Chapter 3. Germany: 1933-1938

[3.8. Joint's money questions - percentage of the sectors]

[Joint does not want to have dollars to change in Germany - payments abroad - payments by the German Jews]

Very soon the problem arose of whether to send dollars into Germany. In 1933 and 1934, and to some extent even in 1935, dollars were sent in; but JDC was looking for a way to prevent foreign currency from accruing to the Nazi regime through JDC's support of German Jewry. As early as July 24, 1933, James N. Rosenberg penned a memo to Paul Baerwald and Felix M. Warburg saying he was against sending dollars to Germany,

(End note 47: 14-47)

and by (p. 125)

the end of the year a way was found to avoid this. In a letter dated December 16, 1933, Eric Warburg, son of Max M. Warburg, wrote to James N. Rosenberg that the German Jewish financial expert and friend of the Warburg house, Hans Schaeffer, had worked out the so-called educational transfer plan, which had the approval of the German authorities.

(End note 48:
-- 14-46; and:
-- Warburg archives at Cincinnati (hereafter, WAC), Box 316 (d), interview of James G. McDonald with Dr. Fritz Dreyser, vice-president of the Reichsbank. It was apparently at this meeting that the final details were thrashed out and the Germans consented to the implementation of the scheme).

Under this scheme well-to-do parents would send their children abroad to study; they would pay for this in German marks at a somewhat higher rate than usual, the money to be given to ZA [Central Committee, Zentral-Ausschuss] or RV [Reichsvertretung]. JDC would then pay all the children's fees and expenses in hard currency abroad. It took some time until all the needs of ZA could be covered in this way, but generally speaking no dollars were sent into Germany by JDC after 1935.

ZA's budget was for the central organizations only. The communities had their own budgets and raised taxes to meet them. ZA's central budget was met by local collections, contributions by the communities, and the grants of foreign organizations. But in actual fact, German Jews were covering the larger part of their needs themselves, and JDC contributed only to a part of the German Jewish community's effort, namely, to the budget of ZA.

[The split of the funds according to sectors]

The money thus received was then spent on the various ZA activities in different proportions. For example, in 1935 emigration accounted for some 20 % of the expenditure, whereas in 1936 this rose to about 40 %. Economic aid and vocational training remained fairly stable at around 25 % of the budget. All the other items - schools, welfare, organizations, and the like - took less by percentage, but with the overall increase in the budget this did not mean a reduction in absolute figures. On the whole, these were the proportions that prevailed in subsequent years as well.

Some small sums of money allocated by JDC to Germany did not go through ZA. Late in 1933 the American Friends Service Committee (AFSC) offered their help in dealing with individual cases in Germany, where operations through recognized German agencies were impossible or inconvenient. Much of this work was actually only half legal, and the Quakers did the job very efficiently. The relationship between the two agencies, based on a common (p. 126)

Table 5: JDC Expenditures in Germany (in German marks - about 2.5 marks per $)
Year	JDC expenditure	Total ZA budget	Total raised in Germany	JDC percentage of ZA budget
1934	855,427	2,418,146	13,000,000	35.0 %
1935	933,000	2,863,000	21,000,000	32.5 %
1936	1,188,884	4,123,125		28.7 %
1937	1,610,000	4,400,000	20,000,000	36.3 %
(End note 49: Based on the following main sources: -- 28-30 - ZA reports for 1935 and 1936 -- 28-3 for the 1937 RV (ZA) budget; -- R22-ZA report for 1934 -- R19-annual report for 1933; -- R16-annual report for 1934, and Kahn's report for 1934, 1/3/35 [3 January 1935] -- R15-Kahn's Bulletin for I.1936; -- R13-draft of 1936 report, 5/28/37 [28 May 1937] -- and Baerwald's letter to F.M. Warburg, 3/3/37 [3 March 1937]; -- Executive Committee meetings of 1/4/34, 3/6/35, 2/10/36, 12/9/37; -- summary by E.M.M. Morrissey on 3/2/36 in WAC, Box 345 (a). The figures unfortunately show fairly wide discrepancies, sometimes of over $ 10,000. The problem of the exchange rates had a great deal to do with this; we have relied chiefly on summaries made after the close of each year, for internal purposes, and have disregarded claims made in public).
Footnote: JDC expenditure: JDC in New York had the following figures (this included small allocations that did not go through the ZA budget): 1933: $ 197,000; 1934: $ 440,000; 1935: $ 290,000; 1936: $ 546,000; 1937: $ 686,000 (End note 50: Kahn to JDC, September 1938, 9-27) Footnote: Total raised in Germany: That is, the total sums raised for public purposes by all Jewish groups, communities, and organizations, including RV [Reichsvertretung] and ZA [Central Committee, Zentral-Ausschuss]. Footnote: JDC percentage of ZA budget: Local fund raising brought forth 42.8 % of the funds for the 1935 budget of ZA, 41 % in 1936, and 35.8 % in 1937. The difference between that and the JDC contribution, on one hand, and the total required, on the other, was provided largely by ICA and the Central British Fund for German Jewry (CBF).

idea of service without political strings, had been very close ever since World War I; in the German emergency this relationship prompted Kahn to say, "I should like to do something for the Quakers, who have behaved very well, as always."

(End note 51: 22-Gen. & Emerg. Germany, AFSC)

Reports by W.R. Hughes, the Quaker representative in Germany in 1934/5, gave JDC some insight into the type of work the Quakers did. Apart from the Quakers, JDC also gave money to other nonsectarian efforts, the total for the period up to 1936 being $ 116,557.

(End note 52: 29-Gen. & Emerg. Germany, nonsectarian relief)

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