Israel to Float $500,000,000 Bond Issue in U.s.; Morgenthau Beads Corporation’s Board

The Government of Israel will seek to raise $500,000,000 in the next three years through the sale of bonds in the United States, it was announced today following the first meeting of the board of governors of the American Financial and Development Corporation for Israel, which was established last week to conduct the Israel bond drive.

Henry Morgenthau Jr. was named chairman of the board of governors of the bond organization. In accepting the post, Mr. Morgenthau reported that he had discussed the Israel bond issue with President Truman at the White House last Wednesday.

“Although Israel is not yet three years old, it has already made phenomenal progress in its economic development,” Mr. Morgenthau said. “The spirit of democracy, as I saw it in Israel only three months ago, is very strong. It is a part of the daily bread and the daily life of the people, and they are coming very close to us in our common desire for the preservation of human freedom and dignity. In the present world crisis, we need Israel as much as Israel needs us. Therefore, we should regard the strengthening of Israel’s economic life as part of the business of safe guarding our own future.”

Among the other principal participants at the organizing meeting of the board of governors were Israel Ambassador Abba Eban and James G. McDonald, who has served as American Ambassador to Israel from the first days of its independence. Julian B. Venezky, who has served as chairman of the National Campaign Cabinet of the United Jewish Appeal was chosen chairman of the executive committee of the bond organization.

MCDONALD CITES “CLOSER RELATIONS” BETWEEN ISRAEL AND WEST

The board of governors consists of 100 outstanding American business and community leaders, it was announced by Henry Montor, chief executive officer of the A.F.D.C. The importance of the bond issue for Israel’s future economic development and for the absorption of 600,000 new immigrants in the next three years was stressed by Ambassador Eban and Ambassador McDonald.

Mr. McDonald characterized the economic progress of Israel as a “modern miracle” which requires for its continuance “only the continuance of the flow of vital agricultural and other machinery and materials from the West.” Observing that the Government of Israel is striving for “closer relations with the West, “Mr. McDonald said that “these ties will prove of mutual advantage because Israel and the United States can hope to prosper only in a free world.”

“The bond issue offers the American people the opportunity to re-enforce a bulwark of freedom in a torn and shattered world,” Ambassador Eban said. “In view of the present world situation the defense and economic consolidation of Israel activities have to be telescoped. The existence of Israel has been marked by a growth of population without parallel in the history of modern civilization. The speed with which new immigrants have been transformed into productive citizens is the best guarantee of the economic maturity of the state of Israel, ” he said.

The board of governors of the Corporation consists of 100 outstanding American business and community leaders, it was announced by Henry Montor, its chief executive officer. Among the members of the board are:

Joseph Cherner; Samuel H. Daroff; Abraham Feinberg; George Friedland; Samuel Goldwyn; Abe Kasle; William J. Levitt; Joseph Mazer; Edward D. Mitchell; Sidney Rabb; Lewis S. Rosenstiel; Albert Schiff; Mrs. Dorothy Schiff; Morris Shapiro; Rudolf G. Sonneborn; Roger W. Straus; Benjamin Swig; Jacob Blaustein; Benjamin G. Browdy; Frank P. Goldman; Dr. Nahum Goldmann; Mrs. Samuel W. Halprin; and Dr. Irving Miller.

It is contemplated that after registration with the Securities and Exchange Commission, the bonds will be offered to the public through Jewish communities in the various parts of the country where the American Financial and Development Corporation for Israel will establish branch offices.