The Transfer Agreement (71 page)

Broaching the question of the worldwide outrage, Hoofien wrote,
"If
the Jewish masses are upset-which is justified-and oppose seeing clearly the importance of the matter for the Yishuv, then the duty of the people's leaders is to instruct and enlighten the people, . . . not give in cowardly ... and sacrifice the interests of Palestine's construction to public opinion.
⁹

"The second argument ... is that this agreement breaks the boycott .... Notwithstanding the fact that the boycott has
not
been formally declared as part of the Zionist Organization's political program, and without analyzing here the question of whether the boycott is a right or wrong weapon, ... it must be stressed explicitly once more that the whole argument is wrong and based on erratic reasoning. Boycott makes sense if [transferred assets] are realized by something other than purchased goods. But when the merchandise has no other equivalent, and in fact represents the compensation for our claims, then boycott is pure insanity."
¹⁰

Hoofien continued writing defenses, rationales, and elucidations. His point of view focused totally on the necessity of saving Jewish assets.
If
the anti-Nazi boycott were successful, he believed, German Jews would be pauperized anyway. Why not convert part of that tragedy into reconstruction in Palestine and thus help avoid future emergencies through the establishment of a Jewish State? To resist this imperative, asserted Hoofien, would create war between Zionists and the Zionist Organization.
¹¹

"If
you want to enter into this absurd conflict with the Yishuv, whereas the whole world—after a quiet future analysis ...
—
valuates
how much the Yishuv has been right and how much you have been wrong, so do what you please. Only do not pretend that you have not been warned explicitly and at the proper time. I consider your decision—" There was no time to complete the notes.
¹²
The Political Committee session was at hand.

Hoofien took his notes into the meeting room. Members of the committee included Meir Grossman, Stephen Wise, Menahem Ussischkin, David Ben-Gurion, and many others. Testifying were E. S. Hoofien, Berl Locker, Dr. Arthur Ruppin, and Mr. Sam Cohen.
¹³

Locker began by stating that the Zionist Executive "did not conduct negotiations which led to the conclusion of the Transfer Agreement with Germany. Mr. Sam Cohen, who was in London early in June, showed the Executive a letter ... from the German Ministry of Economics, which resulted from negotiations conducted by Mr. Cohen on behalf of Hanotaiah. The German government intimated in that letter its readiness to allow Jews emigrating to Palestine to take with them RM
15,000
in cash and RM
10,000
in goods produced in Germany. The agreement provided for a total of RM
I
million, and the German Ministry was prepared to extend the agreement at a later stage. It was then contemplated to form a Liquidation Bank .... During those conversations with Mr. Cohen, it was thought that it would be better if his agreement were not confined to Hanotaiah, but embraced other organizations as well. The Executive was in no way in charge of negotiations."
¹⁴

The next witness was
E.
S. Hoofien. In front of him were his notes detailing full complicity by the Zionist Executive. But Locker has just asserted that the Executive was totally uninvolved, that the whole matter was Sam Cohen's doing.
If
Hoofien read from those nine pages of stationery, he would utterly discredit Locker, Mapai, and the entire Executive, and probably kill the Transfer Agreement.

So instead of reading from the front of the stationery, Hoofien read from the reverse sides which bore little more than his handwritten chronology of events. "On May
19,"
Hoofien began, "the German Ministry of Economics addressed a communication to Mr. Sam Cohen, putting forward the proposals to which Mr. Locker has already referred." Opposition then arose to Hanotaiah acquiring a monopoly. In July, he [Hoofien] conferred with Dr. Landauer in Berlin and suggested that the Anglo-Palestine Bank was really "not anxious" to be involved in Cohen's agreement. A Conference of Institutions was then formed in Palestine, recalled Hoofien, reading his chronology almost line by line.
They
urged that "the Transfer Agreement be taken in hand."
¹⁵

