The Transfer Agreement

 A story that largely has gone untold, The Transfer Agreement: The Dramatic Zionist Rescue of Jews from the Third Reich to Jewish Palestine recounts the controversial Haavara Agreement between the Zionist movement (as a rescue operation) and the Nazi regime for expediency to achieve an objective.

Some stories largely hidden in the dark recesses of history fairly cry out to be told, and this overview is about one: the dramatic Zionist rescue of Jews from the Third Reich to Jewish Palestine starting in in 1933. The Third Reich, as a result, transferred some 60,000 Jews and $100 million (almost $1.7 billion in 2009 dollars or $2.3 billion in 2022) to Jewish Palestine. In return, Zionists agreed to halt a Jewish-led worldwide anti-Nazi boycott that had threatened Hitler’s regime in its first year.

Ultimately, the transfer (Haavara) agreement saved lives, rescued assets, and seeded the infrastructure of the Jewish state. This book chronicles the anguish underlying that agreement and documents one question: When will the Jewish people not be compelled to make such heart-rending choices?

Indeed, when will all people similarly confronted be freed from the desperation of such choices?

Was the Haavara Agreement madness…or genius? Clues lie within the folds of myriad details.

Jews were first to recognize the threat posed by Hitler and first to react. The Catholic Church, the Lutheran Church, and the Supreme Muslim Council all endorsed the Hitler regime. The United States, England, France, Italy, Russia, Argentina, Japan, Ireland, Poland, and dozens of other nations signed friendship and trade treaties, knowingly contributing to Germany’s economic and military recovery.

Hitler was unique: especially, he was organized. Among Hitler’s enemies, none were so well organized as the Zionists. While world leaders increasingly recognized the Hitler threat, they hoped it would not arrive. Zionists recognized Hitler’s threat—and had always expected it to come in some form. Those factors ultimately determined events of the era and the transfer agreement.

The Nazis had promised that upon assuming power, they would rebuild Germany’s economy, dismantle its democracy, destroy German Jewry, and establish Aryans as a master class—in that order.

With Hitler’s installation, Nazi atrocities intensified. Midnight home invasions by Brownshirts forced Jewish landlords and employees to sign papers at gunpoint favoring tenants or employees in disputes. Leading Jewish physicians were kidnapped from their hospitals to the outskirts of town and threatened with death if they did not resign and leave Germany. Dignified Jewish businesspeople were driven from their favorite cafes, savagely beaten, and sometimes forced to wash streets.

As these atrocities intensified, the American Jewish Congress released a statement: “The time for caution and prudence is past; we must speak up like men; how can we ask our Christian friends to lift their voices in protest against the wrong suffered by Jews if we keep silent?”

At the time, opinions were conflicted about anti-Nazi boycott movements—working to Hitler’s advantage because the Jewish-led worldwide anti-Nazi boycott was one weapon Hitler feared.

Many Jewish organizations believed in the power of Jewish boycotts: a weapon that Jews were ready and willing to use in emergencies to dissuade anti-Semitic forces.

Every implementation of a worldwide boycott set in motion atrocities in Germany against German Jews, however. German medical and judicial societies immediately expelled their Jewish members. In German cities, local SS contingents surrounded Jewish stores, smashed windows, and lobbed stench bombs. Frequently, police demanded that stores owned by Jews close.

The Jewish community in Germany reacted with terror. Prior outbursts had been sporadic, unorganized acts of intimidation and violence against individual families and businesses. The boycott against Jews of the 1930s, however, would become a systematic economic pogrom that would plague every German Jewish business and household. No one would be spared. What professional could survive if he could not practice? What store could survive if it could not sell?

So it was that as the worldwide Jewish boycott was organized against German goods, the German government instituted a boycott against German Jews. This anti-Jewish boycott, violent or disciplined, would be disastrous for Germany’s fragile economy at the time, and virtually everyone in Germany with realistic business sense knew it.

The anti-Jewish boycott in Germany created economic vacancies that eventually would be filled by unqualified rank-and-file Nazis. In Berlin alone, about 75% of the attorneys and nearly as many of the doctors had been Jewish before the Zionists’ boycott.

The Nazis essentially launched war against Jews, mobilizing all Germany. The Jews would launch their own war against the Nazis, mobilizing all the world. Anti-Hitler/Nazi boycotts, protest marches, and meetings were now in store. Germany was to be isolated politically, economically, and even culturally until she cast off the Nazi leadership, to be taught another bitter lesson.

