Financing the Jewish National Home

by Dr. Abdul-Sattar Kassem

Introduction

Among the Jews of Europe in the eighteenth and nineteenth centuries, many writers and a variety of currents emerged seeking a solution to what was known as “the Jewish problem.” As a result of the interaction among these various currents across the European states, three principal tendencies eventually took shape:

First: The assimilationist tendency

Proponents of this tendency proposed the idea of Jews integrating into European societies and living within the broader community — that is, the Jew would leave the ghetto, seek a place for himself among the people, and become an ordinary individual like everyone else, without distinction. They argued that assimilation would erase any distinct Jewish identity that could serve as a target for attack, and would turn Jews in general into ordinary individuals difficult to single out or to resent collectively. But this argument met with fierce opposition from religious authorities, who said that such ideas would dissolve Jewish society and could potentially abolish the Jewish religion altogether.

Second: The liberal (emancipationist) tendency

Proponents of this tendency did not agree to assimilation, given the loss of identity and culture it entailed, but instead saw a need for openness toward the broader society, participation in public activities, and the building of wide social relations with people in general. They believed participation in public occasions was necessary, and that opening Jewish doors to Christians for social interaction was likewise vital, since it would win over hearts and dispel prior negative impressions. But this proposal, too, failed to win the approval of religious authorities, who feared that some might become enamored of the broader society, which could lead to a growing departure from Jewish society and to intermarriage that contradicted Jewish principles.

Third: The national tendency

Proponents of this current said that the only solution available to the Jews was to seek a national homeland of their own, separate from other nationalities. This won the approval and encouragement of religious authorities, who were keen to affirm that Palestine was the required location. Great attention converged on this tendency, which grew stronger with the passing of days. Many writers and thinkers adopted this tendency and helped build a body of public opinion among Jews that embraced the idea. It should be noted that Christian writers from England, France, and elsewhere also adopted the idea and promoted it. It is worth noting that this tendency ultimately prevailed, even though it represented a grand ambition requiring sacrifices, and despite the money it would require. Its proponents were well aware that the financial requirements entailed by their choice were not easy, and that they would have to mobilize enormous energies to raise the necessary funds.

Jewish founding associations before Zionism

Many people, particularly at the popular level, assume that settlement in Palestine began with the rise of the Zionist movement. This is a mistaken assumption, because many settlements were established before Zionism, financed and sponsored by Jewish movements and wealthy Jews. Indeed, if we look at the beginning of the Zionist movement’s formation, we find that the settlement movement was actually curbed temporarily, for reasons related to giving priority to the political dimension over the practical one.

The Alliance (Alliance Israélite Universelle), founded by wealthy Frenchmen, was a pioneer in financially supporting Jews in connection with their activities in Palestine. In 1870, the Alliance established the first agricultural school (Mikveh Israel, “Hope of Israel”) in Jaffa to teach the sons of Jews residing in Palestine the arts of agriculture. The school was built on a plot of 2,600 dunams of land belonging to the village of Yazur, leased from the Ottoman Sultan. This school later contributed to supporting Zionist settlement because of its technical capacity to identify areas suitable for agriculture, which was the Jews’ foremost concern.

In Britain in 1891, an association was established known as the Jewish Colonization Association (JCA), intended to help the Jews of Russia, who were suffering severe persecution, by resettling them in Argentina. But from 1900 onward it began supporting settlement activity in Palestine, and pledged to support the settlements that had already been established by the Hovevei Zion (Lovers of Zion) settlement society, whose funding Rothschild had stopped providing.

The Halukka system (distribution of aid)

Jews who emigrated to Palestine, acting on their own personal responsibility and outside the framework of the associations, were active in raising money from their countries of origin so that they could continue living in Palestine. Each group from a given country would send its own emissaries to collect donations, and the group would content itself with such support while largely abstaining from work. Religious Jews received a better financial share than the non-religious, which encouraged many to make their children religious and marry them off at a young age. It was observed that this system created large disparities in living standards between Jews who came from wealthy countries and those who came from poor countries, producing divisions among them, and between the religious and the non-religious.

The important thing about this system is that the Jews preferred idleness to work, and paid no attention to a life of agriculture and development. Jewish leaders did nothing but incite an end to this kind of assistance, and encouraged people to work in the fields if they wanted to continue to live. This system was, to a large degree, destructive.

The wealthy Montefiore

The wealthy Briton Moses Montefiore was interested in Jewish immigration to Palestine, and decided to put some of his money to this purpose. He visited Palestine several times during the nineteenth century and established numerous educational institutions for Jews there, supporting them financially, particularly in agriculture, which he regarded as the best field for a Jewish settler life. In 1855 he obtained permission from the Ottoman Sultan to buy land outside the walls of Jerusalem to build a hospital, but instead he built settler houses there, with diplomatic support from the British consul. This construction formed the basis of Jewish settlement in Jerusalem, which expanded to become the western part of the city. Following Montefiore’s death, Jews established a fund in his memory called “Mazkeret Moshe,” which financed eight residential quarters in western Jerusalem.

