings. No responsible body in America has suggested boycott. We have been and are doing all in our power to allay agitation." [75]

In between the British capitulation and the Committee's announcement that day, Horace Rumbold, the British ambassador in Berlin, visited von Neurath to discuss the anti-Jewish boycott. Von Neurath briefed Ambassador Rumbold about Hitler's twelve-hour ultimatum and suggested there was some hope because Jewish and governmental statements from Britain had already been assured. Events were speeding so fast, however, that Rumbold was unaware of his own country's activities in previous hours. Rumbold was, in fact, raising doubts about those British assurances when von Neurath was summoned to the phone. German sources in Washington were calling with the news that American Jewry had issued the announcement Hitler demanded. [76]

It now appeared that von Neurath's impossible task might be completed. The latest updates from his people working in France and with the American State Department indicated that similar statements would be forthcoming. But aside from the American Jewish declaration, which was already public, the other declarations were wholly contingent upon canceling the April First boycott.

It was now up to the chancellor. Despite the encouraging reports, Hitler still refused to cancel the next day's boycott. [77]

Von Neurath could scarcely believe Hitler's refusal. Germany's diplomatic honor had been put on the line. Foreign assurances were solicited under the express warranty that if produced, the anti-Jewish boycott would be canceled. Those assurances were either in hand or forthcoming. Von Neurath was so physically shaken he could hardly function. Von Papen was so furious he tried to convince President Hindenburg to declare martial law. At the same time, urgent appeals were lodged by German shipping, manufacturing, and financial concerns to stop the anti-Jewish boycott at all costs. [78]

Even as last-minute appeals were being made to Hindenburg, the phone rang in charge Gordon's Berlin office. Undersecretary of State Phillips was calling from Washington with the public statement von Neurath needed. Phillips dictated the declaration: "The situation in Germany is being followed in this country with deep concern. Unfortunate incidents have indeed occurred, and the whole world joins in regretting them. But without minimizing or condoning what has taken place, 1have reason to believe that many of the accounts of acts of terror and atrocities which have reached this country have been exaggerated, and I fear that the continued dissemination of exaggerated reports may prejudice the friendly feelings between the peoples of the two countries." [79]

Phillips continued dictating the statement: "I have been told that protest measures ... in certain American cities ... would result in a partial boycott of German goods .... Not only would such measures adversely affect our economic relations with Germany, but what is far more important, it is by showing a spirit of moderation ourselves that we are likely to induce a spirit of moderation elsewhere." [80]

Hull had caved in, nullifying America's earlier warning of far-reaching repercussions should the anti-Jewish campaign take place. He was prepared to release the new statement to American newspapers Saturday morning. But Phillips qualified the retreat carefully, insisting that Gordon "make it clear [to von Neurath] that he cannot issue such a statement unless you receive definite assurance that the boycott will be called off. You will readily understand that the Secretary would be placed in a highly embarrassing position if, after issuing this statement, the boycott should commence. We shall therefore await a further message from you to the effect that the boycott will be called off.... How soon can you get a reply back to us?" [81]

Gordon answered, "The Foreign Minister told me where to get him at dinner. I could be there in five or ten minutes. I can call you back in fifteen or twenty minutes hence." Gordon added that von Neurath had assured him that the British foreign secretary would send a similar statement, but the final details had "not yet been settled." Gordon knew that minutes counted. "I will call him [von Neurath] at dinner at once and will call you back in thirty minutes. I will put the call in now while I am going around to see him." Gordon hung up and immediately phoned the German foreign minister. [82]

At about that time, Hindenburg had undoubtedly contacted Adolf Hitler one last time. Using whatever prestige and influence he could still wield, the president insisted Hitler cancel the April First campaign. All the old arguments were exchanged. Perhaps some new ones. And then for some reason, or perhaps for some combination of reasons, der Fuhrer unexpectedly agreed. The boycott must indeed be stopped.

For whatever reason, Hitler finally agreed the Reich would at this early stage suffer far more than it would gain, and was not yet strong enough to risk the battle. He agreed the tactic of boycotts would be abandoned. Instead, he would proceed against German Jewish economic viability by regulations, legally. Step by step. But Saturday morning's action was now too far gone to be aborted. To do so, admitted Hitler, would probably result in bloodshed at the hands of uncontrollable SA troops outraged by the disappointment. [83]

Therefore, a reluctant compromise was struck that would enable Hitler to satisfy Brownshirt demands for an attack against the Jews, yet limit the economic retaliation by world Jewry. The chancellor would declare "a pause in the boycott late the first day, then a brief moratorium. If, by Wednesday April 5, foreign agitation had receded sufficiently, the boycott would be dissolved altogether. However, the drive to expel Jews from professions and destroy their place in German society would begin at once. [84]

Hitler then called Goebbels, insisting that SA members loyal to Goebbels and Goering be marshaled and told that the boycott had been curtailed. Goebbels reluctantly prepared a radio announcement suspending the anti- Jewish boycott at 7:00 P.M., April First until the following Wednesday morning -- to observe the drastic reduction of foreign agitation and anti-Reich boycott movements. During the Saturday active boycott hours, no violence could be perpetrated. No Jewish store could even be entered, and no Jew could be manhandled. Jewish banks would be exempted by edict to minimize economic disruption. [85]

It was now nearly 11:00 P.M. in Berlin. The world still believed that eleven hours hence, the Nazis would stage their violent pogrom throughout Germany. Charge Gordon reached von Neurath. He read him Hull's statement disavowing the anti-German boycott, but the German foreign minister, in great distress, admitted it was now too late. Von Neurath said Hitler felt too many SA units were awaiting the moment and could not be disappointed. The only consolation von Neurath could relate was the decision to suspend the campaign at 7:00 P.M., Saturday. Gordon sadly agreed to pass the news to Washington. [86]

Within five minutes Gordon was listening to the radio for Goebbels' announcement limiting the boycott to a single day. But Goebbels' remarks were at once both reassuring and ominous. He made clear that "the boycott will be carried out with iron discipline and no one will be bodily in jeopardy .... Every act of physical violence will be punished severely.... Provocateurs who ... incite violence shall be handed over to the police." [87] Then Goebbels, who commanded the personal loyalty of many Storm Trooper factions, added his own threatening postscripts. Instead of downplaying the likelihood of a resumption that next Wednesday, he declared that if atrocity reports and the international anti-Reich boycott movement did not totally subside by Wednesday, the anti-Jewish campaign would be "resumed with unprecedented force and vehemence." [88]

Goebbels left the studio and drove to a hall on the west side of Berlin, where he addressed an already agitated crowd of Brownshirts. In the hypnotic, demagogic Nazi style, Goebbels worked the crowd into a violent frenzy. To cheers, Goebbels shouted, "Tomorrow not a German man or woman shall enter a Jewish store. Jewish trade throughout Germany must remain paralyzed. We shall then call a three-day pause in order to give the world a chance to recant its anti-German agitation. If it has not been abandoned ... the boycott will be resumed Wednesday until German Jewry has been annihilated!" [89]

Goebbels then admitted to the crowd that the party had not planned on its avowed confrontation with the Jews until Hitler had consolidated more power. "We did not plan to open this question immediately. We had more important things to do." Then, accusing the Jews of "taking bread from German workers" by creating the international anti-Hitler boycott, Goebbels bellowed a stern warning: "We have not hurt one Jewish hair, but if New York and London boycott German goods, we will take off our gloves." The throng exploded with chants of "Hang them! Hang them!" [90]

At midnight in Berlin, charge Gordon telephoned Undersecretary Phillips in Washington. Gordon was forlorn that some minuscule delay on the State Department's part had been a factor. "As I told you this afternoon," Gordon said, "it was an eleventh-hour breakdown." Gordon added that Sir John Simon's letter disavowing protest and boycott "did not materialize." Under the circumstances, Hull's appeasement statement would be retracted and withheld from public view. [91]

In New York, Stephen Wise finally fell asleep well after midnight that Friday, hoping that history would prove that his steadfast activism against Hitler had not precipitated the events to follow. Those events were in fact long planned by Nazi leaders. The American Jewish Congress protests and the growing Jewish-led anti-Reich boycott merely forced the Nazis to execute their plans much sooner than expected. One reassuring letter from a Berlin confidant reached Wise shortly after April First. It explained: "Over here they have made the Jews and everyone else think that this boycott was only a retaliatory measure because of the action of the Jews in England and America and that nothing would have occurred otherwise. Lies -- all lies. It was prepared months ago. I know! ... Could any country in 48 hours have a complete list of every Jewish shop in Germany ... including the seamstresses, little shoemakers, tiny shops in basements that sell vegetables, and all this [even] in the smallest hamlets and towns .... This was organized to the nth degree." Stephen Wise also hoped that history would confirm that his steadfastness did more than bring the true Nazi intentions out into the open. Wise hoped to prove he actually prevented a bloody medieval outrage. [92]

When Jewish merchants in Berlin arrived at their stores the morning of April First, they found cadres of placard-carrying, arm-waving Brownshirts shooing customers away. All Jewish stores were identified by a yellow spot against a black background, reminiscent of the yellow stars Jews were forced to wear in the Middle Ages. In Hamburg, Munich, Frankfurt, and in every city and most towns throughout Germany, the pickets cried, "Buy German. Don't buy from Jewish stores!" Stink bombs were rolled into Jewish department stores. Judges were hauled off their benches by defendants. Doctors' patients were admonished at the door. [93]

Many stores had been closed days earlier by regional boycotts under way since the first announcement. Despite the pleadings of "Aryan" insurance companies, exuberant SA units did shatter windows and wreck property. Some German citizens actively opposed to the boycott deliberately shopped at Jewish stores, buying the first object they laid their hands on. These people were filmed by Nazi cameramen for exhibition at local theaters; some of them were set upon and stamped on the forehead with the word Traitor. [94]

In the most fashionable sections of Berlin, Brownshirts armed with blackjacks and other weapons staged a daylong terror siege that included invading Jewish-owned stores, vandalizing the merchandise, extorting money, and then brutally beating the proprietors. [95] One Jewish attorney was murdered by a mob in Kiel after being dragged from a jail where he was being held after he resisted boycotters. [96]

Throughout Germany, cruel acts of intimidation and destruction formally inaugurated the new era. But much of the outside world was misled about the degree of violence because Goebbels' Government Press Office ordered newspapers to publish only photographs "which are within the limits of the legal boycott." Hence, all photographs showed disciplined SA troops impassively standing outside Jewish stores functioning as no more than informational pickets. On March 31, Streicher's boycott office circulated a statement that a "Communist group" was planning widespread window-smashing and looting; hence, vandalism against Jews was in advance declared to be a Communist, not a Nazi, transgression. Strict censorship and German hysteria over even reporting an incident that would be termed "atrocity propaganda" created a quiescent facade that fooled many Western journalists and diplomats and the rest of the world for decades. They would believe the April First anti- Jewish boycott was essentially nonviolent. [97]

But Stephen Wise was not deceived. He was convinced that even if the more visible acts of physical violence might now be avoided, the quieter acts of violence -- occupational ousters, deprivations of civil liberties, cultural obliteration -- would continue, until German Jewry was finished. Wise was determined that the rights of Jews not be sacrificed and vowed to fight bitterly until the Hitler regime was toppled by right-thinking Germans who would realize that Hitler's campaign was national suicide. [98]

On April First, Volkischer Beobachter printed a photograph of the enemy of Adolf Hitler. It was a picture of Stephen S. Wise standing beside two Congress supporters. Late the night before, Goebbels wrote privately that the struggle against international Jewry "will be a fight to the finish." [99]

April First was therefore Day One. The Nazis had launched their war against the Jews, mobilizing all of Germany. The Jews would launch their war against the Nazis, mobilizing all the world. Anti-Hitler boycotts, protest marches, and meetings were now in store. Germany was to be isolated politically, economically, even culturally until she cast off her Nazi leadership. Germany was to be taught another bitter lesson.

[admin]

Part 2: The Zionist Movement

7. The Zionist Solution

THE WORLD awoke to German Jewish refugees. They appeared immediately following April First. But it wasn't the boycott alone. Jews were being purged from every commercial and professional field. Thousands became victims of random street violence. Tens of thousands more were jailed on specious charges. Worse, the Third Reich was drafting legislation to legitimize the illegitimate course of Jewish destruction, even as workers rushed to construct a mysterious political concentration camp at a pastoral village named Dachau.

There was no time for elaborate arrangements. Getting out was important, out to anywhere. An extra hour standing still might mean death for any German Jew prominent in creative, political, or commercial endeavors. By ship, by train, on bicycle and foot, they rushed to the borders, clutching a few parcels of luggage or small bundles of precious items: sometimes just a brown paper bag, cash, some food, pictures of loved ones; often a book, frequently a diary.

At first they were counted by the dozens, then by the thousands. On April First, every train entering Denmark was crowded with German Jewish refugees. That same day, hundreds more entered the Netherlands. Dutch border towns provided temporary shelter and opened their public kitchens to the fleeing families. [1]

In Paris, hundreds of German Jewish refugees strained charitable organizations to the limit. It was the same in Czechoslovakia and Poland, which counted at least 3,000 fleeing Jews, and Switzerland, where at least 6,000 had entered, and Belgium, where thousands of Jews fled over the hills to freedom, many chased by the rifle fire of Reich border guards -- and all this in just the first three or four days following the Nazi anti-Jewish boycott. Non-bordering European states such as Spain and Portugal, and even England, also felt the drama of escape as each new ship yielded more desperate German Jewish citizens. [2]

Within two .weeks of April First, more than 10,000 German Jews had escaped and were now in need of food, clothing, organization, jobs -- a basis for existence. [3] No Nazi claim of "domestic affairs" could any longer stand. The crisis was indeed international. Germany's persecution of its Jews was openly at the doorstep of the world. Newspaper and radio reports from Germany were now bettered by new evidence: men, women, and children, homeless, hungry, and clutching the remnants of their lives in small bags.

As in previous Jewish emergencies, the world Jewish community reacted with political agitation against the oppressive force. But this fight would be different. It would not be waged so much by those with access to high office as by ordinary men and women whose great weapon lay jingling in their coin purses. The front lines would be in dimestores and cinemas, in the camera shops and in the haberdasheries, where every person wielded a mighty power: the simple power to reject. The boycott was the long gun whose shell could reach from London or Detroit to Hamburg or Munich. Therefore, local Jewish committees and national associations would not suffice. People would need to be unified in a far-flung, all-encompassing economic war against the Third Reich. An international Jewish body would be needed. And in 1933 there existed only one that maintained a worldwide organization and enjoyed the popular following and political access the anti-Nazi boycott movement demanded.

That body was the Zionist Organization.

Yet in the eyes of Zionists, the outrages of Hitler were nothing unexpected. Zionist ideology predicted periodic Jewish oppression in even the most enlightened lands of the Diaspora, that is, the communities of Jewish dispersion. Such waves of anti-Semitism had been a regular character of Jewish life in Europe since emancipation in the mid-nineteenth century, when Jews were allowed to emerge from the ghettos and participate on a less unequal footing with other Europeans. In the twentieth century, Jewish blood was easily spilled, not only by the czar until his overthrow, but also along the Polish-Russian border, where from 1919 to 1921 about 100,000 Jewish civilians were massacred by the Soviet and Ukranian armies during the Polish-Russian War; and in Rumania, where during the mid-twenties nationwide anti-Jewish rioting openly sponsored by the minister of the interior destroyed synagogues and killed innocent civilians. [4]

The rise of Hitler was therefore seen by Zionists simply as the latest anti- Semitic episode. But this time things were different. In a macabre sense, things were ideal. The German Jews were not impoverished Russian peasants or lower-class Polish merchants with few valuables. These German Jews were solidly middle class. They possessed land, homes, furnishings, shares of stock. They were lawyers, doctors, engineers, scientists, artists, civil servants. They owned not storefronts, but department store chains. They owned not pawnshops, but major commercial banks. These men and women who had no place in the German Reich would find an indispensable place in the Jewish nation. From their dispossession would come repossession. Behold: Israel was waiting within the borders of the Third Reich.

Here then was a turning point for Zionism. The task facing the Zionist movement was to maneuver to the forefront of the international Jewish response and interpose Zionism and Palestine as the central solution to the German Jewish problem.

Just what was Zionism, and why did it hold such a confusing position in Jewish life at the time? Zionism is one ofthe most misunderstood movements in modern history, both by its adherents and by its critics. Its political patchwork of parties, factions, philosophical feuds, rivalries, improbable alliances, and tenuous coalitions perpetuates the confusion and defies efforts to define the movement in simple, clear-cut terms. But a rudimentary explanation of Zionism is essential to understanding why the movement saw the rise of Hitler as its decisive moment.

In the r8gos, after the pogroms in "uncivilized" Russia, and the Dreyfus prosecution in "civilized" France, Theodor Herzl emerged as the leader of an international group of Jewish thinkers who saw a return to the Holy Land as the solution to Jewish persecution in Europe. Herzl in r895 had written a pamphlet entitled "The Jewish State -- An Attempt at a Modern Solution to the Jewish Question. "The Jewish State," originally written in German under the title "Der Judenstaat," was an extraordinary work. Mixing equal portions of genius and nonsense, human compassion and ruthless pragmatism, a keen sense of history and an impressive utopian notion of the future, "Der Judenstaat" became the bible of the Zionist movement. [5]

In his treatise, Herzl readily admits there is a Jewish problem "wherever Jews live in perceptible numbers." Herzl declares that the Jews themselves "introduced" anti-Semitism by their very presence: "Where it does not exist, it is carried by Jews in the course of their migrations. We naturally move to those places where we are not persecuted, and there our presence produces persecution. This is the case in every country." Thus, Herzl declares that Jewish persecution is not an aberrant facet of bigoted society, but a natural reaction to the appearance of a foreign group -- the Jews. [6]

Herzl identifies "modern anti-Semitism" as distinct from religious intolerance or bigotry; instead, anti-Semitism is a political and economic movement itself created by the emancipation of Jews from the ghettos and their strained acceptance into Christian society. Herzl's words: "In the principal countries where anti-Semitism prevails, it does so as a result of the emancipation of the Jews." Herzl asserts that assimilation of Jews into the mainstream of nations was a historical error that naturally produced Christian backlash. [7]

It is the natural Christian backlash, in Herzl's view, not the Jewish religion, that makes the Jewish people a true and distinct nation. That nation, he declares, must procure itself a territory, establish sovereignty, and transfer its people. Herzl specifies Palestine as the ideal home for the Jewish nation if acquired under formal international guarantees. Herzl denigrates gradual colonizing as mere "infiltration" sure once again to stimulate anti-Semitism. International supervision was prerequisite to any population transfer. [8]

Transfer itself was to take place over several decades following acquisition of the land. First would come the "desperate," fleeing oppression and pogroms. Retrained for labor in the Jewish homeland, they would cultivate the soil and build the physical infrastructure of the state. Second would come "the poor," who would create vast labor pools and commercial demand. Then would come "the prosperous" to capitalize on the Jewish State's trade. And finally "the wealthy" would arrive, to join the now well-established Jewish State. [9]

Throughout Herzl states his anticipation that the multitudes of comfortable Jews throughout the world who are not victims of persecution will vigorously oppose Zionism. "Old prisoners do not willingly leave their cells," he writes. Although Herzl specifies that emigration to the Jewish State would be totally voluntary, he threatens that those who do not join would be left behind, cut off from the Jewish people, and ultimately assimilated by the Christian nations. "Hence, if all or any of the French Jews protest against this scheme on account of their own 'assimilation,' my answer is simple: The whole thing does not concern them at all. They are Jewish Frenchmen, well and good! That is a private affair for the Jews alone." [10]

While stressing the element of choice -- "He who will not come with us may remain behind" -- Herzl assures that once the choice is made, the methods of achieving Zionist objectives will be accomplished without "any voting on it," even if it requires fighting the aspirations of so-called assimilated Jews. Herzl's words: "Perhaps we shall have to fight first of all against many an evildisposed, narrow-hearted, short-sighted member of our own race." In an even more forceful passage, he declares, "Whoever can, will, and must perish, let him perish. But the distinctive nationality of the Jews neither can, will, nor must be destroyed .... Whole branches of Judaism may wither and fall, but the trunk remains." [11]

Herzl's concepts were very much reflective of his times. During the late 1800s, many European groups developed fervent nationalistic movements. These were generally drawn along ethnic lines that saw linguistic, geographic, religious, and/or historic roots as a basis for sovereignty that superseded the ecclesiastic and/or dynastic state. As nationalistic movements drew their ethnic lines, Jews found themselves systematically excluded, or included only conditionally at the tenuous pleasure of the majority. Herzl's thinking made perfect sense in a Europe that persecuted Jews even when they abandoned their religious practices or converted to Christianity. Herzl was correct. Anti-Semitism, not religion, created the Jewish nation.

