British Financial Crisis Seems to Have Disposed of What Government Had Intended for Benefit of Pales

The financial crisis in Great Britain seems to have disposed of what the Labour Government had proposed for the benefit of Palestine, the “Manchester Guardian” Jerusalem correspondent writes in to-day’s issue. If the £2,500,000 loan for agricultural development has not been indefinitely postponed, he says, it is clearly not as certain of being arranged as it was when Lord Passfield dispatched his letter to the High Commissioner on June 26th. The National Government left nobody in doubt as to the fact that the development scheme would have to be examined afresh in the light of the position in which the British Exchequer now found itself.

This whittling down of what amounted to a definite commitment appears to have upset neither the Arabs nor the Jews, the correspondent adds. Launched as they now say they are on a policy of non-co-operation, in emulation of the Congress in India, the Arabs disliked the scheme from the beginning. By Arabs in this case one means of course the leaders, at any rate the vocal ones. What they feel in their hearts about the benefits the scheme would bring to the country no one knows; their public statements are certainly negative. One Arab argument is that the scheme would be a lever to greater Jewish immigration and development. Irrigation and intensive cultivation will liberate some sparsely settled stretches, and these areas, they say, would be bound sooner or later to fall to Jewish immigrants. One suspects there is another reason which Arab spokesmen are not as proud to air in public. Arab leaders are of two kind. Either they belong to the landed class and are, to put it kindly, far from interested in the improvement of the holdings cultivated by tenants on the old feudal system, with the crops more or less equally divided between the landlord and the tenant; or they are city Arabs, with little understanding of or sympathy with the fellaheen.

Also the scheme did not meet with anything like enthusiasm on the Jewish side. It is disliked partly because of its genesis, partly for its implications. The scheme was recommended by Sir John Hope Simpson as the culminating point in a series of adverse criticisms and unfavourable findings with regard to the administration of Palestine in general and Zionist colonisation in particular.

Disliking the report, disputing the very basis of its findings, the Jews suspect also the proposed remedy, he states. They have nevertheless accepted it with considerable grace, at least publicly, largely because Mr. MacDonald’s letter to Dr. Weizmann in February put another face on the Simpson Report and its recommendations. Their view now is that little remains of either except the name, although in the revised proposals there is some appreciation of the fact that the Mandatory’s is a dual responsibility – on the one hand to a derelict land, on the other towards a homeless people; an admission also that the Mandatory’s task therefore is to increase Jewish immigration without injuring the Arab inhabitants; and a further recognition that this can be done only by encouraging and facilitating (as the Mandatory clearly intended should be done) closer settlement on the land.

CAN PALESTINE REPAY LOAN?: DEVELOPMENT DIRECTOR GOING ON WITH HIS WORK PUT UNLIKELY SCHEME WILL BE IMPLEMENTED

Those who care less about political implications and more about the country’s economic future, the correspondent proceeds, have grave doubts of Palestine ever being able to repay this loan on top of the one of £4,500,000 which many think is already £1,000,000, more than the country can carry.

Several months have passed since Lord Passfield’s dispatch, he concludes. The Director of Development, Mr. Lewis French, has been here since the end of August, but neither the Jews nor the Arabs have nominated their advisers the Arabs because they think to sabotage the whole scheme; the Zionists because they are not quite certain that the Development Director’s work, while his investigation is proceeding, would not include legislation which would mar the scheme if ever put into effect.

Nothing daunted by the hesitancy on the Jewish and the opposition on the Arab side, not apparently discouraged by intimations from London that with the crisis in the British Exchequer the loan may not be guaranteed, the Development Director has gone on with his programme. The first thing on the programme is the register of Arabs claiming to be displaced. This is to be followed by a scheme of resettlement of the registered Arab families, and only later the closer settlement of Jews envisaged in the Mandate is to be tackled. The Development Director has at his disposal £50,000 for this preliminary investigation. He is independent of existing Government Departments and is subordinate only to the High Commissioner. Indeed, he takes precedence over all Government officials, after the High Commissioner, and his salary is said to be in proportion. The £50,000 will no doubt be spent, but whether in the light of the latest developments the findings will be worth it if the scheme itself is not implemented is a question which is undoubtedly troubling Mr. French himself no less than the Government in England and the Administration here.