In the enormous shadow of guilt that seized American Jewry after the Holocaust, the answer all too often has been,
"We didn't do enough." We are quick to shoulder the onus of
self-blame for having been timid citizens, afraid to stir the waters in
uncertain prewar times. But this version of history is untrue. Immediately
after Hitler's rise to power, American Jews
mounted a formidable economic war to topple the Nazi regime.
Just weeks after Hitler assumed power on January 30, 1933, a patchwork of competing Jewish forces,
led by American Jewish Congress president Rabbi Stephen Wise, civil rights
crusader Louis Untermeyer, and the combative Jewish War Veterans, initiated
a highly effective boycott of German goods and services. Each advanced the
boycott in its own way, but sought to build a united anti-Nazi coalition
that could deliver an economic deathblow to the Nazi party, which had based
its political ascent almost entirely on promises to rebuild the strapped
The boycotters were encouraged by the early successes of
their loud, boisterous campaign, complete with nationwide protest meetings,
picket signs, and open threats to destroy Germany's economy if the Reich's
anti-Jewish actions persisted. Skilled organizing from unions, political
groups, and commercial trade associations carried the boycott's message to
every facet of American society and abroad. Depression-wracked nations
around the world quickly began to shift their buying habits from the
entrenched German market to less expensive, alternative goods.
The anti-Hitler protest movement culminated in a
gigantic rally at Madison Square Garden on March 27, 1933, organized by
Rabbi Wise and the American Jewish Congress. More than 55,000 protesters
crammed into the Garden and surrounding streets. Simultaneous rallies were
held in 70 other metropolitan areas in the U.S. and in Europe. Radio
hookups broadcast the New York event to hundreds of cities throughout the
The boycott unnerved the Nazis, who believed that Jews
wielded supernatural international economic power. They knew that in the
past Jews had used boycotts effectively against Russian Czar Nicholas II to
combat his persecution of Jews, and automaker Henry Ford to halt his
anti-Semitic campaign. Whether or not this new boycott actually possessed
the punishing power to crush the Reich economy was irrelevant; what
mattered was that Germany perceived the Jewish-led boycott as the greatest
threat to its survival--and reacted accordingly.
Relentless in exploiting the Nazis' vulnerability, Rabbi
Wise and the other boycott leaders were determined to form one cohesive
international movement under the banner "Starve Germany into
submission this winter." But Hitler succeeded in averting this scenario by exploiting divisions within world
The Nazi counteroffensive was launched at a secret
meeting in Berlin, just six months after the Nazis took power and at the
height of the anti-German boycott.
On August 7, 1933, an official delegation of four German
and Palestinian Zionists and one
independent Palestinian Jewish businessman were ushered into a conference
room at the Economics Ministry in Berlin. The Jewish negotiators were
greeted courteously by Hans Hartenstein, director of the German Foreign
Currency Control Office. They talked for some time about investment,
emigration, and public opinion, but the underlying theme was the boycott.
The Nazis wanted to know how far the Zionists were willing to go in subverting the boycott. The Zionists wanted to know how far the Reich was
willing to go in allowing them to rescue German Jews.
Hartenstein was about to call the inconclusive meeting
to a close when a messenger arrived with a telegram from German Consul
Heinrich Wolff in Tel Aviv, who advised Hartenstein that concluding a deal
with the Zionist delegation was the best way to break the crippling
boycott. Hartenstein complied, and the Transfer Agreement was born.
Three days later, the Reich Economics Ministry issued
the pact as Decree 54/33.
The Transfer Agreement permitted Jews to leave Germany
and take some of their assets in the form of new German goods, which the
Zionist movement would then sell in Palestine and eventually throughout
much of the world. The German goods were purchased with frozen Jewish
assets held in Germany. When the merchandise was sold, the sale proceeds
were given to the emigrants, minus a commission for administration and a
portion reserved for Zionist state-building projects, such as industrial infrastructure and land
Two Zionists transfer
clearinghouses were established: one under the supervision of the German
Zionist Federation in Berlin and the other under the authority of the
Anglo-Palestine Trust Company in Tel Aviv. The Berlin-based office
exchanged blocked Jewish cash for German wares.