Herzl's pamphlet, "Der Judenstaat," included a detailed blueprint for building the Jewish State. Two instruments were necessary: first, a "Society of the Jews," to negotiate and manage the affairs of the emerging Jewish nation; second, "The Jewish Company," a strictly commercial entity to liquidate the financial position of Jews in Europe and transfer their wealth to Palestine. According to plan, the Jewish Company would take charge of the assets of each emigrating Jew and provide a compensating value in land, machinery, and homes in the new Jewish State. The Jewish Company would manage the European Jewish businesses and/or Jewish financial matters until they could be sold off to "honest anti-Semites" who would step into the Jews former economic positions. Herzl promises Christian governments that this Jewish Company would sell off Jewish holdings at a substantial discount. He further entices Christian governments to cooperate in the Zionist program, with a promise of great prosperity to their Christian citizens once Jews totally withdraw from Europe. Until self-sufficient, the new Jewish State would also represent a loyal and lucrative market for the exports of cooperating Christian countries. [12]

The organized withdrawal of all Jews from Europe carried an obvious appeal, even an unintended justification, for anti-Semites. As such, Zionism was as much a threat to comfortable middle-class Jews as anti-Semitism itself. Established Jewish communities insisted they were entitled to be treated like ordinary citizens of any country in which they lived. Herzl's answer to the expected resentment of the Jewish majority was simply to wait. "Great exertions will hardly be necessary to spur on the movement." "[Anti- Semites] ... need only do what they did before, and then they will create a [Jewish] desire to emigrate where it did not previously exist." [13]

"Der Judenstaat" was an instant success, propelling Herzl to the forefront of the tiny Zionist movement. In 1897, a year after "Der Judenstaat" was published, the First Zionist Congress was convened in Basel, where the Basle Programme was adopted. It called for the legal, international, supervised acquisition of a Jewish State and the orderly, peaceful, and voluntary emigration of all Jews in the world to its boundaries. At the same time, the Zionist Organization was established to function as "the Society of Jews" to lobby for the Jewish homeland and represent all Jews who accepted Zionism. Membership was granted to any Jew who paid the biblical shekel, a token fee equaling about twenty-five cents. Two years later, in 1899, Herzl's "Jewish Company" was founded as the Jewish Colonial Trust Company, a banking entity incorporated in England. In 1901, the Jewish National Fund was established to purchase and cultivate land in Palestine in preparation for the Jewish State. It was prohibited from ever selling any land, once acquired, and would ultimately become the corporate owner of all land in the Jewish homeland. [14]

Deep philosophical divisions gripped the Zionist Organization from the outset. Soon a circle of dissident factions and opposing parties began fighting for leadership of the movement. The chief conflict was between "practical" and "political" Zionists. The "practicals" wanted to settle the Jewish homeland "step by step," gradually colonizing to create the ultimate political reality. The "politicals" eschewed what Herzl had already labeled as "infiltration" and insisted upon a full political arrangement prior to organized settlement. [15]

That full political arrangement was promised in 1917 when England issued its Balfour Declaration committing Turkish Palestine to a Jewish Homeland should the Allies win the War. When the dream seemed likely to become a reality, anti-Zionist Jewish forces, including the world's influential Jewish leaders, fought the prospect bitterly. But in the postwar era, with the Allies devoted to ethnic self-determination for Arabs, Europeans, and even faraway colonial subjects in Africa and Asia, Jewish nationalism was an eminently legitimate even if still controversial aspiration. The League of Nations and the victorious Allies concurred that the Jews should return to their original homeland after an exile of almost 2,000 years.

Although the Balfour Declaration's essence had been incorporated into the Versailles Peace Treaty of 1919, the actual League of Nations Mandate to Britain to oversee the Jewish national home was not finalized until April 1920 at an Allied conference in San Remo, Italy.

Herzl's dream had been realized within barely two decades. The Jewish State was virtually a fact. There were ifs and buts. The declarations did not use the words "Jewish State," but instead used the words "national home for the Jewish people." Moreover, intense last-minute lobbying changed the phrasing to "a national home," not "the national home." As such, the existing Arab populations were to be a protected group within Palestine's borders. And, of course, the rights of Jews in other countries would not be prejudiced. 16 But limitations aside, the Jews had finally reached the road back to their Promised Land. The obligatory Talmudic incantation "Next year in Jerusalem" now possessed an exciting and real meaning.

During the years before the League of Nations Mandate, the Zionist movement was in nervous limbo, unsure when the creation of the Jewish State would commence, and what form it would take. A long list of Zionist Organization parties, factions, and splinter groups developed. Each was self-righteously convinced that its approach to the Zionist ideal was the best, each claimed to speak for the Zionist movement and the Jewish people, each clamored for its version of Zionism to be recognized by the international community. They disagreed on whether the Balfour Declaration and the League Mandate constituted the long-awaited international sponsorship Herzl had required, with step-by-step colonizing now to be the future focus. Or were the British merely supplanting the Turks as an authority that would continue to refuse Jewish sovereignty? Should Jewish Palestine be a territory associated with Britain, an independent nation, an autonomous canton of a larger British colony, or the Jewish partner of a binational entity in Palestine? [17]

During 1920, amid daily massacres on the Polish border and political uncertainty, eminent Zionist leader Max Nordau espoused a stark new concept some called catastrophic Zionism. Nordau, a radical philosopher with a doomsday outlook, had been Herzl's closest ally in Zionism's founding years. In Herzl's dying moments in 1904, his followers insisted Nordau succeed him as head of the Zionist movement. But Nordau refused, preferring to remain outside the upper echelon. At the Tenth Zionist Congress in 1911, Nordau predicted that if a Jewish Palestine were not granted soon, millions of Jews in Europe would be annihilated by the emerging political forces. [18]

As the slaughter of Jews on the Polish-Russian border and the question of Jewish sovereignty in Palestine were tediously debated, Nordau proposed the immediate transfer of 600,000 pogrom-afflicted Jews to Palestine within a few months -- without any real preparation. The assets of these 600,000 Jews would of course come with them. Nordau reportedly predicted that a third of those Jews would starve to death, a third would find Palestine unacceptable and reimmigrate. The remaining third would create a majority or near-majority in Palestine, and the Jewish State would quickly and finally be achieved. [19]

It had been twenty-five years since Herzl first declared "Whoever can, will, and must perish, let him perish .... Whole branches of Judaism may wither and fall, but the trunk remains." Max Nordau, Herzl's reluctant heir, was now proposing to extend philosophical writings and dogmatic utterances into reality. The result of his plan, if carried out, would be the accepted sacrifice of hundreds of thousands of Jews, the dispossession and redispersion of hundreds of thousands more, but the survival of enough people with enough resources to achieve the all-important salvation of future generations. Nordau argued that it was better for hundreds of thousands of Jews to perish in the struggle to achieve Jewish redemption in the land of Israel than wait for the cossack's sword to fal1. [20]

The Zionist leadership rejected Nordau's plan as frightening and impractical. Although placed on the shelf, Nordau's catastrophic Zionism firmly moved many in the Zionist leadership to believe that the coming decisive moment would somehow arise out of a similar, perhaps even more threatening, tragedy.

One who reluctantly spurned Max Nordau's concept in 1920 was Vladimir Jabotinsky, a fiery maximalist who advocated extreme approaches to Jewish nationalism and Jewish self-defense. However, in an equally controversial move, Jabotinsky ironically sealed a pact with the Ukrainian nationalists responsible for the massacres leading to Nordau's plan. Jabotinsky's agreement established a Jewish militia at the rear of the Ukrainian forces to protect Jewish civilians, many of whom were Zionists. Although violently criticized in 1921 at the Twelfth Zionist Congress, Jabotinsky silenced his foes by dramatically declaring from the rostrum, "In working for Palestine, I would even ally myself with the devil." The curses turned to cheers as the audience endorsed Jabotinsky's rationale with a standing ovation. That ovation was the turning point for many who now came to believe not only that the decisive moment for Zionism would be some coming catastrophe, but also that the solution would require Zionist negotiations with the hand responsible. [21]

January 30, 1933. Adolf Hitler came to power.

During the first days after the Hitler boycott against Germany's Jews, the Zionist movement's hierarchy in Europe and America was busy trying to plot a course of action. Their objective was not to mobilize Jewish and non- Jewish resources for the preservation of Jewish rights in Germany. Rather, they sought a means of turning the miseries of German Jewry into a new impetus for a Jewish homeland in Palestine.

Zionist leadership had, in fact, refused to oppose the Nazi expulsion ideology from the outset. Within twenty-four hours of Hitler's appointment, German Zionists finalized a recently discussed program called Youth Aliya. [22] Aliya is the Hebrew term for emigration to Israel; its literal translation is ascent. On the premise that there was no longer any future for Jews in Germany, Youth Aliya organized youngsters to find a future in the Jewish homeland. Loving parents, mostly non-Zionists, hoped that one day after Hitler had passed, their children might return to Germany spared the scars of Nazism. The project began none too soon. Within a few months, Jewish children were either banished, segregated, or subjected to quotas throughout the Reich's eduational system. And the Nazi theory of race, which humiliated every Jewish child, quickly became mandatory teaching in all classes. [23] Youth Aliya served a noble purpose in allowing young German Jews to grow up in dignity as part of a historic new future. But it was also a sign to the Nazis that Jews themselves were willing to organize their own expulsion.

The Zionist acceptance of Jewish expulsion was not limited to the Germans. Zionist leaders worldwide saw Hitler's persecution as the fateful beginning. Even a defender of Jewish rights as eminent as Supreme Court Justice Louis Brandeis quietly conceded the right of Jewish existence in Germany.' Within a fortnight of der Fuhrer's January 30 appointment, Justice Brandeis shocked Stephen Wise by candidly declaring, "The Jews must leave Germany. There is no other way." An astonished Rabbi Wise asked, "How can five-hundred eighty-five thousand people be taken out of Germany?" Brandeis interrupted, "I would have the Jews out of Germany. They have been treated with deepest disrespect. I urge that Germany shall be free of Jews. Let Germany share the fate of Spain. No Jew must live in Germany." [24]

Nazi leadership, of course, gleefully noted the Zionist acceptance of Jewish expulsion -- even if it was clear that the concurrence was perverse, since the Nazis sought Jewish cultural destruction and the Zionists sought a Jewish renaissance. But concurrence or not, the Nazis regarded the Zionists as their enemy personified, and from the outset carried out a terror campaign against them in Germany.

German Zionist officials felt certain their phones were tapped, their mail read, and their office subject to covert entry. Morale was shattered. So precarious was the Zionist position that the ZVfD's headquarters at 10 Meinekestrasse suspended all open correspondence with Zionist bureaus in London and even Palestine. Information was instead passed through secret channels at border towns near Czechoslovakia. In one such report in early March, Czechoslovakian Zionist official Dr. Franz Kahn passed the following briefing to Zionist offices throughout the world: "No Jew can possibly establish relations with the government; all previous contacts are now of no value whatever. The ZVtD expects to be completely closed down .... All available cash funds have been either pulled out or sent to Palestine." [25]

But Zionism's threatened status in Germany changed instantly following the March 25 meeting in Goering's office with Jewish leaders. It was after Kurt Blumenfeld's utterance that only the Zionists possessed the international organization capable of stopping the anti-Nazi movement that the Nazi view changed. From that moment on, the Third Reich realized it could exploit the Zionist movement against the Jews. At the same time, Zionists became convinced they could exploit the Nazi movement for the benefit of future generations of the Jewish people.

As soon as Blumenfeld and his colleague Martin Rosenbluth returned home from Goering's office that day, they summoned their associates to discuss Goering's orders. It became clear that the Zionists were suddenly heading the mission to London. This was an opportunity for the Zionist cause to rise to the forefront of the crisis. It was agreed Blumenfeld could not be spared from Berlin for even a few days. Rosenbluth would go. To avoid the appearance that only the Zionist Federation of Germany was talking to British Jewry, other Jewish personalities would have to accompany Rosenbluth. The officials selected Richard Lichtheim, a former member of the Zionist Executive Committee who was currently a leader in Vladimir Jabotinsky's dissident Revisionist Union. [26]

As an afterthought, Rosenbluth and company decided that a member of the non-Zionist Central Verein should also join the mission. This way, Rosenbluth reasoned, if the mission failed, Zionists as a group would not be blamed. Still, it was important to locate a Central Verein member who was not anti-Zionist. The men selected Dr. Ludwig Tietz, son of Alfred Tietz, the German department store magnate and philanthropist. Tietz quickly agreed. [27]

By Monday morning March 27, Rosenbluth, Lichtheim, and Tietz arrived in Britain. They were met at the train station and immediately driven to the Zionist Organization headquarters at 77 Great Russell Street, just near the British Museum. About forty Jewish leaders, Zionist and non-Zionist, had assembled in the board room awaiting their report. The three explained Goering's demands to stop the anti-Nazi protests in England and America. As ordered, they placed a transatlantic phone call to Stephen Wise in a futile effort to cancel his Madison Square Garden rally. That done, the Zionist delegation forecast to their audience that the end of Jewish life in Germany was an inescapable reality. Only Palestine was left as a solution. But most of the assembled Jewish leaders represented the Board of Deputies of British Jews, a long-established, traditionally anti- or non-Zionist group. These men, and even some of the Zionist officials, seemed to disbelieve the German delegation's prediction. [28]

After the briefing session, Rosenbluth, Lichtheim, and Tietz reported to German Ambassador Leopold von Hoesch as Goering had instructed. Von Hoesch, a non-Nazi holdover from the Weimar Republic, had no taste for National Socialism. Nonetheless, for Germany's sake, and perhaps his own, he asked the Jewish delegation to convince Lord Reading not to resign his presidency in the Anglo-German Association as a protest against Reich anti- Semitism. Von Hoesch also asked that more atrocity denials be sent to anti- Hitler circles in London and New York. Contrary to Berlin's expectations, sympathetic embassy officials allowed the three Zionist leaders a reasonable freedom to move about. So several secret meetings were quickly scheduled. [29]

Lichtheim and Tietz also secured an interview with Lord Reading and implored him to delay his resignation from the Anglo-German Association. Reading became suspicious. In desperation, Lichtheim and Tietz described in detail the Nazi reign of brutality, and how this small achievement might somehow satisfy Goering and in some way delay violence. Reading agreed to delay his formal resignation two weeks, but insisted on venting his outrage about persecution in Germany a few hours later in Parliament. [30]

Late at night on March 29, Rosenbluth, Lichtheim, and Tietz were seated in the lobby of the Russell Hotel, located a short walk from the Zionist Organization. Unsure of their success, uncertain of future events, the tired emissaries somberly awaited their early departure back to Germany the next morning. But in a corner of the lobby, a world news ticker, scarcely noticed before, became a sudden hub of activity. The Nazis had officially announced their boycott of Jewish businesses and professionals commencing April 1 to last until commercial Jewish life was utterly obliterated. In the delegates' minds, this development changed everything. They immediately contacted Zionist leader Chaim Weizmann. [31]

The next day, still relying on the liberty granted by the German embassy, Rosenbluth went from meeting to meeting debating solutions to the German Jewish problem. The tone of many of the conversations changed. The April First boycott represented a turning point in the foreign perception of the crisis. Jewish leaders and British officials who had previously doubted the severity of German Jewry's plight could now see a doomsday rising. Weizmann began talking with wealthy. British Jews, including Anthony Rothschild, Lord Reading, Lord Sieff of the Marks and Spencer department stores, and Pinchas Rutenberg. [32] After these initial conversations, Weizmann suddenly departed for Palestine. Ostensibly he left to survey the prospects for emigration in the developing Jewish homeland. But his secret plans involved clandestine meetings with Arab, British, and Zionist leaders to discuss a solution on a vast scale.

While Weizmann and the wealthy Jews of London were conceiving plans to help German Jews within a Zionist context, the German Jews themselves became increasingly desperate. When it was learned Hitler might be dissuaded by formal declarations against any anti-German boycott, Berlin Zionists sent an urgent telegram to the Zionist Organization in London asking for such a proclamation. The cable reached Rosenbluth, Lichtheim, and Tietz about midnight on March 30. [33]

The German Zionist delegation in London panicked. Rosenbluth and Lichtheim dispatched cables to Stephen Wise and the Jewish Agency in Jerusalem, instructing them to notify Adolf Hitler formally that no anti- German boycott would be organized. Rosenbluth and Lichtheim discussed the cables with no one, but signed them in the name of the Executive Committee of the Zionist Organization, thus making the instructions direct orders. [34]

Within a few hours, the Executive Committee discovered the desperate deception and immediately instructed the Jewish Agency in Jerusalem to disregard the cable and delay any message to Hitler. But it was too late. The Jewish Agency had already complied. [35]

"OFFICIAL PALESTINIAN JEWRY HAS NOT PROCLAIMED BOYCOTT GERMAN GOODS STOP ARE SURE BOYCOTT SO FAR SPONTANEOUS ACTION BY INDIVIDUALS AND MAY BE STOPPED IF GERMAN AUTHORITIES WILL NOT CONTINUE ACTIONS AGAINST JEWS." The cable was sent directly to Hitler's office. The Jewish Agency acknowledged the blind execution of the order from London with a telegram reading, "CABLE DISPATCHED TO BERLIN AS REQUESTED DESPITE MISGIVINGS SUPPRESSED BY YOUR SIGNATURE." [36]

Although the ruse had been quickly uncovered, two leading Zionist newspapers in Jerusalem, Doar ha-Yom and Haaretz, reported the communication, but with no mention of the background. [37] Thus, rank-and-file Zionists in Palestine were put on notice that their leadership opposed any involvement in the fight against Hitler.

Up to the moment the Jewish Agency dispatched its cable to Hitler, Palestinian Jewry had closely followed the dictates of the Zionist Organization in London. However, after the April First action this power flow would be suddenly reversed. Palestine would now make the decisions, especially when it came to the German Jews and Adolf Hitler.

To understand the sudden power shift, one needs to understand exactly what the Jewish Agency for Palestine was. Most observers had long believed that the Jewish Agency for Palestine was an independent entity established in 1922 by the international community after the Allies decreed that Britain work with "an appropriate Jewish agency" to build the Jewish national home. As such, most believed the Jewish Agency was a quasi-governmental unit, with its own appointed bureaucracy exercising its own limited authority over emigration and development in Jewish Palestine, and officially answerable to the League of Nations. [38] However, in 1922 the Allies designated the Zionist Organization in London as the "appropriate" agency. The Zionist Organization then merely created the Jewish Agency for Palestine to function as the officially recognized administrative body. In reality, the Jewish Agency simply acted as an alter ego of the Zionist Organization, coordinating most of its important policy decisions in advance with London. [39] Thus, the Jewish Agency became the governmentally recognized half of what Herzl had earlier named "the Society of Jews" -- the bargaining agent of the Jewish people. And in the spring of 1933, the Jewish Agency began to do just that.

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8. The Currency Exemption

BARGAINING in earnest with the Hitler regime began on March 16, 1933, a political light-year before the April First Nazi boycott that would radically change Jewish life in Germany. Four men gathered in Jerusalem to discuss the German Jewish situation. They were Arthur Hantke, Avraham Landsberg, Felix Rosenbluth, and David Werner Senator, all prominent German Zionist emigres to Palestine. Felix Rosenbluth (who later changed his name to Pinchas Rosen) was a former president of the Zionist .Federation of Germany; he would later become Israel's first minister of justice. Felix's brother, Martin, led the late-March Zionist delegation to London. David Werner Senator was an immigration expert and a member of the Agency's Executive Committee. [1]

The men talked of the potential for Palestine in the German crisis. Although by March 16 no overt anti-Jewish government action had occurred, thousands of Jewish professionals, especially in the provinces, had already been ousted from their positions. They knew that Jews who had never considered emigrating to Palestine were now inquiring en masse at British consulates throughout Germany. But uniformly, the German Jews discovered the same problem: Existing Reich currency restrictions forbade taking assets out of the country unless it was "in the national interest." [2]

The four German Zionists also knew that middle-class Jews would not leave Germany without their property. Yet middle-class Jewish professionals were ideal prospects for emigration to Palestine because they possessed the equivalent of £1,000, satisfying British entry requirements. The question was how to allow them to take that much of their money out of Germany.

It was Felix Rosenbluth who first suggested negotiating with the German government. Perhaps the government would allow a special concession allowing Jews to take the requisite equivalent of £1,000 if they emigrated to Palestine? [3]

The others reacted with astonishment -- not at the thought of negotiating with the Nazis, but because Rosenbluth thought it feasible to approach them. Rosenbluth was asked what the Zionists could possibly offer the Nazis to induce them to allow Jews a legal exception to the currency restrictions and help Palestine in the process. Rosenbluth answered: the emigration of a few thousand Jews. [4]

The others were still skeptical. Hitler had vowed never to negotiate with the Jews of Germany, even though Goering had already met twice with Central Verein leaders in an effort to contain Jewish protest in New York. The four men wondered if the British ambassador in Berlin could make contacts and relay the information to the Zionist Organization in London. So they decided to sound out their associates in the international Zionist movement. [5]

A few days later, Senator wrote to the Zionist Organization Executive Committee in London: "We all received the plan with skepticism, even if this should be proposed in an honourable way. But at least it might be important to request an opinion from the ZVfD .... In these times you have to consider all the possibilities." [6]

Currency restrictions in Germany were indeed the barrier to an orderly transfer of the wealth and the citizens of Germany's Jewish middle class. Enacted in August 193I by the Bruning government at the height of a fiscal crisis, the currency restrictions prohibited anyone -- Jew or Christian, German or foreigner -- from taking currency out of Germany without permission. The restriction was aimed not at Jews, but at speculators and hoarders. [7] But it now loomed as the unbreachable obstacle to Jews emigrating to Palestine -- especially since British entry regulations limited all categories of Jews except those in possession of £1,000 [about $5,000]. The restriction ironically suited the German Zionists in Jerusalem because it was precisely those Jews with enough money to qualify whom they wanted. As one German Zionist warned the Jewish Agency, "There is a danger that German Jews with money will go to other countries and those lacking means will come here. We must work on this matter." [8]

Breaching the currency barrier required negotiation. But in late March 1933, what Jew was in a position to negotiate with the Third Reich? Certainly not the traditional German Jewish organizations. As loyal Germans, they would never promote Jewish emigration, precisely because it dovetailed with Nazi intentions. Certainly not the Berlin Zionists, whose organization had already been identified as "the enemy" by the Nazi party.

A go-between would be needed. He would need to be sympathetic to Zionism, but not directly associated with the Zionist Movement. He would need important connections in the holdover German government, especially in the financial sphere. And he would need to operate in secret. Not even the Zionist Organization in London or the Jewish Agency in Jerusalem could know of his activities. Only the German Zionist Federation hierarchy in Berlin would be aware of his work. The man selected for this mission was a businessman, Mr. Sam Cohen.