The journalist Salomon

A journalist named Yoel Moshe Salomon was active in Palestine both in the press and in settlement. He founded the first Hebrew newspaper, called Ha-Havatzelet (“The Lily”), in 1870, and through it waged a major campaign against the Halukka system. He managed to raise a great deal of money and bought wide tracts of the lands of the village of Mulabbis, amounting to 13,375 dunams, from two Palestinian merchants, al-Qassar and al-Tayyan. In 1878 the settlement of “Petah Tikva” was established on this land. At the same time, the Jews of Safad obtained financing with which they bought half the lands of the village of al-Ja’una, amounting to 4,000 dunams, on which the settlement of “Rosh Pinna” was established.

Hovevei Zion

This society was active in raising donations and building settlements in Palestine. One wealthy Russian Jew financed the purchase of a plot of 3,340 dunams of the lands of Uyun Qara, which the Ottoman Sultan had offered for sale because the peasants were unable to meet their obligations. The settlement of “Rishon LeZion” was established on this land. The society also raised money with which it bought 6,000 dunams of the lands of Zummarin, south of Haifa, which had been owned by a French citizen. It bought 2,600 dunams near the village of Mulabbis, 2,500 dunams near Lake Hula that had been owned by the French consul, 2,000 dunams from a German owner, and 3,750 dunams south of Ramla. In the same period, the JCA company, established by the wealthy Jew Hirsch, managed to buy some 31,500 dunams from the Sursock family near Tiberias.

Rothschild

Baron Rothschild, the wealthy Frenchman, was famous for his support of Jewish immigration to Palestine, and for his support of the settlement process, particularly before the rise of the Zionist movement. The Baron donated large sums of money to the Alliance society, and took one of the rabbis as his advisor on policy regarding support for settlement and land purchase in Palestine. During 1882 and 1883, Rothschild financially sponsored 3 settlements and began establishing a fourth, at an expense that reached, at the time, 4.5 million French francs. In doing so, he launched an active settlement movement before the rise of the Zionist movement, and with his money was able to establish multiple footholds for expanding settlement in Palestine.

Rothschild cooperated with the JCA company, established by Baron Hirsch, in support of settlement in Palestine, and the two parties together completed the construction of a number of settlements between 1905 and 1919.

The Jews managed to establish 17 settlements in Palestine before the rise of the Zionist movement: 9 of them in the north of Palestine and 8 in its center. Their population numbered 3,867 settlers, and their combined area was 139,230 dunams. Rothschild spent about 40 million francs on settlement, and the Hovevei Zion society spent 2 million francs. It should not be forgotten that Rothschild’s support for settlement was an investment — he served the settlers, and they served him.

The Herzl stage and the Zionist Organization

Herzl noted in his book The Jewish State that it was important to establish the Jewish Company, which would carry out the practical measures for what the Society of Jews — which came to be known as the Zionist movement — was planning. He focused on raising money, and said it was a mistake to rely on wealthy Jews, and that reliance should instead be placed on the poor, who would be ready to emigrate and to give what they could in order to achieve the goal. This position of his was reinforced after he met both Hirsch and Rothschild and found only disappointment from them. He came to hold a position against wealthy Jews for their refusal to support him, and this view was reinforced by these wealthy men’s stance when the Zionist Organization decided to establish a joint-stock bank to support the Zionist goal: they decided not to invest, and prevented other banks from taking on the sale of the Zionist bank’s shares.

At the very start of its establishment, the Zionist Organization decided on important steps to raise the money needed to achieve its goals, summarized as follows:

That monthly financial dues would be a condition of membership in the Organization. A financial share was imposed on members, to be paid as dues toward achieving the goal, and failure to pay meant loss of membership.

It spoke of donations as a second factor in supporting Zionist activities, and encouraged members to seek donations, particularly from the well-to-do.

The establishment of banks or financial funds dedicated to financing the Organization’s various activities.

Herzl fought the battle to establish another joint-stock bank in Britain, but those responsible for selling the shares failed because of the opposition of the wealthy. Herzl put his full weight behind selling the shares, and after two years managed to raise only 1/8 of the amount required to begin operations. He raised a quarter of a million pounds sterling out of the proposed bank’s total capital of 2 million.

Shortly after it began operating, this British Zionist bank established a company it named the Anglo-Palestine Company, which set up a branch for itself in Palestine under the name the Anglo-Palestine Bank, which after the establishment of the state became Bank Leumi.

After the bank, the Zionist movement established the national fund company (Keren Kayemet) in 1901, with the aim of purchasing and developing land in Palestine and its surroundings (Greater Syria in general). This fund focused on afforestation, establishing the Herzl Forest that exists today, and established the first kibbutz in Palestine, Degania, near Tiberias. The fund became a company after the establishment of Israel and is still operating today, leasing land only to Jews, and only for 49 years.