The Tel Aviv office, called Haavara Trust and Transfer
Office Ltd. (Haavara Ltd.), sold the swapped German merchandise on the open
market, collected the proceeds, and matched them up to the German Jewish
emigrants whose money had been used. Organized under the Palestinian
commercial code, Haavara Ltd. was operated by conventional business
managers. Its stock was wholly owned by the Anglo-Palestine Bank, the
official Zionist financial institution that later changed its name to Bank
The Transfer Agreement enabled both Germany and the
Jewish community in Palestine to achieve key objectives. Transfer helped
Germany defeat the boycott, create jobs at home, and convert Jewish assets
into Reich economic recovery. It helped the Zionists overcome a major obstacle to continued Jewish immigration and expansion in
Palestine. Under British regulations then in force in Palestine, Jews could
not enter without a so-called Capitalist Certificate, proving they
possessed the equivalent of $5,000. To be in possession of such a sum
qualified the immigrant as a "capitalist" or investor. Transfer
made capitalist immigration possible because destitute Germans received the
required $5,000 (actually the immigrant's own seized funds) once the
assigned German goods were sold.
The Transfer Agreement also allowed "potential
emigrants" to protect their assets in special blocked bank accounts,
which could not be accessed without purchasing and reselling German goods.
Between the active and potential emigration accounts, the Transfer
apparatus, through official and unofficial transactions, generated an
estimated 100 million Reichmarks. The more German goods Zionists sold, the more Jews could get out of
Germany and into Palestine, and the more money would be available to build
the Jewish State. The price of this commerce-linked exodus was the
abandonment of the economic war against Nazi Germany.
The Transfer Agreement tore the Jewish world apart,
turning leader against leader, threatening rebellion and even
In the painful choice between relief vs. rescue, most of
the Jewish world opted for relief; that is, defending the right of Jews to
remain where they were as free and equal citizens. But the Zionist leadership favored rescue, which was
completely in keeping with their solution to anti-Semitism--a
Jewish homeland in Palestine.
A half-century earlier, the Zionists visionary Theodor Herzl had
foreseen that a "Jewish Company" would be created to manage the
businesses and assets of Jews who immigrated to the future Jewish State.
Their assets would be sold off at a substantial discount to cooperating
"honest anti-Semites," who would then step into the former
occupations of the departing Jews.
Zionists saw Haavara as Herzl's envisioned "Jewish
Company" and Transfer as an opportunity to contract for a more secure
Jewish future. Forty years of struggle to create a Jewish State had come to
a sudden and spectacular turning point. The Zionist leadership's awesome and difficult task was to enter into cold, anguished
negotiations with Jew-haters, not in an atmosphere of emotion and frenzy,
but with diplomacy and statecraft.
By the end of April 1933, total Reich exports were down
10 percent as a result of the boycott. But the economic war against Germany
still lacked cohesiveness. Stephen
Wise, who possessed the organization, the universal recognition, and
the will to unify and direct an efficient campaign, knew that only a
central group could target specific German industries and avoid duplication
of effort. Wise also envisioned
an enforcement apparatus insuring that any entity that traded with Germany
would itself become a boycott target. This strategy set the Zionists and the boycott movement on a
collision course. If the Zionists were to
finalize a merchandise-based pact with Nazi Germany, then Jewish Palestine
would be in violation of the boycott and its products and fundraising
declared untouchable. Wise and other boycotters felt certain that this
threat would derail any exploratory commercial talks between the Zionists and Hitler's
In fact, secret preliminary and partial negotiations and
even interim "transfer" agreements had begun in April 1933. When
news of these early negotiations leaked out, the Zionists split along Revisionist and Mapai
(Labor) lines. Transfer became a convenient battleground in an already
tense atmosphere in which Zionist factions fought over economics,
settlement policy, and other issues. The Transfer deal was widely seen by Revisionist leader Vladimir Jabotinsky as an
unholy pact with the Nazis that would mainly benefit Labor-dominated Zionist institutions. Protest meetings,
screaming headlines, public debates, and rancorous shouting matches broke
out in Zionist circles throughout Europe
and Palestine. David
Ben-Gurion and other Laborites retaliated, calling Jabotinsky "the Jewish
Hitler" and his black-shirted Revisionist followers
"Fascists." Revisionists became the most ardent anti-Nazi boycott organizers, attacking any Jew or Zionist who would do business with Hitler. It was all complicated by the fact that
the Jewish Palestinian economy was inextricably linked to German commerce.
Indeed, Germany was the number-one customer for Palestine's number-one
At the center of the maelstrom was Chaim Arlosoroff, a member of
the Jewish Agency Executive Committee. This quiet academician and visionary
designed the Transfer plan and supervised all negotiations with the Reich.
So tense was the public hysteria over what Transfer was--and was not--that
in May 1933 Arlosoroff granted a lengthy interview to a Zionist newspaper disclosing the entire plan, which only 24 hours earlier had been
marked "Top Secret."
