The Transfer Agreement (54 page)

Cohen was hearing an ultimatum and it was coming from a bank that embodied the authority of the Zionist Organization. This was a moment of hard choices. All of nothing, or part of something.

Cohen chose something. Mechnes approved. They then handed Hoofien the July
18
transfer decree and asked him to propose any amendments he felt proper. They would return to Berlin and ask the Economics Ministry to ratify the changes.
³⁶

Mr. Sam Cohen had finally agreed to withdraw. There was no need for recriminations, no need for explanations about all the previous reversals and intrigues. That was all past. Call it bad communications. What was important now was Cohen's pledge to withdraw—spoken before his partner Mechnes and the head of the Anglo-Palestine Bank with no further possibilities for misunderstandings.

All that remained was for Consul Wolff to switch his recommendation to the new trust company of the Anglo-Palestine Bank and the Conference of Institutions. Margulies was doing everything possible with the consul himself. Hoofien would work on Schmidt-Roelke.

An interagency correspondence was dictated by Hoofien from Anglo-Palestine Bank's London office to Landauer at the ZVfD. This rendered the impression that the two entities regularly coordinated on projects and communicated informally. While the note was addressed to the ZVfD, it was wholly intended for the eyes of Schmidt-Roelke.
³⁷

Hoofien's correspondence stated, "During the last few days I have heard from you as well as from Mr. Sam Cohen that . . . the Reich Economics Ministry will approve certain procedures for transfer of Jewish capital to Palestine . . . in such a manner that our bank is to open an account with the Reichsbank into which funds for the credit of Hanotaiah are to be deposited. I have thereupon immediately expressed my surprise to you over . . . a linkage between our bank and Hanotaiah without our bank having been consulted."
³⁸

The note admitted that Hoofien had asked his mangers in Palestine to
enjoyed with the German consul. "Today,
I
received a reply," Hoofien declared, "which stated—similarly to the very information I received from Mr. Cohen—that we had in no way authorized this, that furthermore, the official Jewish authorities had never authorized Mr. Cohen's actions, and that Mr. Cohen had never informed the Consulate General of either. However, the Consulate General has informed our office that it is firmly in favor of a monopoly for Hanotaiah."
³⁹

Rejecting Consul Wolff's warnings, the correspondence first cited Wolff's words: "As the Consul General puts
it,
if we opt out, the matter will proceed without us, with only Hanotaiah and the Temple Bank participating." Hoofien then did just that—he opted out. He explained, "Hanotaiah is a plantation company and nothing else. Nor is it the only one. . . . To appoint Hanotaiah as a central point for Palestinian imports from Germany . . . would be . . . giving it an impossible task. If we were to state that funds are deposited in our account with the Reichsbank and we were therefore participants in the transfer operation, we assume a moral obligation to the German public which we are not prepared to undertake. Will you therefore be good enough to inform the Reich Economics Ministry that we regret to be unable to participate in the arrangement described in the letter of July 18."
⁴⁰

After opting out, Hoofien pointed out, "The possibility appears to remain open that the operation be implemented without our participation, as the Consul General in Jerusalem has indicated . . . but I doubt very much that it would amount to very much if the German and the Palestinian public finds out that we had seen fit to decline."
⁴¹

As he did with Mechnes and Cohen, Hoofien gave the Reich a respectable way out. He related the entire conversation with Cohen and Mechnes that day, including his offer of working with Hanotaiah so long as they limited their involvement to plantation activities, garnered no monopoly and subordinated to the bank's trust company. Hoofien asserted that both Cohen and Mechnes "told me they are prepared to comply with our wishes in every respect" and willing to ask the Reich to adopt whatever amendments Hoofien felt correct.
⁴²

What would be correct? "I am prepared to establish in Palestine an agency for handling exports from Germany and to come to an appropriate agreement with the Reich Economics Ministry, if you [Landauer] tell me that the Economics Ministry desires this. I would be prepared to travel to Berlin for that purpose." Hoofien added that just as he was dictating the correspondence, he received another cable from the Conference of Institutions. The Jewish Agency had joined forces with the Conference, thus unifying Zionist support for the Anglo-Palestine Bank's efforts.
⁴³