Few were undecided about Mr. Sam Cohen. In the minds of some of those he worked with or affected, Sam Cohen was an evil rogue, interested in no more than his own greed at the expense of his people; he was a traitor, a collaborator, a wealthy manipulator, a liar and a fraud, a schemer, a sower and seeker of influence, a man whose fortune bore the bloodstains of Jewish liberty and Jewish aspirations. To others who were closer, Sam Cohen was a munificent man of the Jewish cultural movement, a man who worked tirelessly, often selflessly, to help the Jewish people fight starvation, cultural dissolution, and national dispossessionj a deeply religious man, a committed Zionist, a rescuerj a man whose contributions were often unseen but rarely unfeltj a little-known man whose immense importance to Israel deserved a special honored place in the saga of the Jewish people and their redemption.

Each side used him for what it needed: devil or deliverer. Yet few ever understood that Sam Cohen was in fact a little bit of both.

Sam Cohen was born in 1890 in the Polish industrial boom town of Lodz. At age seventeen, he left Lodz to study finance and economics at the University of Marburg in Germany. At Marburg, Cohen developed many vital contacts. After the Great War broke out, he went to Berlin, where he began trading in real estate. War fortunes were won and lost quickly. Sam Cohen's was won. After the war, still in his twenties, Cohen became a partner in a small Berlin bank, Louis Berndt and Successors. He also gained control of a small coal-mining operation in Upper Silesia, Poland. [9]

Cohen's reputation for philanthropy was established during the war. In late 1915, a Jewish relief committee and Warsaw municipal authorities appealed to the occupying German Imperial authorities for permission to distribute food to starving Jews. The kaiser's formal declaration of consent identified "the gentleman Sam Cohen" as one of two authorized purchasing agents and stipulated that "this undertaking has an altruistic character and is not aimed at any profit." The words "at any profit" were underlined in the original. [10]

In the 1920s, Sam Cohen was courted for economic aid by a variety of Zionist and Palestinian groups. In late 1923, the Palestine Land Development Company, one of several Zionist Organization land-acquisition corporations, enlisted Cohen's investment of £40,000 to purchase strategic tracts connecting Haifa and the Valley of Jezreel. The development-company director praised Sam Cohen in a letter as "the first to further one of the most important land purchases in the history of Jewish Palestine's development." [11]

In addition to Jewish national redemption, Sam Cohen was committed to Jewish cultural redemption. In 1927, Nahum Goldmann announced that his long-planned Encyclopaedia Judaica would be published, the first comprehensive Jewish reference in Hebrew and German. Several donations totaling £210,000 hinged on a major endowment of £50,000 from "a German banker." The unnamed banker was in fact Sam Cohen. [12]

But anonymity characterized many of Sam Cohen's philanthropic and business dealings. Often people at the top didn't even see him, negotiating instead with his attorneys and emissaries. He traveled widely making deals and hearing pleas for donations over dinner. One day in Berlin, the next day in Prague, three days later in Tel Aviv, a week later in Vienna, the next day in Warsaw, two days later in London. He maintained apartments and hotel rooms in all those places, but few knew where he really lived: an opulent castle in Luxembourg. [13]

Now, as Adolf Hitler was preparing to crush Germany's Jews, as the Zionist movement sought to pick up the pieces, Mr. Sam Cohen, his connections, his style, would become the pivotal factor.

***

Sam Cohen wasted little time. He arrived in Frankfurt in late March.14 Separate meetings were arranged with two senior government officials held over from the German Imperial and Weimar days. The first was with Hans Hartenstein, director of the Reich Foreign Currency Control Office. It was within his power to allocate foreign currency for uses in the "national interest." The second meeting was with Hans Schmidt-Roelke, director of the Foreign Ministry's Eastern desk, which had purview over the Middle East. Sam Cohen asked both officials for a special currency exemption for Jews agreeing to emigrate to Palestine. [15] The Zionist movement would see to it that German exports were dramatically increased, thus earning additional foreign currency. However, part of that additional foreign currency would have to be set aside for Jewish emigrants, each receiving £1,000 to enter Palestine. [16]

The appeal of a currency exemption was clear, and quickly approved in principle by Hartenstein in consultation with Schmidt-Roelke. 17 During the chaotic first weeks of Hitler's regime, the authority over Jewish affairs was uncertain -- indeed that authority would be constantly debated during the life of the Third Reich. In March 1933, senior bureaucrats such as Hartenstein and Schmidt-Roelke could on their own make decisions of great consequence to German Jewry.

Hartenstein's motives were not altruistic. Middle-class Jews would liquidate their existence in Germany. This meant forfeiting all their assets, except for about 15,000 reichmarks (RM), equivalent to the £1,000 needed to enter Palestine. RM 15,000 represented but a fraction of a middle-class Jewish family's accumulated wealth. The rest would be either forfeited to taxes or frozen in blocked accounts. German banks would be enriched by the influx of blocked marks. Jews would quit Germany in an orderly fashion, leaving the overwhelming majority of their wealth behind, as well as economic vacancies that would be taken over by Aryans. Simultaneously, the Zionist movement promoting German exports would not only increase desperately needed foreign exchange and domestic jobs, but would pierce a stake through the heart of the Jewish-led anti-Nazi boycott. At a time when Adolf Hitler was striving to expel Jews, increase Aryan employment, and reconstitute the treasury, the currency exemption would be justified. The Zionists would be awarded a currency privilege allowed no Aryan.

While Hartenstein, along with Schmidt-Roelke, granted basic approval to Cohen's plan, they suggested Cohen work out the operational details with Heinrich Wolff, German consul in Palestine. Wolff was the German official who functioned as the Reich's eyes, ears, and voice in the territory considered to be the center of the international Jewish movement. [18]

Cohen left at once for Palestine. [19]

During these final days of March 1933, Georg Landauer, director of the German Zionist Federation in Berlin and one of the few men who knew of Sam Cohen's mission, lost contact with Cohen. In the hysterical days just before the April First anti-Jewish boycott, Sam Cohen was forced to return to Palestine without reporting to Landauer. However, a letter had already been mailed by Landauer to Cohen's Tel Aviv hotel: "We have received news from interested parties in Frankfurt, with whom you have entered into negotiations .... Under present circumstances, we cannot tell the full story publicly, since this would give rise to misunderstanding .... Current laws concerning exchanges of capital with foreign countries make the whole thing very difficult. Nevertheless, some progress is already being made. But we will act on any suggestions and will make use of any persons who might be available in this work." [20] Landauer's letter was dated March 31, 1932. The year 1932 was either accidentally miswritten or deliberately misdated. The ZVfD's pattern during those weeks was to sign reports with code names or omit dates on letters, often insisting correspondence be destroyed after reading to protect the author's identity. [21]

By the end of March, Sam Cohen had briefed Landauer's German Zionist associates in Jerusalem, handing the matter over to them for action. They in turn tried to verify Cohen's report through the Zionist Organization via the British ambassador in Berlin. So they took Chaim Arlosoroff into their confidence. Arlosoroff was a member of the Jewish Agency Executive Committee and one of Zionism's most respected personalities. On March 30, 1933, he cabled his friend Professor Selig Brodetsky at the Zionist Organization Executive in London. ArlosorofI's question: Had Germany created a special currency exemption for Jews emigrating to Palestine? [22]

On April 4, during a Jewish Agency meeting, Arlosoroff vaguely suggested it might be necessary to negotiate with the Hitler government about emigration. He made no mention of Sam Cohen's mission. But Arlosorqff was able to obtain tentative permission to visit Berlin and finalize operational details of Cohen's still secret arrangement. After the session, the Jewish Agency sent cable 613 to the Zionist Organization in London: "DESIRABLE NEGOTIATE GERMAN GOVERNMENT EMIGRATION FACILITIES ... MEMBER EXECUTIVE FORTHWITH PROCEED BERLIN LONDON." [23]

That same day, Professor Brodetsky convinced A.C.C. Parkinson of the Colonial Office to use the British embassy in Berlin as a go-between to determine whether normal restrictions on currency were still in effect. [24] The British inquiry needed to explore several Reich bureaucracies. In addition to the currency-removal restrictions, another regulation rationed foreign currency only to transactions critical to the Reich's economy. For example, British pounds to purchase raw materials qualified for an allocation. [25]

Yet every German citizen had a right to emigrate, a right Hitler's ascent had not abridged. During economic and political upheavals, Germans of all ethnic backgrounds had exercised this right. The Reich Emigration Advisory Office determined how much foreign currency -- generally a few hundred dollars -- was needed to gain entry to the foreign country. [26]

When on April 5 the British embassy questioned the various Reich offices, it unexpectedly learned that Jews emigrating to Palestine could remove £1,000 to satisfy the British entry prerequisite. British Ambassador Horace Rumbold conveyed the news to London at once. A few days later, on April 8, Parkinson cautiously wrote Brodetsky: "The usual restrictions on the export of foreign currency are still in force, but ... Jews wishing to take up residence in Palestine who have given proof of possessing £1,000 are granted permission to export this sum by the German authorities." [27]

The British received the information so routinely they probably presumed the currency permission merely represented some gap in the restrictions the Nazis had not yet abolished. [28] London was totally unaware that the currency permission was not a loophole but the result of Sam Cohen's secret contacts with the Third Reich.

When Brodetsky learned on April 8, via the Colonial Office, that the special exemption existed, he realized that somehow the German Zionists had succeeded with the German government. But the times were too volatile to admit openly that Zionists were negotiating with Hitler for the exit of Jews. So in a carefully worded April 13 letter of thanks to Parkinson, Professor Brodetsky tried to cast the exemption as a concession won not by the ZVfD, but by the British. Brodetsky's letter solicitously declared, "We are very glad indeed to see that it has been made possible, through the good offices of His Majesty's Ambassador, for Jews wishing to leave Germany, to settle in Palestine ... [with] the qualifying minimum £1,000. I should like to thank you most sincerely for your help in the matter, and I hope some means may be found of conveying to [Ambassador] Sir Horace Rumbold our warm appreciation of his assistance in obtaining this most valuable concession." Brodetsky ended by asking permission to publicize the Palestine exemption as a British accomplishment. [29] The British government immediately recognized the maneuver and began planning a defensive response. [30]

At the same time, Brodetsky forwarded copies of Parkinson's confirmation to Georg Landauer of the ZVfD in Berlin, and Chaim Arlosoroff at the Jewish Agency in Jerusalem. When Arlosoroff received the information, he assumed that the exemption would be controlled by official Zionist bodies. He would negotiate the details secretly in Berlin. [31]

But Landauer was worried. He wanted the exemption to cover more than merely the £1,000 entrance fee. After all, Jewish assets in Germany were considerable. An exemption of no more than £1,000 would represent not the planned migration of Jewish wealth, but the orchestrated salvation of a pittance. Parkinson's vague confirmation increased Landauer's uncertainty. So Landauer wrote Brodetsky a follow-up letter: "It would be very good if that note [Parkinson's confirmation] could be interpreted to mean that [Britain's] Berlin ambassador did not merely pass on general information, but that his message was based on a specific ruling by the [German] government. Can you clarify this?" Landauer added, "It is certainly not our goal to merely secure the £1,000 per person, but to obtain formal permission to take along capital sufficient for establishing a new livelihood in Palestine." [32]

.Landauer had in mind at least a second £1,000 for each immigrant to invest in Palestine. This second £1,000 would be controlled by official Zionist entities on behalf of the immigrant. The immigrant would own it, but the Zionist movement would have the power to use it. As the German Zionists conceived the idea, this massive influx of liquidated Jewish capital would not only bring the first wave of monied Jewish citizens to Palestine; it would deliver the investment capital needed to establish the Jewish State. [33]

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9. Redemption or Relief

THE CHALLENGE now was implementation. Even before Professor Brodetsky had received confirmation of the currency exemption, leading Zionist personalities in London began planning a so-called liquidation company. The form this company would take and who would control it would determine the destiny of the Jewish State. Since Zionism's inception, Jewish Palestine had been built an acre and an edifice at a time by donations and dollar less idealists. Herzl had declared that the transplanting of the middle class and their wealth would be the true beginning of the Zionist culmination. So, like the Zionist movement itself, creating the liquidation company became a political struggle.

The first closed-door discussions about creating a liquidation company were organized by Palestine industrialist Pinchas Rutenberg, founder of the Palestine Electric Company. His idea was a company, initially capitalized by wealthy British Jews, to liquidate all Jewish assets in Germany and move the proceeds -- along with the people -- to Palestine. [1] The idea was once again straight from Herzl's pages.

On the night of April 7, Rutenberg met with Nahum Sokolow and Berl Locker of the Zionist Executive Committee, at Sokolow's London home. In outlining the liquidation company, Rutenberg explained that Lord Reading had agreed to serve as chairman and that the Rothschilds had offered their bank to sell the shares. Rutenberg stipulated that the Jewish Agency would have to manage the company. [2]

However, as discussion about a liquidation company began, a crosscurrent developed. The world Jewish community began donating large sums of relief money, despite the economic hard times of the Depression. How the money should be spent, and the political solutions to the refugees' status, suddenly threatened the Zionist solution.

Should German Jewish refugees be absorbed into the surrounding countries until the time was right to return to Germany? If Hitler remained in power, at least the refugees would be living in familiar communities: in France, Belgium, and the other haven states.

Or should the German Jews be assisted in Germany proper, thus reducing the factors precipitating their flight? People could be retrained. New employment found. Interim loans arranged. After transition to a new social niche, perhaps a Jewish presence would be accepted by the National Socialist regime, especially once the first waves of anti-Semitic violence ended. German Jews could then retain their German citizenship. Many Jewish organizations favored this approach, including the Joint Distribution Committee, the major international Jewish relief organization. On April 2, the Joint -- as it was known -- opened a giant fund-raising drive in New York to help Jews maintain their existence in Germany. The same day, interfaith meetings were held throughout Canada protesting the Hitler regime and dedicating Canadian relief efforts to helping German Jews survive the times as legitimate citizens of the Reich. [3]

Kay: You didn't used to kill women and children in war, you know, when the British army were pure, kind of. You know, you didn't go out and kill. I think at Dresden they did do some of that, but that was Walt Whitman Rostow and his crowd. And he's a very dangerous man. Because Walt Whitman Rostow is a Communist.

Eric: Okay, in what capacity is he?


July 29, 1989: Ronald Reagan with traveling companion retired U.S. Marine Lt. General Victor Krulak (in the yellow shirt)

Kay: Oh, he was one of the wise men in Kennedy's administration. I think he was probably responsible for the movement that got Kennedy murdered. I believe it was an Israeli group which did it, with some of these rogues. Walt Whitman Rostow was the one who got us into the Vietnam war because he wanted to sell the weapons and stuff. He and Victor Krulak who is the present Commandant's father, Krulak was his lackey. Walt Whitman Rostow went with General Taylor and wrote the report that got us into the Vietnam war. And all the time that the Pentagon was saying, "No, no, no, no," he was a cheerleader for the weapon sales. He and Henry Kissinger. He and Henry. Walt Whitman Rostow, [1] Eugene Debs Rostow, [2] these were Communists, names for Communists. Eugene Debs Rostow, and, it's either his son or his other brother, runs the big Boston mob, the Port there. His name is Nicholas Rostow.

Eric: She claims that the war in Bosnia was also manipulated by these people, and that the CIA is not as important as we assume it is. She believes that most of the secret operations are coming from a group of criminals working within our military and NATO. Sometimes she refers to them as "The Joint."

Kay: The war in Bosnia is simply a stage to train assassins, to be a market for brand new weapons, and to be a marketplace so the drug money can be used. And the Army runs the whole show. It's totally run by the Army. The CIA is a bogus thing, you know. It's training in doctrine command, it's NATO, it's SHAPE: Supreme Headquarters Allied Powers Europe, started by Eisenhower. It's a totally independent corporation. It's main function is to sell weapons and launder money.

Eric: You're talking about the CIA?

Kay: No, I'm talking about SHAPE. The CIA is kind of bogus. It's just there. [3]

Eric: That's just a trade name for the media to use.

Kay: It's just to confuse us, to get us off the track. It's all being done by Army people who are now Joint.

Eric: She describes "The Joint" as being in New York, and that it acts as a funding organization for their criminal activities.

Kay: The funding organization, one of the funding organizations, was out of New York, and it was called "The Joint." And Meyer Lansky -- see, our Mob, the organized crime, the Jewish Kabbalist group ...

Eric: Unlike the gangsters of Al Capone's era, Meyer Lansky and his friends can manipulate entire nations rather than just a few cities. In this next segment, she mentions that one of the operations that "The Joint" was funding, was the illegal immigration of Nazis into America. Since she describes "The Joint" as being Jewish, your first thought might be to assume they were helping Jews escape Nazi Germany. However, what she describes may be what other people refer to as Operation Paperclip, although she does not use that expression. She is going to mention that many of these Nazis had "The German Disease." And she refers to them as "The Pink Triangle Boys." She is referring to homosexuality and sex with children. The Nazi party had the same problem that the Republican party suffers from. Specifically, there are a lot of accusations that many top Nazi and Republican leaders are homosexual, that some are raping children on a regular basis, and that some are covering up the slave trade. In Nazi Germany, some of the rapists and homosexuals were arrested and put into prison camps, and pink triangles were put on their uniforms to identify them from the other prisoners. She believes that thousands of these Pink Triangle Boys were brought to America at the end of World War II. She also claims that the Nazi Government was brought down by the German people when reports about the raping of children started spreading through the population. This seems to be happening right now with the Bush Administration. The Jeff Gannon incident seems to be forcing a lot of people to face the possibility that many top government officials are not what they claim to be.


The Pink Triangle Boys

Kay: This funding group in New York, they would pay for passports which were illegal. In fact, my grandfather was involved with that. That's how I know so much about it, because my grandfather was told to keep silent and not tell anybody. And of course he told my grandmother, and my grandmother told me, and I've told my children. Everybody knows they brought in probably more than 200,000 Nazi soldiers, and SS, and you know, whacko scientists and psychologists. And all of them, most of them, had "The German Disease." You know, because it was their culture.

Eric: The German Disease?

Kay: Yeah, "The German Disease" is what the Pink Triangle Boys were. Colonel Ron Ray writes about this. He's a Marine Colonel who's a Christian who's writing about the "Cherry Marines," about homosexuality, and the group sex orgies, and so forth, which brought down the German government. Because Naples, which is where all of the Navy is doing their playing, I mean today, in Naples, these orgies are going on. It was where Krupp, [4] the weapons manufacturer, used to take the German High Command, and they would go onto the Isle of Capri into the Blue Grotto. And they would have big orchestras, and they'd bring in little boys, little Italian boys, who would be raped. They'd give them trinkets. And of course the mothers gradually found out, and just like me, it was one thing when there was just one of me, now there a lot more of us wives who are talking and telling truth. And those Italian women went to newspapers in Italy. They wouldn't listen. But when they went to the wives of these guys in Germany, it brought it all out. It brought the German government down, because they were duplicitous in it. But what they were doing was pedophilia. They were raping, bringing in little boys. They involve the Catholic Priests, you know, who were bringing in ... Anyway, but what happened was this whole group came over to the United States. And it's an old culture. But it's the reason there are a lot of things going on with children these days. And it explains why it's all being covered up. Because if you've got police officers who are playing these games, and they're going into the woods, like what is that place where, I mean, even Eisenhower played these games, even Mike Kemp out at it's called "The Hermitage" in California, where they all get drunk and they run around nude in the woods and stuff.

Eric: The Hermitage? Bohemian Grove?

Kay: That's it! Bohemian Grove.

Eric: Rather than Hermitage?

Kay: Bohemian Grove. That's the name of it. My brain's tired. And there was a big one in Washington called Rush River Lodge where they used to all go. And there are lots of places now, but the problem, as I see it, is that I think they are trying to destroy America.

Eric: She also accuses Caspar Weinberger of being part of this group of criminals.

Kay: They are selling weapons! I mean, that is what the military is doing. It's totally controlled by the Mob. Look at this. Weinberger was General Douglas MacArthur's -- he spied on MacArthur in Korea. Who was MacArthur's nemesis, albatross? It was none other than little old intelligence "I'm-going-to-tell-every-move-you-make" Weinberger. Young. But he did it. He brought down MacArthur. Every move MacArthur was going to make, he broadcast it through the Chaplain, his little intelligence network. And he got brownie points with the group because he brought down the big lion. When you bring down a big lion like that, you get a big job. You've done good work. And they needed to get rid of MacArthur because he didn't want to keep the wars going. He wanted it over and, you know, it's like General Truffey (sp?) who took over after the Vietnam War was over. And he was on C-Span in August 1996 with former Ambassador Whitehead, and a few of the other State Department Vietnam people, and General Truffey had been holding these things in for years. He was on C Span. This man let it all out. He said, "I took over at the end of the Vietnam War. I was in control, right? Big general in charge. So I say, 'Cut off the shipment of weapons.' So I tell the Pentagon, 'Cut off the shipment of weapons.' " He said, "I got a phone call from Henry Kissinger saying, 'The weapons are going to continue at the wartime rate.'

Eric: Just when you think you've heard the strangest accusation possible, she comes up with another one that's even more difficult to believe. For example, she claims that some Communist dictators were also put through the homosexual mind control procedure by these criminals.

Kay: Because already the Communist agents, the New York, Brooklyn, New Jersey Mob, were already training Mao. Mao was trained in Paris. So was, you know, the one in Cambodia. What's his name? I can't think of his name. The one who was Pol Pot. They were homosexually -- bless their little hearts -- by priests. They were wonderful little boys, sent there, you know, "turned," which is the word when they believe their mothers, and then all of a sudden the world's horrible, and they have these wonderful friends who are going to make them leaders. They are turned, psychologically, and it's a pattern. And so this is why it's so important to know what they are doing to innocent little boys in the Army and the Marine Corps today.

