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D

Yehuda Bauer: My Brother's Keeper

A History of the American Jewish Joint Distribution Committee 1929-1939


[Holocaust preparations in Europe and resistance without solution of the situation]

The Jewish Publication Society of America, Philadelphia 1974

Transcription with subtitles by Michael Palomino (2007)

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Chapter 4. Refugees: 1933-1938
[4.10. The involvement of the Joint in Palestine since 1920 - Emergency Fund since 1929]

[Investments of the Joint Distribution Committee in Palestine]

JDC's involvement in Palestine had begun with the founding of the organization, for JDC had come into being in the wake of efforts to aid suffering Jews in Palestine in 1941. In the 1920s Warburg's and Baerwald's non-Zionism did not preclude a deep interest in what they considered to be constructive work in that country. They took a businesslike approach to the growth of Palestine's economy by investments that would produce profits, loans to sound enterprises, and the development of natural resources.

[The Zionist funds just organize immigration to Palestine - nothing more]

The Zionist-inspired funds had a different policy. What was important to them was the development of the country's capacity to absorb immigrants - and if money had to be "wasted" in order to build enterprises or to develop social experiments whose results would take many years to prove themselves, they were not averse to that. The desire for economic profit to them was secondary to national interests.

[Partly JDC leaders consider Palestine like "USA" to settle]

To a number of JDC leaders, Palestine was essentially an Arab country into which Jews had a right to immigrate and in which they should settle and develop their institutions, in much the same way that they had done in North America. "The picture of British guns", one of them said, "forcing a foreign rule upon a majority population so that a minority can obtain political, economic and cultural privileges does not accord with the conscience of peoples bred to the principles of free self-government."

(End note 58: WAC, Box 252, Marshall to Weizmann, 12/4/29 [4 December 1929])

[1929: Palestine: Warburg establishes tripartite committees with Moslems, Christians and Jews - committee for cooperation]

Warburg, with his penchant for neat organizational structures, was trying in 1929 to set up tripartite committees of Moslems, Christians, and Jews. This was to be crowned with a committee for cooperation, chaired by his friend, Judah L. Magnes, chancellor of the Hebrew University.

(End note 59: WAC, Box 252, Warburg to Magnes, 10/9/29 [9 October 1929])

[August 1929: Arab rioters murder Jews at Hebron and other places]

All this came in the wake of the August 1929 disturbances during which Arab rioters brutally murdered large numbers of defenseless Jews at Hebron and other places.

[Joint does not see: Support Palestine means support a Jewish national movement]

Basic to the approach of JDC leaders was a misunderstanding of the tremendous drive of a desperate Jewish nationalism, now swiftly spreading to the North American continent as well, with which they were utterly out of (p.159)

sympathy. They thought they could channel what they considered to be the more moderate Zionist ideas into investment companies and business expansion and ultimately arrive at some political compromise guaranteeing civil rights to Jews. But they, too, felt that they had to participate somehow, that in some way Palestine was their concern as well; and in the process they helped to build solid foundations for a Jewish national movement in Palestine - a result that they had not foreseen and certainly would have deprecated.

[1920s: Palestine: Working groups under indirect JDC supervision]

In line with JDC principles generally, work in Palestine in the 1920s was slowly transferred to responsible groups that carried on under indirect JDC supervision. JDC supported the Hebrew University and some yeshivoth directly.

[June 1925: JDC Brandeis wing installing Palestine Economic Corporation (PEC)]

But in June 1925 it joined the Brandeis wing of the Zionists in setting up the Palestine Economic Corporation (PEC). To this body it transferred all its economic work in Palestine and promised additional funds. All this came to a total of $ 1.5 million, which was to be paid within three years.

[1922: JDC and ICA found the Central Bank of Cooperative Institutions in Palestine]
Most important among the assets transferred was the majority share of JDC in the Central Bank of Cooperative Institutions (founded 1922), of which the other main partner was ICA. That bank, run (starting in May 1925) by Harry Viteles, an American who had settled in Palestine, had become a central banking institution for Palestine's budding cooperatives. Between 1922 and 1929 it loaned $ 3 million to a variety of local bodies and individuals.

[Joint with the Loan Bank (Kupath Milveh)]
Other assets transferred included the Loan Bank (Kupath Milveh), reorganized in 1924, which provided small loans mainly to small businessmen and artisans on the same lines as the JDC kassas did in Eastern Europe.

[Jewish settlements 1922-1926 - crisis 1926/1927]
All these activities were vital in enabling the young Jewish settlement in Palestine to weather the crisis of 1926/7, which resulted from an ill-advised building boom and rash investments in trade.

[Joint actions in the Palestine Economic Corporation (PEC)]
JDC could not fulfill its obligations to PEC because of the economic crisis in America. Had PEC not been, practically speaking, a JDC affiliate, JDC would have run into considerable difficulties because of its inability to pay the full amount promised. But with (p.160)

Warburg as honorary president, and Bernard Flexner, another JDC stalwart, as chairman, work continued despite the fact that JDC had only paid in $ 1,164,000 by early 1930 and was paying PEC only small amounts of the rest of the sum throughout the 1930s.

