The Transfer Agreement (21 page)

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
I9I5,
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
I920S,
Sam Cohen was courted for economic aid by a variety of Zionist and Palestinian groups. In late
I923,
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 ofthe 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. Arlosoroffs 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
6
I
3 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 Ambasssador 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
£ I ,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