TEL AVIV (Dec. 21)
In a move to counteract the British suit against the Anglo-Palestine Bank for about $5,000,000 in former German assets, the Israel Government has applied to the courts to establish the legal status of the funds, it was officially announced here today. The sum represents monies paid by the Jewish National Fund for former German properties at Sarona and which are now blocked in the Anglo-Palestine Bank.
The announcement explained that Israel had attempted a settlement of the issue within the framework of many other problems between the two nations–some of which have already been ironed out. However, the British action in bringing suit against the Anglo-Palestine Bank, depository of the funds, has forced Israel also to ask the courts to settle the question.
The announcement recalled that the funds were turned over to the Israel Custodian of Enemy Property shortly after the termination of the British Mandate. The Custodian instructed the bank to transfer the funds to London to be credited to the British Government, but the transfer was never carried out because of the complete isolation of Jerusalem, which was then under siege.
Later, when the country was at peace, it was legally impossible to transfer the money because the Israel Government Foreign Exchange Controller would not give permission. At this point, Israel claims, the funds should remain with the Custodian of Enemy Property, who continues to function. When the government asked Britain to delay its claim pending the outcome of the current financial negotiations between the two states, the latter refused and began its suit.