[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.
