The Transfer Agreement (70 page)

He had doneit before. Just one month earlier, Untermyer had created-on a moment's notice-the World Jewish Economic Federation in Amsterdam. And less than ten days before the Eighteenth Zionist Congress, Untermyer had swayed the American Jewish Congress to abandon Stephen Wise's leadership and by resolution compel him to declare for a boycott. The strong-men of the American Zionist movement were all in Prague. Untermyer could operate in America unchallenged, and had indeed already convinced New York regional Zionist organizations to demand Prague pass a boycott resolution.
²⁷

Untermyer wasn't to be toyed with, and Congress leaders knew it.
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The Tuesday morning August
29
session at Prague could not be postponed. Among the first scheduled to speak was Rabbi Stephen S. Wise, boiling with grievances against Mapai. First, Labor was close to engineering the return of Chaim Weizmann as president of the Zionist Organization; Wise despised Weizmann and was determined to prevent his reascendance. Second, because Mapai feared the boycott Wise would proclaim at Geneva and the competition of his World Jewish Congress, Mapai leaders had suddenly forced the Actions Committee to withdraw its endorsement of the Geneva conference. Third, Mapai leaders had encouraged the Board of Deputies to withdraw their co-sponsorship of the Geneva conference and convene their own counterconference in conjunction with the Zionist Organization, this one to coordinate worldwide relief donations.
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Wise was not winning. The best way he could strike back at Mapai was through a dramatic defense of the Revisionists, tying in the unacceptable policies of Weizmann for good measure. Wise began his speech with a stinging rebuke of Weizmann's address in Chicago advocating restricted Jewish settlement. One by one, Wise went on to discredit a range of other controversial Weizmann attitudes.
If
the delegates supported Weizmann, warned Wise, the movement would never recover.
³⁰

Continuing the attack, Wise lashed out directly at Mapai's plans for selective immigration for halutzim, who were steeped since childhood in the idealistic workers' society Mapai hoped to achieve. "Utopia!" cried Wise. "This is what Mapai is planning to create in Palestine. You may actually make a utopia out of the land of Israel, but don't delay its resettlement for the sake of this possible utopia." At this the Revisionists applauded loudly, while Mapai people rose to shout denigrations and denials. Wise went on, accusing the Laborites of trying to create a society in Eretz Yisrael where everyone who did not think like them or belong to their political party would be unable to gain entry or find work. Once more, the Revisionists cheered, while Mapai people hollered catcalls.
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At one point, Chairman Motzkin had so much difficulty restraining interruptions, he admonished that if Mapai did not behave he would punish them by letting Wise speak past his time limit. This threat tamed the unruly ones briefly; that is, until Wise ended his provocative speech, declaring that the "Congress must create peace among the factions. The majority represented by the Labor party is responsible for continuing the work in Palestine. But they must not say that only those Jews can enter who share their views." The entire Revisionist group then stood and applauded wildly, shouting congratulations. The Mapai group hissed and booed, calling Wise "ignorant" and a "liar," claiming the Revisionists had fed him lies.
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Wise's abrasive speech, coming from a leader of American Zionism, was a great blow to Mapai's prestige at the Congress. His comments conspicuously lacked any reference to the Transfer Agreement or the orange deal, probably because as breaches of the boycott he felt these issues should be confined to the Geneva Conference. However, others had not forgotten. Meir Grossman rose again to demand an answer to his interpellation.