The Zionist Solution

In the eyes of Zionists, the outrages of Hitler were nothing unexpected. Zionist ideology predicted periodic Jewish oppression in even the most enlightened lands of the Diaspora. Anti-Semitism had been part of Jewish life in Europe since the Jews’ emancipation in the mid-19th century, when Jews were permitted to emerge from the ghettos and participate in society with other Europeans—but on a less equal footing.

Zionists therefore saw Hitler’s rise as simply the latest anti-Semitic episode. German Jews were not impoverished peasants or lower-class merchants who owned few valuables. German Jews were solidly middle class, owning lands, homes, furnishings, and stock shares. They were lawyers, doctors, engineers, scientists, artists, and civil servants. They owned department store chains and commercial banks.

These men and women who’d had no place in the German Reich would find an indispensable place in the new Jewish nation. Behold: Israel was waiting within the borders of the Third Reich.

Here was a turning point for Zionism. The Movement’s task was to maneuver to the forefront of the international Jewish response and interpose Zionism and Palestine as the central solution to “the German Jewish problem.”

One of the primary founders of Israel, Theodor Herzl, detailed a blueprint for building the Jewish state that would organize the withdrawal of all Jews from Europe—a feat that carried an obvious appeal, even an unintended justification, for anti-Semites. That political arrangement was promised in 1917, when England issued its Balfour Declaration, committing Turkish Palestine to a Jewish homeland, should the Allies win World War I.

Nazi leadership, of course, relished the prospect of Jews’ expulsion, though the concurrence was clearly perverse: the Nazis sought Jewish cultural destruction and the Zionists a Jewish renaissance.

In response to Hitler’s anti-Jewish policies, Zionists organized a worldwide anti-Nazi boycott at the beginning of Hitler’s reign. Many Jewish organizations believed that was the only effective restraint against Nazi policies.

German leaders realized this anti-Hitler/Nazi boycott threatened to kill the Third Reich in its infancy, either through utter bankruptcy or by promoting an imminent invasion of Germany by its neighbors. Nazis realized that if they were to survive, the boycott would have to be ended.

Every revelation of an atrocity against German Jews, however, propelled the need for the Zionists’ countering boycott.

In a feat of truly divergent thinking, Hitler then proposed linking the purchase of German goods to the settling of German Jews in Palestine: by cultivating orchards in Palestine and using the Jewish national homeland as capital, the anti-Nazi boycott could be broken. The Zionist movement would not only be obliged to refrain from—and oppose—any boycott on German goods; it also would be obliged to sponsor German exports aggressively.

Moreover, the systemic aggress against German Jews would create vast pools of blocked German marks that Germany could use to pay debts. Every German pipe sold, chemical purchased, and pound of foreign currency earned contributed toward another dunam (measure of land area used in Israel and other parts of the former Turkish empire) and another citizen for Eretz Yisrael, the Holy Land, the territory of which include biblical Israel. At the same time, every economic or diplomatic knife slashed at Hitler merely lacerated hopes for a Zionist solution. The plan carried abundant political and financial incentives for the Third Reich.

Jews around the world were now having to choose between fighting Hitler or building Palestine: preserving the old or securing the new. The transfer agreement is the point at which Zionist and Nazi philosophical spheres first touched. German Jews could settle in Palestine if they brought German-manufactured goods with them, thereby breaking the economic boycott against Germany.

As German Zionists had conceived the idea, this massive influx of liquidated Jewish capital would not only bring the first wave of Jewish citizens’ money to Palestine; it would also deliver the investment capital needed to establish the Jewish state.

To Nazis, the territory of Palestine was a convenient dumping ground—in a sense, a remote, self-run concentration camp. To Zionists, this territory was the Promised Land, destined to be a Jewish state.

Palestine was now the crucial gateway to expanding German exports throughout the emerging Middle East market, including Egypt, Iraq, Lebanon, Syria, and North Africa. The Reich deemed this market essential if certain strategic raw materials Hitler craved for war were to be acquired via bilateral trade agreements.

Agreeing to the transfer, the German government felt sure, would trigger the breakup of the anti-Nazi boycott—because the Zionist movement would now essentially be in the German export business.

German Jewish wealth and immigrants would be transferred in a flow wholly dependent on the purchase of German merchandise and commodities.

Through liquidation of their assets, Jews would achieve independence for the first time in 2,000 years.

Those who rejected the anti-Nazi boycott in favor of the Zionist solution questioned whether Jews could ever win such a war…and if they did, would the battles only continue from generation to generation?

