JERUSALEM (Aug. 7)
A report on the industrial financing policy of the Israel Government prepared by an American consultant for the United States Operations Mission, was described as “one-sided and self-contradictory” by David Horowitz, Governor of the Bank of Israel, in an interview with The Jerusalem Post here today.
The consultant, Edward Tennenbaum, president of the Continental-Allied Company of Washington, had asserted in his report that Israeli industry was severely hampered by a shortage of working capital caused by the Government’s credit-restricting policies which gave rise to an expensive black market in credits. Mr. Tennenbaum had also urged the infusion into the country’s money supply of some 100,000,000 pounds ($56,000,000)–about 13 percent of the currency in circulation. The American expert challenged the Israel Government’s assumption that there was danger of inflation as “no longer correct.”
Mr. Horowitz asserted here that easing of credits would again start inflationary pressures and deteriorate the balance of payments. He quoted World Bank and International Monetary Fund reports which described inflation as a destructive element in Israel’s economy. Even a ten percent increase in the annual volume of credits was excessive, Mr. Horowitz declared.