The Transfer Agreement (51 page)

Landauer also sent a letter that day, July
19,
to E. S. Hoofien, general manager of the Anglo-Palestine Bank, who was then in London. Landauer's letter asked Hoofien to establish a bank-supervised trust company in Palestine ready to commence on a moment's notice. He made it clear that speed was essential because there was always the threat of Sam Cohen.
⁹

To further neutralize Cohen, Landauer urged Hoofien to have the Anglo-Palestine Bank people in Jerusalem "keep in close contact with the German Consul." Just as Wolff had been the avenue to Cohen's recognition at Wilhelmstrasse, so would Landauer's project receive official endorsement—if only Wolff would transmit his approval.
¹⁰

Even before Hoofien received Landauer's July
19
memo, the London Zionists were busy preparing for a massively enlarged transfer plan. Werner Senator, who had attended the July 13 Wilhelmstrasse meeting, was preparing a major report to the Zionist Executive in London that outlined the new proposals formulated by Landauer. At the same time, Professor Brodestsky asked his contact A.C.C. Parkinson once more to request the assistance of the British Foreign Office. Senator would be returning to Germany to finalize details of the transfer. To drape Senator in the cloak of legitimacy, Professor Brodetsky wanted the British embassy to allow Senator to use their offices.
¹¹
Foreign Office officials objected that the whole request was "another of Professor Brodetsky's attempts to get us identified with Zionism abroad." But the Colonial Office ultimately struck a compromise whereby Senator would be allowed to call at the embassy but would not be allowed the use of embassy facilities such as telegraph or telephone.
¹²

Landauer had indeed gone to extraordinary lengths to reclaim the authority to conclude the agreement with Germany. He had convinced Hanotaiah to withdraw from its monopoly. Yakhin had retreated from joint participation with Hanotaiah. E. S. Hoofien and the Anglo-Palestine Bank would quickly establish a bank-supervised trust company in Palestine. Anglo-Palestine Bank people in Jerusalem would convince Consul Wolff to switch his endorsement from Cohen to Landauer. Landauer was staying in very close touch with Hartenstein, with copies of everything going to Schmidt-Roelke. And Senator, of the Jewish Agency, would be joining Landauer soon as the official representative of the Jewish government in Palestine, complete with British embassy trappings.

At stake was literally the future of the Jewish national home.
If
the huge transfer expansion the Reich planned was put into force through Sam Cohen, Jewish emigrants would quickly discover an essentially cashless existence in
Palestine. By the time they discovered the unattractiveness of Cohen's transfer, their money would nonetheless become blocked marks in Hanotaiah's special bank account. Only Cohen would have use of the money. When bad experiences became widely known, German Jewry would seek refuge anywhere but the Jewish national home.

But if Landauer's project were put into force through the Anglo-Palestine Bank, German Jewish émigrés would be free to pursue whatever existence they chose in Palestine. They would have the
£1,000
entry money in hand, and shortly after they arrived, as German goods were sold, they would receive even more of their money, perhaps a second
£1,000.
In a nation like Palestine, where wages amounted to no more than a few pounds daily, a
£2,000
head start would guarantee a comfortable life. The transferred Jews would in turn become consumers, purchasing familiar German goods coming in as part of the transfer. This in turn would support the transfer of even more German Jews.

Shortly after Landauer's transfer memorandum to the Economics Ministry was delivered, Hartenstein invited Landauer to a conference to discuss details of the transfer.
It
was finally going as Landauer wanted. He was in control. To make sure all aspects of the negotiations remained fully in hand, he asked his friend Herman Ellern, of the Ellern Bank of Karlsruhe, to visit Schmidt-Roelke beforehand and support Landauer's initiative.
¹³

At Wilhelmstrasse on July
20,
Hartenstein was most cordial as the meeting began. But as the conversation progressed, Landauer probably wondered if they weren't talking about two wholly different concepts. Landauer's memorandum outlined the
future
expansion of the transfer. Yet Hartenstein explained the transfer had already been expanded two days before. With whom?

