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Britain Refuses to Redeem $40,000,000 in Bonds Issued by Palestine Mandatory Regime

The question of redeeming Palestine bonds issued by the British Mandatory Government of Palestine during the last few years, which reached a value of approximately $40,000,000, and which are held by a large number of small investors here, is now presenting a serious problem.

The Jews in Palestine bought these debentures as a means of saving money. They were urged by the Jewish Agency to buy these bonds because the Mandatory had promised that part of the proceeds would be earmarked for Jewish projects. The British Government is now, however, showing no inclination towards meeting the interest payments or redeeming the bonds.

Some of the small investors have given up hope of recovering their money and are selling the bonds at almost any price to speculators. Some of the buyers are acting in behalf of a group of local financiers, who intend to take legal action on the issue in British courts. A number of the bond-holders proposed that the Israeli Government assume the old mandatory bonds by accepting them as part payment in various Israeli war loans, but the Cabinet rejected the suggestion. The Cabinet is prepared, however, to make official representations to the British Government, in conjunction with other financial claims Israel has against Britain.

The Israeli Government, furthermore, has forbidden local businessmen to negotiate independently with the British concerning the payment of trade accounts in these bonds. The Cabinet here does not wish individuals to reach financial settlements on these bonds to the possible detriment of leas fortunate investors. The Government has promised to treat the bonds as of equal importance with the question of Israel’s holdings of Palestine pounds and plans to arrange for a general registration of all holders of bonds issued by the mandatory, as soon as the time is ripe for action.

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