37. The Political Committee

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ELIEZER 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.¹

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.² 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.³

"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."⁴

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.⁵

"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."⁶

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.⁷

"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."⁸

Broaching the question of the worldwide outrage, Hoofien wrote, "If the Jewish masses are upset-which is justified-and oppose seeing clearly the importance of the matter for the Yishuv, then the duty of the people's leaders is to instruct and enlighten the people, . . . not give in cowardly ... and sacrifice the interests of Palestine's construction to public opinion.⁹

"The second argument ... is that this agreement breaks the boycott .... Notwithstanding the fact that the boycott has not been formally declared as part of the Zionist Organization's political program, and without analyzing here the question of whether the boycott is a right or wrong weapon, ... it must be stressed explicitly once more that the whole argument is wrong and based on erratic reasoning. Boycott makes sense if [transferred assets] are realized by something other than purchased goods. But when the merchandise has no other equivalent, and in fact represents the compensation for our claims, then boycott is pure insanity."¹⁰

Hoofien continued writing defenses, rationales, and elucidations. His point of view focused totally on the necessity of saving Jewish assets. If the anti-Nazi boycott were successful, he believed, German Jews would be pauperized anyway. Why not convert part of that tragedy into reconstruction in Palestine and thus help avoid future emergencies through the establishment of a Jewish State? To resist this imperative, asserted Hoofien, would create war between Zionists and the Zionist Organization.¹¹

"If you want to enter into this absurd conflict with the Yishuv, whereas the whole world—after a quiet future analysis ...—valuates how much the Yishuv has been right and how much you have been wrong, so do what you please. Only do not pretend that you have not been warned explicitly and at the proper time. I consider your decision—" There was no time to complete the notes.¹² The Political Committee session was at hand.

Hoofien took his notes into the meeting room. Members of the committee included Meir Grossman, Stephen Wise, Menahem Ussischkin, David Ben-Gurion, and many others. Testifying were E. S. Hoofien, Berl Locker, Dr. Arthur Ruppin, and Mr. Sam Cohen.¹³

Locker began by stating that the Zionist Executive "did not conduct negotiations which led to the conclusion of the Transfer Agreement with Germany. Mr. Sam Cohen, who was in London early in June, showed the Executive a letter ... from the German Ministry of Economics, which resulted from negotiations conducted by Mr. Cohen on behalf of Hanotaiah. The German government intimated in that letter its readiness to allow Jews emigrating to Palestine to take with them RM 15,000 in cash and RM 10,000 in goods produced in Germany. The agreement provided for a total of RM I million, and the German Ministry was prepared to extend the agreement at a later stage. It was then contemplated to form a Liquidation Bank .... During those conversations with Mr. Cohen, it was thought that it would be better if his agreement were not confined to Hanotaiah, but embraced other organizations as well. The Executive was in no way in charge of negotiations."¹⁴

The next witness was E. S. Hoofien. In front of him were his notes detailing full complicity by the Zionist Executive. But Locker has just asserted that the Executive was totally uninvolved, that the whole matter was Sam Cohen's doing. If Hoofien read from those nine pages of stationery, he would utterly discredit Locker, Mapai, and the entire Executive, and probably kill the Transfer Agreement.

So instead of reading from the front of the stationery, Hoofien read from the reverse sides which bore little more than his handwritten chronology of events. "On May 19," Hoofien began, "the German Ministry of Economics addressed a communication to Mr. Sam Cohen, putting forward the proposals to which Mr. Locker has already referred." Opposition then arose to Hanotaiah acquiring a monopoly. In July, he [Hoofien] conferred with Dr. Landauer in Berlin and suggested that the Anglo-Palestine Bank was really "not anxious" to be involved in Cohen's agreement. A Conference of Institutions was then formed in Palestine, recalled Hoofien, reading his chronology almost line by line. They urged that "the Transfer Agreement be taken in hand."¹⁵

Hoofien recalled the August 7 Wilhelmstrasse meeting and his subsequent efforts to complete all the procedural details. He admitted that the Anglo-Palestine Bank did help create the Berlin trust company that would serve as the Liquidation Bank. But Anglo-Palestine's only function, he argued, would be holding German merchandise sale proceeds until German Jews arrived in Eretz Yisrael to be reimbursed. The motive was to collect in an organized fashion the money belonging to emigrating German Jews. And, he said, the negotiators were guided throughout by the Conference of Institutions.¹⁶ Hoofien had avoided implicating the Zionist Executive by identifying the Conference of Institutions as the source of his authority. Locker's story stood unchallenged.

