Dealing with the Devil

The Transfer Agreement: The Untold Story of the Secret Pact Between the Third Reich and Jewish Palestine.
by Edwin Black.
Macmillan. 416 pp. $17.95.

Edwin Black here retells the story of the agreement worked out between Zionists and the Nazi government in 1933 by which German Jews were allowed to emigrate to Palestine and retrieve a small portion of their assets in various forms, including an indirect interest in imported German goods. The Zionists’ motives in making this “deal with the devil” were clear and cold-blooded. Recognizing the peril of the Jews trapped in Germany, they worked to build a Jewish state in Palestine by using the capital of desperate middle-class German Jews. In doing so they rejected an alternative strategy, that of a broadly-based rescue mission; they short-circuited attempts to relocate Jews to countries other than Palestine; and they often spoke of the “rescue of assets” rather than of people. They thought these efforts realistic. Palestine’s primitive economy could not then absorb limitless waves of refugees without collapsing, but the infusion of capital and skilled middle-class individuals would greatly increase the absorptive capacity of Jewish Palestine and thus enable it someday to provide a national home for all Jews who desired one. This was a rational analysis, whatever one thinks of its ethical dimension.

The Nazis made a similar analysis. In the midst of a world depression, with staggering unemployment, the highly industrialized German economy needed to export goods and maintain job levels. Moreover, it was Nazi policy at this early date to get rid of unwanted Jews while keeping most of their wealth. The transfer would allow a sorely pressed Hitler to derive economic benefits from Jewish suffering. The primary motive of the Nazis, however, was to weaken and possibly destroy a worldwide anti-German trade boycott under way since March 1933; they made the Zionist breach of the boycott a quid pro quo for the transfer agreement. And indeed, the boycott was undermined by the leadership of the Zionist movement. In one form or another, the transfer agreement remained in effect until the war.

All this Black covers in mountainous and excessive detail. The whole issue has been much more succinctly treated by David Yisraeli (“The Third Reich and the Transfer Agreement,” in the Journal of Contemporary History, 1971), whom Black acknowledges but does not cite in his voluminous footnotes. Working from printed documents, unpublished letters, and private papers, Black is soundest in describing the complicated negotiations of various Zionist representatives and private individuals with the organs of the German government. But good history is not merely the gathering of data. On questions and issues that go beyond the mechanics of the transfer negotiations, the book is defective.



Black’s weakness as a historian emerges in his treatment of the politics of the anti-Nazi boycott movement. He relies much too heavily and uncritically on contemporary sources, newspaper accounts, and diplomatic reports. He is content to treat actors in the events as the best experts on the state of the German economy, the importance of Jews in the functioning of the world economic system, the precariousness of Hitler’s political position, and numerous other issues which require a longer perspective to be judged properly. Black’s neglect of the secondary scholarly literature is perverse and leads him to his most serious error of judgment—drastic overestimation of the political and economic efficacy of the boycott weapon. I shall return to this failing.

A different sort of error is at work in Black’s account of the boycott struggle in America. Here he openly sides with the representatives of mass organizations of Jews from Eastern Europe such as the American Jewish Congress and the Jewish War Veterans; these favored immediate resistance to Hitler, dramatic demonstrations, and, eventually, organized boycott of German goods. The “villains” of the piece are American Jews of German background, the leaders of elitist organizations like the American Jewish Committee and B’nai B’rith, who worked against the boycott and preferred behind-the-scenes efforts to persuade the influential.

However the leaders of these latter organizations are finally to be judged, their motives and views must be considered seriously in a work that pretends to historical scholarship. Black, however, dismisses them as “unwitting tools of the Third Reich” who were willing to sacrifice their relatives rather than face the reality of German anti-Semitism. Openly and by innuendo he accuses them of betraying the Jewish people because of their lingering attachment to German culture. Whereas he considers Zionist policy to have been based on reasoned assessments of the boycott’s chances of success and of its potential threat to a hostage Jewish population in Germany, he brands German-American Jews as appeasers even though they reached the same conclusion as did the Zionists.

Black taxes these Jews with a lack of realism: they should have recognized Hitler’s murderous intentions right from the beginning. Yet what is important is that they, like most of the rest of the world, did not; the historian’s job is to explore and explain, not to sneer. Black leaves the reader woefully uninstructed on the context of Nazi anti-Semitism and the Jewish response to it.

Black’s ignorance of German history and Nazism’s place in it lead to equally grotesque conclusions. He relies on outmoded secondary works, makes numerous errors, and distorts his subject. One example must suffice. Black draws an unwavering anti-Semitic line from Martin Luther to Adolf Hitler; the “Luther Solution” is his term for what inspired both the transfer agreement and the Final Solution to the Jewish Question. Since the Germans were by implication simply bestial, and always had been, their actions in the Holocaust need no explanation. This may be convenient, but it is a parody of history as well as of historical interpretation.



But what is outrageous about The Transfer Agreement has little to do with its shoddiness as history. Rather, it is the three questions Black poses at the end of the book: Could the anti-Nazi boycott have worked? Was the transfer agreement with the Nazis responsible for the creation of modern Israel? Do the Zionists, who undermined the boycott movement, bear the guilt for Hitler, and, by extension, the Holocaust? To these questions Black answers yes, yes, and no, although a reader would be excused for thinking the final negative is really a yes. Serious scholars would answer no to all three.

Black asserts that for a short time in 1933 it was possible to launch a unified, organized boycott of German goods which would have toppled Hitler. He supports this assertion with no compelling proof and makes two faulty assumptions.