Hoofien explained that the Conference "speaks with authority. It is composed of representatives of all leading Jewish authorities . . . [and it] informs me it will ask the Consulate . . . to consider the Conference along with our bank as the sole representatives of Jewish authorities in Palestine's."
⁴⁴
Hoofien's point: The Anglo-Palestine Bank, the pivotal financial institution, and the Conference of Institutions representing all the important commercial and political entities, all wanted the Hanotaiah agreement changed. Even Mr. Sam Cohen and Hanotaiah now wanted the agreement changed.

Only one man now stood in the way of doing the correct thing. That man was Consul General Heinrich Wolff. Hoofien put the burden on the consul, stating that once the Jewish delegation presented its bona fide authority, "it will of course be up to the Consulate General whether it will comply with this request." He added that if Consul Wolff truly understood the powers represented by the Conference of Institutions, "he will hardly fail to do so."
⁴⁵

Hoofien's correspondence to Landauer intended for Schmidt-Roelke was received at the ZVfD's Berlin office on July
31, 1933.
Landauer promptly delivered it to Schmidt-Roelke's office with a note attached: "Herewith a copy of a letter addressed to me from London by the Director of the Anglo-Palestine Bank, Mr. S. Hoofien . . . . While this letter is written in the style of an interagency correspondence, it contains some important information which I do not wish to fail to bring to your attention." Landauer promised to telephone later.
⁴⁶

Schmidt-Roelke was confronted that day, July
31,
with a thicket of reports, memoranda, and cables about whether Sam Cohen was the man the Third Reich thought he was. But Consul Wolff, the Reich's man on the scene, had investigated all the charges. Wolff reported simple business jealousy as the basis for the sudden criticisms. He recommended in the strongest terms that the Reich honor the Hanotaiah agreement and ignore the criticism. Whatever shortcomings were implicit in the plan would in time be overcome.

But now the head of the Anglo-Palestine Bank himself had written that Wolff had misstated the facts about Cohen.
If
Cohen himself agreed that the consul had misunderstood Cohen's authority, that would surely settle the matter. Without Cohen's clarification, there was virtually no way to decipher who was correct.

Clearly, the only solution was to bring Cohen and Landauer together with other interested parties to discuss the issue face to face. Schmidt-Roelke instructed one of his key subordinates, Dr. Eberl, to contact Cohen in London, apprise him of the conflicting information and Hoofien's statement that Cohen had voluntarily withdrawn from the transfer.
⁴⁷
Dr. Eberl's July 31
communication to Cohen, including the full text of the July
28
Hoofien letter, arrived in London the next day.

Late on August 1,
Sam Cohen wrote back to clarify all questions. "My Esteemed Dr. Eberl: I am addressing this letter to you because you have conducted all negotiations with me and are fully familiar with the subject matter. I have for more than 3½ months spent my entire energies, my capabilities, my intentions, and my influence preparing the groundwork for my project in Palestine. I have worked with equal intensity on the implementation of this project in Prague, Amsterdam, and London. All the influence and
connections that I was able to muster and which were accessible to me have made it possible for me to bring this project to fruition despite great obstacles.
⁴⁸

"Without the Hanotaiah group in Palestine," he continued, "including the farmers, the cooperative societies, industrialists, and merchants, it would never have been possible to find interest for the project. All appropriate authorities in Palestine and London have approved of my project. This purely personal success is begrudged me by dirty competitors and their henchmen. The competition has used every means at its command to destroy the project. Anything they could not accomplish by countervailing arguments and objective proof they tried to do by slander."
⁴⁹

If
there was any doubt in the Foreign Ministry's mind about Cohen withdrawing from the transfer, or admitting Hanotaiah's inability to execute the merchandise sales, or his willingness to subordinate to the Anglo-Palestine Bank, the next sentences settled the question. Cohen's words: "No objective arguments are possible against my project and against Hanotaiah; it is the only company in the country which can, with my help and collaboration, implement this contract. No bank is necessary for its implementation. Hanotaiah has sufficient capital to do so. . . . Success is absolutely guaranteed."
⁵⁰

