IBM's Thomas Watson Receives Nazi Merit Cross of the German Eagle as IBM Profits from Punch Card Technology

IBM Chairman Thomas J. Watson receives the Merit Cross of the German Eagle with Star from Adolf Hitler in June 1937 while serving as President of the International Chamber of Commerce, becoming the first American honored by Hitler with this special award created to “honor foreign nationals who made themselves deserving of the German Reich.” The medal, bedecked with swastikas and worn on a sash over the heart, ranks second in prestige only to the German Grand Cross and recognizes Watson’s role in facilitating IBM’s highly profitable relationship with Nazi Germany through punch card technology that enables unprecedented efficiency in Nazi demographic tracking and bureaucratic operations.

Watson’s Nazi medal reflects IBM’s strategic technological relationship with Germany during the 1930s, when IBM’s German subsidiary Deutsche Hollerith Maschinen GmbH (Dehomag) operates as the company’s most profitable foreign division. Watson travels frequently to Germany during the 1930s, micromanaging Dehomag while IBM’s majority-owned subsidiary supplies the Nazi regime with Hollerith punch card and accounting equipment starting in the early 1930s. Nazi concentration camps operate “Hollerith Abteilung” (Hollerith departments) using this technology, and IBM’s German profits soar as Watson greatly expands Dehomag’s operations throughout the decade.

The 2001 book “IBM and the Holocaust” by Edwin Black argues that Watson personally approved and spearheaded IBM’s strategic relationship with Nazi Germany in pursuit of profit, and that IBM punch-card technology—a precursor to the computer—allowed the Nazis to automate demographic identification efforts that made persecution far more efficient and systematic than would otherwise have been possible. While some historians dispute whether Watson knew the deadly uses to which IBM’s technology would be put, IBM technology undeniably facilitated Nazi bureaucratic efficiency during a period when the perilous state of Jews in Nazi Germany was regularly described in newspapers. Black notes that “whether this is because IBM officials never asked or because they simply never discussed it,” no “smoking gun” proves Watson knew how the machines were being used, but “Watson should have known.”

Watson retains the Nazi medal for three years, finally returning it only in June 1940 amid public outrage during the bombing of Paris, when anti-Nazi sentiment in the United States reaches fever pitch. By this point, Nazi persecution of Jews and political opponents has been undeniable for years, making Watson’s prolonged acceptance of the honor particularly damning. The episode demonstrates how American corporate leaders could maintain highly profitable relationships with fascist regimes even as those regimes engaged in violent suppression of political dissent, intimidation and discrimination against Jews, and preparation for aggressive war. Watson’s three-year retention of Hitler’s medal while IBM profited from Nazi contracts establishes a template for corporate collaboration with authoritarian regimes that prioritizes profit over human rights, prefiguring later debates about American business relationships with apartheid South Africa, Communist China, and other repressive governments.