Eric: In her eight hours of interview, she lets out a lot of accusations. And she accuses a lot of high ranking government officials of a lot of serious crimes. She does not show any signs of hesitation or fear except when asked one particular question. In this next segment, she is explaining that both her uncle and her husband were involved in secret weapons sales to a certain country for "The Joint." Which country? And who is "The Joint"? This is the only issue that she hesitates to talk about. However, after saying the "Z" word, she returns to normal and resumes her accusations of murder, corruption and sexual perversion.

Kay: You know, selling weapons to whatever country. I know the country, but in other words, they were doing work for "The Joint" under the table all these years.

-- Mrs. Kay Griggs on How the Government Works, directed by Eric Hufschmid

Or should some larger-scale solution be found? Mass resettlement had been a frequent remedy for Jewish crises. After the Russian and Rumanian pogroms at the turn of the century, hundreds of thousands of East European Jews were resettled in America by relief groups, especially the Hebrew Sheltering and Immigrant Aid Society or HIAS. After the Great War, Jews were resettled en masse in various parts of Central and Eastern Europe, and even in special agrarian "colonies" in the Ukraine and Crimea, principally through the efforts of the Joint. Now HIAS was suggesting another mass resettlement, this time in South America. HIAS had quickly convinced several Latin American governments to open their doors to German Jewish refugees, and was readying a worldwide effort to facilitate the mass resettlement. [4]

All of the non-Zionist schemes for relieving the plight of German Jews required vast amounts of donations, which Jews and non-Jews alike were willing to give. But the Zionist movement saw these relief efforts as threats because the solutions excluded Palestine. [5] More important, the donations would divert funds from the Zionist movement. In other words, here was a Jewish crisis, and not only would the answer lie in lands other than Palestine, but the Zionist movement would suffer economic ruin in the process.

Depression agonies had already halted most international Zionist contributions. Many regular fund-raising drives were suspended indefinitely awaiting some improvement in the world economy. [6] Jewish Agency treasurer Eliezer Kaplan summarized the situation: "In 1933, contributions to the Palestine Foundation Fund [the funding arm of the Jewish Agency] have reached an all-time low of £160,000 [about $800,000] .... Its [recent] deficit was over £500,000 [$2.5 billion]. Settlement projects of the Jewish Agency Executive were discontinued in 1928. The sole task of the Executive Committee in recent years has been: how to maintain the status quo and prevent bankruptcy." [7] If the Jewish Agency's financial picture did not improve, the question was not if the Zionist Organization would go bankrupt, but when.

Moreover, Jewish Palestine was desperately undermanned. At a time when impoverished Jews from Poland and Rumania sought entry into Palestine, strict British immigration quotas created seemingly insurmountable barriers. Jewish Palestine's well-known boom economy teetered precariously on the edge of an ever-extending cliff. If the right supply of manpower were not available to pick the oranges, construct the worker housing, and make Palestine's precious few factories function, the whole economy could topple over the brink. For example, during the 1932-33 manpower shortage, all schools were suspended and Jewish students from all over Palestine were trucked to the groves to help with the harvest. [8]

The reminder was constant: Only one category of immigrant was free from quotas -- the so-called capitalist in possession of £1,000. So the German Jewish refugees were suddenly spotlighted as the answer to an array of Palestinian problems. But the currency exemption and liquidation company would be futile if Jews were to be saved in a non-Zionist, non-Palestinian context.

On April 4, 1933, Berl Locker of the Zionist Executive in London wrote to Chaim Weizmann, in care of the Jewish Agency in Jerusalem. Weizmann had already left for Palestine to organize for the expected transfer. Having been forced out of the Zionist Organization presidency two years before, Weizmann held no official position. But his prestige among Jews and in governmental circles was indisputable, and indispensable to the Zionist drive for dominance in the fund-raising and relief effort. Aware of Weizmann's sensitive political position, Locker appealed to Weizmann on both pragmatic and historic grounds to help arrange some token act that would help the Zionists take over the relief movement. "In this tragic moment," wrote Locker, ''there is much more need for leadership, which is now totally lacking. If we could just succeed in transferring a couple of thousand Jews to Palestine, an appeal for financial help would resonate among all Jewry." [9]

Two days later, Dr. David Werner Senator, one of the four German Zionists in Jerusalem who initiated the Reich currency negotiations, wrote Bernard Kahn, a Jewish relief organizer in Paris. Senator's letter declared, "I believe this catastrophe can only be compared with the expulsion ofthe Jews from Spain .... A large social and constructive aid operation [is needed]." Constructive in Zionist parlance meant activities building up Palestine. "If a leader can head this aid operation -- and many of us are considering Weizmann -- then such an emergency can bring millions of pounds. The Americans and English Jews of German origin are still rich enough today to mobilize for their own flesh and blood enormous sums of money, and they will do it, if we know how to get hold of them the right way." Senator added, "A lot will depend on the drafting of plans, if we know the people; and on negotiations with Jewish organizations in Europe and Palestine." [10]

Senator then revealed to Kahn that a thousand immigration certificates had been issued to the Palestine Office in Germany. Immigration certificates were a controversial matter. The British Colonial Office, which administered the mandate over Palestine, governed the trickle of Jewish emigration to Palestine. Noncapitalists -- those not possessing £1,000 -- were subject to a complicated "Labor Schedule," based on the "absorptive capacity" of the economy. Twice yearly the British government and the Jewish Agency would negotiate how many new entrants Palestine's economy could absorb. Once the figure was finalized -- it often fluctuated between 500 and 1,500 per half year -- it was wholly up to the Jewish Agency to distribute individual "immigration certificates." How many certificates were allowed for Czech Jewry, Polish Jewry, or any other Jewish community was based on Jewish needs in those countries, how the proposed emigrants would contribute to the social and economic reconstruction of the Jewish homeland and, of course, on the jagged course of Zionist and Jewish Agency politics. Most certificates had traditionally been allotted to impoverished Polish Jews eager to settle in the homeland. Few had been either requested by or granted to German Jews. [11] But Senator saw these first 1,000 as only "the beginning," adding, "it now depends if we can make something out of this ·accomplishment, because these 1,000 families that come could transform into 1,000 returnees if the appropriate thing is not done for them." [12] To do the "appropriate thing," the Zionists would somehow have to divert relief donations from stabilizing German Jewry in Europe, and use those funds to construct Jewish Palestine.

All the questions of a Zionist versus non-Zionist solution, the relief-fund threat, and Zionist policy during the crisis were debated at an April 9 Jewish Agency Executive Committee session in Jerusalem. Attending were representatives of other Zionist bodies, including the Organization of German Immigrants, which virtually functioned as the ZVfD's alter ego in Palestine. As the meeting opened, only the German Zionists and two of the Jewish Agency's six Executive members -- Senator and Arlosoroff -- knew of the special currency exemption. And Arlosoroff was unaware that Sam Cohen was the negotiator. However, the others were preoccupied with another question: how Zionists could control the relief donations.

Emanuel Neumann, a prominent American Zionist leader, declared, "In America, two million dollars for the aid fund was collected, and there is not one Zionist among all the 'trustees.' This is a very unhealthy situation." [13]

Some of the participants insisted on organizing an emergency collection under the auspices of the Palestine Foundation Fund. This would guarantee a large share of the money for building Palestine. Others reasoned that such a drive would be confusing, and Zionism's bad reputation for politicized financial mismanagement would repel wealthy Jewish contributors. So to avoid openly involving the Palestine Foundation Fund, yet retain financial control, the participants after much debate suggested the formation of a wholly new refugee fund. The new fund would be organized around Zionist "trustees" who would channel the dollars to both refugees and Palestinian "constructive" projects as they saw fit. [14]

As they argued, Dr. David Werner Senator impatiently reminded them that as each hour passed, more money was being collected under non-Zionist auspices. "Speed is demanded," he said. "Because of our many speeches we lose time and we don't get to the action." [15]

Finally, the men agreed that the special fund would bear a name that did not identify it with Palestine or Zionism. Just after the decision was adopted, Neumann added a condition, that the fund-raising committees in each nation agree in advance to "earmark" a suitable percentage for Palestine. Neumann made clear that without such a prearrangement, the Zionists would not participate in the relief effort. One man spoke up, asking if this wouldn't advertise Palestine's involvement and "through this, maybe not enough money will be given." Another in the group explained that only the administrators and trustees, not the donors, would know that some of the money was going to the Jewish homeland. Therefore, "the wealthy will not determine in advance that their contributions will go to Palestine." [16]

All that remained was to secure Weizmann's titular leadership of the fund. Enjoying the respect of both Zionist and non-Zionist Jews, he was obviously the best man for the job and could probably be convinced. But some Executive members were concerned that Weizmann's involvement would threaten Nahum Sokolow, the man who had replaced Weizmann as Zionist Organization president. For much of the session, the men quibbled about how visible Weizmann could and could not be in the new drive. Finally, they agreed that Weizmann as part of a committee could dramatically inaugurate the fund-raising drive at an international relief conference in London in early May. By forcing Weizmann to operate with "a committee," the men reasoned, his personality would not dominate the operation. [17]

The gentlemen of the Jewish Agency did not speak very compassionately that day for the plight of German Jews. Their rhetoric was political and practical. They had seen the likes of Hitler before. At the outset of the April 9 meeting, the German Zionists had reported on the situation in Germany: 60,000 arrested; at least four detention camps in operation; constant disappearances; 9,000 doctors out of work. Jews in the big cities might be able to survive, but the Jews must emigrate from the small rural towns. One German representative forecast the problem this way: "Shortly, hundreds of people without means ... will be arriving. Many will not be suited to the work available here. It is necessary, therefore, to prepare: [refugee] camps, training centers, organization in the settlements." [18] Another German Zionist summarized their intent: "This time, Palestine must be first." [19]

Up to this point in the meeting, Chaim Arlosoroff had said little. Arlosoroff saw the unending dissension of the Jewish Agency as a barrier to decisive action. Instead, he saw himself as the man ordained for the pivotal task ahead: negotiating the resettlement of Jewish citizens and their money from Germany to Palestine. He would do it all by himself if necessary.

Ukrainian-born and German-educated, Dr. Arlosoroff, as head of the political department of the Jewish Agency, functioned as the foreign-minister- in-waiting of the Jewish nation. Although only thirty-four years old in a movement dominated by elder pioneers, Arlosoroff stood out as one of the troika leading the Jewish Agency. His visionary Zionism never thought small. His words were selected carefully, and frequently remembered by those who heard them. [20]

Arlosoroff proffered a hint of his thoughts when he interrupted the bickering gentlemen to state, "The German crisis is a difficult experience for Zionism, and its results will be most important to the future of the movement. The young Jew must ask himself: What is the difference between the Jewish reaction to this oppression now -- in a period of Jewish nationalism -- and the reaction before? . . . Since the start of Zionism, this is the first instance when Jews who are considered free have been placed in a situation like this. Also Palestine is put in a special situation for the first time. If Zionism will not do what is required of it, then there will be grave results." [21]

Arlosoroff then alluded to currency regulations as the major obstruction to a political solution to the German situation. But he speculated that the regulations might be overcome by converting assets into merchandise and bringing the merchandise out of Germany. To handle the problem, Arlosoroff said, personal contact with the German Zionists in Berlin would be necessary. [22]

A representative of the German Zionists attending the Jewish Agency meeting, Dr. Zmora, spoke up at this point, saying, "'We should not now talk about the specifics of the plan, because we still have to work them out." As Dr. Zmora spoke, Arlosoroff and the German Zionists were aware of the special currency exemption and how far discussions had gone. However, most of the others thought Arlosoroff was speaking of some nebulous future plan to be negotiated. To keep the exemption secret, Dr. Zmora proposed that the group dispense with discussing details and simply authorize Arlosoroff and Senator to travel to Berlin to contact the local Zionist leaders in a fact-finding mission. [23]

Arlosoroff and Senator voted in favor. But Neumann couldn't understand why they felt it was so essential to visit Germany. Referring to Rosenbluth and Lichtheim's mission, Neumann said, "Two people from there [Berlin] already went to London, so what is there still to clarify?" [24]

Arlosoroff answered that he would travel to London anyway for a relief conference in early May. So, on the way, he would just stop in Germany to discuss emigration and development plans for Palestine "in a basic and comprehensive way with the Zionist leaders." Arlosoroff suggested that the contact should be by a non-German, and sending several envoys was too expensive. Jewish Agency officers had other pressing duties. Therefore, he alone should do the job. He ended casually, "I thought of going next week." [25]

Neumann objected, "I'm not certain whether it is necessary.... Maybe it is still too early." Neumann was suspicious of Arlosoroff's well-known maverick style, and proposed "London be advised on this ... see what their opinion will be." Careful not to seem too eager, Arlosoroff backed off, saying, "I see that the reaction of the board is not favorable, and 1am prepared to forgo my travels." [26]

The meeting ended indecisively with regard to both Arlosoroff's trip and Weizmann heading a Zionist refugee fund. Instead, the gentlemen did as they often did when decisions were necessary -- they deferred to the nine-man London Executive Committee. That would take precious time, time that didn't exist in Arlosoroff's view. So Arlosoroff was convinced that a fait accompli was the only option.

And secrecy would still be crucial. Arlosoroff had learned a bitter lesson about sharing information with the Executive just the month before. In March, confidential land purchase discussions between the emir of Transjordan and Arlosoroff, and even some of Arlosoroff's privately expressed disparaging comments about the emir, had been leaked to Jewish and Arab newspapers in Palestine and Europe. The leaks obviously came from within the Jewish Agency Executive itself. The disclosures were so damaging to Zionist and Arab conciliation efforts that on March 23, Arlosoroff told the Executive Committee that it could no longer be trusted and might just as well resign. Arlosoroff's comments prompted the other Executive members to recite their own lists of shocking leaks, with each member accusing the others of being responsible. [27]

Arlosoroff also knew that American Zionist representative Emanuel Neumann reported every development to Zionist leaders in New York. [28] Any merchandise-oriented arrangement with the Third Reich would instantly come to the attention of Stephen Wise and the American Jewish Congress. The repercussions would probably destroy negotiations with Germany and obstruct the Zionist refugee fund as well.

If there was to be a transfer of the Jewish nation to the Jewish State, Arlosoroff would have to arrange it alone, and in secret.

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10. Arlosoroff's Secret Contacts

QUICKLY the Jewish Agency Executive recognized that Arlosoroff was acting on his own, creating initiatives and making decisions in the name of the Zionist movement. For example, the day before, on April 8, Arlosoroff held an unexpected and historic luncheon at Jerusalem's posh King David Hotel for Weizmann and the leading Arab sheikhs of Palestine. The luncheon was officially arranged on behalf of the Jewish Agency, but the members of the Executive weren't consulted until the night before. Most of the Jewish Agency Executive did attend, but grudgingly. [1]

Arlosoroff's luncheon was the first public meeting between Zionist and Arab leaders. No one understood how Arlosoroff managed to secure Arab attendance. Several of the Arabs owned strategic lands in the Huleh Valley (in Upper Galilee) and Transjordan (the area east of the Jordan River). Behind closed doors, Weizmann and Arlosoroff talked with the sheikhs about glorious things to come, glorious for Arabs and Jews alike, including the arrival of many Jewish newcomers and plenty of commercial development. [2]

Weizmann described the historic meeting as the beginning of a tunnel being dug from both sides with the parties destined soon to meet. The Arab sheikhs announced to reporters after the luncheon that they now realized that the hope of developing their regions lay in cooperating with the Jews, to whom they were now extending a warm welcome. [3]

Stunned by the sudden rapport, Jewish Agency leaders wondered where Arlosoroff's one-man movement would go next. They might have been able to guess, had they known of secret contacts on binational matters between Arlosoroff and Arthur Wauchope, Britain's high commissioner for Palestine. Binationalism was an on-off movement among Zionists and within the British government. Binationalists debated many different formulas for joint or coequal Arab-Jewish national rule in Palestine. But all of them called for some sort of political arrangement whereby Jews and Arabs could achieve their separate but equal national aspirations. Some of Zionism's most influential leaders advocated binationalism in one form or another. Among them were Arthur Ruppin, David Ben-Gurion, Judah Magnes, and Chaim Weizmann, who would in later years support Palestine's partition into separate Arab and Jewish states. Importantly, German Zionism as a movement subscribed to binationalism, and despite frequent disagreements, considered itself Weizmann disciples. [4]

Arlosoroff had vacillated over the years on binationalism, basically because as soon as Arab leaders agreed to any element of cooperation, anti- Jewish Arab agitation would discredit the Arab leaders as traitors representing no one but themselves. But now, in the context of the hoped-for German Zionist and Weizmann-led renaissance, Arlosoroff was convinced there could be no solution to the Jewish problem in Europe without a solution to the Jewish problem in Palestine. [5] Ideas, of course, were easy to come by. It was money -- the lack of it -- that made the difference between ideas and results. The German currency exemption, however, and other monetary aspects of the Hitler crisis, could finance binational ideas into binational realities.

Arlosoroff, sworn to secrecy by High Commissioner Wauchope, had been since mid-March 1933 negotiating with the Mandate government toward some sort of binational solution. In the initial project, Britain would spend hundreds of thousands of dollars to resettle tenant Arabs displaced by Jewish land purchases. Arlosoroff was secretly advising the high commissioner on how best to spend the money, whether technical education should precede the construction of workman's quarters, and other details. [6] Such a liaison was unthinkable to his Jewish Agency colleagues, but Arlosoroff was convinced these days might actually constitute the live-or-die episode for Zionism. In mid-April Arlosoroff had received two important letters, one from Berl Locker of the Zionist Executive in London, the second from Martin Rosenbluth, the ZVfD liaison to London. Locker's letter stressed the urgency of Zionists quickly dominating the international relief and fund-raising effort, and of solving the German Jewish problem through Palestine: "Brodetsky and myself feel this is the last moment for us to make our voice heard, if we do not want to be the fifth wheel on the wagon." Locker added, "We still think it possible today to procure large sums ... in connection with the situation in Germany .... We must act, to make our voice heard, and to prevent the new 'Help Fund.''' Locker emphasized, "The main point is: ... We must at least tell the public that we place the question of Palestine at the center of the matter." [7]

Rosenbluth's letter reinforced the inspiration that these were sudden and historic moments in Jewish history, moments that would terminate Jewish life in Europe and deliver the Jewish homeland to the Jewish nation. However, Rosenbluth also warned of a solution that would exclude Zionism and Palestine. "1 fear that we shall be forced to fight [an idea] in the next few days which is basically against a special role for the Jewish Agency and Palestine." Rosenbluth maintained that if the non-Zionist solutions could be debunked or supplanted, the relief effort could be not only politically lucrative but commercially profitable to Jewish companies. "Here [in London] the belief is widespread that the slogan 'German Jews to Palestine' will be very attractive from the financial viewpoint. ... They think, moreover, that it is no disaster if certain groups make attempts at obtaining big financial means for colonization of German Jews in Palestine on a more merchant-like basis." [8]

Verification of the Zionist assumption that Jewish life was officially over in Germany came swiftly. On April 7, Hitler promulgated the first formal anti-Semitic decree, summarily dismissing virtually all Jewish government employees. Other decrees were readied to outlaw almost all non-Aryan attorneys, judges, jurors, or Jewish dentists and doctors working with social health plans. Simultaneously, the Nazis themselves elevated Palestine to new importance by abruptly halting the flow of refugees. National Socialism of course wanted Jews out of Germany. But in the first days of April, as thousands fled, the Reich realized that the refugees were a liability they could not afford. Nazi leaders such as Goebbels were certain that Jewish refugees in France, Great Britain, and other haven countries would naturally become the core of the anti-German crusade. Nazi economic planners such as Schacht were convinced that the outflow of Jewish businesspeople would cripple the nation's commerce, especially in foreign trading. And the Reich assumed that fleeing Jews would smuggle out whatever wealth they could, thus further debilitating the German economy. [9]

Germany's crackdown on escape was at first sporadic. On April 3, Reich border guards fired at Jews as they frantically scrambled over the hillsides into Belgium and Holland. That same day, border police had stopped a trainload of Jews just before it entered Czechoslovakia. That night, Reich authorities announced that no Jew could leave Germany without a police exit visa. And in Breslau the police actually confiscated all Jewish passports. Later, guards were posted every fifty yards along some border points to prevent Jewish flight. [10]

Hitler's unexpected problem now was how to get rid of his country's Jews in an orderly fashion that would not pose a threat. The answer was methodical emigration with a gradual usurpation of Jewish status by Aryan replacements. One locale that could absorb thousands of German Jewish citizens, yet isolate them politically, was the stretch of desert and swamp at the far end of the Mediterranean Sea called Palestine. To the Nazis this territory was a convenient dumping ground, in a sense a remote, self-run concentration camp. To the Zionists, this territory was the Promised Land destined to be a Jewish State.

Arlosoroff saw the forces of good and evil, pain and prophecy racing toward one central point in time. Following the divisive April 9 Executive session, Arlosoroff remained convinced that the Agency's factionalism could not be overcome in time to seize the historic moment. Arlosoroff concluded that he alone would orchestrate the final negotiations for the liquidation of Jewish existence in Germany and its transfer to Eretz Yisrael.