"Three days ago," Grossman shouted, "we were told we would have a reply .... I believe we have shown fairness in waiting for it this long." Aware that Berl Locker had previously promised an answer to either the Congress plenum
or
a "committee," Grossman tried to head off a closed-door disclosure. "We will not be satisfied with merely a reply to the Political Committee. We want a reply to the Congress. I am asking the chairman whether the Executive will give us a reply."
³³

Locker answered: "'The fact that so few plenary sessions have been held is the reason that Grossman's interpellation has not been answered until now. But this is our reply: The Executive has ... determined that the negotiations referred to in the interpellation had not been ordered by the Executive. We are prepared, however, to furnish additional details to the Political Committee. We will leave it up to the Political Committee whether or not it will communicate this reply to the plenary session."
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Chairman Motzkin added: "'I wish to remind all concerned that the bylaws state the following about a reply to interpellations:
'Reply can be given orally or in writing; it can also
be
refused by the Executive with reason therefore.
' "
³⁵

If
Locker thought that he could deny the Executive's responsibility because the Anglo-Palestine Bank controlled the arrangement, Grossman here too, was one step ahead. "Inasmuch as Mr. Locker has declared that the Zionist Organization has nothing to do with the negotiations," Grossman added, "I wish to ask whether or not the Anglo-Palestine Bank is subject to supervision by the Executive?"
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The answer was obvious. Virtually everyone in the hall knew that the Zionist Organization owned the Anglo-Palestine Bank through subsidiaries and essentially controlled it through the Executive. Before Locker could respond, however, a Mapai delegate, Israel Mereminski, stood up and intervened. "To begin with, the Executive has stated that it has nothing to do with the agreement," Mereminski said. "In the second part of its statement, the Executive declared that ... this was a matter for the Political Committee." Defending Locker from the need to answer further, Mereminski rhetorically asked, "Does the Executive mean that it refuses to make a comprehensive statement before the Political Committee-which deals with all political matters affecting the Congress-has had a chance to examine the matter and decide whether ... the matter is to be submitted to the Congress?
If
this is the case, I believe it is sufficient reason not to reply to Grossman's inquiry."
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Locker interjected, "In my opinion, the Executive is entitled not to reply to an interpellation by stating the reason therefore .... The Executive wishes to ... furnish all details in its possession to the Political Committee. That should put an end to the matter."
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Motzkin added a helpful clarification: "Mr. Locker's statement should be understood to mean that the Executive will make its statements to the Political Committee; the Congress will then be entitled to deal with it.
It
is of course possible, Mr. Grossman, that after you have heard the Executive's statement to the Political Committee, you will withdraw your interpellation."
³⁹
Motzkin's comment held out hope that perhaps if Grossman-an alternate member of the Political Committee-were briefed privately behind closed doors, he would understand the sensitivity of the issue and spare the full Congress a floor report.

But Grossman brushed aside any compromise. And since the Congress was due to hold its final session the next day, he added a new demand: "I propose that the Congress order the Executive to make its statement to the Political Committee
today,
and that the matter be submitted to the [full] Congress this evening or tomorrow morning."
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This was the key demand. By having the statements made to the Political Committee within a few hours and reported at once to the floor, the delegates could then learn all the details and vote on rescinding the Transfer Agreement before the Congress disbanded.

Motzkin looked out at the faces of the delegates. For days, they had been bombarded by rumors, press leaks, and flying allegations. Rank and file back home were all demanding to know the truth about the Transfer Agreement. A response to Grossman's interpellation had been delayed three times, debate had been clotured, and sessions had been canceled.

It could go no further. Chairman Motzkin turned to Berl Locker and said, "We ask the Executive to furnish its statement to the Political Committee
today."
Cheers burst forth from the Revisionists. Before they became carried away, Motzkin added, "As to the second part [reporting the findings to the full Congress], we will talk about that tomorrow. We will now proceed with the general debate."
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It is doubtful that in their exuberance the Revisionists were still paying attention. What was important was that finally the delegates would learn what they needed to know about the negotiations with Germany, and what in fact was the Transfer Agreement.

E
LIEZER
SIEGFRIED HOOFIEN
was scribbling notes nervously. The Dutch-born Jew had enjoyed a meteoric rise within the movement since his early days as a financial assistant in the Cologne office of the Zionist Organization. During World War I, as manager of the Anglo-Palestine Bank, he had averted financial disaster by printing temporary banknotes when the Ottoman currency fell. After the war, as director-general of the Bank, E. S. Hoofien was involved in virtually every aspect of Palestine's commercal growth.
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When the potentials of German transfer were in danger of being lost, E. S. Hoofien was called in like a financial savior to redeem the opportunity. Indeed, he had almost single-handedly devised the transfer's intricate banking procedures. To the small circle of Zionists who knew of his recent accomplishment at Wilhelmstrasse, he was a true hero.

