Grievances Against Z. O. Administration Stated by Lawrence Berenson

The grievances of the two members of the Administrative Committee of the Zionist Organization of America, Mr. Lawernce Berenson and Mr. Samuel Rosensohn who resigned from their positions recently, were stated by Mr. Berenson in his address before the Washington Opposition conference last Sunday. In view of the unusual interest in these grievences, displayed in many Zionist quarters, the Jewish Daily Bulletin quotes below a considerable part of the address which constituted the main attack on the Lipsky administration.

“I was one of the members of the administrative committee,” Mr. Berenson stated, “who, together with Mr. Rosensohn and Dr. Wise, resigned recently from the organization. My resignation from the organization reminds me somewhat of the story of the poor Jew who tried to get into a “schul” on Yom Kippur without a ticket. He was met at the door by the “Shames” (sexton), who asked him for his ticket. He said he had none. The “Shames” told him he couldn’t get in. The poor Jew then said he had some very important business with a man named Cohen. After some discussion the “Shames” said I’ll let you go in and talk business with Cohen but if I catch you praying I’ll break your neck. That was the position that Mr. Rosensohn and I found ourselves in after some months of service on the administrative committee and that’s why we resigned–because we dared practice Zionism–because we dared to aid the administration out of its difficulties and put the organization on a proper financial basis.

“A campaign of attack, first quietly and subsequently openly. was made against us with the result that our position as members of the administrative committee became practically useless. There are several of you here who attended the Atlantic City Convention last June and you recall the bomb-shell that was exploded by Zeldin in his attack on affairs of the organization. As a result of that disclosure of that expose of things that the administration had done up to that time there was a clamor for a change in administration–for a business administration–a clamor that men be invited to participate in affairs of the administration who would help clean up the financial difficulties of the organization and try to restore confidence of the Zionists in the country in the organization of it. As a result of that clamor Mr. Rosensohn, Mr. Lindheim and I were invited to become members of the committee and to participate in the work–to help clean up the difficulties of the organization–and we started out immediately after the convention. One of the first things we did was to create a thing theretofore unknown to the organization, a balanced budget–a budget whereby the organization could never spend or create an invented necessity for sums in excess of the budget. We found the organization with a deficit of $175,000–a deficit the large part of which had been created under the leadership of Mr. Lipsky in the year or two prior to the Atlantic City Convention. That budget is exclusive of guarantees. It is an actual deficit of the organization itself. In the creation of that balanced budget it became necessary to eliminate a lot of expenditures that had been made by the organization in other years. Reduction of subsidies and elimination of compensation to favored individuals.

“Another thing that we undertook to do was to eliminate that deficit by a special measure, namely, the creation of a live membership for the organization. We planned a campaign to raise $200,000 by selling live memberships at $100 each. I was appointed chairman of that committee to undertake that task and on we went with work, but as we went along we found that this whispering to which I have referred kept growing louder and louder and louder, until it broke out in meetings of the executive committee, where the president of the organization in open hostility to those who had done the work in bringing about this budget, attacked us. Our influence soon came to count for naught. It is an amazing thing that the president should have undertaken the task–the unfavorable task–of driving out of the organization those men who are trying to put it on its feet. You heard Mr. Zeldin state that a note in the Mercantile Bank in New York was endorsed by the organization for the American Zion Commonwealth to the tune of $285,000. That American Zion Commonwealth situation we have not heard the end of, the Lord knows I am very fearful of the outcome of the American Zion Commonwealth. I am wondering if it will ever pull out of the mess that it is in. A petition of bankruptcy has been filed against the American Zion Commonwealth in Palestine. An attempt is now being made to save the Commonwealth and to raise $200,000. That is futile because in my opinion the liabilities are overwhelming. The liability is $1,068,000–that is the indebtness. The assets consist of approximately $400,000 of accounts receivable and of doubtful value, because those accounts receivable are money owed by American purchasers of the lands in Palestine, and those sums, in my opinion, will not be paid until deeds are produced for American purchases, and as things look those deeds will not be produced, so that the assets are of doubtful value. The remaining asset is land in Palestine. Thre have been various estimates placed on the value of the lands. That land was purchased in the land boom and speculaton which went on in Palestine a few years ago. In part the moneys which were received were used instead of for the purpose of acquiring titles to the land, were used to purchase additional lands. The American Zion Commonwealth attempted to build a hotel, this was a great loss and the project was abandoned. The value of the Haifa Bay development is extremely doubtful. It is, therefore, difficult to judge just how much the land is worth, because, as I stated, it was purchased in land boom time. The boom is over and the Zion Commonwealth has these other contingent liabilities in connection with that land. If the Arabs do undertake to foreclose, as they threaten to do, on vast tracts of land, owned by the Commonwealth, there won’t be much land left for the landowners who are about 2,000 in number.

“One of the obligations of the Zionist Organization of America was the endorsement on this note on the Central Mercantile Bank of New York of $285,000. President Weinstein and Rosenblatt were largely participant in that work. They were the two prime movers in the land speculation. When the speculation was rife and it seemed as though the American Zion Commonwealth was going to make lots of money Mr. Lipsky–a man without any business experience whatsoever endorsed the American Zion Commonwealth as an American Zionist Institution–placed the moral support of the organization behind that of the institution–ran all sorts of editorials and articles in the New Palestine and the other Zionist Organization publications, and was largely responsible for inducing American purchasers to make deposits for the acquisition of lands for the American Zion Commonwealth. Because of that the Zionists of the country took the position–the leadership of the organization having taken the position–that the American Zion Commonwealth is an American Zionist institution. Because of that and the clamor of the land purchasers of the organization, the United Palestine Appeal was compelled to advance in cash on account of the American Zion Commonwealth — instead of this amount going to Palestine–a sum of $320,000, and an additional sum of about $125,000 more of the United Palestine Appeal money which couldn’t go to Palestine and which was raised for this purpose, had to be used to pull the American Zion Commonwealth out of its difficulty.”

In reply to a question by Mr. Friedman as to whether Mr. Lipsky endorsed the note without the authorization of the committee the speaker declared: “That endorsement was placed upon that note by Mr. Lipsky without the knowledge, without the consent, without the authority, without the approval of anybody of the Zionist Organization of America.”

Questioned by Dr. Wolfe of St. Louis, Mr. Berenson stated: “The United Palestine Appeal found it necessary to advance these sums of money. The situation of the American Zion Commonwealth was so critical and the criticism throughout the country was so great and the felling among the land purchasers spreading from one to the other got so bad that there was grave danger to the whole United Palestine Appeal Campaign danger of the collapse of the entire Zionist Organization and of American Zion Commonwealth being placed in a much worse Eght. In order to save the United Palestine Appeal Campaign and the Zionist Organination of America it was found necessary to advance these sums of money in order that the whole campaign might not be smased to bits.”