On April 13, 1933, Arlosoroff met with a worried Rutenberg. To succeed, his liquidation company would need thousands of middle-class Jews to purchase small blocks of noncontrolling stock. Rutenberg feared that the rival plan for a Zionist refugee fund would ruin everything. People would not buy shares in a liquidation company that wasn't expected to return dividends for ten years and donate additional money to a relief fund as well. One or the other, probably both, would be unsuccessful. Rutenberg said he would rather see his liquidation company delayed or canceled than launched on a path of failure. [11]

The next day, April 14, Arlosoroff and Weizmann met at an experimental agricultural station near Tel Aviv with High Commissioner Wauchope and Sir Phillip Cunliffe-Lister, the British colonial secretary, who had just arrived from London. Cunliffe-Lister was the cabinet officer with direct purview over England's colonies and the Palestine Mandate. Together, Wauchope and Cunliffe-Lister possessed the power to change radically the course of Jewish nationalism in Palestine. Cunliffe-Lister had already talked to Rutenberg in London about transplanting German Jews to Palestine via a liquidation company. Essentially, the colonial secretary approved. [12]

But the many thousands, perhaps hundreds of thousands, of German Jews could not possibly dwell in the tiny enclaves that comprised Jewish Palestine. In 1933, only about 4 percent of Palestine's 10,000 square miles was in Jewish possession. Most of this land was concentrated in enclaves around Jaffa-Tel Aviv, the northern Mediterranean coast, Haifa and the Galilee. Large tracts were reserved for cultivation. About 20 percent of Palestine was Arab-owned. The Mandate government owned the remaining 70 percent, and half of that was uninhabitable desert. So more room would clearly be needed. [13]

As the two Zionists and two British officials spoke, their attention turned to the swampy Huleh Valley in northeast Galilee. All previous Zionist efforts to purchase this land had been stymied by either government obstruction or radical Arab pressure on the Arab landowners. But Cunliffe-Lister and Wauchope could guide this swampland from Arab ownership to Jewish control. And by meeting's end, they appeared so inclined. [14]

Most of Arlosorofl's meetings with Rutenberg and with the British were still either secret or arranged by Arlosoroff working alone. And although they were conducted more or less under the color of the Jewish Agency, most Agency officers learned of the episodes only after the fact. No wonder that a few hours after the secret April 14 rendezvous with Weizmann, Wauchope, and Cunliffe-Lister, Arlosoroff's maverick actions were finally confronted. Arlosoroff was briefing the Executive Committee about his meeting the night before, in which Rutenberg threatened to abandon his liquidation company because it could not succeed alongside the fund-raising campaign. Arlosoroff explained that London would have to decide which operation should be executed, the fund or the company. Ludwig Pinner, one of the German Zionists attending the session, objected to the continuing delays. "The initiative in this matter came from us," Pinner said. "We intended to begin work immediately ... but as organized Zionists we turned to the Jewish Agency Executive. Then a 'battle for authority' began." [15]

Emanuel Neumann then spoke up angrily. "1 cannot express an opinion on these issues, since activities are being undertaken without my knowledge. This is a scandal which 1 cannot simply ignore. 1 hear everywhere, even in the street, of important matters which are unknown to me. Meetings are called without us. 1 will not participate in any discussion until all members of the Executive are provided with full information on every matter." Neumann then ticked off the sources of his irritation. "Among the things which 1heard outside were: discussions with the colonial secretary, the Huleh, discussions with Rutenberg, and so on. It will perhaps turn out that there are other matters which are not known to us." [16]

The exchange closed with Neumann insisting that London be consulted for authority to undertake any special action -- this, a direct attempt to control Arlosoroff. [17] But Arlosoroff would not be stopped.

The next day, April 15, Arlosoroff contacted Rutenberg and Weizmann to help decide the next step. Rutenberg conceded that the donations fund took priority over the liquidation company because each lost day meant lost revenues. Moreover, non-Zionist fund-raising was an even greater threat to Zionism. [18]

On April 16, the Jewish Agency gathered again. Arlosoroff admitted that he had taken the initiative once more by formally inviting Weizmann to head up the fund-raising operation. Arlosoroff defended his action, declaring, "We are neglecting a historical opportunity and betraying our mission .... I warn the Executive. A delay for internal reasons will backfire on us." The Executive members realized that Arlosoroff now was personally shaping the highest level of Zionist politics. [19]

Neumann was furious: "We did not decide to ask Dr. Weizmann to head the appeal. We decided to send a telegram to London to inform our colleagues there of our views and ask their opinion. If someone has approached Weizmann on this matter, it was done prematurely and without authorization .... One cannot behave in this manner .... There is Rutenberg, and there is Weizmann. They negotiate. Negotiations are undertaken with them. We have no place in this as an Executive .... They arrange matters and come to us afterwards ... to vote and decide. Is this an Executive or a fiction?"

Continuing in anger, Neumann declared, "Here we learn that an agreement has already been completed between Weizmann and Rutenberg. In that case-what are we doing here! I do not even know exactly what Rutenberg's plan or what Weizmann's intentions are.... Things have gone too far.... I therefore inform you that: A, I am resigning from the [special German crisis] committee; B, I retract my vote on our earlier decision concerning the [fundraising] operation to be headed by Weizmann, as I did not then know of Rutenberg's proposal; C, I agreed then to Dr. Arlosoroff traveling to Germany and London -- at the moment I see no point in this, and I accordingly retract my agreement." [20]

The others attending, including Arlosoroff, tried to reason with Neumann, stressing that all the bickering was trivial compared to the crisis in Germany, and the crisis Zionism would suffer unless it quickly interposed itself in the solution. Dr. Senator tried to convince Neumann to continue working on the German problem. Neumann answered, "I cannot retract my resignation." Senator then announced, "In that case, I also resign." [21]

The meeting abruptly ended, with Zionism's response to Hitler still undecided. After Arlosoroff left the room, Neumann instructed the secretary to cable London in code all that had transpired. [22] Energies would now be spent not on relieving Jewish agony in Germany, but in finding some way to prove who was boss in the Zionist movement.

Yet Arlosorotf's momentum was not stalled. Two days later, April 18, Arlosoroff organized a day trip to the Huleh for Weizmann, Cunliffe-Lister, and Wauchope. Stopping at a point near Tiberias and the Sea of Galilee, the men talked and came to a meeting of the minds. Cunliffe-Lister stated that Britain was in principle in favor of Jews taking over the Huleh. He would even recommend to the British cabinet that Transjordan lands be used for Jewish emigration as well -- subject to three stipulations: First, if Jews moved to Transjordan, an extra military unit would be needed for the area, and its £30,000 annual expense would have to be borne by the Jews. Second, the Zionist press must refrain from any mention of extending the Jewish National Home into Transjordan. Third, the Jewish Agency would be superceded by a specially chartered company to carry out the settlement. [23]

During the conference, Colonial Secretary Cunliffe-Lister did most of the talking, while High Commissioner Wauchope tried not to commit himself. However, at one point Wauchope asked Weizmann directly when the transfer would begin. Weizmann replied, "It must either happen in the next year or two, or would have to be put off for ten years." [24]

Rutenberg's liquidation company now became all the more pivotal, as did AriosoroWs personal negotiation with the Third Reich as the official representative of the Zionist movement. The Jews of Germany would have to be steered to Palestine. But without genuine authority, Arlosoroff was certain the Nazis would not cooperate. And even then, he was unsure just how far the Reich would go. [25] So when Arlosoroff discovered Neumann's telegram 620, sent in code to the London Executive in an attempt to discredit Ariosoroff's authority and block his visit to Berlin, Arlosoroff dispatched his own cable:

"SPECIAL 622: OUR TELEGRAM 620 DISPATCHED ... WITHOUT MY/ SENATOR CONSENT OR KNOWLEDGE STOP ... INFORMAL CONVERSATION PURPOSE COORDINATE RUTENBERG SCHEME NOT ILLEGAL BUT VERY HELPFUL ... DELAY ACTION OWING TO INTERNAL CONTROVERSY ... ENDANGERING PALESTINE PARAMOUNT POSITION IN EMERGENCY ACTION AND RESULTING MORAL LOSS ZIONISTS." [26]

Arlosoroff's main goal now was to wrap up Jewish Agency business quickly and leave for Berlin. In yet another Executive session, held on April 19, Arlosoroff declared that approval for this trip had already been granted and that "Mr. Neumann's retraction of his vote does not change the situation as far as I am concerned. I am therefore prepared to travel." Neumann, still suspicious, suggested that the matter at least be tabled until the next session. Arlosoroff replied, "I do not agree to a delay." Finally, Senator, who knew why Arlosoroff needed to visit Berlin, broke in and said, "There is already a decision, and if there will be a demand [from London] to change it ... then we will discuss it." Arlosoroff added decisively, "I shall prepare to travel." [27]

On April 22, Cunliffe-Lister held a secret meeting with two of the most important Arab personalities in Palestine. One was the emir, who owned much of the Huleh lands; the other was the Mufti of Jerusalem, the virulently anti-Jewish leader who by intimidation, bribery, and family influence kept the fires of violence and confrontation in Palestine stoked. After Arlosoroff learned of the meeting, his outlook toward an immediate binational arrangement dimmed. Apparently, the mufti had maintained his usual rejectionism. This convinced Arlosoroff that the path to binational coexistence would be a spiral that first settled Jews on land surrounding their existing enclaves and only later expanded to the Huleh. In the meantime, despite difficulties, settlement in the Transjordan would be necessary for the coming waves of German Jews. [28]

On April 23, just a few days before Arlosoroff was to leave for Berlin, one last Jewish Agency session was convened. In the background, the pauperization of the German Jews was clearly accelerating. Disenfranchisement not obligated by government decree was implemented by popular fanaticism. [29] What's more, Jewish Agency leaders were convinced that if Hitler succeeded, the crisis in Germany would be reenacted in Austria, internationalized Danzig, and perhaps even Rumania. [30] They were intensely aware that their response now would be noted by anti-Semitic regimes elsewhere in Europe.

At the April 23 Agency meeting, Rutenberg was called in to explain personally his liquidation company, now provisionally named the Palestine Development Corporation. As Rutenberg explained his concept, it became clear that his liquidation company would in fact absorb most of the Zionist institutions, including the Jewish Agency, the Jewish National Fund, and the Palestine Foundation Fund. Arlosoroff hoped that the company's shares would -be split fifty-fifty between Zionist institutions and private investors, but the precise percentages couldn't be guaranteed. [31]

The concept was so mammoth that some Executive members could not comprehend exactly how it would work. Others were uncertain where the Zionist movement would find the money to purchase 50 percent of the company's shares. The questions and debate continued until Arlosoroff angrily chastised: "Some fifty days have been lost since March tenth, and each day is worth one hundred thousand pounds [in Jewish donations going to other sources]. We have already lost half the company's capital. We cannot continue to talk." [32]

But the gentlemen then disagreed over whether Rutenberg's company should be purely commercial, syphoning German Jewish wealth to Palestine via business ventures, or whether the company should actually oversee resettlement. Senator was against the company engaging in any relief activities. Rutenberg was shocked. "If I had wanted to found a commercial company," Rutenberg complained, "there would have been no need for me to come here. The operation is intended to be both commercial and ethical." [33]

However, after an acrimonious debate, the Executive unanimously endorsed Rutenberg's company as a "purely commercial" venture engaging not in the transfer of people, but in the transfer of money. This new approach to solving the German Jewish question stressed not political negotiations with the Reich for relief, but commercial negotiations with the Reich for business. [34]

There was no time to lose. Arlosoroff asked German Consul Heinrich Wolff for a letter of introduction to the German government so he could initiate discussions of emigration and property transfer. Wolff was happy to comply, preparing a letter to the Berlin Foreign Ministry that glowingly described Arlosoroff as an important Zionist official who had been instrumental in good relations between the Jewish Agency and Germany. [35]

Introduction in hand, Arlosoroff made ready to leave Palestine. However, just before he left, the members of the Jewish Agency Executive Committee insisted on a last-minute confrontation. On April 25, they demanded once and for all to know exactly why Arlosoroff was going to Germany. Arlosoroff at first denied that his trip was really very special. But when Neumann absolutely insisted the trip be canceled and that the authorizing vote be rescinded, Arlosoroff finally blurted out, "I don't wish to be a football ... to be condemned for my bad behavior." In a moment more he admitted his true mission. [36]

German assets must be liquidated and transferred to Palestine. A structured institution -- say, an emigration bank -- would be necessary. Arlosoroff would organize it, probably through future negotiations with the German government. Arlosoroff claimed that the negotiations were not actually possible at this tense moment. Instead he might just lay the groundwork with the German Zionists in Berlin for government negotiations to come.37 Senator, the man who started the currency exemption negotiations six weeks earlier, saw his plan disintegrating. Arlosorotrs authority was now clearly in dispute. Senator declared he would also travel to Germany. This Arlosoroff opposed, believing that as a German, Senator's negotiations would be doomed. Ukrainian-born Arlosoroff insisted that he would go, Senator would not, and that was that. [38]

What now for Senator and his German Zionist colleagues, so eager to convert their currency exemption into a viable program? How could they lift this opportunity out of the miasma of Zionist factionalism and save the transfer? They doubted that the man they had taken into their confidence, Chaim Arlosoroff, visionary and dynamic as he was, was capable of accomplishing the feat. What Zionist official could, given the Jewish Agency's political strife?

Mr. Sam Cohen was still in Palestine and paid a visit to Consul Heinrich Wolff that same day, April 25. [39] Sam Cohen had a plan.

Cohen was connected to a company named Hanotaiah Ltd., which in Hebrew meant "the planters." Hanotaiah (Ha-noh-tay-ah) essentially existed as a profit-making subsidiary of a settlement organization called the Young Farmers Association. Hanotaiah's main business was buying and selling land, especially for orange orchards, and providing equipment needed for citrus cultivation. [40]

Cohen explained his idea. The consul approved and provided Cohen with what amounted to a rival letter of introduction, describing Hanotaiah as an important land-investment firm -- citing several million dollars in business over the past four years. Partially explaining what Hanotaiah had to offer, Wolff wrote, "Up to now, Hanotaiah has bought pumps, pipes, and so forth in Czechoslovakia, since they are cheaper than in Germany." Wolff knew that pipes were one of Germany's most important exports. The letter explained that Yugoslav and Italian firms were soliciting Hanotaiah's pipe orders as well. But Hanotaiah would purchase all future pipes and other agricultural equipment from Germany if the merchandise could be paid for with the frozen assets of German Jews. [41]

It was very complicated. But, wrote Wolff, all would be explained by Hanotaiah's representative, who would travel to Germany to negotiate the deal. [42]

Arlosoroff left Palestine for Berlin on April 26, 1933. Mr. Sam Cohen left for Berlin shortly thereafter. [43]

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11. Stifling the Boycott

ZIONIST LEADERS, during April 1933, sought to cooperate with the Nazi Reich to arrange the orderly exit of Jewish people and wealth from Germany. But during the very same weeks, Jewish groups throughout the world were struggling to resist and topple the Reich to keep Jews in Germany as citizens. Boycott and protest were everywhere.

April I: Paris, the International League Against Anti-Semitism made good on its threat to declare a boycott, effective 10:00 A.M. until the downfall of Adolf Hitler or the resumption of full rights for German Jews. Istanbul, Jews distributed circulars urging a boycott of all German products. [1]

April 2: Toronto, a mass protest meeting cosponsored by Jewish and Christian clergy adopted the boycott. Paris, Cardinal Verdier publicly assured the chief rabbi of Paris that Catholics would actively support the anti- Hitler movement. [2]

April 3: Salonika, 70,000 Greek Jews gathered in a mass protest against Hitler. Panama, fifteen leading Jewish firms announced the cancellation of all orders of German merchandise. [3]

April 4: Bombay, Jewish protest meetings condemned the Hitler regime. [4]

Aprils: New York, 15,000 leftists protested both Nazism and those Jewish and governmental leader's going slowly in the fight against Hitler. [5]

In Poland, the national boycott against Germany was enforced by mob violence. On April 6, Reich Ambassador Hans Moltke officially demanded an end to the violent boycott and its semiofficial encouragement. The Polish Undersecretary of State angrily told Moltke to his face that the Polish government did not desire to interfere with the boycott. Anti-German boycott violence was so extensive in Upper Silesia that the German Foreign Ministry declared ''the situation altogether unbearable" and threatened to complain to the League of Nations. [6]

In England, on April 9, the fear of Polish-style boycott violence prompted police in London and Manchester to insist all storeowners, under pain of prosecution, remove "Boycott German Goods" window posters. The next afternoon, boycott suppression was excitedly debated in Parliament. Home Secretary Sir John Gilmour denied that the police were acting on express government orders. Just to make sure, Winston Churchill called for an official end to the suppression, to which the home secretary answered, "Certainly." [7] Meanwhile, Britain's Labour-dominated boycott movement continued to expand. By April 15, The Daily Herald, quoting industry sources, estimated the fur boycott alone would cost Germany $100 million annually. [8]

Similar scares faced the Reich from all over Europe.

April 13: Bucharest, German trade was already suffering from a semiofficial boycott because the Rumanian National Bank refused to allocate foreign currency for German imports (in retaliation for Reich barriers to Rumanian goods). Now Rumanian Jews formally joined the popular purchasing embargo, thus eliminating many barter deals as well. In Ploesti, Jewish merchants refused three carloads of German porcelain despite frantic price reductions by the shippers. Other German industries in Rumania were similarly afflicted. [9]

April 17: Antwerp, the fur boycott was extended to Belgium following a binding resolution by Jewish fur traders. [10]

April 19: Belgrade, the anti-German boycott in Yugoslavia was so damaging that local Nazi surrogates began an intense but futile counterboycott to pressure Jews to abandon the fight. [11]

The spirit of the anti-Nazi boycott was fueled not only by persistent organizers, but by encouraging press reports. For example, the sudden termination of Germany's April First action was explained by the world press as Hitler's retreat from economic retaliation. [12] This convinced many that the best defense was a better offense.

Encouragement continued. Berlin newspapers began to report Germany's foreign trade for the first quarter in a dangerous decline. [13] On April 9, Hjalmar Schacht, Hitler's newly appointed head of the Reichsbank, surprised a conference of international bankers in Basel by reducing Germany's foreign debt with a $70-million dollar check. Although the payment severely drained reserves, Schacht hoped to inject some believability into Germany's credit. But the financial press reported the "show of strength" as a mere desperate maneuver. [14] Financial writers pessimistically pointed to the extraordinary German economic dislocation directly caused by Hitler's anti-Jewish policy. The press emphasized that the economic problems included both external backlash and massive internal disruption resulting from the sudden subtraction of the Jewish middle class from the commercial mainstream. [15]

On April 10, Germany announced that Jewish veterans would be exempted from sweeping anti-Jewish occupational expulsions -- at Hindenburg's request, in the name of fairness. The New York Times attributed the "softening" not to sentimentality, but to the world protest and resulting economic chaos within the Reich. A week later, the Times carried another story repeating the theme, adding that a quiet but cohesive lobby within German economic circles opposed continued anti-Semitic activity. [16]

In a radical move on April 22 that would have been impossible in later years, a group of German industrial associations unanimously rejected official government reports citing a recent 9 percent gain in manufactured exports, especially machinery, textiles, and steel. In their daring announcement, the industrialists admitted they had actually suffered a heavy decline. [17]

Pessimistic newspaper and radio reports were vital to keeping the anti- Nazi boycott movement alive, because every boycott thrives on the appearance of success. It matters little whether a business decline is actually due to a boycott or to seasonal fluctuations, strikes, material shortages, or the phases of the moon. People want to see evidence of damage. When they do, the devoted redouble their devotion and the uncommitted see real value in the protest and jump on the bandwagon. In April 1933, such evidence was abundant for those opposed to Adolf Hitler.

On April 26, British Embassy Commercial Counsellor F. Thelwell in Berlin ended a twenty-two-page economic forecast with the words "If as time goes on the effects of bad foreign trade make themselves felt in industrial employment in Germany and money is not forthcoming for schemes of work and settlement, the pressure of economic distress may yet prove strong enough to break the political stranglehold which Hitler has put upon the country." [18] Germany could not afford a boycott.

What's more, the American Jewish Committee in New York, the State Department in Washington, the Foreign Office in London, and the Jewish Agency in Jerusalem were all becoming aware that protest and boycott were the only effective restraints on Nazi policy.

For example, on April 5, Berl Locker of the Zionist Organization Executive Committee in London readily acknowledged the power of the protest in a letter to a colleague: "It is clear that these [British protest] actions, added to the general anti-Nazi attitude of the press ... have surely caused the [April First] anti-Jewish boycott to be limited to a single day." Despite this awareness, Locker admitted in the same letter, "My friends and I have attempted to energetically counter the so-called Greuelpropaganda [atrocity stories] .... We also made efforts to counteract the proclamation of an [anti-Nazi] boycott [in Britain] and we were successful, at least with the official organizations. Of course, we cannot directly influence the individual merchant .... " [19] In the first week of April, Locker also advised the Jewish Agency in Jerusalem that for tactical reasons, Zionists in all countries should avoid participating in the struggle against Hitler. Locker feared that open criticism of Hitler would precipitate crackdowns on German Zionism and jeopardize contacts with the regime. [20]

Both the American State Department and the British Foreign Office were equally aware that pressure and only pressure was restraining the Reich. British and American legations around the world reported the distress the anti-Nazi protest and boycott movement was causing the German government. But while aware of press reports attributing the so-called softening of Hitler's campaign to sudden economic distress, the British and American diplomatic communities continued to preach noninterference, political reassurance to the Reich, and economic cooperation as the wisest method of reducing anti-Semitism in Germany.

In the case of Zionism, the State Department, and the Foreign Office, their hands-off policy was in pursuit of ideals. Zionists, of course, were seeking detente with an enemy to achieve Jewish nationalism. American and British diplomats were seeking an illusory peace by an ineffective strategy later to be labeled appeasement. But the [Zionist] American Jewish Committee's antagonism to anti-Nazi activity defied even their own definition of Jewish defense.

