NEW YORK (Mar. 13)
A new sales organization for Israel bonds, under the direction of Dr. Joseph J. Schwartz, executive vice-chairman of the United Jewish Appeal, is now in the process of formation in this country, it was revealed here today by Israel’s Finance Minister Levi Eshkol, prior to his return to Israel.
Mr. Eshkol said that the underwriting agreement between the State of Israel and the American Financial and Development Corporation for Israel–of which Henry Montor was executive head–would be terminated by mutual agreement because of what he termed “honest differences” over sales policies. He paid tribute to Mr. Montor and emphasized that there would be “complete continuity” of bond sales during the transition period.
The text of a formal statement issued by Mr. Eshkol reads:
“Throughout my brief visit in the United States on this occasion, during the course of which I have had the honor of discussing the affairs of Israel with the leadership of many Jewish organizations. I have been greatly impressed by the spirit of responsible concern which I have met on all sides for the problems of Israel and the Jewish people. I return to Israel in full confidence that the support and understanding of American Jewry will continue in the future as in the past to sustain and help Jewry overseas through the United Jewish Appeal, to enable us in Israel to continue to absorb Jewish immigrants seeking refuge and dignity in our midst, through State of Israel Bonds, to press forward to the goal of Israel’s economic consolidation on the solid foundations which have already been firmly laid.
ESHKOL EXPLAINS REASON FOR THE CHANGE
“It is with deep regret that I announce that the Underwriting Agreement between the State of Israel and the American Financial and Development Corporation for Israel for the sale of State of Israel Bonds by the latter will shortly be terminated by mutual consent. However, the American Financial and Development Corporation for Israel will continue the sale of Israel bonds, as hitherto, until a successor organization is established to carry on the sales function.
“The sale of Israel bonds under the Underwriting Agreement between the State of Israel and the American Financial and Development Corporation for Israel will shortly be terminated, by mutual consent, because of honest differences with respect to policies of sales. On March 1, 1954, the State of Israel signed an underwriting agreement with the American Financial and Development Corporation which provided, among other things, for the exclusivity of sales of Israel Bonds by the American Corporation and which gave full power to the American Corporation to determine the times, places and methods of sale of Israel bonds.
“However, in the light of a variety of considerations, the State of Israel subsequently stated that certain modifications were required in this broad grant of authority. The officers of the American Corporation felt, however, that the enterprise which they led could be managed most effectively only in relation to the Underwriting Agreement as it had been originally drawn. As a result, the State and the American Financial and Development Corporation agreed that the American Corporation should not continue its activities.
ISRAEL MINISTER THANKS LEADERS OF BOND ORGANIZATION
“On behalf of the State of Israel, I want to express my deepest appreciation to the officers and directors of the American Financial and Development Corporation for Israel for the extraordinary service they have rendered to the State of Israel during the past four years, in initiating and successfully conducting the sale of Israel Bonds, first, in the United States and now also in 28 other countries. I want particularly to record the gratitude which the State owes to Rudolf G. Sonneborn, president of the Corporation, Julian B. Venezky, chairman of the executive committee, Samuel Rothberg, national chairman of the Bond Organization in the United States, and Henry Montor, chief executive officer of the Corporation.
“I want especially to pay tribute to Henry Montor whom we in Israel regard as one of those who distinguished himself in mobilizing the material and moral resources that made possible the establishment of the State and who, since the State of Israel was established, has been in the forefront of those who have stood by our side with ingenuity, skill and devotion to provide vast sums, first as director of the United Jewish Appeal for 13 years, and now during the past four years, as chief executive officer of the Israel Bond Organization. He was the directing head of the United Jewish Appeal in the critical years following World War II when American Jewry rose to the greatest heights in financing the rehabilitation of the Jewish refugees and the rise of the State of Israel. During the past four years, the American Financial and Development Corporation for Israel has sold $185,000,000 of State of Israel Bonds.
