Further Economic Progress in Palestine Despite Crisis Report of P. E. C. Shows

Further economic progress in Palestine despite the economic crisis of 1930-32 is noted in the report of the Palestine Economic Corporation published today.

The corporation will meet at Temple Emanu-El on Thursday evening.

Particular progress is noted in the orange industry, 3,452,000 cases having been exported in the 1931-32 season to March, 1932, with a value of £1,639,000, or double that of 1931.

There were no bank failures in Palestine during the year under review and only one credit cooperative society was liquidated. Exports of manufactured articles also increased except the soap industry which was hard hit by adverse tariff measures in Egypt, the principle market.

The Corporation reminds the Board of Directors that at the time of formation of the Corporation only six years ago the problem was to select those economic enterprises in Palestine for credits “which gave promise of productivity, permanent value to the country, and stimulation of a healthy growth of industry and commerce.” The problem is no longer that of production, but of effective marketing.

The total net assets of the Corporation were $2,686,777 on December 31, 1931, compared with $2,307,821 at the close of 1930. After the end of the fiscal year, the Loan Bank, Ltd., a Palestinian institution which grants loans to small urban borrowers, was transferred to the Corporation so that at the present time the assets of the Corporation are $2,925,000.

The net operating income for the year was $9,579.85, compared with $16,050.24 in 1930. The auditor’s report of the Company shows that there are sufficient reserves to cover the difference between its Sterling loans and investments and the dollar rate of exchange as of December 31, 1931. The report contains a summary of the activities of the subsidiary institutions of the Company:—the Central Bank of Cooperative Institutions in Palestine, Ltd., which grants credits to cooperative societies; the Palestine Mortgage & Credit Bank, Ltd., which is entirely owned and controlled by the Company, and the Bayside Land Coropration, Ltd.

The Corporation stresses the sound economic development of Palestine rather than the securing of maximum returns. It grants credits to those classes of the Palestinian population which cannot be reached through existing credit institutions. Beginning with urban mortgage credits to relatively well situated borrowers in the suburbs of Jerusalem and Haifa, it has extended its credit operations continuously and progressively to include artisans and skilled workers in the towns, farmers in the colonies, the owners of small industrial enterprises, industrial producers’ cooperative societies, and finally the agricultural laborers in the orange producing sections. In each case a beginning was made with a relatively small group of borrowers, the scope being increased after a proper business procedure had been worked out.

The Corporation has also participated as shareholder in those Palestinian projects which are likely to be of importance in the economic development of the country. The Corporation is the largest single shareholder in Palestine Potash, Ltd., the company which is extracting potash and other products from the Dead Sea. It is also the largest shareholder in the Palestine Hotels, Ltd., which company constructed the King David Hotel at Jerusalem, an important step in the development of the tourist trade of the country. An important tract of land in the vicinity of the Haifa Harbor now under construction was also acquired by the Corporation.

The report includes photographs of some American water drilling machinery in Palestine. The Company has joined with the Palestine Jewish Colonization Association (PICA) in setting up a Water Drilling Unit with an experienced foreman-driller in order to apply the most modern machinery employed in drilling in this country to Palestinian conditions. The Company also financed the first undertaking in introducing American machinery in a central orange packing house.

Among interesting recent developments noted in the report is the export of grapefruit, which increased from 21,000 in the year 1927-28 to 57,000 in 1930-31 ; the increasing local production of eggs and poultry products, and early potatoes.

The 5,000 dunams, 1,250 acres, owned by the Company in the Haifa Bay area is located in the immediate vicinity of the land on which the oil industry has established itself. Practically all the benzine, paraffin and fuel oils imported into Palestine are pumped into the Oil Tanks on the Oil Area at Haifa direct from oil tankers. The works of the Shell Company are located south of the Company’s land, and to the west, along the coast of the Mediterranean, the works of the Iraq Petroleum Company are to be established. The Company has granted funds for 180 mortgage loans for a workers’ suburb on the Haifa Bay area.

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