Then Dr. Ruppin testified. He argued that without some agreement with the Reich, organized emigration would be impossible. Nothing in the agreement violated the boycott because no new currency would come to Germany as a result of the transactions. Dr. Ruppin did not explain that after the first 3 million reichmarks were transferred, all other merchandise transfers would involve at least partial payments in foreign currency. Nor did he discuss the numerous associated commercial enterprises that were being organized partly on transfer assets and partly on foreign currency.¹⁷

Question: Was it still possible to abolish the Transfer Agreement? Ruppin said it was indeed possible, but such an act would be utterly irreconcilable with the interests of Zionism, Palestine, and German Jewry.¹⁸

Final testimony was rendered by Mr. Sam Cohen, whose comments were brief. He basically reiterated the assertions of Hoofien and Ruppin, adding that the original currency exemption allowed emigrants bound for Palestine to take the necessary £1000, but the details were "not settled. That concession could easily be withdrawn." By negotiating the Transfer Agreement, the currency exemption was totally stabilized. Proof that it was not advantageous to Germany, said Cohen, was the fact that Reich currency authorities opposed much of the plan because it failed to provide Germany with foreign currency.¹⁹

Numerous questions were asked by the Political Committee members. Hoofien provided most of the answers. Would the Transfer Agreement allow Germany to dump goods on the Palestinian market, thus destroying locally manufactured wares? Not really. Would the Transfer Agreement increase employment opportunities for German workers? Obviously yes, but not all that much. Did German officials act in a hostile, denigrating manner? No, generally, and besides, the agreement was good from the Jewish point of view. How many families could really emigrate with part of their assets in the near future? Probably about 2,000 families. About 650 individuals had already emigrated . .. [and] brought with them £650,000 [more than $3 million].²⁰

At one point Menahem Ussischkin, chief of the Jewish National Fund, started criticizing the Transfer Agreement and the Anglo-Palestine Bank's role in it. As a founding father of the Anglo-Palestine Bank, Ussischkin's comments were taken seriously. Putting aside the moral questions, Ussischkin asked, how could a bank involve itself in anything as controversial as this? A gentleman sitting next to Hoffien scrawled a note to Hoofien: "Uss. definitely wants you to get out of it--don't be mistaken about it. He only gives you a proper motive for doing it." Hoofien nonetheless cited the bank's political obligations. At this, the gentleman next to Hoofien slipped him another note: "You have put the case of the A.P.B. very well but . .. a bank runs away from anything political. ... They don't know what the depositors will do."²¹

Questions continued. There were so many complicated facets to the Transfer Agreement: moral, financial, practical. What would the British say, their trade interests in Palestine having been severely diluted? How should Zionist leaders answer angry Jewish critics? Just how badly would the Transfer Agreement hurt the anti-Nazi boycott? Was it Zionism's destiny to work with anti-Semites as Herzl had commanded? Or was Zionism's larger obligation to fight the persecution of Jews? The rationales and criticisms went back and forth. Was it better to fight Hitler, or concede the battle and convert Nazi persecution into a salvation for the Jewish people? All the known arguments were posed and counterposed, considered and reconsidered.²²

When the Political Committee meeting was over, most of its members were thoroughly confused. On the surface, it was easy to shout denunciations as though everything was either black or white, but the issues were so monumental, so emotional, and laced with so many imponderables that it became impossible for most members to adopt clear postures of either endorsement or rejection.

Some compared the confrontation with Hitler to the confrontation with the Egyptian pharoah. Then, too, it was a question of freeing a stubborn and reluctant people from captivity, freeing them with their cattle and goats and possessions. Was Moses to refrain from negotiating with the pharoah? If he had, the Jews would have never made an exodus to Israel with possessions needed to establish themselves. Hitler was the new pharoah, pro-Transfer people argued. The German Jews were the descendants of the slaves reluctant to depart. As in pharaoh's day, without negotiation, there would be no freedom, no Israel.

With all their biblical schooling, however, these well-meaning men forgot that Moses would not compromise and that freedom for the children of Israel was secured not by prizes but by plagues.

The moderates who emerged from the August 2g Political Committee session were still undecided about the Transfer Agreement, but the extremes of Zionism-Mapai and Revisionism-had only reinforced their earlier attitudes. Mapai still saw transfer as the beginning of national actuation. Revisionists more than ever saw transfer as a betrayal the Zionist movement was duty bound to rescind. Now that representatives of all parties had heard Political Committee testimony about at least the superficial aspects of the agreement, the Revisionists believed they could appeal to the delegates for a resolution of nullification. As expected, the only way Mapai could block this was by intensifying their allegations that the Revisionists killed Arlosoroff.