First, he overstates the precariousness of Hitler’s position in 1933. Although Black insists that Hitler was already having monumental difficulties controlling zealous party members and storm troopers, in fact this did not become a serious problem until 1934, when Hitler murderously purged them. Black resurrects the problem of unpaid German reparation debts and a retaliatory French occupation of the Ruhr without mentioning the Hoover moratorium of July 1, 1931, which effectively ended reparations. Also, the rumors of preemptive military strikes by Poles and Czechs in 1933 were largely imaginary, the fears of nervous Nazi diplomats; by means of an uncritical reading of the record, Black preposterously argues that the “plans” for these invasions were provoked by the anti-Semitic persecution in Germany.



The second faulty assumption is to equate the Nazi view of the boycott with its real potential as a political weapon. Black blithely instructs us that the “perception of reality” is often more important in history than reality itself. True enough. But in the case of the boycott, the reality was more important than either Nazi fears or Jewish hopes. The solidarity requisite for a boycott would eventually have foundered on economic facts. Germany remained, despite its economic problems, a great industrial power, and in chemicals, optics, and heavy machinery no one could produce as cheaply or as well. No government seriously considered an official boycott of German goods. The American government, for example, was almost wholly preoccupied with the danger of a German default on debt obligations to American banks. Moreover, much of Eastern Europe was dependent on its German markets, and none of Germany’s trading partners, who were also in the throes of the depression, could long avoid dealing with that country unless they were willing to suffer dire economic consequences.

Finally, the boycott never had any hope of shutting off trade with Germany except by the exercise of extraordinary consumer restraint. For consumers to have sustained such action on the basis of no more than the heartening newspaper stories which Black finds so convincing was to expect a great deal. Black’s own hopes for the boycott rest on a vastly inflated estimate of Jewish economic power; in this he ironically echoes the Nazis’ own fantasies. But the Nazis were at least surprised when the Jews were thrust out of German economic life with so little disruption. Black remains enthralled by the stereotype.

Black further builds his case for the boycott’s potential by exaggerating its adverse effects on Germany. He points to falling foreign exchange and hard-currency reserves and the desperate German expedients to meet this crisis. Only occasionally and incompletely does he acknowledge that the depression had much to do with this situation. Overdramatizing as usual, he speaks of a Germany reeling, “with bankruptcy and invasion at the door.” “By early June 1933, the specter of collapse was hovering over the Third Reich.” As if sensing that such inflated rhetoric does not make an argument, Black also turns to earlier historical examples of the boycott weapon. But these only make the case against him more decisively. None of the examples he cites was a clear success, many were outright failures, and a few were not boycotts at all.

Even granting the possibility of a much better organized anti-Nazi boycott resting largely on the solidarity of Jewish consumers, one could argue that it would have strengthened Hitler politically while weakening Germany economically. If Hitler was adept at anything, it was the exploitation of propaganda opportunities. This skill can be seen in his handling of the partial boycott he did face. The emergency created by “vengeful Jews” provided him with yet another pretext for extending his control over every facet of German life. In fact, long before any consumer boycott could have hoped to bring him down, Hitler had become virtually invulnerable within Germany.



The second question—did the Nazis make Israel economically viable?—is easier to deal with and further demonstrates Black’s weakness as a historian. In spite of the welter of detail concerning the transfer agreement, Black gives us little precise, documented information about the actual transfers. How many German Jews settled in Palestine? Black says 60,000 between 1933 and 1941, all of them through some form of the agreement. He cites no sources for these figures. Yisraeli, using German foreign-policy documents, tells of 32,995 emigrants between 1932 and 1937, of whom only 12,500 used the transfer agreements.

How much of the capital assets of German Jews went into building the state? Again without attribution, Black says approximately $100 million. The authoritative statistical source on the transfer (Werner Feilchenfeld et al., Haavara-Transfer nach Palästina, Tübingen, 1972) records $40.5 million. This is significantly less than Black maintains and shrinks further when the rise in the value of the Palestine pound and the decline of the mark are considered. Interestingly, in 1937 the Nazis debated whether to continue the transfer agreement, and decided to do so because the loss of capital was slight; regrettably, from their point of view, the agreement had a negligible effect upon German exports to the Palestine market, accounting for only 0.1 percent of the total. But they were relieved to find that the transfers in no way contributed to the building of a Jewish state.

In the absence of more detailed knowledge, the question of the Nazi role in establishing Israel must remain moot. But Black has no special claim to the truth, and his unproven assertions hold no weight. In any event, to see the creation of Israel solely as a matter of adding bricks to its economic infrastructure is to ignore a host of other factors, including the political role played by the United Nations after the war, the world’s bad conscience about the Jewish catastrophe, and the Israeli war of independence. Black’s logic notwithstanding, state-building is not so simple a process.

The third question Black asks and answers is the loaded one. With typical hyperbole, he accuses the Zionists of driving “a stake through the heart of the Jewish-led anti-Nazi boycott,” and of granting a reprieve to the Third Reich; at the same time, however, he rejects as an “absurd” distortion the idea that the Zionists were somehow responsible for Hitler and his atrocious crimes, including the Holocaust. Yet he has a great stake in encouraging this false conclusion. Black’s Zionists were chiefly responsible for sabotaging the boycott, so promising a weapon in his eyes; how from his point of view can we not blame them in part for Hitler’s survival in power?



In various appearances before and since the publication of The Transfer Agreement, Black has hinted at a conspiracy against him by “extremist Jews” who might think—wrongly, of course—that he has endangered the future of Israel by “exposing” the story of Zionist negotiations with the Nazis. In fact the story has been told before, and often, and with infinitely greater sophistication. To the historical record Black has added conspiracy-mongering, innuendo, and sensationalism, but nothing new, and much that is both factually wrong and morally shabby.



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