The Israeli State Council last night adopted three bills providing for the floating of three national loans–a war loan, a bank loan and a popular loan–totalling $54,000,000. The loans will be spent on defense, increasing the railway facilities of the country, setting up of a new airline and assisting municipalities to repair war-damaged areas.
In submitting the bills to the Council for adoption, Israeli Finance Minister Kliezer Kaplan declared that the funds were needed “in connection with the tremendous difficulties of financing the war and the need to protect the stability of its currency against inflation.”
The largest of the three is an issue of $30,000,000 for war purposes. Bearing three and one-half percent interest, the ten-year issue becomes payable in part after five years. Kaplan announced that economic institutions and organizations have pledged to cover the full amount of this loan.
In the event that they should not be able to meet the full quota, Kaplan said, the bill provides for compulsory loans from individuals owning property in excess of $9,000. The amount they must land the government will vary in direct proportion to the amount of property which they own. An appeals board will be provided for persons who believe that they have been assessed unfairly. The Finance Minister warned that shirkers who are discovered will be assessed higher sums than they normally would have been expected to lend the government.
LOTTERY PRIZES INTRODUCED; LOTS MAY BE SOLD ABROAD
The popular loan, a 20-year issue, will pay three percent interest in the form of lottery prizes, including 700 lots. Sums won in the lotteries will be income tax exempt, while the lots may be sold not only in Israel but also to persons abroad, it such a sale does not clash with their national laws.
The popular and the bank loan will each amount to $12,000,000. The bank loan will be a short term issue–repayable within five years at three percent interest. The Finance Minister pointed out that the banks will be asked to subscribe only four percent of the nation’s total bank deposits, thus leaving them free to grant ordinary commercial credits.
Declaring that he expects all three loans to be subscribed by February 1, next, Kaplan said that up to $40,000,000 would be used directly in the war effort while the rest would be used for highways, rail transport and an airline independent of foreign lines. In addition, municipalities would receive loans from the national government to tide them over their difficulties.
Voicing the hope that the state budget can be met without a deficit, Kaplan said that up to now the Treasury has been able to stabilize the economic situation, but that the government’s needs are increasing. He reported that the last few months have been most difficult financially since help from abroad dropped off as compared to the contributions received during the summer months.
The Jewish Agency has not collected enough funds abroad to cover the cost of absorbing the new immigrants, he stated, therefore the Jews of Israel are carrying the additional burden. He expressed the hope that contributions from abroad would increase.
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