This should not give the impression that the Zionist Organization was wealthy from the start of its establishment, and that money flowed to it from every direction. It obtained some money at times, and at other times suffered from a shortage of it, but more important than the money itself was the insistence on persevering and on relentless work. Herzl, his associates, and even his opponents were marked by great determination, to the point that Herzl refused to accept a salary, and most of the time refused to eat in a restaurant or sleep in a hotel. The two elements of determination and belonging were decisive in sustaining the Zionist movement financially.

The Zionist Organization was active in buying land, purchasing about 80,000 dunams by 1900, bringing the area owned by Jews to 220,700 dunams; and by 1914 this had become 420,600 dunams, the purchases of which were distributed as follows:

About 242,000 dunams were bought by the JCA company and the Rothschild group;

About 159,000 dunams were bought by private institutions;

About 17,000 dunams were bought by the Keren Kayemet.

23 new settlements were built by 1914, bringing the number of settlements on the eve of the World War to 40 settlements.

The Palestine Land Development Company focused on buying land for commercial purposes, concentrated around the main Arab cities. It bought land north of Jaffa and built houses there whose number grew over the years to become Tel Aviv; it bought land on Mount Scopus in Jerusalem, where the Hebrew University was later established; and it bought land in Haifa on Mount Carmel, where the Technion Institute of Applied Engineering was established in 1912. Much of this land had been owned by Westerners from Germany and Britain. The company also allocated funds to security matters, establishing in 1909 the Hashomer (“The Watchman”) organization to guard the settlers and settlements against the Arabs.

After the British Mandate

The JCA company and the Rothschild group joined forces after the establishment of the British Mandate to encourage settlement and build the necessary infrastructure, and the two established a new company under the name PICA (Palestine Jewish Colonization Association). The JCA resumed its work after the 1929 uprising that drove the Jews out of Hebron, and in 1933 it partnered with the Emergency Fund for Palestine to establish a new company called Amica, which worked in supporting industry, agriculture, and culture.

The founding fund (Keren Hayesod) was established in 1920, and was regarded as the fundamental pillar in supporting settlement and the economy. It was first established in London, and moved to Jerusalem in 1926. This fund specialized in settlement construction, while the task of purchasing land remained in the hands of the national fund, which was allocated 20% of the founding fund’s budget. It helped build the electric company, and helped establish the potash factory on the Dead Sea.

The land owned by the national fund grew from 16,366 dunams in 1920 to 278,627 dunams in 1930, and to 936,000 dunams in 1948.

Kofer HaYishuv was established in 1938 in order to collect taxes from Jews for defense purposes. In 1940 the fund began levying emergency taxes, and in 1942, rescue taxes.

The matter of financing became easy after the issuance of the Balfour Declaration, and after the Mandate instrument over Palestine in 1922. It became clear that the Zionist movement had achieved a great historical accomplishment, and the fear of the failure of the Zionist project — which had held back the hopes of ordinary people and of the wealthy in particular — had dissipated. The great powers had adopted the Zionist project, and it became assured that security and legal protection, settlement construction, and economic protection would be provided for Jews immigrating to Palestine. As a result, people flocked to emigrate and to donate, and many wealthy Jews were compelled to fall in line and began donating generously.

Conclusion

Money is important and necessary to achieve great goals related to people and their concerns. This is why, after establishing the Zionist Organization, the Zionists focused on raising money. They encountered difficulties, but they insisted on continuing. They set before themselves a number of criteria to govern how the money would be spent: buying land, building settlements, and establishing the economic base with heavy emphasis on agriculture, because it is the foundation of self-reliance. Then came the building of educational institutions, because they form the launching base for the process of building on scientific and methodical foundations. They established an agricultural school and set aside a number of settlements in various parts of the country for agricultural training, and they established the Rehovot institute for scientific research, the Technion institute, and the Hebrew University.

In their financial course, they focused on membership dues because these formed the basis of an inexhaustible financial structure, and because they served as a measure of commitment to the cause. They also focused on individual initiatives in immigration and settlement, the most important product of which was the “Yishuv” settlements; they then entirely excluded the idea of free aid to individuals and families. Aid remained tied to building infrastructure for all settlers, and to the work individuals performed. This is why they waged a major campaign against the Halukka system, and bought vast numbers of axes and farming tools, and raised draft animals such as mules, donkeys, and horses.

The Zionists’ persistence was the decisive element in achieving their goal. They insisted on exploiting all their resources and energies, and on monitoring every disbursement and expenditure. It was clear that their position defined politics as insistence on what is possible, not as the art of the possible.

Source: Translated from the original Arabic, “تمويل إقامة الوطن القومي اليهودي” by Dr. Abdul-Sattar Kassem.