Immediately after becoming German Chancellor in 1933, Adolf Hitler started his campaign against “international Jewry”, ordering national widespread violent attacks against Jews and their property. Rhöm's Storm Troopers introduced a reign of terror breaking into properties, murdering people, setting their own prisons. On April 7, 1933 Hitler promulgated his first anti-Semitic decree dismissing all Jewish civil servant employees. This meant that Jews could no longer serve as teachers, professors, judges or hold other positions in public administration. Albert Einstein and hundreds of other Jewish scientists and members of other professions began to pack their bags and leave Germany supplementing the cadres of various British and American institutions. The events unfolding in Germany met with immediate reaction from the Jewish community worldwide. Jews, especially those in Eastern Europe, began boycotting German goods inflicting harm on the fragile German economy that relied on export trade. In America, American-Jewish Congress led by Stephen White and its allies, organised in March mass rallies at Madison Square Garden in New York and other American cities, which were broadcast worldwide. German stocks tumbled badly and President of the Reichsbank, Hjalmar Schacht, warned Hitler that the continued anti-Jewish boycott would lead to an economic catastrophe.
At this point, the Rothschilds and members of the Zionist movement came forward with a plan that would rescue the Nazi-German government. They planned to use the plight of the German Jews to facilitate their project of creating a Jewish state in Palestine. In March 1933, the Jewish delegation from Germany led by Martin Rosenbluth from Zionist Federation of Germany (ZVfD) arrived in London to seek help from Chaim Weizmann, Anthony Rothschild and Lord Sieff to the solution to the boycott problem. Zionists in London planned to form the liquidation company, an idea previously devised by Theodor Hertzl, to liquidate Jewish assets in Germany and bring proceeds to Palestine. Martin Rosenbluth's brother, Felix, was the first to suggest negotiations with the German government to lift the restrictions on currency exports and allow middle class German Jews to take out the equivalent of £1,000 to Palestine, which would satisfy British entry requirements, and would deliver the investment capital needed to establish Jewish state in Palestine. As the situation for the Jews in Germany was rapidly deteriorating, Sam Cohen, Jewish fraudster and businessman, was sent as an intermediary to approach the Nazi government. Cohen proposed for the German Jews' assets to be frozen in special blocked account of which emigrant could convert RM 15,000 into £1,000 to gain entry to Palestine. But instead of actually receiving the RM, the emigrant would receive its equivalent in land or equipment, the value of which would be establish by Hanotaiah Ltd. The company would use the emigrant's sperrmarks for the “purchase of all kinds of of [German] raw materials, pipes, iron constructions, agricultural machines, fertilizers, pumps, fertilizing machines, and chemicals”, which would then be transferred to Palestine.242 This arrangement resembled indentured servitude and gave prospect of making money for Hanotaiah Ltd, at the same time boosting German exports and fulfilling the Zionists' object of bringing Jews and capital to Palestine. The plan was supported by the American Zionists. “I urge that Germany shall be free of Jews”, said Edward Brandais, the head of the American Zionist Movement, in a conversation with New York rabbi, Stephen Wise, “Let Germany share the fate of Spain. No Jews must live in Germany.”243 For the Nazi Party this was a great opportunity to fulfil their agenda to cleanse Germany from the Jews and their influence. As early as in 1920s, Hitler admitted the Nazi willingness to embrace Zionism stating that “to reach our goal, we must use every means at our disposal, even if we have to make a pact with the devil himself.”244