Grossman's interpellation called for the Political Committee to make a report at the Tuesday night session or the final session on Wednesday morning, August 30. But the committee needed far more time. Mapai's forces also needed more time to lobby for a resolution indicting the Revisionists for Arlosoroff's murder. Furthermore, routine Congress business had not yet been completed because of all the delays. Congress leaders were forced to extend the convention until September 3.²³

After the Political Committee adjourned, its members went directly to the main hall for more floor debate. At 9:I5 P.M. the general session was called to order by Motzkin. The frustration expressed by the initial speakers reflected just how rankled the delegates were becoming and how impatient they were for a united stand. One eloquent Austrian General Zionist, Oskar Gruenbaum, blamed both the Revisionists and Mapai. "I keep imagining a picture. We are all fighting on ice and the ice breaks and we don't realize that we are drowning. If we continue with a policy like this, then the waves will drown us and you will share the guilt that Jewry loses its last chance-Zionism."²⁴

The next speaker was a Polish Mapai delegate who reflected rank-and-file Mapai disillusionment with their own party's response to Hitler. "We are overlooking the big picture for the details. The big national disaster, the German tragedy, this we exploit for money collections and coJonization. But this is not enough. The whole Jewish world in Europe is psychologically ready for an emigration. What are we doing to organize this movement? ... One thousand to two thousand certificates in view of the agony of six hundred thousand Jews is a terrible shame."²⁵

Later, Berl Katznelson, one of Mapai's central figures, stepped to the dais. His goal was to marshal delegate frustration against Revisionism and undo the losses suffered earlier when Stephen Wise battered the entire Mapai position from his ostensibly neutral General Zionist corner. So Katznelson's speech fired first at Wise. "Dr. Wise is a prominent personality and his voice . . . is heard all over the world. But when this voice is used . . . to spread false concepts, then this is very dangerous." Attacking Wise for being a labor crusader in America but anti-Labor while in Prague, Katznelson declared, "There are Jews, Zionists, who are very radical. They get excited about liberty, progress, labor rights, and democracy. But all their radicalism and their progressive concepts they confine to the non-Jewish world. When they come to us, they forget the basic concept of organized labor and social rights. In regard to America, Dr. Wise is a very progressive man." Katznelson then turned to the Revisionists and cried, "In America, it would be impossible that Dr. Wise become the speaker of [fascist] black forces.²⁶

"Here it is possible. Here people, who in regard to the world in general can be called almost socialist, here they can operate even with ... the Revisionists. While here, he [Wise] has chosen to associate himself with those who are helping to create an atmosphere similar to Hitler's."²⁷

Addressing delegates critical of Mapai's lackluster reaction to the German crisis, Katznelson cried, "It is not our fault that we did not come to the Congress with proposals. Zionism fell into a terrible disaster. Our movement is purely a movement of liberty. Now that it has been stained with blood, we cannot proceed with constructive labors .... If you had read ... [news of the Arlosoroff murder] in the press of Eretz Yisrael ... which arrived here today, then you would understand this Congress cannot do anything, until it has been freed from this disgrace."²⁸

Revisionist hecklers shouted out, "Then why did you convene the Congress?" Katznelson shot back, "That's why we convened it. You thought you could playa double game. You act like you don't know anything [about the Arlosoroff murder], but others came and revealed it."²⁹

At this point, Grossman, seeking to remind the audience about the Transfer Agreement, yelled in Yiddish, "How does it go with your business?" The word business was uttered by Grossman not in Yiddish, but in English with a hostile inflection.³⁰

Katznelson, hearing this, attacked Grossman for insisting on interpellations about the Transfer Agreement while refusing to discuss the Arlosoroff issue. "I admire the equanimity of Grossman," Katznelson said sarcastically. "He's got time and he can remain in silence [on Arlosoroff]. But there are things which don't let him rest [such as the Transfer Agreement], and which he demands should be dealt with immediately at the Congress. This he demands, when the matter can be brought forward to the press. But he, the man of the Democratic Revisionists, remains silent when every day things are published [about the Arlosoroff case] which bring only shame ... to our movement." Hitting hard with the murder accusation, Katznelson cried, "Only one of us has been slaughtered so far. Nobody can guarantee that tomorrow a second will not fall .... Therefore the first business of the Congress is to liberate Zionism from this right now!" Like Grossman, Katz-nelson broke from Yiddish to speak the word "business" in English and with an equally if not more demonstratively hostile tone.³¹

This is how it went. Hour after hour, night after night. The crisis in Germany was omitted from the agenda. The menace of Hitlerism was bypassed. The Nazis must have been smiling.