On June 16, 1933, the Revisionist newspaper Hazit
Haam published what many considered a death threat: "There will be
no forgiveness for those who for greed have sold out the honor of their
people to madmen and anti-Semites.... The Jewish people have always known
how to size up betrayers...and it will know how to react to this
crime." That evening, Chaim
Arlosoroff and his wife Sima took a Shabbat walk along the beach in
north Tel Aviv at a point now occupied by the Tel Aviv Hilton. Two men
dressed as Arabs approached the couple and asked for the time. Sima was
worried, but Arlosoroff assured her, "Don't worry, they are Jews." A few moments later,
the men returned, one with a Browning automatic. A bullet flashed into
Arlosoroff's chest, mortally wounding him. Two Revisionists were charged
with the murder and sentenced to death, but they were released later on
The boycott question also divided the American Jewish
community. Leaders of B'nai Brith and the American Jewish Committee,
organizations largely comprised of German Jews who had for decades preached
staunch Jewish defense, feared that the boycott would subject their
brethren in Germany to retaliation. The Jewish War Veterans, who well
remembered their German enemy from the Great War, were not swayed by such
reservations. Though it lacked the resources of the larger Jewish
organizations, the JWV pressed for a total commercial war against Germany.
Joining them was feisty Louis Untermeyer, founder of his own anti-Nazi
organization, the American League for the Defense of Jewish Rights.
In Germany, the besieged Jewish community opposed the
boycott. They fervently appealed to friends and relatives in American
Jewish organizations to halt any talk of protest or boycott, fearing the
reprisals promised by Reich authorities and Nazi hooligans for any
encouragement of anti-Nazi actions. As a result, B'nai B'rith and the
American Jewish Committee did their best to blunt the boycott's impact.
Zionist Congress opened on August 18 in Prague, only 11 days after the
Transfer Agreement was sealed in Berlin. Advocates of the pact planned to
outmaneuver, outtalk, outscheme, and outlast boycott proponents. The August
7 pact would be adopted, either overtly before the assembled delegates or
covertly in closed-door rules committees. Either way, Transfer would go
At the Congress, Wise fought the Transfer Agreement privately and publicly. He lost. After
midnight motions and surprise votes, the Transfer Agreement was adopted on
August 24 as official policy. Zionist discipline was imposed upon all boycotters, including Stephen Wise. Despite his
allegiance to Zionism, Wise vowed to press ahead with his plan to form a
unified global boycott within the framework of a so-called "Central
Jewish Committee," which was to be declared two weeks later in Geneva
at the Second World Jewish Congress.
But as the days progressed, the plight of German Jewry
became more and more desperate. Nazism's stranglehold on Germany appeared
all the more irreversible. European anti-Semites everywhere were following suit. Jewry seemed finished in Europe. A Jewish
homeland in Palestine seemed the only answer.
September 8 now became the crucial date: the Central
Jewish Committee would be established at the much-publicized Second World
Jewish Congress in Geneva to deal the economic deathblow to Germany. In the
end, however, Wise bowed to Zionist pressure and simply backed down. The
boycott was abandoned.
A dejected Wise left for Paris. On the train, he met a 14-year-old German Jewish girl, a
refugee, who had heard about the Geneva meeting. Wise asked her whether she thought
the decisions there had helped or done damage. Looking at him, the young
girl answered, "Es muss sein, es muss sein." "What must be,
In the weeks that followed, Wise dodged reporters' questions
about the decision. Haunted by the girl's remarks, Wise simply said, "What must
be, must be." Decisions had been made that only God could judge, only
history could vindicate.
After war erupted on September 29, 1939, the
dispossession of the Jews turned to annihilation. The Transfer Agreement
served as a lifeline to the Jews who still could be saved. All debate about
Haavara among Jewish groups ceased. The less said the better, lest the
Nazis cancel the deal. Ultimately, the war did force an end to Transfer,
but not before some 55,000 Jews were able to find a haven in Palestine.
Those who would condemn the Zionist decision to enter into a pact with Hitler have
the luxury of hindsight. In 1933, the Zionists could not have foreseen the death trains, gas chambers, and crematoria. But
they did understand that the end was now at hand for Jews in Europe. Nazism
was unstoppable. The emphasis now became saving Jewish lives and
establishing a Jewish State.
From the Zionist point
of view, the boycott did succeed. Without it, there would never have been a
Transfer Agreement, which contributed immeasurably to a strengthened Jewish
community in Palestine and the creation of the State of Israel. And
Transfer would never have happened had American Jews not mobilized as
quickly as they did, only days after Hitler rose to power.
No one can say what combination of factors might or not
might have stopped Hitler. What is clear,
however, is that American Jewry did not react to the Nazi threat with
indifference, cowardice, or indecisiveness. We were determined, courageous,
and resourceful--but, ultimately, divided.