Experience Showed Further Investments in Palestine Justified

President of Economic Corporation Gives Reasons for Sums Authorized

The experience of the Palestine Economic Corporation in the fields of agriculture and industrial credits convinced the Executive Committee of the Corporation that further investments along these lines are justified, according to the statement of Bernard Flexner, president, in further explanation of the items in the $1,010,000 budget authorized by the Committee for the Corporation’s Palestine work.

With regard to agricultural credits, Mr. Flexner stated: “A further appropriation was made to carry forward the long term agricultural credit work of the Corporation in which it has been engaged since its organization and in which field it has outstanding commitments at the moment, of approximately $235,000. These credits are granted for periods varying from three to five years and are used, briefly stated, for the development of orange groves, improvement of almond groves, and vineyards, purchase of live stock, construction of farm buildings and for general farm improvements.

“The experience of the Corporation in this field of work justifies an extension of these activities. In the grant of the additional credits made possible by the new appropriation, the Corporation proposes to follow the same methods of investigation into applications for such loans, that it has pursued in the past. In making these investigations the Corporation not only has the assistance of Mr. Harry A. Viteles, General Manager of the Central Bank, but is fortunate in having an Advisory Committee of Palestinian experts and farmers, familiar with the local situations relating to the applications, who voluntarily give generously of their time and thought in considering the requests for loans. It is to be observed further that the Corporation will continue to grant these credits through local cooperatives and local agencies in accordance with its general policy of stimulating local initiative and local responsibility wherever possible.

“The Committee authorized an additional sum for long term loans to members of one of the colonies, for the purpose of refunding certain indebtedness and providing new sources of income for the colonists from new agricultural branches of activity. This work is being undertaken in cooperation with another public Jewish organization.”

With regard to orange marketing, Mr. Flexner stated: “One of the problems to which much thought has been devoted in Palestine, is the improvement in the methods of marketing of the orange crop. It is a subject that has engaged the attention of the Palestinian Government. Within a few years groves recently planted will begin to bear fruit and the amount available for export will increase considerably. Since the orange industry is the most important branch of agricultural enterprise in Palestine and in fact its basic industry, it is most urgent that sound methods of grading, packing, shipping, and marketing be worked out. With these facts in mind and as an indication of our interest, the Committee has set aside a reserve for participation in any concrete practical plan which, in their judgment, will improve the present situation.

“An additional appropriation was made for industrial credits. Believing that the experience to be gained from a small experimental fund was the prerequisite for activity on a more comprehensive scale in the field of industrial credits, a sum was appropriated last year. In conducting this work, the Corporation was represented by Mr. Emanuel N. Mohl, Managing Director of the Palestine Mortgage and Credit Bank, Ltd., which institution is now entirely owned and controlled by this Corporation. Furthermore, the Corporation was fortunate in having the services of an expert Palestinian committee, consisting among others, of two managers of important Palestinian industries. Most of the loans ranged between $1,000 and $1,500 and were granted for the purchase of machinery, raw materials, operating capital for tanneries, iron foundries, manufactures of paper products, furniture, and other similar purposes. On the basis of the experience thus gained, the Executive Committee felt warranted in authorizing new funds for this purpose.

“The Corporation has appropriated additional funds for the establishment of small houses in the colonies suited to the relatively low wage level for agricultural workers. This work will be a continuation of the previous effort in this direction in the Workmen’s suburb near Hedera, by Mr. Emanuel N. Mohl, where each family was provided with a house, a small plot of ground for a vegetable garden, a cow and some chickens. In this case each workman supplied about twenty percent of the total cost of the holding. The Colony Council of Hedera cooperated in this work and rendered valuable assistance. A number of private and public angencies in Palestine have approached us to cooperate with them in similar undertakings.

“An additional allocation of funds was approved for the continuation of the first organized effort undertaken by any financial institution in the grant of morgage loans for farmers’ houses in the colonies. Our part in the financing of these homes has consisted in granting first mortgages repayable in fifteen years, with amortization and interest payments payable throughout the period, in equal quarterly installments. In this work great stress was laid upon the employment of sound business practices in building i. e. the employment of architects, the supervision of contractors by the architects, separation of the work of contracting from the work of financing, etc.

“Since its formation the Corporation has had under consideration a number of plans for providing adequate hotel facilities for the increasing number of visitors to Palestine. Over a year ago the Executive Committee indicated its willingness to participate in the construction of a first class hotel in Jerusalem. The negotiations have recently reached the stage when a definite commitment of funds was approved by the corporation The hotel will be under the management of a Board consisting among others of the Managing Director of the Egyptian Hotels Co., Ltd., one of the largest hotel companies of the Near East, and Frank Goldsmith, who is connected with the Hotel Carlton at Cannes and a number of other continental hotels.

The execution of the program of work outlined above will bring the total of investment and commitments of the Palestine Economic Corporation in Palestine, to $2,300,000.”