Hoofien recalled the August 7 Wilhelmstrasse meeting and his subsequent efforts to complete all the procedural details. He admitted that the Anglo-Palestine Bank did help create the Berlin trust company that would serve as the Liquidation Bank. But Anglo-Palestine's only function, he argued, would be holding German merchandise sale proceeds until German Jews arrived in Eretz Yisrael to be reimbursed. The motive was to collect in an organized fashion the money belonging to emigrating German Jews. And, he said, the negotiators were guided throughout by the Conference of Institutions.
¹⁶
Hoofien had avoided implicating the Zionist Executive by identifying the Conference of Institutions as the source of his authority. Locker's story stood unchallenged.

Then Dr. Ruppin testified. He argued that without some agreement with the Reich, organized emigration would be impossible. Nothing in the agreement violated the boycott because no new currency would come to Germany as a result of the transactions. Dr. Ruppin did not explain that after the first 3 million reichmarks were transferred, all other merchandise transfers would involve at least partial payments in foreign currency. Nor did he discuss the numerous associated commercial enterprises that were being organized partly on transfer assets and partly on foreign currency.
¹⁷

Question: Was it still possible to abolish the Transfer Agreement? Ruppin said it was indeed possible, but such an act would be utterly irreconcilable with the interests of Zionism, Palestine, and German Jewry.
¹⁸

Final testimony was rendered by Mr. Sam Cohen, whose comments were brief. He basically reiterated the assertions of Hoofien and Ruppin, adding that the original currency exemption allowed emigrants bound for Palestine to take the necessary
£1000,
but the details were "not settled. That concession could easily be withdrawn." By negotiating the Transfer Agreement, the currency exemption was totally stabilized. Proof that it was not advantageous to Germany, said Cohen, was the fact that Reich currency authorities opposed much of the plan because it failed to provide Germany with foreign currency.
¹⁹

Numerous questions were asked by the Political Committee
members. Hoofien provided most of the answers. Would the Transfer Agreement allow Germany to dump goods on the Palestinian market, thus destroying locally manufactured wares?
Not really.
Would the Transfer Agreement increase employment opportunities for German workers?
Obviously yes, but not all that much.
Did German officials act in a hostile, denigrating manner?
No, generally, and besides, the agreement was good from the Jewish point of view.
How many families could really emigrate with part of their assets in the near future?
Probably about
2,000
families. About
650
individuals had already emigrated .
..
[and] brought with them
£650,000
[more than
$3
million].
²⁰

At one point Menahem Ussischkin, chief of the Jewish National Fund, started criticizing the Transfer Agreement and the Anglo-Palestine Bank's role in it. As a founding father of the Anglo-Palestine Bank, Ussischkin's comments were taken seriously. Putting aside the moral questions, Ussischkin asked, how could a bank involve itself in anything as controversial as this? A gentleman sitting next to Hoffien scrawled a note to Hoofien: "Uss. definitely wants you to get out of it--don't be mistaken about it. He only gives you a proper motive for doing it." Hoofien nonetheless cited the bank's political obligations. At this, the gentleman next to Hoofien slipped him another note: "You have put the case of the A.P.B. very well
but .
.. a bank runs away from anything political. ... They don't know what the depositors will do."
²¹

Questions continued. There were so many complicated facets to the Transfer Agreement: moral, financial, practical. What would the British say, their trade interests in Palestine having been severely diluted? How should Zionist leaders answer angry Jewish critics? Just how badly would the Transfer Agreement hurt the anti-Nazi boycott? Was it Zionism's destiny to work with anti-Semites as Herzl had commanded? Or was Zionism's larger obligation to fight the persecution of Jews? The rationales and criticisms went back and forth. Was it better to fight Hitler, or concede the battle and convert Nazi persecution into a salvation for the Jewish people? All the known arguments were posed and counterposed, considered and reconsidered.
²²

When the Political Committee meeting was over, most of its members were thoroughly confused.
On
the surface, it was easy to shout denunciations as though everything was either black or white, but the issues were so monumental, so emotional, and laced with so many imponderables that it became impossible for most members to adopt clear postures of either endorsement or rejection.

