Israel Finance Minister Spikes Rumors of Intended Nationalization of Industry

Rumors that the Government of Israel would nationalize industry were publicly and categorically denied last night by Finance Minister Eliezer Kaplan in an address before the Knesset. He also denied that the government has advised potential investors to seek partnership with Histadrut enterprises.

Introducing a bill in the Israel parliament to encourage private initiative and foreign capital investment in Israel, Mr. Kaplan disclosed that Israel’s expenditures during the past eleven months totalled 80,000,000 pounds, of which 90 percent was spent for imports. Income during the same period, he added, was also 80,000,000 pounds, of which approximately half was derived from national funds, private enterprises and other sources.

The Israel Finance Minister added: “Our pound’s real value increased in this period and signs of deflation were observed.” He also outlined a series of measures aimed at encouraging foreign capital investment in the Jewish state, including reduction of various taxes. He revealed that negotiations are under way with the U.S. and Britain for a bilateral agreement to prevent investors from paying double income taxes.

Official and banking circles in Israel were unperturbed today by a reported drop in Israel pound quotations on the Zurich, Switzerland. free market. The pound was reported last week as selling at a rate of one to $1,84, instead of the official ratio of one to $2.80. The Swiss decline was attributed here to local causes, chiefly the large-scale smuggling of Israel notes abroad.

ISRAEL NEEDS $280,000,000 IN 1950 TO CARRY OUT DEVELOPMENT PLANS

During his speech in the Knesset, Finance Minister Kaplan said that Israel would need 100,000,000 pounds–about $280,000,000–in foreign exchange during 1950 to realize the government’s development program, with about ninety percent of the currency needed for imports. He emphasized that the special privileges provided for in his bill would be granted equally to foreign and local investors for enterprises recognized as “confirmed establishments.”

Negotiations are now going on with the Israel Government for the gradual transfer to Israel of the Telsen Electric Company of Manchester, England, one of the largest British producers of bakelite accessories and electrical appliances.

The proprietor of the concern said here today he was convinced that he could sell Telsen products made in Israel easily as those produced in Britain, especially for the market in India, South Africa, Rhodesia and southern Europe, where freight costs would be cut by the shorter distances.

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