[Activities of the Palestine Economic Corporation (PEC): Jerusalem, Tel Aviv - purchase of land - infrastructure - mining]

PEC invested its funds in Palestine not only through the institutions already mentioned but also by supporting the Mortgage and Credit Bank, which helped finance the building of much of modern Jerusalem and northern Tel Aviv. In 1932, with PEC help, the bank participated in setting up the Kiriat Hayim suburb in Haifa and a number of smaller urban settlements elsewhere. PEC joined PICA (ICA in Palestine) in supporting the Palestine Water Company and helped equip them with modern American drilling machinery. The Haifa Bay Land Company, in which PEC also invested handsomely, bought land in Haifa Bay and provided settlers with easy access to land.

[This land was bought from rich Arabs - and the poor Palestinians could only watch].

Flexner, Warburg, and Robert Szold also represented PEC on the board of the Palestine Potash Company, which was developing the Dead Sea resources, after PEC had acquired $ 262,631 worth of the company's shares.

[Herzl had promised that there could be gold in Palestine to find like in South Africa. That means that founding of "Jewish State of Israel" is also a kind of gold rush - but the promises of Herzl in his racist booklet "The Jewish State" only were false fantasies].

[March 1929-Jan 1931: King David Hotel in Jerusalem]
In March 1929 PEC provided 20,000 pounds of the 165,000 pounds subscribed to the Palestine Hotels Company, organized by private investors in Egypt and England. As a result, the King David Hotel in Jerusalem was completed in January 1931.

(End note 60: Files 107-17 (period up to 1933)

[Since August 1929: Moslem crowds rioting in Jewish settlements]
Another JDC involvement in Palestine affairs resulted from the August 1929 disturbances. Moslem crowds, incited by the mufti of Jerusalem, Amin El Husseini, killed and pillaged in Jewish settlements wherever they could.

[23 Aug 1929: "USA": Emergency Fund for the Relief of Palestine Sufferers established]

On August 23 the news regarding the slaughter of Jews at Hebron had reached the United States, and within four days an Emergency Fund for the Relief of Palestine Sufferers had been set up under David A. Brown of JDC, with the full participation of the Zionists. Julius Rosenwald, Nathan Straus, and Felix M. Warburg were honorary chairmen. The participation of Rosenwald marked the effort as essentially humanitarian and nonpolitical. 25,000 dollars was donated by each of the three chairmen and $ 50,000 by JDC. In the end total contributions (p.161)

amounted to $ 2,210,474. Together with contributions collected in Palestine itself, the total amount was 589,768 pounds.

The next problem was how to spend the money.

["USA"-Palestine: Emergency Fund: Jonah J. Goldstein and his wife are nominated to distribute the funds - Emergency Fund distribution committee established]

In September 1929 Warburg nominated Judge Jonah J. Goldstein and his wife, Mrs. Harriet B. Lowenstein-Goldstein, comptroller of JDC, to go to Palestine and distribute the funds there. On their way the Goldsteins stopped over in London and arranged for the coordination of British and American efforts.

In Palestine, local and British Jews soon took charge, and the Goldsteins became but partners in the effort. They left in December 1929, and the expenditure of funds was supervised by a committee composed of Brig. Frederick Kisch, a British Zionist leader who lived in Palestine, Pinhas Rutenberg, founder of the Palestine Electric Company; and Maurice B. Hexter, who represented JDC interests. The practical work was done at first largely by Mrs. Bentwich, later by the Palestinian Zionist Elijah Berlin and Charles Passman (Passman, an American, represented ICA in Palestine).

The funds collected were much larger than the situation actually required. The families who had had to leave Hebron and a few other places were quickly settled, and their needs seen to. In fact, local funds had satisfied most of these needs before the American fund became effective.

[Since Dec 1929: Emergency Fund changes from relief to reconstructive activities - investment fund]

In December [1929] a reorganization of the fund led to a change from relief to reconstructive activities. As a result, quite unexpectedly the Emergency Fund, originally intended as a pure humanitarian gesture, became an investment fund that supported such things as land buying (together with ICA), the development of the Huleh Valley concession, lands in the north of Palestine, the settlement of Hartuv near Jerusalem, Ein Zeitim near Safed, and the resettlement of Be'er Tuvia, which had been destroyed in the disturbances. Apartment houses near Haifa, security buildings (which, in fact, meant subsidies for the Haganah), telephones, access roads, and so on were financed by the Emergency Fund. In Jerusalem the agricultural school at Talpiot and the fortress-dining hall at Ramat Rachel, which in 1948 broke the Egyptian attack on the southern approaches to the city, now stand (p.162)

as monuments to the Emergency Fund.

(End note 61: R10, report of the Emergency Fund, 1936, by Maurice Hexter. Cf. also interview with Judge Jonah J. Goldstein (H)

A total of 332,748 pounds was spent on this kind of reconstruction, as distinct from relief.

[1922-1933: Joint Distribution Committee is not investing much in Palestine]

In the early 1930s, until Hitler's takeover, JDC did not spend large sums of money in Palestine; it limited itself to partial support of some yeshivoth and the Hebrew University (the latter, one suspects, largely because of Judah L. Magnes's personality). However, after the advent of the Nazis in Germany, the situation changed completely. German immigration to Palestine increased sharply.







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