Some compared the confrontation with Hitler to the confrontation with the Egyptian pharoah. Then, too, it was a question of freeing a stubborn and reluctant people from captivity, freeing them with their cattle and goats and possessions. Was Moses to refrain from negotiating with the pharoah?
If
he had, the Jews would have never made an exodus to Israel with possessions needed to establish themselves. Hitler was the new pharoah, pro-Transfer people argued. The German Jews were the descendants of the slaves reluctant to depart. As in pharaoh's day, without negotiation, there would be no freedom, no Israel.

With all their biblical schooling, however, these well-meaning men forgot that Moses would not compromise and that freedom for the children of Israel was secured not by prizes but by plagues.

The moderates who emerged from the August 2g Political Committee session were still undecided about the Transfer Agreement, but the extremes of Zionism-Mapai and Revisionism-had only reinforced their earlier attitudes. Mapai still saw transfer as the beginning of national actuation. Revisionists more than ever saw transfer as a betrayal the Zionist movement was duty bound to rescind. Now that representatives of all parties had heard Political Committee testimony about at least the superficial aspects of the agreement, the Revisionists believed they could appeal to the delegates for a resolution of nullification. As expected, the only way Mapai could block this was by intensifying their allegations that the Revisionists killed Arlosoroff.

Grossman's interpellation called for the Political Committee to make a report at the Tuesday night session or the final session on Wednesday morning, August 30. But the committee needed far more time. Mapai's forces also needed more time to lobby for a resolution indicting the Revisionists for Arlosoroff's murder. Furthermore, routine Congress business had not yet been completed because of all the delays. Congress leaders were forced to extend the convention until September 3.
²³

After the Political Committee adjourned, its members went directly to the main hall for more floor debate. At
9:I5 P.M.
the general session was called to order by Motzkin. The frustration expressed by the initial speakers reflected just how rankled the delegates were becoming and how impatient they were for a united stand. One eloquent Austrian General Zionist, Oskar Gruenbaum, blamed both the Revisionists and Mapai. "I keep imagining a picture. We are all fighting on ice and the ice breaks and we don't realize that we are drowning.
If
we continue with a policy like this, then the waves will drown us and you will share the guilt that Jewry loses its last chance-Zionism."
²⁴

The next speaker was a Polish Mapai delegate who reflected rank-and-file Mapai disillusionment with their own party's response to Hitler. "We are overlooking the big picture for the details. The big national disaster, the German tragedy, this we exploit for money collections and coJonization. But this is not enough. The whole Jewish world in Europe is psychologically ready for an emigration. What are we doing to organize this movement? ... One thousand to two thousand certificates in view of the agony of six hundred thousand Jews is a terrible shame."
²⁵

Later, Berl Katznelson, one of Mapai's central figures, stepped to the dais. His goal was to marshal delegate frustration against Revisionism and undo the losses suffered earlier when Stephen Wise battered the entire Mapai position from his ostensibly neutral General Zionist corner. So Katznelson's speech fired first at Wise.
"Dr.
Wise is a prominent personality and his voice . . . is heard all over the world. But when this voice is used . . . to spread false concepts, then this is very dangerous." Attacking Wise for being a labor crusader in America but anti-Labor while in Prague, Katznelson declared, "There are Jews, Zionists, who are very radical. They get excited about liberty, progress, labor rights, and democracy. But all their radicalism and their progressive concepts they confine to the non-Jewish world. When they come to us, they forget the basic concept of organized labor and social rights. In regard to America, Dr. Wise is a very progressive man." Katznelson then turned to the Revisionists and cried, "In America, it would be impossible that Dr. Wise become the speaker of [fascist] black forces.
²⁶