In early April, Committee president Cyrus Adler received an anguished letter from a friend writing from Paris. The man was ruined, living from moment to moment as a refugee. Adler's frightened friend sought to debunk the Committee's belief that German atrocities were in the least bit exaggerated. Over several neatly typed pages, the refugee listed typical disappearances, beatings, and murders: Herr Kindermann disappeared for several days until his frantic family received a letter from a Nazi commander to pick up his body. Herr Krell disappeared until one of the Nazi torture houses called with the news that he had thrown himself out a fourth-floor window. Herr Naumann, seized by Brownshirts, dragged through the streets, beaten over his entire body, and then forced to suffer as pepper was sprinkled on his wounds, died shortly thereafter of a skull fracture and blood poisoning from the pepper. [21]

Adler's friend beseeched the Committee to "not take the slightest notice of assurances ... whether they come from Jewish or non-Jewish sources, from within Germany or from without. The real truth is only known to those Jews who are condemned to live in Germany under the present government, and they dare not breathe a word about what is going on, because they would pay for such information with their lives." [22]

In a final insistent paragraph, the refugee begged Adler, "You free Jews in free countries, demand restoration to German Jews of their civic, social and economic rights. The only practical way to attain this end is to boycott all German goods except where they come, without a doubt, from a Jewish manufacturer or producer." [23] But Adler would not change his position.

Unshakable evidence about Nazi horrors arrived on April 6, when Adler and B'nai B'rith president Alfred Cohen received a cable completely invalidating the denials of German atrocities that German Jewish leaders had issued and the Committee had earlier published. But instead of making the information public to expose the truth, Adler and Cohen wired the news verbatim to Secretary of State Cordell Hull: "APPEAL OF GERMAN JEWISH ORGANIZATIONS TO AMERICAN JEWS TO CEASE PROTESTS DEFINITELY MADE UNDER INTIMIDATION STOP GOERING INVITED FOR SECOND TIME JEWISH LEADERS STOP ... HE WAS EXTREMELY ABRUPT DEMANDED IMMEDIATE INTERVENTION THAT JEWS ABROAD DISCONTINUE HORROR LEGEND/BOYCOTT CAMPAIGN OTHERWISE GERMAN JEWS WOULD BEAR CONSEQUENCES STOP ... JEWISH LEADERS OBLIGED OUTLINE PLAN TO GOERING TAKE UP CONTACT WITH JEWISH LEADERS ALL COUNTRIES FOR DENYING HORRORS/DISCRIMINATION/BOYCOTT." [24]

Adler and Cohen assured Hull that the facts would be temporarily "withheld from publication." Hull acknowledged in kind within hours: "I HAVE RECEIVED YOUR TELEGRAM ... SHALL BE GLAD TO FIX A TIME FOR FURTHER DISCUSSION OF THE SITUATION." [25]

Adler and the Committee continued to deprecate publicly Jewish efforts to boycott Germany or even organize protest. Committee people would always point to the instructions of German Jewish leaders to stop all protests and boycotts and not believe the exaggerated stories of Nazi brutality. Yet Adler and his colleagues knew those German Jewish admonitions to be false, spoken under the truncheon, and, in fact, no more than tools of Nazi propaganda.

At first, the Committee was partly successful in muzzling Jewish protest. For example, on April 2, while many were still trying to determine the truth about German atrocities, the Joint Distribution Committee held a relief conference. The Joint traditionally avoided political controversy to protect its internationally recognized status as a neutral relief agency, analogous to the Red Cross. Officiating at this April 2 meeting were Committee leaders Cyrus Adler and Joseph Proskauer. Quickly, the Joint's position at the conference was seen not as neutral, but committed against anti-Hitler activism. The rostrum speakers openly repudiated efforts by Jewish organizations to boycott German imports. Finally, Rabbi Jacob Sunderling from Hamburg rose to recite the truth about Nazi tortures in Germany. Proskauer and another gentleman cut short the rabbi's remarks, arguing that such speeches had no place in a relief conference. The crowd objected loudly. One person shouted, "We don't want to hide anything. Let him go on!" Rabbi Sunderling tried to make himself heard, his eyes welling with tears as his words were being ruled out of order. Finally, since Rabbi Sunderling would not be muffled and the audience demanded he be heard, the chairman summarily adjourned the meeting. But the audience would not leave, so Proskauer stepped to the platform to emphasize the point: The meeting was over. Rabbi Sunderling would not be heard. [26]

On April 6, Adler wrote to a leader of the Jewish War Veterans accusing the JWV of having "furnished a pretext for the German [anti-Jewish] boycott." A copy of Adler's letter reached J. George Fredman, commander in chief of the JWV and head of its boycott committee. Fredman bluntly answered Adler: Our action "needs no apology.... Our organization was the only one which started right, kept straight and is still right on the situation . . . . Jewry should be united in this movement -- it is the only weapon which will bring the German people to their senses." Adler, in an April 19 reply, lectured back, "I wish to reiterate and even strengthen the statements I made heretofore. The American Jewish Committee, in objecting to boycotts, demonstrations, parades, etc. was acting in accordance with the wishes of leading Jews in Germany as directly conveyed to them over the long distance phone from Paris where they were entirely free to talk .... I cannot use language sufficiently strong to indicate my hope that you will discontinue the form of agitation which you started." [27]

Soon the Committee's reluctance was no longer seen by the great masses of American Jews as wisdom and behind-the-scenes tactics. Instead, the Committee -- together with B'nai B'rith -- was viewed merely as meek and silent; or worse, a saboteur of the anti-Nazi movement. So although the Committee and B'nai B'rith retained some element of "establishment" recognition and access, the American people opposed to Hitler -- Jewish or not -- rejected them.

The rejection soon became public. In conjunction with an early-May protest action, an editorial in the leading Yiddish daily, Der Tog, bitterly attacked the Committee and B'nai B'rith for their "policy of fear and silence." In a stunning rebuke, the editorial asked, "What do Messrs. Adler and Cohen propose? ... Silence and nothing else! ... [Our] people are determined to fight for their very life.... The voice of the masses will be heard." [28]

Their voices were indeed heard, not only in America, but in Nazi Germany.

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12. Fear of Preventive War

BECAUSE German foreign policy included supervising exports, the Reich Foreign Ministry became the clearinghouse for all the disheartening boycott news regularly transmitted by German consulates and trade missions throughout the world. These reports invariably came across Foreign Minister von Neurath's desk and were distributed to Schacht, Hindenburg, and Hitler as von Neurath thought necessary. [1] During April 1933, Berlin's most important in-boxes were brimming with frightening boycott and protest news from around the world. Some boycotters were clever enough to increase the Reich's anxiety by sending their boycott announcements directly to the Foreign Ministry in Berlin.

Those business leaders who found Hitler's financial policy suicidal also sent their bad news to the Foreign Ministry. Munster's Chamber of Commerce reported canceled orders from Holland and France. Offenbach's Chamber of Commerce reported boycotts of their goods in Belgium, Egypt, Denmark, and Finland. There could be no mistake, according to the Offenbach report. Many retail establishments, such as those in Copenhagen, prominently displayed signs reading "No German Bids Accepted." [2]

Matters worsened. Quickly, the leaders of Germany realized that the anti- Hitler boycott was threatening to kill the Third Reich in its infancy, either through utter bankruptcy or by promoting an imminent invasion of Germany by its neighbors. When the Nazis consolidated power in early March, Polish officials openly reinforced troop strength along the Polish Corridor. This was in response to der Fuhrer's bellicose threats to seize the Versailles-created territorial bridge. [3] In late March, the anti-Nazi boycott helped push Poland from a heightened defensive posture to a near-hysterical readiness to invade Germany.

On April 7, von Neurath, Schacht, and other key officials briefed Hitler about the Reich's perilous condition in the wake of the accelerating anti-Nazi backlash. Emphasizing that various neighbors were actively contemplating a preventive war with Germany while she was still weak, von Neurath told Hitler, "The gravity of the dangers threatening us should not be underestimated." Foremost among the potential invaders was Poland, determined to preempt any territorial compromise. Other neighbors to the east -- Rumania, Yugoslavia, Hungary, Czechoslovakia -- would have to be kept on friendly terms, principally through trade, to preclude any anti-German alliance with Poland. The West was also threatening. Von Neurath reminded Hitler that when German Chancellor Bruning told a newspaper in early 1932 that Germany would consider stopping all reparations, France mobilized for possible invasion. The foreign minister warned that France might resume her threatening posture if the Reich persisted in its policies. [4]

Von Neurath did not have to remind Hitler what happened when Germany defaulted on reparations payments in 1923. France did invade. The political chaos resulted in cyclonic inflation.

The foreign minister was plain about the Reich's absolute military vulnerability. He assumed that France was the strongest military power in the world. Germany could not challenge her in the least, and lagged five years behind the might of even her lesser enemy, Poland. Moreover, Europe vigorously opposed Germany's efforts to rearm. And Hitler's cabinet knew that the Jewish protest and boycott movement was in the forefront of political agitation to keep Germany a weaponless nation. So von Neurath was forced to list Germany's main defensive assets not as guns and bombs but as international goodwill and her value as a trading partner. [5] Von Neurath's military statement to Hitler concluded, "We shall first have to concentrate our political activity on economic questions, in order to avoid in all circumstances warlike complications with which we cannot cope at the present time." [6]

Then Schacht told Hitler the dismal economic truth. Things were far worse than in 1930. Then, foreign exchange reserves totaled RM 3.3 billion, which Schacht considered dangerously low. Current reserves had dwindled to merely RM 450 million. Therefore, the end of foreign exchange and, hence, viable international commerce was now in sight. Every last sum of foreign currency was being gathered, even from German banks overseas. Within months -- perhaps sooner -- "foreign exchange would no longer be available." Some way must be found to prepare the nations trading with Germany for the abrupt cessation of payments, said Schacht, stressing his hope that hostile reactions -- like those feared from the French -- could be avoided. [7]

But Schacht had an idea, perhaps the only idea capable of saving trade relations. Massive blocked accounts -- that is, frozen bank accounts--would create a giant pool of blocked reichmarks, called Sperrmarks, which Germany could use to pay obligations. Debtors would have no choice but to accept the reichmarks, and they would be usable almost exclusively in Germany. [8] The true owners of such blocked accounts -- foreigners and emigrants -- presumably could not all use their sperrmarks at once, especially since they could not be removed from the country. Thus, the Reichsbank could trade them freely.

Schacht's idea was to elevate this shell game to a pseudolegitimate financial technique to save the German economy. During the April 7 conference, Schacht predicted that so many new blocked accounts could be generated that there would be money left over for "the new needs of the Reich." Hitler ended the April 7 conference by insisting that Schacht's plan get under way at once. [9]

But the situation deteriorated rapidly. On April 12, German Ambassador Moltke in Warsaw reported that the anti-Nazi boycott was inciting the Polish people and their leaders to military edginess. "Everywhere the slogan is: destruction of everything in Poland which is still German, and boycott of everything which comes from Germany," wrote a distressed Moltke. "Everywhere straw men labeled Hitler are being burned." He added that the Polish government's open support for the "boycott against German goods as legitimate and useful" was incontestable. Moreover, reported Moltke, the Polish foreign minister had warned him that any retaliation against Polish Jews or any others of Polish extraction living in Germany would be met with dangerous Polish countermeasures, the "consequences [of which] were unforeseeable." [10]

On April 22, German Ambassador to Italy Ulrich von Hassell reported worse news from Rome. In a one-sentence telegram, Hassell relayed highly reliable information from circles close to Czech President Thomas Masaryk that Prague was planning to support "Polish intentions of preventive military action at the German eastern border." No longer confined to preemptively occupying demilitarized zones in the Polish Corridor, Poland's military threat now included an actual invasion of Germany proper. And as feared, Czechoslovakia was primed to join her. Von Neurath passed Hassell's telegram directly to President von Hindenburg. [11]

The next day, April 23, Ambassador Moltke responded to an urgent inquiry from Berlin seeking his confidential assessment of the chances of a Polish invasion. Moltke answered with the known arguments circulating in Poland. Persuasively in favor was the growing feeling that Germany under Hitler would one day attack Poland. Since war was inevitable, Polish leaders were convinced they should conquer the East Prussian region of Germany at once while Germany was still weak and unarmed. The arguments against such a preemptive invasion were Poland's exaggerated fears of nonexistent German weapon stockpiling, the financial cost, and Poland's doubts about her own military capability. In balancing the pros and cons, Moltke concluded that the chances of an invasion were even. [12]

In an attached memo, Moltke listed proof that Poland was readying should the decision to invade be affirmed. Poland's war industry had increased production 100 percent since Hitler took office, placing large orders for airplane engines, munitions, field kitchens, and the other staples of war. Polish representatives were even then in France purchasing heavy artillery and antiaircraft guns. Reserve officers had been called up. And troops due to be discharged had been kept on for additional months of duty. In an ominous show of force, the government had ordered the rapid deployment of 30,000 soldiers and artillery at Vilna just the day before. [13]

On April 25, at 12:45 P.M., German Ambassador Walter Koch in Czechoslovakia dispatched an urgent telegram to Berlin: "THERE IS NO DOUBT THAT A PREVENTIVE WAR IS BEING CAREFULLY CONSIDERED AT THE PRAGUE CASTLE WHERE THE THREADS OF ALL INTERNATIONAL PLOTS AGAINST GERMANY COME TOGETHER .... RECENTLY [PRESIDENT] MASARYK SPOKE OF WAR AS A MATTER OF COURSE. I AM CONVINCED THAT POLAND'S INFLUENCE HERE IS CONSTANTLY PRESSING FOR A PREVENTIVE WAR, AND THAT THE CZECHS HAVE THE INTENTION TO INTERVENE ACTIVELY." [14]

Koch's telegram was received in the Foreign Ministry at 4:00 P.M. Two hours and forty-five minutes later, Hitler and the entire cabinet assembled to consider the prospect of an imminent invasion. [15] As they saw it, Poland would act to protect her borders. Czechoslovakia would take advantage of the situation and at the same time strike at German anti-Semitism. France might move to counter border tensions and preclude any plan to discontinue reparations.

Von Neurath pleaded, "The situation is so tense that provocations from our side must under all circumstances be avoided." [16]

The Jewish question and the anti-Nazi boycott were a common aggravating factor in Germany's intensifying economic and military problems. Polish Jews had successfully inflamed Poland from defensive concern to war hysteria through their violent anti-German boycott and protest movement. German officials were in fact astonished that the historically anti-Semitic Polish people would allow Jewish persecution in Germany to become the pretext for a war. But it was happening. The anti-Nazi movement in Czechoslovakia was encouraging Masaryk's government to join the opportunity. Masaryk believed anti-Semitism to be an evil unacceptable to Christianity. The international boycott was frustrating every Reich effort to earn the foreign exchange needed to keep France at bay. Events were fitting into the Nazi conception of war: a cataclysmic conflict caused by Jews through economic and propaganda means. But Germany simply was not ready.

The Third Reich had raging problems. Perhaps cunning diplomacy and the self-interest of the world could dampen many of those problems. But at every turn the anti-Nazi protest and boycott movement threw fresh fuel on the fires. There was no longer any doubt. The boycott would have to be stopped.

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13. Message to Schacht

FOLLOWING the lesson of April First, Nazi leaders sought to avoid noisy anti-Semitic outbursts that would provoke more headlines and retaliation. Instead, they planned the methodical destruction of Jewish existence in Germany -- not through riots, no longer through declared boycotts, but through exclusionary regulations and private purges. Julius Streicher sadly admitted when the anti-Jewish boycott was rescinded, "I have a feeling that the boycott battle will pot be further taken up.... This will prove a disappointment to millions of Germans. . .. It was not easy to yield, but Adolf Hitler can only proceed one step at a time." [1]

Yet as in any radical movement, NSDAP activists were constantly trying to outdo each other. In this vein, a hysterical drive for Nazi purity was announced April 12: So-called un-German books would be burned in giant bonfires across Germany on May 10. [2]

In response, Stephen Wise and the Congress on April 19 called an emergency meeting of 1,000 Jewish delegates representing 600 New York-area Jewish organizations. As usual, the delegates shouted for the Congress to finally proclaim the boycott. Jewish groups could then begin organizing. But once more Wise refused the call. [3]

Wise felt that the formal boycott was so valuable a weapon it should be held back just a little longer while the spontaneous, unorganized movement hinted at the damage to come. And he wanted to announce the formal boycott as part of a worldwide Jewish retaliation declared by an international Jewish body convened in a dramatic flourish for that very purpose. Specifically, Wise envisioned a World Jewish Conference in Geneva during September 1933. And deep inside, he probably harbored doubts stemming from Zionist pressures to hold back on the boycott. [4]

So Wise answered the shouters: "The time has not yet come for an official boycott -- we still have other weapons." When delegates insisted on stronger action, Wise pleaded with them: "We are not going to disclose our campaign so that Hitler . . . will know our next move. I will not be your leader if I cannot be trusted." [5] Instead of launching the official boycott, the delegates unanimously agreed to a monumental parade to take place the night of the Nazi book burnings. [6]

Newspapers on April 27 carried the announcement that the 600 New York-area Jewish organizations would ask their 2 million members to march through Manhattan in a display perhaps equal to the Victory parade of 1919. [7] The performance would have to be impressive, if only for one spectator who would be in America at the time: Hjalmar Schacht.

Schacht was coming to the United States in early May to confer with American officials. The Reich hoped somehow to maintain good economic relations with the United States. Exports and foreign currency -- these were the precious remedies to massive German unemployment, a weak, unarmed German military, and a continuum of material shortages. Schacht's mission was therefore all-important.

The May 10 parade in many ways was a repeat of the Madison Square Garden effort. The American Jewish Committee and B'nai B'rith opposed every detail. However, this time their disapproval was not waged privately, but in the media in a desperate attempt to dissuade millions of Jews throughout the country who wanted to organize against Hitler. Of the many public attacks the Committee launched against the May 10 plans, the first major condemnation said it as well as any: "We nevertheless consider such forms of agitation as boycotts, parades and mass meetings and other similar demonstrations as futile. They serve only as an ineffectual channel for the release of emotion. They furnish the persecutors with a pretext to justify the wrongs they perpetrate and ... distract those who desire to help with constructive efforts." [8]

At the height of the parade preparation, in a rebuke to the Committee, the April 29 New York Times editorialized in favor of protest -- Jewish and non- Jewish -- as the only means of making Nazi leaders take note. "The thing that must drive home most surely to the mind and conscience of Germany's rulers is the outcry of the non-Jewish world .... The Nazi rulers do know ... that the heads of Christian churches everywhere have been foremost in the protest." [9] The editorial reinforced Wise's strategy of making Jews the vanguard of a larger, interfaith movement. Shortly after the editorial, non-Jewish participation in the march accelerated. By May 4, in addition to 250,000 Jews, 50,000 mostly non-Jewish AFL unionists promised to march. [10]

That day, May 4, the luxury liner Deutsch/and was tugged into the docks of Manhattan. Wealthy German industrialists and prominent German politicians were aboard. But once the lines were tied, the reporters who assembled on the deck were not seeking out magnates or mayors. They were looking for Reichsbank president Hjalmar Schacht, .:he man the German media called "the Wizard." When they found him, at breakfast in the dining room, the question was immediately put: Is the Reich planning a propaganda campaign to counter reports of German atrocities? [11]

"What atrocities?" Schacht demanded defensively. "I have not seen any." "Why don't your papers enlighten you?" he barked. "Why don't your papers tell the truth? Why do your papers spread warlike feelings?" The Wizard then pulled out a New York Times clipping from the day before about a planned Nazi demonstration in honor of a German shot by the French during their 1923 occupation. Another article in the same Times edition mentioned tensions on the Franco-German border. With Schacht's voice rising in ferocity, he declared, "When you print stories like this you are stirring up warlike feeling. That kind of stuff makes for war!" Unable to control himself further, Schacht crumpled the Times clipping and ceremoniously threw it on the deck. [12]

On May 6, at noon, Schacht visited Secretary of State Cordell Hull's Washington office. They spoke briefly with Hull expressing confidence that Germany and the United States would enjoy a new economic partnership. At 1:00 P.M., Hull and Schacht drove up to the White House. Standing in front was FDR. Photographs of smiling men were snapped. They walked into the vestibule as a military band played the German national anthem and martial divertimenti. Lunch was served promptly. With Schacht seated next to the president, the two talked for some time about economic problems affecting both countries. [13] At one point, Roosevelt stood up and proposed a toast to President Hindenburg. Schacht returned the gesture by proposing his own toast to Roosevelt and conveying the best regards of Adolf Hitler. A half hour remained for some private talk, away from the crowd and the White House photographer. Schacht sat on the sofa next to Roosevelt. FDR immediately made it plain that Hitler's policy toward Jews had been costly to Germany's economic and political recovery. The American people, said the president, were quite unsympathetic to Germany, not even liking the newsreel scenes of Nazis marching in uniform. FDR called American outrage a hurdle to be cleared if economic success was to be achieved for Germany. [14]

Reminding Schacht that Secretary of State Hull was a believer in free trade, Roosevelt alluded to an extraordinary increase of mutual trade. Schacht asked how? FDR answered that the details would be worked out later, but it would allow Germany to repay its massive debts to other countries. [15]

That night, just before midnight, Schacht cabled the Foreign Ministry in Berlin detailing all that Roosevelt had said. [16]

***

When Schacht went to bed, late on May 6, there were scintillas of encouragement in the air. But the next day, the news was again bad. Larger boycott groups were organizing. And I.G. Farbenindustrie, one of Germany's colossal conglomerates, publicly admitted an extraordinary export slump due to anti-Nazi trade reprisals. Sales of some Farben commodities had fallen by as much as half. Farben, a leading foreign-currency earner, was one of the few sources Schacht had been relying upon to buy time. [17]

As a crowning touch that May 7, the American Jewish Congress cabled Schacht a courteously humiliating summons: "RESPECTFULLY INVITE YOU TO JOIN REVIEWING STAND OF HUGE DEMONSTRATION TO BE HELD IN NEW YORK ON MAY 10 ... TO DEMONSTRATE EXTENT OF SOLIDARITY OF AMERICAN CITIZENS OF ALL FAITHS IN RESPECT TO POLICY OF YOUR GOVERNMENT IN REDUCING ITS JEWISH POPULATION TO SECOND-CLASS CITIZENSHIP." [18]

Later, Schacht reportedly confided to a friend, "Is there nothing in America to talk about but the Jewish question? That's all I hear: Jews, Jews, Jews and the Jewish question!" [19]

The next day, the Munich Chamber of Commerce released a report verifying that drastic adverse trade developments were indeed due to the worldwide anti-German boycott. The report concluded with a plea for the German government to counteract. [20]

That same day, May 8, Schacht met in FDR's office with the president, Secretary Hull, and German Ambassador Hans Luther. There was perhaps one way Schacht could stunt the anti-Nazi boycott movement. The gamble would have to be taken before the May 10 protest matured into a formal declaration of economic war against the Reich. The gamble involved American creditors holding either German municipal bonds or general German commercial debts. Schacht had warned before that Germany' would be unable to pay its debts if a boycott deprived it of the normal trade required to amass foreign exchange. At this rate, Germany would indeed run out of foreign currency within weeks. There was now nothing to lose.