With Mr. Sam Cohen, explained Hartenstein. Cohen had assured the ministry that the ZVfD would organize a special Hanotaiah office in its Berlin headquarters to serve as the German clearinghouse. Hanotaiah's main office in Tel Aviv would function as the Palestinian merchandise clear-inghouse. Hanotaiah would process all Palestinian transactions through its bank accounts in Palestine, which would be opened in both the Anglo-Palestine Bank and the German-controlled Temple Bank.
¹⁴
Was it not exactly as Landauer had insisted: two clearinghouses, one in Germany, one in Palestine—with the money channeled through the Anglo-Palestine Bank?

Hartenstein then showed Landauer a letter on the stationery of Economics Minister Kurt Schmitt, signed by Schmitt's deputy, Dr. Reichart. Dated July
18, 1933,
the letter to Hanotaiah confirmed, "On the basis of the renewed negotiations between Mr. Sam Cohen and my experts, I am willing to support the emigration of German Jews to Palestine by allowing the following facilities for an extended transfer of their assets." The second paragraph authorized voluntary deposits into Hanotaiah's blocked accounts for both actual emigrants and for any other Jew considering emigration or "willing to
participate in the development of Palestine."
¹⁵
That covered every Jew living in Germany.

Reflecting the uproar about unemployment and the dramatic decrease in exports of finished goods due to the anti-Nazi boycott, the Schmitt-Reichart authorization specified that "finished goods" would be exported to Palestine to achieve the transfer. The order acknowledged that deposits made by German Jews would be handled through "an office at the German Zionist Federation, Berlin, Meineckestrasse 10." Yet Landauer, director of the ZVfD, hadn't even been consulted.
¹⁶

The letter also stipulated that German Jews, upon arriving in Palestine, would receive cash from the merchandise sales.
¹⁷
Landauer had emphasized how important cash would be in enabling Jews to rebuild their lives and making mass emigration viable. But Landauer was certain that Cohen would keep most of the sale cash, repaying emigrants with whatever parcels of sandy acreage Cohen felt sufficient.

The July 18 order listed Hanotaiah's initial expanded permission as RM 3 million—$15 million—and superseded Cohen's original RM
1
million deal. Unlimited additional permissions were allowed, but the letter demanded an unspecified minority percentage of foreign currency for transfers beyond the first RM 3 million. Dr. Reichart was explicit: "I wish to point out what my experts have repeatedly and decidely emphasized to Mr. Cohen, that after the 3 million reichmarks have been used up ... foreign exchange must be received in payment" for at least part of the purchase price.
¹⁸

The final words of the permission letter indicated that emigration to Palestine was absolutely linked to German exports to Palestine.
If
Germany was to continue providing precious foreign exchange to emigrants to meet the British entry requirement, she could do so only as part of an overall export program. The first RM 3 million then was an inducement. Thereafter, the Third Reich wanted real money.
¹⁹

Landauer was now forced to crack the illusion of partnership and told Hartenstein, "I cannot acknowledge that Mr. Sam Cohen or Hanotaiah are authorized by responsible national institutions." As for Cohen's clearinghouse office at the ZVfD, Landauer declared that it simply did not exist. He added, "I doubt very much if Mr. Sam Cohen or Hanotaiah have the possibility to satisfy [reimburse] the emigrants if they do not sell the goods in an appropriate manner." And such sales would essentially be impossible, Landauer said, since in truth Hanotaiah was an orange grove company, not a retailer or a distributor. "Therefore," Landauer declared, "I cannot assume the responsibility of advising emigrants to undertake their financial transactions with Hanotaiah."
²⁰

Hartenstein, undoubtedly shocked, answered, "Mr. Sam Cohen has been accredited by the German Consul General in Jerusalem.... He is a leading person and has all the authorizations of national institutions." Therefore, Hartenstein said, he would allow Hanotaiah's expanded permission to stand. Hartenstein tried, however, to reassure Landauer with a promise to watch Hanotaiah's work and make sure Cohen's company lived up to all expectations.
²¹