After praying for supporters and allies of the Jews for decades, Zionists finally realized that the opportunity to transfer would come not from friends but from foes, as Herzl had predicted.

After forty years of struggle to create a Jewish state, a sudden, spectacular turning point was reached.

For 40 years, there had never been enough money, land, or men; so long as those essentials were lacking, the Jewish state would never be.

But in an office on August 7th, 1933, all this changed. A few men working with telegrams, letters of introduction, images, and the power of prejudice and pretense, glimpsing an opportunity for salvation in the abyss of Nazi injustice, managed to help arrange that miracle.

Henceforth, when Jews were threatened, as they often had been and likely always would be, they would have a nation of their own to come home to: to enter not as a refugee or stranger, but as a full citizen.

The price of this new nation would be the abandonment of the boycott war against Nazi Germany. Whole branches of Judaism would wither, but the trunk would survive.

18th Zionist Congress opens in Prague

In August 1933, a week-long 18th Zionist Congress began, with each Jewish group bringing its own notion of whether such an agreement might represent a betrayal of the Jewish people or a daring move to save German Jews and create a national wellspring for Eretz Yisrael.

We now can see that God used the Zionist Movement in 1933 to bring about the transfer agreement—at the very end of the conference: delegates had spent the whole week disputing the agreement, discounting it, and then—only at the last minute—approving it.

Many future leaders of the new nation of Israel attended the congress in Prague. Clearly God was at work, preparing the Jewish people’s future well before 1948.

On September 3rd, 1933, at 4:30 pm, the final session of the 18th Zionist Congress began for 300 delegates from around the world, plus alternates. Each had one vote.

Those who understood the power of the transfer agreement knew in their hearts that the Jewish state would rise from the anguish and ashes of German Jewry. Indeed, German Jewry would be only the first wave of immigrants.

While it’s always the last key on the ring that opens the door, the passage of the transfer agreement was truly a miracle, confirming that God uses people, situations, and circumstances to bring about His greater purposes. What the devil had meant for evil, God utilized for good to save many of His people.

Most everyone at the 18^th Congress had seemed to be against the agreement…until everyone was for it. God, the master chess player always strategizing seven steps ahead, changed men’s hearts to bring about His will and purpose: deliverance for His people 15 years before the nation Israel was founded.

Some compared the Zionists’ confrontations with Hitler to the biblical confrontations in which Moses engaged with the Egyptian Pharaoh, when the question was about freeing stubborn, reluctant people from their captivity—and from their cattle, goats, and possessions. Was Moses to refrain from negotiating with Pharaoh? If he had, the Jews never would have made the exodus to Israel with the possessions they needed to establish themselves.

Hitler was a new pharaoh, the Transfer people argued, and German Jews were descendants of the enslaved people who had been so reluctant to depart from Egypt. As in Pharaoh’s day, without negotiation, there would be no freedom—no Israel.

God, hard at work on a reconstruction project amid all the chaos, was accomplishing an excellent thing.

4 Biblical themes in this story

1. God can use for good what the devil intended for evil—such as the Nazi Regime.
2. God is always thinking about tomorrow: the nation of Israel was birthed well before its 1948 founding.
3. God sets the stage for His future agenda, even using and changing the hearts and minds of adversaries.
4. When God is doing great work, bumps along the way can be expected: conflicts, opposition…no easy journey.

For years, Nazi leaders had cooperated with Zionists—not out of sympathy with Jewish nationalism, but simply to effect the removal of Jews from Germany and break the anti-Hitler/Nazi boycott.

Jewish Palestine’s rapidly expanding economy brought worker and commercial opportunities. More doctors, lawyers, engineers, teachers, hoteliers, restauranteurs, and entrepreneurs were needed. Several thousand German Jews who came to Israel on limited capitalist certificates filled many niches.

Fifteen years earlier, the nation of Israel hadn’t existed. Few could visualize what was to come into being, but one small group of men foresaw it all. Nothing would stop them—no force was too great to overcome. These men were instrumental in the creation of Israel, each leaving a fingerprint on the most controversial undertaking in Jewish history: the Transfer Agreement that paved the way for the state of Israel.

Was it madness…or genius?

Works Cited

Black, Edwin (2022). The Transfer Agreement: The Dramatic Zionist Rescue of Jews from the Third Reich to Jewish Palestine. Washington: Dialog Press.

The dramatic Zionist rescue of Jews from the Third Reich to Jewish Palestine. Washington: Dialog Press.