So Schacht surprised FDR, Hull, and Luther by announcing that Germany would soon stop paying interest on American loans, and then stop paying all external debts generally. Ambassador Luther nervously resettled himself in his chair, waiting for FDR's response. Hull became visibly agitated. Schacht himself mentally prepared for Roosevelt's outburst. But Schacht was amazed when FDR just slapped his thigh in a jovial display and laughingly roared, "Serves the Wall Street bankers right!" [21] The president of the United States did not comprehend.

But Hull understood completely. Five billion dollars in debts would be defaulted on, $2 billion of which was held by Americans. And he understood the timing. Coming just before the World Economic Conference in London, and arising out of a conversation with the president, the German move would certainly seem like some bizarre fiscal connivance to prop up the Hitler regime at the expense of America and her allies. Now Hull was outraged. The countless brutalities against Jews and the escalating campaign of legalized Jewish dispossession in Germany did not ruffle the secretary of state. But tinkering with Hull's emerging economic order was a capital offense that excited him to a fighting stance. [22]

Hull summoned Schacht to his office the next day. The secretary had been able to explain the ramifications to Roosevelt and secure the president's condemnation. When Schacht arrived, Hull deliberately began searching through papers on his desk, pretending Schacht was not standing in the doorway. Only after several minutes did Hull finally acknowledge Schacht's presence with the words "I am to give you this from the president." He handed Schacht an envelope. Wary of what was happening, Schacht asked if he should read the contents at once. Hull said yes. Schacht carefully pulled the short note from the envelope and read it silently. It was in fact a message from Hull, reading, "The President has directed me to say to you in regard to ... the decision of the German Government to stop [payments] ... on obligations externally sold or externally payable, that he is profoundly shocked." Schacht replaced the note in its envelope, said nothing, but sat down at Hull's desk. [23]

Schacht was barely seated when Hull exploded. "I was never so deeply surprised as I was yesterday afternoon by your announcement. My government is exercising every ounce of its power to bring [our] ... nation out of the depths of awful panic conditions, back in the direction of normal prosperity. Just as real progress is being made, you come over here and, after sitting in confidential conferences with our officials ... suddenly let it be given out from our doorstep that Germany suspended these payments .... It is greatly calculated to check and undermine American efforts to restore domestic business conditions." [24]

Schacht apologized, claiming he had not foreseen the implications of his statement. Not true. Schacht was trying to coerce America and the world away from the boycott movement and into continued economic support of the Hitler regime. Emerging as it did from a White House conversation, it indeed appeared as though the president understood and agreed to Germany's reneging on its debts so long as a boycott was making it impossible for her to pay. Hull refused to accept Schacht's excuses, and scowled, "Any person ought to realize the serious possibilities of such steps." [25] But scowls were unimportant. The Wizard had begun to work his magic.

***

In the days before the May 10 march, Stephen Wise continued to walk a tightrope between Jewish powers. On the one side was the great mass of American Jewry, eager to declare an official boycott. On the other side was the tiny faction of mostly German-American Jews represented by the Committee and allies in B'nai B'rith. In a May 9 letter to Albert Einstein, Rabbi Wise complained, "In America, I am sorry to say, there is no unity of opinion and action. Things are made infinitely more difficult for us by American Jews of German descent who believe they owe it to their German past to disbelieve the stories of Hitlerish barbarism and brutality .... The result is that, what with the [coming] London Economic Conference and the lack of pressure on the part of the rich German [American] Jews, the Administration has found it simpler not to act." [26]

Hjalmar Schacht, surrounded by America's anti-Hitler tumult, understood that on May 10, hundreds of thousands of American citizens would assemble to denounce the Reich. Schacht knew that the newspapers would continue to print anti-Nazi news, one article giving rise to another, fueling the boycott.

Indeed, some columns addressed Schacht directly. One New York Times article just before the May 10 parade capsulized the intended drama. Headlined "HEAD OF REICHSBANK, HERE FOR WHITE HOUSE TALKS, FACES OPPORTUNITY TO GAUGE CRITICISM OF NAZIS," the article wished Schacht "all good luck" in his efforts to rehabilitate Germany's battered economy. However, the article predicted, all his efforts would hinge on ending the Reich's anti-Semitic campaign, which carried with it constant economic retaliation by the rest of the world. Noting that "it is said that his word is law in all that pertains to finance and economics in Berlin, it is fortunate that it is upon the ears of Dr. Schacht himself that will fall" the voices of anti-Nazi protest. The article warned Schacht to listen and face the facts: The anti-Nazi boycott was killing the German economy. [27]

And now Samuel Untermyer, one of America's most prestigious and forceful Jewish leaders, was filling Stephen Wise's leadership vacuum. In a speech that made headlines just before the May 10 parade, Untermyer urged all Americans to ban all German products and services. Untermyer called the simple act of boycotting the "obvious remedy." [28] The masses were now demanding unity against Hitler.

***

At noon on May 10, Jewish commerce in New York stopped as promised. Employees, customers, and owners alike took their leave to return home and prepare for the afternoon's event. This spectacle would dwarf even the March 27 rally. Indeed, the parade swelled to 100,000 strong. [29]

They marched under Jewish banners, Zionist flags, anti-Nazi placards, and military pennants. They wore dapper business suits, dirty smocks and work shirts, army uniforms, rabbinical robes, white collars, and habits. [30] Shoulder to shoulder they marched in the face of Nazi threats to retaliate, in defiance of the forces of fear among their own people. In this moment they were united.

Chanting anti-Nazi slogans and vowing to resist Hitler, the crowds, fifteen deep on either side of the street, urged the protesters to escalate the fight. If there was any question of leadership, it was settled now. Roars of applause and volcanic cheers greeted a hat-waving Stephen Wise at every corner. For hours, Wise, 100,000 behind him, marched south toward Battery Park. Along the way, cheering people in windows showered the parade with ticker tape and confetti. At Seventeenth Street, thousands of assembled labor unionists, their ranks extending to the East River, flowed into the mainstream. At City Hall, Mayor O'Brien and other dignitaries stood on the steps of a reviewing stand. It took more than four hours for the protesters to pass. [31]

Despite the late hour, the throng gathered at Battery Park. There, the speakers condemned Hitler and his Reich. The cries for resistance were silenced only when the rally was officially closed by the playing of "The Star Spangled Banner" and the anthem of Jewish resistance, "Hatikva." Similar rallies were held in other cities, including Chicago, where 50,000 braved the rain. Those too old, too young, or too weak to walk joined the caravan of 500 cars and trucks that brought up the rear. [32]

The American people had a message. They were speaking in unison. And the most important man listening could not help but hear their warning.

From Washington, Schacht contacted an old friend, David Sarnoff, the president of RCA, and accepted an invitation to a May 12 private dinner party at Sarnoff's home. The Wizard knew that about a dozen Jewish leaders had also been invited -- including Stephen Wise. Both the Reich and influential American Jews had been seeking a private parley to see if some ceasefire could be arranged. [33] The dinner seemed to be a perfect opportunity.

But when Justice Brandeis learned that the much-debated dinner was actually to take place, he counseled Stephen Wise against the meeting. Brandeis was privy to rumors in official circles that Hitler might soon back down due to international economic pressure. Any symbolic gesture to Schacht now would be the wrong signal. Wise agreed with Brandeis, but decided to attend the Sarnoff dinner if only to counterbalance the voice of American Jewish Committee leaders who had been invited. [34]

As expected, the dinner was a complete failure. After the meal, Schacht warned the Jewish representatives that outside interference "would only make matters worse." No one cared to comment, and Schacht took his leave. [35]

The next day, May 13, Schacht received an urgent call from James Mac- Donald of the Foreign Policy Association. Having just conferred with Roosevelt, MacDonald insisted on meeting with Schacht. Schacht was scheduled to leave aboard an ocean liner later that night, but he rearranged his remaining hours for the urgent meeting. That afternoon the two men met. Mac- Donald's message: Time was running out for Germany. According to Macdonald, the mood in France was suddenly turning uglier. There was talk about "partitioning Germany and making up for what was left undone in Versailles." [36]

He pleaded with Schacht to convince Hitler to do something -- exactly what, MacDonald did not know -- but something to avoid the possible dismemberment of Germany. Schacht thanked MacDonald for the concern, but warned that such a dismemberment would not be accomplished as easily under Hitler as it was following Germany's war defeat. The Wizard tried to feign a facade of strength and courage, but as he boarded the vessel for the return trip to Europe, he had indeed concluded that the Jewish question was destroying Germany's interests in America. Only after intervening days of transatlantic solitude did Schacht compose an urgent cable to Chancellor Hitler informing him of the unsuccessful dinner with Jewish leaders and MacDonald's dire warning that France and others were entertaining the notion of dismantling Germany forever. [37]

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14. Mr. Sam Cohen's Deal

GERMANY'S destitute foreign-currency situation, aggravated so severely by the Jewish-led boycott, had a swift impact on the Zionist currency exemption. The exemption had been approved to defuse the boycott, increase German exports, and generate more foreign currency for the Reich. But the anti-Hitler boycott was as virulent as ever and expanding daily. Palestine itself, which stood to gain a windfall from the exemption, was as active in the boycott as any nation. Ironically, despite Nazi hatred for Jews, Jewish Palestine was vital to the German economic strategy.

At the turn of the century, when the Zionist movement was headquartered in Germany and its official language was German, Herzl and his circle looked to Kaiser Wilhelm as the logical sponsor of the Jewish State in Palestine. Herzl promised Imperial Germany a perpetual commercial and military outpost, as well as a colony of German culture in the Holy Land. From Jewish Palestine, the German Empire could anchor a highly desired sphere of influence in an undeveloped Mideast ripe with commodities and cheap labor, and equally in need of German merchandise. Jewish Palestine would be to Germany what India and Hong Kong were to England. In return, Kaiser Wilhelm was to persuade his ally, the Turkish sultan, to make Jewish Palestine a German protectorate. Although Herzl and the kaiser met twice in 1898 to consummate the arrangement, the kaiser ultimately withdrew his support. [1]

Although colonial status had not been arranged, Zionists continued to look to Germany for commercial, cultural, and political support. During the Great War, Britain enunciated the Balfour Declaration and similar pledges to various Arab potentates, intending to create local rebellions in the Turkish Mideast. Only the German government's intervention saved the Jewish population in Palestine from annihilation at the hands of the Turks, who suspected Zionists and Jews in general of favoring the Allied cause against Turkey. [2] (The same Turkish regime systematically slaughtered 1.5 million Armenians during the same years for many of the same political reasons. [3])

After Palestine was mandated to the British, Zionists switched allegiance to the United Kingdom. But extensive ties to Germany remained. In fact, during the postwar years, German leaders fashionably showed their support for Jewish nationalism through Germany's Pro Palestine Committee. A leading plank of this support pointed to Palestine's reliable place in German commercial and diplomatic recovery. This view prevailed right up to the Hitler ascendancy. [4]

Yet Palestine's importance to Germany was more vital after Hitler than before. In the decade since the Jewish Agency had been established, Jewish Palestine had flourished, even amid a worldwide Depression. While this tiny corner of the Mideast by 1933 accounted for only 0.1 percent of Germany's overall exports, it was a disproportionally important customer for certain vital Reich industries such as fertilizer, farm equipment, and irrigation pipes. [5] Far beyond its own consumption, however, Palestine was now the crucial gateway to expanding German exports throughout the emerging Mideast market: Egypt, Iraq, Lebanon, Syria, North Africa. This market was deemed essential by the Reich if certain strategic raw materials Hitler craved for war were to be acquired via bilateral trade agreements.

But the Yishuv -- that is, the Jewish population of Palestine -- was not following the direction of the Zionist Organization leadership. Despite official Zionist calls to abstain from anti-Nazi activities so as not to jeopardize Zionism's commercial and political ties with Germany, the rank and file said no. As early as February 1933, Jewish newspapers in Palestine began urging a boycott, and merchants in great numbers complied. On March 27, the Revisionist newspaper Doar HaYom expressed the popular sentiment in a defiant editorial: "Listen Hitler," the Jews of Palestine will not display "criminal apathy." World Jewry, the paper predicted, would rise up "as one man" to boycott Germany. Palestine would set the example: "No German machines, no German textiles, no German films, no German medicines, no German books and newspapers will be bought." [6]

Official Zionist rejection of the anti-Nazi movement, which became public just before the April First action in Germany, changed the nature of the boycott in Palestine. It quickly became a grass-roots trend spreading in spite of Zionist leadership. Hence, it was no different from the boycott in America and many other countries. People wanted to boycott and fight. Leaders refused. Thus, in the days after April First, many Palestinian newspaper editorials -- heavily influenced by Zionist institutions -- became stunningly silent about the German situation. No longer was boycott advocated. Tel Aviv's Chamber of Commerce tried to keep its merchants in line by resolving against any boycott, insisting that world trade was too valuable to the continuing Palestine boom. [7]

Since mainstream Zionist officials refused to confront Hitler and insisted on continuing mutual trade, it was only logical that the Revisionists would assume the vanguard of protest. Revisionists -- the followers of Vladimir Jabotinsky -- rejected the Zionist Organization, advocated paramilitary Jewish self-defense, and pursued a maximalist territorial claim in Palestine. Their ranks were composed largely of East European Jews, especially Polish Jews. What Revisionists did around the world was often a direct reflection of Jewish activism in Poland. Naturally, Revisionists in Palestine agitated for an emotional, often violent, boycott of anything German.

In fact, in late March 1933, as the Zionist leadership's stance toward Hitler crowned a constellation of other Revisionist political grievances, Jabotinsky advocated an open break with the Zionist Organization. Since 1925, his Revisionist Union had enjoyed special dissenter status within the Zionist Organization. But now Jabotinsky was determined to lead his Revisionist Union toward an actual takeover at the coming Eighteenth Zionist Congress in Prague, scheduled for August 1933. However, when the Revisionist hierarchy gathered in Kattowice, Poland, in the last week of March, they could not agree on tactics; nor could they bring themselves, in the face of the Hitler threat, to abandon the Zionist Organization. Jabotinsky knew that the rank and file was with him. So, in an action that stunned the movement, Jabotinsky dissolved the entire Revisionist leadership structure, declaring he would lead by personal fiat. [8] In his fight to evict the existing Zionist leadership, the anti-Nazi boycott would be the single most visible arena of confrontation.

Doar HaYom, the Revisionist newspaper in Palestine, and Betar, the paramilitary Revisionist youth corps, were relentless. Tactics included public humiliation of businessmen trafficking in German goods, mass recruitment of boycott pledges from merchants, picket lines, disruptive demonstrations, and incessant editorials condemning those who traded with Hitler. Many thousands of dollars' worth of German orders were canceled in Tel Aviv and Jerusalem in the first days of April alone. [9]

Berlin clearly understood that much of Palestinian Jewry was in the forefront of the anti-Nazi boycott. By mid-April, Consul Heinrich Wolff was dismally reporting that the boycott was seriously damaging all German economic interests in the area. Many German businessmen in Palestine desperately sought to issue oaths repudiating Hitler's crusade; such oaths were useless. By May 1933, Consul Wolff informed Berlin that the boycott movement had made the crucial transition from a merchant-based protest to a consumer protest. The results: Agfa film sales, very poor. Of 626 physicians in Palestine, 452 were Jewish and no longer prescribing German medicines; German pharmaceutical houses were in ruin. No more German films were being screened; Ufa film distributors were devastated. Buying loyalties were abruptly transferred to Belgium, Holland, France, and Sweden, even when those products were more costly. [10]

The Zionist rank and file in Palestine were waging economic war against Hitler -- with or without their leaders' permission.

***

An anti-Hitler Yishuv violently hostile to German merchandise was the accurate Nazi perception in Berlin when Chaim Arlosoroff arrived in early May -- and when Mr. Sam Cohen arrived shortly thereafter. Acting separately, both men discovered that the precious Zionist currency exemption had been abrogated by the Germans. When the first German Jews approached Reich authorities seeking their special allotment of foreign currency -- about RM 15,000 worth of British sterling -- they were sent on bureaucratic runarounds, or told they could obtain only RM 10,000, a third shy of the equivalent needed to enter Palestine. Many who took what they could were nonetheless turned back at the border by Reich guards. [11]

Foreign exchange was essentially exhausted, and the Reich was about to suspend most of its external obligations. Currency Control director Hans Hartenstein had only granted the exemption on the promise of extra foreign currency flowing into Germany as a result of boosted German exports. Since the Jews had failed to keep their side of the bargain, the exemption was stricken.

Arlosoroff must have certainly been discouraged. After spending weeks to secure the cloak of authority for his visit to Germany, the deal was dead. Just as he feared, too much time had been wasted.

Actually, the deal was never really very alive. Georg Landauer, director of the ZVfD, knew as early as mid-April that the growth of the Jewish-led anti-Hitler movement had prompted the Reich to renege on the exemption. In an undated letter, sent sometime between April 14 and April 17, Landauer cautiously complained to Professor Brodetsky of the Zionist Organization in London that German Jews were receiving only two-thirds of the £1,000 needed to enter Palestine. If emigrants could not obtain "the minimum in accordance with Palestine immigration law," the currency exemption would not be workable, wrote Landauer. He asked Brodetsky to confirm again via the British whether the exemption was still formally in place. [12]

The British now found themselves being dragged in as the medium of negotiation -- a role they did not want. And Brodetsky's overly thankful letter of April 13, 1933, to A.C.C. Parkinson, falsely identified the British as having won the exemption. Two days after receiving Brodetsky's letter, which also asked to publicize the exemption as a British deal, Parkinson telephoned the Foreign Office and explained the situation. A Foreign Office functionary commented, "Professor Brodetsky needs careful watching, as he is only too anxious to maneuver His Majesty's Government into acting or appearing to act as the protectors of the Jews in general in foreign countries and not merely of those Jews who possess British or Palestinian nationality." Parkinson drafted a response explicitly denying that the British were involved in the currency concession. He added that since Nazis were paranoid about foreign interference, "from the point of view of the Jews in Germany, it would seem wiser not to suggest that a concession had been made as the result of representations from abroad." [13]

But just after Brodetsky received Parkinson's denial, Landauer's new request came in. So Parkinson was asked to verify again whether the currency exemption was formally in place. In view of the crisis, Parkinson reluctantly agreed to once more ask the British embassy in Berlin to make inquiries. [14] But at this stage, inquiries were useless. The one common ground between Germans and Jews -- emigration to Palestine -- had become off-limits because the boycott of German goods had dried up the essential lubricant of any deal: money.

***

Only money could reopen the dialogue between Zionists and Nazis. Here Arlosoroff, the planner, could only fail. But Mr. Sam Cohen, the doer, could possibly succeed. While Arlosoroff slowly struggled to conceive a legally valid plan, Sam Cohen quickly presented the Reich with a marks and pfennigs proposal Germany would find irresistible.

Cohen started by retaining attorney Siegfried Moses. Moses was experienced in government as the postwar food controller of Danzig. He was active in Jewish communal affairs as director of the Jewish Workers Aid Society in Berlin until 1923. And he was attuned to business as the former manager of the prominent Schocken department store in Zwickau. Moses had one other important credential. He was president of the German Zionist Federation. [15]

So while Chaim Arlosoroff was in Berlin on behalf of the Jewish Agency, Sam Cohen would be able to pose as the official emissary of Zionism. And who in the Third Reich would doubt him when Siegfried Moses, president of the ZVfD, stood at Cohen's side? This kind of window dressing was exactly why Cohen hired Moses. [16]

The ZVfD leadership -- Landauer and Moses -- "allowed" Cohen to usurp the negotiations, believing that the official international Zionist bodies were politically inert. German Zionism needed a pragmatic, resourceful person who could quickly, without consulting anyone, consummate a deal with the Reich; someone who could speak the language of the Reich -- a language now dominated by the nouns of commerce. The Reich, unaware of the charade, would believe they were dealing with the official Zionist movement. But they would in fact be negotiating bilateral trade and emigration with a single man.

