NEW YORK (Apr. 27)
Eleven American life insurance companies signed today a loan agreement with the Jewish Agency for Israel, Inc., providing long-term loans totaling $50,000,000, with the good faith and credit of the American Jewish community, as represented by the United Jewish Appeal, as collateral. The ceremonies took place in the offices of the Jewish Agency here. The United Jewish Appeal is the single guarantor in this unique financial transaction.
The loan is to be repaid in level semi-annual installments designed to fully amortize this loan in 15 years. Representatives of each of the II life companies were on hand for the signing ceremonies along with Max M. Fisher, general chairman of the United Jewish Appeal; Dr. Dewey D. Stone, chairman of the Jewish Agency for Israel, Inc.; Gottlieb Hammer, executive vice-chairman of the Jewish Agency for Israel, Inc.; Rabbi Herbert A. Friedman, executive vice-chairman of the United Jewish Appeal, Inc.; and Jack D. Weiler, of New York City, national UJA chairman representing the Joint Distribution Committee.
Mr. Fisher indicated that the major share of the loans–$44,885,166.22–will be used to liquidate outstanding short-term loans with 97 banks in 39 U.S. communities. The balance will be used by the Jewish Agency for Israel, Inc., for its current budgetary purposes. He pointed out that this will free $4,000,000 per year for the immediate work of the Jewish Agency for Israel, Inc.
The participating life insurance companies are: Aetna Life Insurance Company, Connecticut General Life Insurance Company, Connecticut Mutual Life Insurance Company, The Fidelity Mutual Life Insurance Company, Massachusetts Mutual Life Insurance Company, The Mutual Life Insurance Company of New York, New England Mutual Life Insurance Company, The Penn Mutual Life Insurance Company, Phoenix Mutual Life Insurance Company, Provident Mutual Life Insurance Company of Philadelphia, The Travelers Insurance Company.
The loan was negotiated with the lenders by Mr. Hammer. Simpson Thatcher and Bartlett acted as special counsel to the lending companies, and the firm of Guzik and Boukstein represented the Jewish Agency. P. Stokes Gaither, vice-president of New England Mutual Life Insurance Company, and spokesman for the lenders, commented; “This loan is remarkable in that it has been structured upon the established spirit of philanthropy and the integrity of the Jewish people in America. The guarantor of the loan is the United Jewish Appeal, which is just another way of saying that some of the most respected spokesmen of the American Jewish community are pledging that this loan will be honored.”
U.J.A. LEADERS STRESS THE IMPORTANCE OF THE LOAN AGREEMENT
Dr. Stone, stressing the importance of the agreement, said: “The loan will make it possible for the Jewish Agency for Israel, Inc., and the United Jewish Appeal to eliminate the periodic renegotiation of short-term loans by refunding the obligations incurred by the American Jewish community on behalf of the rehabilitation and resettlement programs in Israel. It will make a larger share of currently collected funds available for current urgent needs in Israel.”
Mr. Fisher, commenting on the significance of the loan, stated: “This unprecedented agreement is a milestone in the history of Jewish philanthropy and probably in the history of all philanthropy. Its uniqueness can be focused in proper perspective when you consider that this sizeable amount of money reflects on the financial and moral credit of the American Jewish community in terms of their record of philanthropic giving.”
“Behind today’s action,” he continued, “stands a tradition of human responsibility which dates back over 2,000 years, as well as the well-organized fund-raising structure of community American Jewish Federations and Welfare Funds, which have pioneered federated fund-raising in this country. The fact that II life insurance companies have committee commercial funds for this agreement is sound and concrete testimony to the ability and willingness of American Jewry to meet the challenges posed by the needs of their distressed brethren.”
While this is the first time that American life insurance companies have loaned money to the Jewish Agency directly on the good faith and credit of the American Jewish community, seven of the companies involved in this new $50,000,000 loan have over the past few years made available $27,000,000 in long-term loans for construction of housing in Israel.