By Wednesday morning, August 30, Political Committee members had slept a night on the subject of the Transfer Agreement. Some convinced members became uncertain; some uncertain ones became convinced. Hence, there was still no unanimity when the Political Committee convened its second meeting that morning.

The session opened with a background talk by Professor Selig Brodetsky, who had been deeply involved in the transfer negotiations. He explained how the Zionist Organization had taken decisive steps early on in response to the rise of Hitler. Information was obtained through British government channels, and Neville Laski of the Board of Deputies and Leonard Montefiore of the Anglo-Jewish Association were influenced to avoid an "open struggle against the Third Reich." This was done to keep the lines of communication open between the Zionist Organization and Berlin. The Transfer Agreement had obviously created great dissatisfaction throughout the Jewish world, Brodetsky conceded, but he insisted the agreement was needed if German Jewish emigration was to be organized.³²

Professor Brodetsky's comments, however, gave Stephen Wise no satisfaction. Wise demanded to know how Nazi propagandists could be prevented from seizing upon the Transfer Agreement to discredit the entire anti-Hitler boycott movement. Brodetsky could not provide a sensible answer.³³

Mindful of Untermyer's ultimatum that the Congress either disown the Transfer Agreement or suffer the recall of the American delegation, Wise laid down an ultimatum of his own. Either the Political Committee clarify how the Transfer Agreement was not a gross breach of the boycott, or Wise would issue a statement on behalf of the entire American delegation condemning the agreement. Such a move would almost certainly trigger the recall Untermyer had promised. Transfer advocates heatedly protested, but Wise insisted he would take public action unless the committee did as he demanded.³⁴

Recriminations and threats continued throughout the day as the Political Committee struggled to resolve the transfer controversy.³⁵ No progress was made, but by meeting's end it had become clear that Mapai's grasp on the Congress-when it came to the transfer question-was indeed weakening. There was now the clear possibility that the unpredictable Congress delegates could be swayed against the agreement. To that end, the Revisionists began planning a minority resolution calling upon the full Congress to repudiate the Transfer Agreement and forbid any future pacts with Germany.

True, the Revisionists' earlier minority boycott resolution had been a total failure, but during that fight, they'd had Stephen Wise working against them. The Revisionists could now count on a dismayed and angry public and the support of Stephen Wise to give their resolution at least a chance.

The Wednesday August 30 Political Committee adjourned just in time for the members to reach the main hall to attend the last session of open debate. The Revisionists were ready to make transfer the big issue. No Revisionists were scheduled to speak that night, but when Berl Locker came to the dais, the Revisionists were ready.

Locker was trying to improve Mapai's image of being too preoccupied with factional feuding to have responded properly to the Hitler crisis. Therefore, much of his speech was devoted to a compassionate reading of the German Jewish tragedy and Mapai's reaction to it. "I know that immediately, when the first news about events in Germany arrived," Locker said in a dramatic voice, "every Zionist and also every Jew asked himself how is it possible to get out as many Jews as possible from Germany and how can they be brought to Eretz Yisrael." At this, the Revisionists in the audience burst into conspicuous laughter, with several shouting, "Through an agreement!"³⁶

Instantly, Locker stopped to answer the hecklers, declaring, "If I am not wrong, and I am sure that I am not, two days before the murder of Arlosoroff, an article appeared against Arlosoroff because of his position on the question of German Jewry, and in the same paper Jabotinsky wrote that it is possible [for the Revisionists] to come to an agreement with Hitler."³⁷

"False quotations! False quotations!" shouted Jabotinsky's supporters.

"False quotations?" Locker answered. "It won't help you anything if you call these quotations false. I assure you, such things were written." Believing the interference to be over, Locker proceeded with his address. But the Revisionists continued to heckle, shouting out "certificates," in castigation of Mapai's decision to force an immigration certificate priority for their own halutzim even over the German Jews themselves. Locker continued, "I can only say to the people that call out the word 'certificate,' that you have a comfortable point of view [not being responsible for quota negotiations with the British as Mapai people were]. When we succeed in obtaining a big number of certificates, then you like it. But when the government only gives us a few, then who is guilty-the Zionist Executive, Weizmann and Mapai?" Revisionist hecklers answered the question: "The [socialist] internationale!"³⁸

The scorn and skirmishing continued until late that evening. Once again, nothing was accomplished. But just as Mapai had been able to block the Revisionists from rallying the delegates to oppose the Transfer Agreement, so had the Revisionists been successful in preventing a successful purge of their party from the Zionist structure.

Mapai understood that it was losing its war to destroy the Revisionists. Just after the session adjourned, Mapai leaders convened an all-night emergency session of the Actions Committee to plan their strategy for ultimate victory.³⁹ The big push would come the next day.