In early May 1933, that man, Sam Cohen, returned to the two senior bureaucrats who had originally granted him the currency exemption in late March: Foreign Currency Control director Hans Hartenstein, and Hans Schmidt-Roelke of the Foreign Ministry's Eastern desk. In his new meetings, Cohen told them about Hanotaiah Ltd., which bought land from Arabs and sold it to Jewish settlement groups for orchard development. Cohen explained his company's impressive activities, which included vast imports of pipes, fertilizers, and other agricultural items -- all traditionally purchased from Czechoslovakia, with eager sources in Yugoslavia and Italy bidding for the business. [17]

Then there were the key issues of liquidation and emigration. Any emigrant, Aryan or Jewish, was subject to several currency regulations. Once a German emigrant liquidated his assets -- stocks, bonds, property -- those reichmarks were frozen as sperrmarks in a blocked bank account. The emigre would then automatically forfeit 25 percent of the account to the Reich Flight Tax, the standard government claim on the assets of any German emigrant. This left 75 percent of the emigrant's assets intact. Of this 75 percent sum, the Emigrant Advisory Office would recommend how much could be removed and/or converted into foreign currency to satisfy a receiver nation's entry requirements. This allowance was generally 200 to 500 reichmarks -- under $200. The remainder of his holdings were left behind, still frozen in a German bank as sperrmarks. [18]

But there were ways to transfer the value of these sperrmarks out of Germany. It was a bit convoluted, but very much in practice by emigrants and foreign businesses. Essentially, the owner of the blocked marks would swap his sperrmarks for someone else's foreign currency in another country. The swap was always at a loss to the owner of the sperrmarks. Potential swappers or buyers were usually foreign businesses in Germany wanting cheap reichmarks. International manufacturing companies, oil firms, and banks were typical foreign buyers. But whoever bought sperrmarks could pay for them only outside Germany, usually with foreign currency reposing in a bank in Amsterdam, London, or Paris. German banks regularly sold sperrmarks by this method. No merchandise transactions were necessary because the prospect of a cheap reichmark was inducement enough. [19]

In practice, then, if a German citizen decided to emigrate, he would sell off all his assets, realizing, say, RM 100,000, equal to $33,000. That entire RM 100,000 would be deposited in a blocked account, and automatically suffer a 25 percent Flight Tax. Of the RM 75,000 that remained, the emigrant would be allowed to take with him only a few hundred reichmarks, which would be converted to francs, dollars, or whatever currency was needed to satisfy immigrant entry requirements. The emigrant would then own just under RM 75,000 in a blocked German account he could no longer spend. Before departing Germany, he would go to a bank and offer to sell his sperrmarks to the highest bidder. A foreign buyer would be found, offering perhaps RM 60,000 for the 75,000 sperrmarks, paying with the equivalent in foreign currency from a foreign bank account. If agreed, the two would simply swap bank accounts. Thus, the foreign buyer would purchase RM 75,000 marks for the foreign equivalent of RM 60,000. And the emigrant would have successfully transferred his money out of Germany, albeit at a loss of about 20 percent after discounts to the buyer and bank commissions. After delays of perhaps months, the transaction would be complete.

Aware of sperrmark transfer techniques, Sam Cohen started dealing. First, find a way to generate enough foreign currency for the German Jewish emigrant to enter Palestine; this amount was £1,000. Then, transfer additional amounts of the emigrant's money to help develop Jewish Palestine, which would be the only allowable destination for the transferred cash.

Under Sam Cohen's plan, the money would never really leave Germany. Instead, Hanotaiah Ltd. would shift its purchases of farm equipment from Czech to German exporters. These German exporters would be paid with reichmarks from the blocked emigrant accounts. When the equipment was sold for pounds sterling in Palestine or elsewhere in the Mideast, Hanotaiah would find some way to compensate the emigrant for the sperrmarks used to pay for the equipment. This compensation would not necessarily be cash. It might be value -- giving the emigrant some orchard land, some agricultural equipment, or a farmhouse. Naturally, Hanotaiah Ltd. alone would determine the "value" of the land or equipment and how much of it equaled the £1,000 needed to enter Palestine. [20]

In summary, Sam Cohen's complicated transfer procedure called for the German Jews' assets to be frozen in special blocked accounts of which the emigrant could convert RM 15,000 into £1,000 to gain entry to Palestine. But instead of actually receiving the RM 15,000 or £1,000, the emigrant would receive land or equipment that Hanotaiah Ltd. said was "worth" RM 15,000 or £1,000. This would technically satisfy British immigration requirements. The prospect of Hanotaiah inflating the true value of land, equipment, or farm buildings to artificially equal the RM 15,000 was obvious. Herzl had in fact predicted that Jewish wealth could be transferred by assigning an inflated value to land that had been acquired without cost or quite cheaply. Compared to Germany's standard of living, Jewish Palestine's boom was still a primitive economy where labor could be found for a few pounds daily, where simple domiciles could be erected for well under £100. [21] Cohen's scheme promised massive windfalls for Hanotaiah and good business for Germany, as the emigrants' assets were divided between Zionism and the Third Reich -- in the Reich's favor.

Cohen's idea seemed credible to the Germans. By linking the purchase of German goods to the settling of German Jews in Palestinian orchards and the circuitous capitalization of the Jewish national home, the anti-Nazi boycott could now be broken. The Zionist movement would be obliged not only to refrain from and oppose any boycott, they would be obliged to aggressively sponsor German exports. Moreover, the systematic egress of German Jews would create vast pools of blocked marks that Germany could use to pay debts. Sam Cohen's deal was more than business; it was brilliance. Every German pipe sold, every German chemical purchased, every pound of foreign currency earned contributed toward another dunam and another citizen for Eretz Yisrael. At the same time, every economic or diplomatic knife slash at Hitler merely lacerated the hopes for a Zionist solution. The deal carried abundant political and economic incentive for the Reich.

And the deal was good for Zionism. Once the emigrant arrived in Palestine, possibly penniless, he was essentially obliged to work the land to stay alive. Hence, middle-class German Jews would be steered to Jewish agriculture in the Promised Land.

This cashless transfer did resemble a twentieth-century update of indentured servitude, but the Zionists, needing money to purchase land and men to work it, were committed to social engineering and occupational retraining. Philosophically, they were devoted to converting the Jews from merchants and bankers in Europe into farmers and laborers in Eretz Yisrael.

This goal was also acceptable under Nazi theory, which sought German Jewry's expulsion to their own land in Palestine and their conversion to occupations detached from international commerce. In effect, the Zionist ideal and Sam Cohen's offer were exactly what the Nazis had in mind.

***

Hitler and von Neurath were waiting at the Wilhelmstrasse government complex the morning of May 11, 1933. In walked Britain's Ambassador Sir Horace Rumbold. Rumbold tried to defuse the urgent atmosphere by explaining his request for an audience as a formality with each new chancellor. Hitler brushed aside this explanation, declaring that statesmen outside Germany could not understand what was happening inside the Third Reich. The Poland situation was a bad problem, said Hitler, a problem created by the Versailles Peace Conference. Hitler wanted the Polish Corridor moved east so Germany could absorb the territory now occupied by the Corridor. Otherwise, tension between Poland and Germany would remain. [22]

Hitler abruptly turned to Germany's massive unemployment. He vowed he would not allow the Aryan work force to become deteriorated and demoralized. Labor conscription -- drafting an essentially unpaid work force to engage in great public works -- was the only solution. Suddenly, switching topics again, Hitler identified Marxism as the party's great target. Marxism would be destroyed. Der Fuhrer did not directly refer to Marxism as a Jewish movement, but there was no doubt in Rumbold's mind whom he meant. [23]

Rumbold kept trying to get a word in during Hitler's ramblings. Finally, the ambassador was able to speak, and he brought up the treatment of Jews under National Socialism. No sooner had Rumbold uttered the words than Hitler became excited, working up to a trancelike state. Der Fuhrer stood up as though addressing thousands in a stadium. "I will never agree," he shouted with sweeping oratorial gestures, "to the existence of two kinds of law for German nationals. There is an immense amount of unemployment in Germany, and I have ... to turn away youths of pure German stock from the high schools. There are not enough posts for purebred Germans, and the Jews must suffer with the rest!" [24]

Hitler warned the world in the presence of his imaginary throng, "If the Jews engineer a boycott of German goods from abroad, I will take care that this hits the Jews in Germany!" [25] It was as though the moment were filled with cries of mass adulation, as though the swelling fury of the crowd itself were fueling Hitler's verbal violence, as though he could see the scores of thousands with their white palms exposed in a rhythmic Nazi salute, producing ear-splitting roars of "Seig Heil, Seig Heil." [26]

But the room was empty. Except for Hitler, von Neurath, and Rumbold. When suddenly the imaginary crowd seemed to dematerialize before Hitler's eyes, and not before, a frightened Rumbold tried to calm the chancellor by claiming that the anti-German boycott placards had probably already been removed from the store windows of London's East End. Rumbold wanted to mention that foreign boycott or not, German Jews were German nationals as much as anyone else, and entitled to the full protection of law. But he was afraid to rekindle Hitler's maniacal flame. [27]

In a somewhat milder manner, Hitler then unexpectedly brought up Palestine. He zeroed in on Jewish immigration policy, telling Rumbold that he understood that Jews wishing to settle there could not gain entry unless in possession of £1,000. Hitler thought this was a good idea. If Germany had required such a financial test for the East European Jews who had settled in Germany since the Great War, there would now be no Jewish question facing the Reich. But without such a requirement, Hitler declared, lower-class, impoverished Eastern Jews had brought in every form of disease and caused rampant demoralization. [28]

Hitler, now totally calmed down, told Rumbold that Germany knew how valuable a good relationship with England was. Rumbold answered cautiously -- and Hitler did not seem provoked -- that no country, especially a great country, could live in today's world "in isolation surrounded by a Chinese wall." Hitler agreed. Rumbold cautiously continued, explaining that the economic, trade, and even internal policy of one country necessarily caused reactions in other nations. Still no flare-up. Rumbold, still cautious, acknowledged that the treatment of German Jews might be described as "internal affairs" by Germany. But the reactions to that policy -- no matter how Germany described them -- were clear. In England, Germany was forfeiting the sympathy gained during recent years. [29]

As Rumbold took his leave, Adolf Hitler seemed more reasonable. Rumbold couldn't help thinking that although he was speaking to a fanatic beyond the reach of reason, the meeting had ended on pleasant terms. [30] Rumbold did not know it, but the spontaneous comments of this interview would echo for seven years as Hitler's policy toward Palestine.

***

On May 11, other Reich leaders were equally worried about the international economic backlash. Economics Minister Alfred Hugenberg, one of the non-Nazi cabinet members still in power, issued a "Decree for the Protection of the Retail Trade," exempting Jewish retailers and certain others from recent sweeping anti-Semitic regulations. Hence, any international boycott of German merchandise would also affect Jewish businessmen. And, in desperation, many German export corporations were actually dismissing their Christian employees stationed abroad and replacing them with Jews. [31] The hope was that somehow world Jewry might then lessen its campaign.

But boycott organizations only continued to gain strength and support. The newly founded American League for the Defense of Jewish Rights and the Jewish War Veterans had finally begun large-scale organizing. And boycott groups in Poland, France, and England were making plans to create a common international front. [32]

By mid-April, the effects were dramatic. England had already supplanted Germany as the single largest exporter to Denmark and Norway, two of Germany's leading customers. Reich sales to Finland were drastically down. Many U.S. stores found merchandise labeled "Made in Germany" virtually unsalable. American retailers urgently sought alternative suppliers in Japan, Czechoslovakia, and England, especially for glassware, toys, china, and sausage. Competitor countries happily rushed in to reap the boycott's benefits. [33]

Total Reich exports were down 10 percent in April. That initial decline was limited because of many unexpired contracts. Reich economic sources were convinced the May figures would be calamitous. With roughly half the German workforce employed by just 2 percent of the companies in Germany, the successful boycotting of even a limited number of cartel industries would be disastrous. Food prices in Berlin were already reflecting the concern, bread and other items escalating 4 percent weekly. [34]

Meanwhile, Germany's border crisis grew hour by hour. Poland's proinvasion military hawks found widespread support among a population inflamed by Jewish boycott committees. Czechoslovakia's known pro-Zionist stance and her readiness to join a preemptive strike only intensified German nervousness about her eastern border. [35] By May 11, the invasion threat had doubled, because France was consumed by what Reich officials called "war fever," fueled by boycott committees and the press. [36]

Events were culminating. The destruction of Hitler's tenuous regime -- from without or within -- loomed as the crisis of the hour in Berlin. German officials and corporate leaders had been dispatched to the cities of Europe and America to try to blunt the attack. Their efforts were unsuccessful. Government clarifications, token protective decrees and threats of unrestrained retaliation against German Jews were also unsuccessful.

Hitler had sworn never to compromise with the enemy. But with bankruptcy and invasion at the door, the discussions with Sam Cohen intensified. Hjalmar Schacht was in America at the time. So the contact point was the Foreign Currency Control Office headed by Hans Hartenstein.

The struggling Reich believed that developing Palestine as a springboard for crucial trade with the Middle East was a desirable thing, as was the organized emigration of Germany's Jews. But desirable as those things were, all of them might somehow be achieved without Sam Cohen and the Zionists -- or at least they could be achieved on Germany's own timetable. However, if the boycott continued much longer, there might be no future for National Socialism. The main question was whether the Zionists could really intervene, not only in the boycott, but also in the anti-Nazi protest movement that was flaming a war fever among Germany's neighbors.

Perhaps so. Even though the Nazis and the Zionists were enemies, the two now needed each other.

On May 12, Sam Cohen was already in the Polish industrial town of Lodz, where he was born and raised, and where he had commercial and political connections among mainstream Zionists, Revisionists, and other Jewish circles. [37] While Cohen was in Poland, the German Zionist Federation found itself in a complicated position. Landauer and his colleagues had originally conceived the transfer concept in mid-March. That was when they called upon the services of Cohen to negotiate the original currency exemption. The exemption procedures were to be worked out secretly as a fait accompli by Chaim Arlosoroff on behalf of an ad hoc Zionist combine led by German Zionists. But in April it had become painfully clear to Landauer and his ally in Jerusalem, David Werner Senator, that Arlosoroff, working officially, could not engineer the mammoth task entrusted to him -- the organized transfer of an entire society. So they turned once more to Sam Cohen to travel to Berlin and negotiate, as though he were the representative of the international Zionist movement. In fact he was representing no more than Landauer's ad hoc faction. The authentic envoy, Arlosoroff, was also in Berlin, believing he would arrange the transfer. He was unaware, however, that the German Zionists had decided to consummate the agreement via Cohen.

The convoluted intrigue played Cohen and Arlosoroff against each other, depending upon the changing perception of which man could deliver the fastest results. But by mid-May, Landauer was losing his tenuous control over the situation. Because Landauer felt Sam Cohen's deal would turn German emigrants into modern-day indentured servants, he tried to manipulate Cohen out of the negotiations and bring Arlosoroff back in. [38] However, without Cohen, Landauer was uncertain exactly how to reestablish communication with the Reich. One idea advanced to Arlosoroff suggested that he contact his old schoolmate Magda Friedlander, whose stepfather was Jewish. Magda and Arlosoroff had been friends during their youth. Magda could now be immensely valuable. She was after all the wife of Paul Joseph Goebbels. But Arlosoroff refused. He had heard that his onetime friend was now among the most rabid Nazi fraus in Germany. Once she had even thrown white mice from a balcony to disrupt a pacifist film. [39]

Landauer and Arlosoroff found themselves in a political doldrum. Unable even to approach the government, they confined their activities to studious deliberations on the fine points of any future plan. Would it conform to international law? Could other countries, even the League of Nations, guarantee or oversee the operation? These theoretical details were put into memos and discussed between them. But their ideas never reached the German government. [40]

Even as Landauer and Arlosoroff hypothesized, the boycott was undeniably reaching into Germany in ever more destructive ways. On May 12, for example, the prestigious Leipzig annual fur auction was held. Ninety percent of the world's fur industry was in Jewish hands, and French, Dutch, British, and American furriers boycotted the event totally. Reich sources admitted that the entire auction was a failure as $3 million worth of furs were withdrawn for lack of buyers. [41]

A decision had to be made, and only Hitler could make it. An accommodation -- a deal -- with the Jews would be necessary. Their weapons of economic retaliation and political agitation were devastating Germany. If those weapons could be neutralized long enough for Germany to recover economically, to rearm its military, then all glories would be within reach of the Aryan people.

A deal made perfect sense, for all the known reasons. Unemployment, foreign currency, raw materials, economic recovery, political rehabilitation, military rearmament. Those were the logical reasons. Yet Hitler had always defiantly resisted logical reasons, and he undoubtedly could have continued resisting them until. the Reich broke apart. Adolf Hitler was not a servant of logic. He was, after all, the man who in 1945 fought until the last minute in his concrete cloister and even then chose to destroy his own life and scorch Germany with it rather than capitulate. So what then compelled der Fuhrer to acquiesce to the logical dictates of the crisis? It could well have been his own madness.

In his conversation on May 11 with Sir Horace Rumbold, the British had the outlandish nerve to lecture him, Adolf Hitler, on the correct treatment of the Jews -- even though, in Hitler's mind, the British themselves, like the rest of the world, indeed recognized the Jews were parasites. Had the British not erected financial barriers to keep the foul, impoverished Eastern Jews out of Palestine? On May I I, Hitler pointed out to Ambassador Rumbold that had Germany erected such financial barriers, the Eastern Jews would never have migrated into the Reich. But Rumbold did not see the validity of Hitler's claim. In Hitler's mind, they were all hypocrites. [42] Very well, he would see how well England liked the very Jews they were pretending to be concerned about.

Adolf Hitler would arrange for those very "disease-carrying" and "demoralizing" Eastern Jews to flow out of Germany and into British Palestine. He would give them the financial wherewithal to overcome British financial barriers, or for that matter the financial barriers of the United States or any other country. Der Fuhrer revealed this attitude just a few days later to Bernard Ridder, publisher of a New York-based German-American newspaper, Staats-Zeitung. In the interview, Hitler confessed he would "gladly pay their [the Jews'] freight to the U.S. and make them a present of a bank account in addition if America would only harbor them." [43] For years, Hitler would continue to harp on this theme: The British didn't want the Jews, otherwise why would they establish a £1,000 Palestinian entry requirement that Jews obviously could not meet? And yet Britain and the other nations maintaining financial requisites for immigrants were constantly assailing him. They could conveniently do so behind their £1,000 protective shields. [44] Hitler would playa racial trick on the British. He would give them the Jews they sought so self-righteously to protect.

And so, as compelling as the logic, was the madness. Quite probably it was that very fleeting moment of madness that made it easier for Hitler to do the logical thing for the illogical reason.

On May 13, 1933, the German Zionists were still perfecting theories, still wondering how to approach the government. Ariosoroff was studying a short, six-point memorandum from Landauer, suggesting the Zionists "offer the German government a large influx of foreign currency to create a basis for negotiations about assisting in emigration." The emigration would be linked to massive land acquisition based on transferred German Jewish assets. But suddenly Siegfried Moses, ZVfD president, still listed as Sam Cohen's solicitor, was contacted by the Foreign Currency Control office. The message was brief: Sam Cohen's deal is accepted. [45]

What Sam Cohen deal? Dissatisfied with his cashless version of transfer, Landauer had cut Cohen out of the negotiations. How was it that the Economics Ministry was now signaling the acceptance of a deal with Sam Cohen?

Siegfried Moses, to avoid prejudicing whatever was happening, simply telegraphed the information to Cohen in Poland, in care of the firm Ben Mazur Brothers, 46 Poludniowa Street in Lodz: "MINISTRY INFORMED TODAY BASIC CONSENT REACHED." [46]

***

On May 19, the Reich economics minister directed a formal declaration to Sam Cohen of Hanotaiah Ltd., outlining the deal. Jewish emigrants would contact Hanotaiah and purchase real estate and agricultural equipment as Hanotaiah saw fit. Bearing the sales contract, the emigrant would then contact both the Emigrant Advisory Office and the Foreign Currency Control Office. The emigrant would then be allowed to exchange his blocked marks for Hanotaiah's land and equipment. No cash was involved unless the Emigrant Advisory Office specifically recommended it, and even then only "the absolute minimum necessary to establish a new existence" in Palestine. A case-by-case review would ensure the least possible release of foreign currency. In return, Hanotaiah would use the emigrant's sperrmarks for the "purchase of all kinds of [German] raw materials, pipes, iron constructions, agricultural machines, fertilizers, pumps, fertilizing machines, and chemicals." For the time being, up to 1 million reichmarks of purchases would be allowed. The Economics Ministry declaration cited "the previously held negotiations between Mr. Cohen and Ministry assistants" and Cohen's assurance "that the same goods until now were bought in Czechoslovakia, and now, because of the [new] regulation improving the position of the German Palestine emigrant, they are to be purchased in Germany." [47]

The German Zionists had constructed a maze of political intrigues. They had shifted their loyalties from Arlosoroff to Cohen to Arlosoroff. Unaware of the intrigues, Arlosoroff persisted in formulating a visionary fait accompli. But Cohen hadn't gone away. He had continued his ruse, negotiating on behalf of the Zionist movement -- even though he represented nothing more than an orchard company.

Meanwhile, the German government felt certain it had triggered the breakup of the boycott because the Zionist movement would now be in the German export business. German Jewish wealth and emigrants would be transferred in a flow wholly dependent upon the purchase of German merchandise and commodities. The Jews of the world would now have to choose between fighting Hitler and building Palestine, preserving the old or securing the new.

Sam Cohen's deal was, in fact, only the preliminary agreement. When discovered by the international Zionist hierarchy, it would be considered inadequate, delivering too little money and too narrow a variety of merchandise to Jewish Palestine. If the Jewish State was to be built, it needed more than Hanotaiah's transactions, more than the sale of a few dunams of orchards. It needed the building blocks of a new society -- everything from taxis to bridges. And it needed more than the mere transferred value of a million reichmarks; it needed a sizable portion -- in cash -- of the billions that constituted German Jewish wealth. The result of a broadened transfer would be more than the expansion of Hanotaiah's few settlements, it would be the expansion of all settlements, and the towns and villages, into an economically, geographically, and politically cohesive state -- Israel. A massive, historically irreversible agreement was sought -- a final solution to the persecution of Jews.

The plan was not a rescue or a relief project. If it was, the. Zionists would have labored for an agreement for Jews fleeing Germany without regard to where they sought refuge. Instead, Jews would be allowed to bring assets out of Germany to rebuild their lives, but only if they liquidated their European existence and rebuilt those lives in Palestine.

The correct word, then, for Mr. Sam Cohen's deal, and the arrangements to follow, was not rescue. It was not relief. It was in fact transfer -- the point between the philosophical spheres where Zionist and Nazi circles touched.