“It is also imperative that I make clear that the State of Israel has the deepest sense of obligation to the thousands of leaders throughout the United States and elsewhere who gave of their time, energy and resources to create this vital instrument of economic survival for the State. I want to assure the 700,000 bond purchasers that they have rendered help of inestimable value to the State and to reassure them that their investments, already at work and producing dividends in Israel, will be repaid in full, interest and principal.
OLD OFFICERS TO CONDUCT SALE OF BONDS DURING TRANSITION PERIOD
“The officers of the American Financial and Development Corporation, who have been and continue to be among the warmest friends and supporters of the State of Israel, have offered their fullest services in enabling the State to make the transition to a successor organization to carry on the sale of State of Israel Bonds.
“It is typical of the devotion of the officers of the American Financial and Development Corporation for Israel that they are carrying on the current activities for the sale of Israel bonds and are making available their vast experience to help launch the new bond-selling organization. We also have every hope that they will be among the American leaders who will continue the responsibility for the sale of Israel Bonds in America.
“It is opportune to say to all officers of Israel Bond organizations throughout the United States and to all lay leaders and professional staff that the State of Israel and the new organization to be formed count heavily on the continuation of their labors. It is these men and women, whether volunteers or technical personnel, who have been the backbone of the great organization that has been built up in America. They can feel amply rewarded for their labors in the knowledge that the great sums of capital they amassed are reflected in the development of Israel during the past four years, in farm and factory, in the exploration and exploitation of mineral and natural resources, in the promotion of housing and irrigation, of tourism and roads and, generally, in the whole fabric of Israel’s economic life.
“The State of Israel relies upon the proceeds from Israel bonds as one of the major factors in its development budget. It is glad to see, first, that the American Financial and Development Corporation for Israel is carrying forward wholeheartedly with current sales, and secondly, that every effort is being made, with universal good will, to set into motion, as rapidly as is practicable, a successor organization to carry on its splendid work.
ISRAEL GRATEFUL TO DR. SCHWARTZ FOR ACCEPTING RESPONSIBILITY
“The responsibility for the establishment of the new sales organization for Israel Bonds has been accepted by Dr. Joseph J. Schwartz, the executive vice chairman of the United Jewish Appeal. The Government of Israel is deeply grateful to Dr. Schwartz for having agreed to accept this great responsibility which means so much to the economic development and consolidation of Israel. The outstanding record of Dr. Schwartz over so many years in the American Joint Distribution Committee and the United Jewish Appeal and the intimate association he has had with every aspect of the development of Israel, admirably fit him for the new responsibilities he has now accepted. The affection and esteem in which he is universally held throughout the Jewish communities of the world have given him a unique stature among the Jews of our generation.
“That Dr. Schwartz should have agreed to shoulder this new task is evidence of his vital concern for the welfare of Israel, and for the unity of purpose which join Jewish communities together for the cause of Israel’s freedom, security and development. It is a further mark of the exceptional spirit of devotion of which he has always been a towering and inspiring example.
“The officers of the United Jewish Appeal, headed by Mr. Edward M. M. Warburg, president, and Mr. William Rosenwald, general chairman, have been good enough to agree to make it possible for Dr. Schwartz to engage in the task of establishing the new organization. They have been moved to make the sacrifice of releasing Dr. Schwartz by their appreciation of the great importance to Israel of the uninterrupted continuation of the Bond effort. Numerous individuals of standing in the Jewish communities of the U.S.A. have already assured Dr. Schwartz of the fullest measure of their cooperation with him and it is expected that it will shortly be possible to complete the legal and practical arrangements required so that the new corporation will be able to function as the underwriter of State of Israel Bonds, at which time Dr. Schwartz will formally assume responsibility for the bond sales effort.
“The Government of Israel has every confidence that the efforts of Dr. Schwartz will be crowned with speedy success and has been greatly encouraged by the measure of cooperation which, in so short a time, he has already succeeded in evoking in so many quarters, both on the part of individuals and organizations.”