But now
E.
S. Hoofien was scribbling notes nervously. The bespectacled man had enjoyed barely a few days rest in a Czech border hotel upon completion of his crosscontinental jaunts.
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He had worked so hard to achieve something of historic value, something he could be proud of, a redemption and foundation both. Deeply motivated, he saw the work as a Zionist's task, not a banker's task. He knew he had the blessing of the leadership. But now he was being called to defend himself before hostile questioners. Laying responsibility for the Transfer Agreement on the shoulders of Mr. Sam Cohen was not sufficient. Everyone by now knew the Anglo-Palestine Bank was involved. So E. S. Hoofien, it seemed, would have to intercept the blame. This he did not want to do.

The Political Committee was to convene at
5:00 P.M.
that day. Hoofien would be the main witness. As fast as possible, he began outlining notes on a short stack of Grand Hotel Steiner stationery, each sheet crested with the hotel's coat of arms. "First of all, it is necessary to remove a false impression which perhaps exists here and there," Hoofien wrote, "as if I or the Bank, without being authorized, only out of a misconceived zeal, have intruded into a political adventure"-he scratched out the word "adventure" and wrote in "undertaking"-" ... have intruded into a political undertaking from which you, those who understand things better, are now obligated to liberate yourselves.
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"When the late Arlosoroff learned of Hanotaiah's negotiations, he cabled to that company that they had no right to let this agreement remain a private one, but that it should be put under national control. This telegram does exist and I have seen it."
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Hoofien clearly specified that the Executive was in charge, not the Anglo-Palestine Bank or E. S. Hoofien. "Dr. Senator [of the Jewish Agency Executive] was present at Mr. Sam Cohen's talks with the Ministry of Economics. Our [bank's] office in Palestine informed the [London] Executive by letter about this matter as soon as we became involved. It is the ZVfD which demands this agreement and our participation.
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"The Conference of Institutions ... in which all authoritative institutions of the Yishuv [Palestinian Jewry] are represented, also explicitly demanded our intervention. . .. " Hoofien explained why the Transfer Agreement was imperative. The Third Reich was pauperizing all of German Jewry. The only way to stop this was economic intervention wherein Zionism could claim the right to salvage some of the assets via merchandise. "Our rationale is as follows: we, i.e. the Palestinian economy, cannot renounce our claims on Germany. We cannot afford the luxury of rejecting merchandise for which our economy does not incur any debit and which in effect constitutes merely the settlement of a just debt. To reject the merchandise would
be
tantamount to making a present to Germany [of the Jewish assets]. And that is what the opponents want the Yishuv to do. But the Yishuv has acquired its economic thinking in the school of hard knocks and it will accept the goods."
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Continuing his defenses, Hoofien wrote, "The counterargument makes use . . . of the sentimental issue, namely that with today's Germany one cannot enter into understandings or even negotiations. The Yishuv skips this argument because it knows that it cannot cash a debt from a debtor without speaking with him and without settling the matter. Even in the resolutions adopted [by the Congress] about an organized emigration, negotiations and agreements with the German government are needed-you have yourselves skipped this argument.
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"The opponents cannot say either, as I have heard during talks and discussions, that the thing should be done, but by no means by an official body. The Yishuv has no understanding of such a cowardly" -Hoofien stopped, crossed out the word "cowardly" and replaced it with "evasion"-" ... has no understanding for such an evasion.
If
it suits Jewish interest that Palestine cashes its debts from Germany, and if it suits Jewish dignity that negotiations are being led, ... then it is the right and obligation of the Yishuv's main economic institutions to handle this matter ....
If
it does not suit the Jewish interest and pride, then nobody should do it."
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