Cohen added: "Mr. Hoofien has told me in so many words that he had no intention whatever to destroy this agreement and that he had no objection to it whatsoever. The only reason for his writing that letter [of July
28]
to Dr. Landauer was the latter's statement that he could obtain a better agreement. Mr. Hoofien told me that he would assume no responsibility for a possible cancellation of this agreement and that he would charge Dr. Landauer with that responsibility."
⁵¹
These were potentially deadly words against Georg Landauer, a German Jew, a man who had stood before the Reich and promised to frustrate—in fact, defy—economic decrees designed to stimulate employment, break the boycott, and achieve Nazi goals.

At that moment nothing was easier in Nazi Germany than denouncing a Jew for economic sabotage. Such a denunciation—justified or not—usually resulted in immediate detention in Dachau without trial. Many such detainees were never heard from again.
It
was Landauer's good fortune that Schmidt-Roelke was an old-school statesman from the Weimar days. Had Cohen's words been read by an NSDAP kommissar, they would not have been glossed over.

Cohen reminded the Reich of his transfer's central usefulness to them—the sabotage of the anti-Nazi boycott that was threatening to crack Germany that winter. Cohen's words: "Personally, I wish to emphasize that without the Hanotaiah group and without my intensive efforts and work, it would be impossible to sell any significant amount of merchandise in Palestine during the next six months. I have made my services in their entirety available to you and to the Reich Economics Ministry for the next six months."
⁵²

Cohen could have hardly been more explicit. Hanotaiah's transfer bore no time limits, no financial ceilings, and indeed was structured to accommodate emigrants for years to come. But both sides knew there would not be years of fruitful transactions if the Reich could not survive the coming winter—''the next six months." As usual, Mr. Sam Cohen selected his words carefully, and emphasized them only with good reason.

Defenses, denials, and derogations recorded, Cohen, however, declined Eberl's invitation to meet with Landauer.
⁵³
It is unclear whether Sam Cohen was actually afraid to return to Germany. He had continually assured the Foreign Ministry he would be available to come to Berlin from London during this period if questions arose. Now at this pressing moment, however, he refused to sit down with Landauer, and claimed to be preoccupied, presumably with transfer and anti-boycott business. "If it were not for the fact that I am presently engaged in negotiations in London in that matter which cannot be postponed," Cohen wrote Dr. Eberl, "I would have come to Berlin for further personal discussions."
⁵⁴

Cohen amplified slightly on these pressing London meetings. He claimed they involved Pinchas Rutenberg, who after "long and difficult negotiations" was won over "for my project. . . . He is the single most influential industrialist and could become one of the largest consumers [of German machinery]. Tomorrow I am to negotiate with Tel Aviv's deputy mayor and hope to enlist him in my plans also."
⁵⁵
Cohen's correspondence rarely lacked the power of important names and pending breakthroughs. This correspondence was no different.

There is no way to know why Cohen refused to meet with Landauer, but Cohen did write that Moshe Mechnes would
be
in Berlin and could be called upon for any further meetings.
⁵⁶
Hence, the decisive confrontation Schmidt-Roelke had hoped for would not materialize. Nonetheless, one more final negotiating session in Hartenstein's office would be needed to resolve somehow the question of who should take possession of the transfer and on what terms. A date was set: August 7,
1933.

T
HE
AFTERNOON
of August 7,
1933
,
the Zionist delegation arrived at 76 Wilhelmstrasse and announced their appointment to a lobby guard who was expecting them. He escorted the group to the Economics Ministry's
conference room. They entered one by one: Georg Landauer, director of the German Zionist Federation; E. S. Hoofien, director of the Anglo-Palestine Bank; Arthur Ruppin, Zionist Organization emigration specialist; aqd Moshe Mechnes, co-owner of Hanotaiah Ltd. Hans Hartenstein, director of the Foreign Currency Control Office, courteously greeted the Jewish leaders and did his utmost to make them feel welcome.
¹