Landauer would not yield. He told Hartenstein that he could not trust any program implemented by Hanotaiah. As the head of the ZVfD, which controlled the Palastina Amt, he was therefore going to counsel all emigrants that anyone transferring via Hanotaiah was doing so at great financial risk. At the same time, he was going to instruct the Zionist authorities immediately to establish a competitive trust company supervised by the Anglo-Palestine Bank as outlined in the transfer memo of July
19.
²²
This was a tense moment. Landauer was speaking to a high German government official. He was declaring that he would create an economic organization to frustrate an important export program. Landauer's adamancy came at a time when high-ranking Nazi officials were being sent to concentration camps for proposing alternative economic plans. It was a time when Economics Minister Kurt Schmitt had received Hitler's authority to crush anyone who did not fully cooperate with economic directives.

But the exodus of Jews to Palestine, the employment that would result from the exports, the foreign currency that would be earned, and most significantly the anti-boycott effect of finalizing the transfer were all too vital to let lapse. So Hartenstein backed down and agreed to stay Hanotaiah's expanded permission briefly, pending a verification from the Foreign Ministry, through Consul Wolff, of Cohen's authority. If Hanotaiah was discredited, Hartenstein would vest the transfer authority with the ZVfD and allow Hanotaiah to participate as a mere importer. However, if Cohen was vindicated and the much-touted Anglo-Palestine Bank trust company did not quickly come into existence, then Hanotaiah would be granted full transfer authority—and Landauer could tell the emigrants anything he chose.
²³
With that compromise, Landauer left the Economics Ministry and went right to work.

A coordinated plan of action was called for. It began that same day, July 20, with Hermann Ellern, who had access to Schmidt-Roelke at the Foreign Ministry. While traveling back to Karlsruhe, Ellern had made contact with Landauer, probably during a train stop at Frankfurt. After learning of the unexpected Sam Cohen development, Ellern telegraphed Schmidt-Roelke:
WILL SEND YOU COMMENTS RE TRANSFER PLAN TODAY STOP WOULD APPRECIATE YOUR CONSIDERATION OF SAME IN IMPLEMENTATION DIRECTIVES"
²⁴

The next morning, Landauer sent an urgent correspondence to Anglo-Palestine Bank director Hoofien in London. He explained the sudden crisis, how apparently between the July
13
Wilhelmstrasse conference and Land-auer's follow-up July 20 meeting with Hartenstein, Cohen had made additional unauthorized representations to the Economics Ministry that once again placed the entire transfer in his hands. In writing his letter, Landauer tried to control his anger. "It is clear that the Reich Economics Ministry and the Foreign Ministry should not have done this thing without asking us. Mr. Sam Cohen's behavior is for me entirely unclear. He has operated with the most impossible remarks. For instance, he said that he will get an office with us, and he is our authorized agent."
²⁵

Cohen's coup could be reversed, but "only if all parties in Palestine establish an office within the week to take over the merchandise and if the APB immediately takes the initiative." Landauer urged Hoofien to "treat this matter urgently" and his letter ended with the simplest distillation of the crisis: What happened in the next few days would "decide in the long run the fate of German-Jewish emigrants' money."
²⁶

Once Hermann Ellern arrived in Karlsruhe, he sent Schmidt-Roelke his personal transfer suggestions. These closely followed Landauer's ideas.
This
was to show Schmidt-Roelke the widespread acceptance of Landauer's viewpoint. Ellern added his comments: "This plan is intended to facilitate for Jewish emigrants the transfer of a majority of their assets to Palestine and reopen a large market for German products. This proposal [however] may have been overtaken by events, namely the agreement . . . with Hanotaiah."
²⁷

Ellern's demarche continued, "I am in close contact with the ZVfD in this matter and feel a personal obligation to inform you of some misgivings, since I want to take a position as early as possible with respect to matters which might be harmful to all parties concerned.... Last night
I
was told at the offices of the ZVfD that, contrary to statements made by Mr. Sam Cohen, there is no question of opening a Hanotaiah office.... Also,
1
have spoken with a representative of Yakhin who stated that Mr. Cohen is not speaking for that company."
²⁸