[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.