Once the Nazi accepted Cohen's offer, the negotiations were taken over by the World Zionist Organization controlled by Chaim Waizmann and the Rothschilds. Sam Cohen was replaced with Chaim Arlosoroff, the Political Secretary of the Jewish Agency, an alter ego of World Zionist Organisation. The Zionists' negotiations with the Nazi immediately triggered a barrage of criticism from the Jewish community worldwide. On June 9, 1933 the Palestinian Revisionist newspaper Hazit Haam declared “At the time when the people of Israel in Palestine and abroad are in defensive war of honour against Germany...an official of the Jewish Agency suggests not only cancellation of the boycott but also a promise of a market for German imports...This should be viewed as putting a knife in the back of the Jewish people while attempting to stretch out the hand of friendship to the Hitler government.”245 Some radicals in the Revisionist movement led by Russian Jew Ze'ev Jabotinsky questioned Arlosoroff's right to be alive. On June 16, 1933, just two days after his return from negotiations in Germany, Chaim Arlosoroff was killed on a beach in Tel Aviv. The killing of Arlosoroff had outraged world opinion but did not stop the Zionists. The Zionists' aim was now to exclude Sam Cohen from ripping fruits of the transfer. On August 7, 1933, Hans Hartenstein, director of the Foreign Currency Control Office, met with the Zionist delegation: Georg Landauer, director of the German Zionist Federation; E.S. Hoofien, director of the Anglo-Palestine Bank; Arthur Ruppin, Zionist Organisation emigration specialist; and Moshe Mechnes, co-owner of Hanotaiah Ltd, and confronted them with Sam Cohen who had originally negotiated the transfer. Landauer and Hoofien argued that Hanotaiah was not trusted by the Jewish people and that only such trusted institution as the Anglo-Palestine Bank could be the clearing house of the transfer. The Anglo-Palestine Bank was owned by the Anglo-Palestine Company, which in turn was a wholly owned subsidiary of the Jewish Colonial Trust, which shares were owned and managed by Zionist Organisation in London,246 led by the Rothschilds and their associates. Hartenstein was reluctant to agree to this proposal until a telegram came from Consul Wolff in Jerusalem, which read that the Anglo-Palestine Bank: “...can absolutely guarantee the implementation of the transfer plan.”247 Cohen had no other option but to agree to relinquish his transfer to a trust company established by the Anglo-Palestine Bank.
The terms of the final TRANSFER AGREEMENT signed in August 25, 1933, provided for two clearing houses; one in Berlin, called in short Paltreu, under supervision of ZvfD, and one in Tel Aviv, called Haavara Trust (haavara meaning transfer), owned by the Anglo-Palestine Bank. The Jewish emigrants would deposit their marks into Paltreu's German-based blocked account, which would be used for purchasing German export goods, tools, building materials, pumps, fertilizer and so forth, which would then be exported to Palestine and sold there by the Haavara company in Tel-Aviv. Money from sales would be given to the Jewish emigrant upon his arrival in Palestine in an amount corresponding to his deposit in Germany from a linked financial institution, the Anglo-Palestine Bank. M.M. Warburg & Co would act as conduit of the money. After signing the transfer agreement with the Nazi-German government, the Zionists subverted anti-Nazi boycotts and between 1936-41 arranged the transfer of some 60,000 Jews, usually well educated middle class German-Jews, and $100 million from Germany to Palestine via Haavara or corollary aspects of the transfer.248 The emigrants often lost significant part of their investment in the process, but the Warburgs made profits, as did the initially small Anglo-Palestine Bank, which later changed its name to Leumi. The Haavara related funds founded multiple Jewish settlements along strategic corridors in western Galilee and in northern Negev, and major industrial enterprises. In this manner the Zionists led by the Rothschilds and the Warburgs helped to populate Palestine, at the same time stabilizing German economy and making profit by ripping off their own countrymen.
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242 Edwin Black, The Transfer Agreement. The Dramatic Story of the Pact Between the Third Reich and Jewish Palestine, First Dialog Edition (USA: Dialog Press Washington D.C., 2009), p. 133 »
243 Stephen Wise, Challenging Years: The Autobiography of Stephen Wise (New York: Putnam, 1949), p. 237; letter, Stephen Wise to L. D. Brandais, Sept. 19, 1933, BPM at AJA; cited in Edwin Black, The Transfer Agreement. The Dramatic Story of the Pact Between the Third Reich and Jewish Palestine, First Dialog Edition (USA: Dialog Press Washington D.C., 2009), p. 78 »
244 Black, The Transfer Agreement, p. 172 »
245 See Haaretz, May 24, 1933 (trans GZ); “Two Forces in Transjordan are Continually Fighting Between Themselves”, Doar Hayom, May 25. 1933; “The Stalin-Ben-Gurion-Hitler Alliance”, Hazit Haam, June 16, 1933 (trans. GB); cited in Edwin Black, Transfer Agreement, p. 150 »
246 Black, The Transfer Agreement, p. 226 »
247 Ibid., p. 248 »
248 Edwin Black, The Transfer Agreement. The Dramatic Story of the Pact Between the Third Reich and Jewish Palestine, First Dialog Edition (USA: Dialog Press Washington D.C., 2009), p. 379 »