Economic aid to Israel became a two-way highway today as the State of Israel began the payment of $24,500, 000 to American investors in its first Israel bonds maturing in 1963. Twelve-year savings bonds bought in 1951 are being redeemed on the basis of one hundred and fifty cents on the dollar.
At a ceremony marking the start of the redemption of the first bonds of the State of Israel to be sold in the United States, Israel Ambassador Avraham Harman said that “the people of Israel welcome the first day of the redemption of Israel bonds as a historic date in its calendar of progress.” Leaders of the Israel Bond Organization Joined officials of the State of Israel at the Redemption Reception at the Israel Consulate.
In presenting redemption checks and founder-investor certificates to three holders of Israel bonds that matured today. Ambassador Harman said: “We earnestly hope that not only the beginning of Israel bond redemption, but the additional dividends of many and far-reaching advances by the people of Israel in the building and growth of a vigorous democracy, will inspire continued confidence in and response to the Israel Bond campaign.”
Leading participants in the ceremony at the Consulate General, in addition to Ambassador Harman, included Abraham Feinberg, president, and Dr. Joseph J. Schwartz, vice-president of the Israel Bond Organization, and Ambassador Katriel Katz, Consul General of Israel in New York.
DR. SCHWARTZ DESCRIBES PROCEDURES OF THE BOND REDEMPTION
Describing the redemption procedures, Dr. Schwartz said that the Treasury of Israel had turned over to the Chase Manhattan Bank the sum of $4,199,175 to cover the payments on all bonds maturing during the first month of redemption. Each month the amount of principal and interest due to holders of maturing bonds will be paid to the Chase which is the paying agent for Israel together with the Continental Illinois National Bank and Trust Company of Chicago and the Bank of America National Trust and Savings Association in San Francisco.
Dr. Schwartz stated that Israel bond sales in the United States during 1951 totalled $52,647, 000, of which approximately 59 percent was in Coupon Bonds and 41 percent in Savings Bonds. Some $5,000,000 worth of the Savings Bonds have since been retired prior to maturity through conversion into shares in Israeli industries, tourist expenses in Israel, gifts to philanthropic institutions, and through payment to the estates of deceased registered owners. The remaining Savings Bonds, more than $16, 000,000, will be paid out at 150 percent, or about $24, 500, 000 this year. The Coupon Bonds of the Independence Issue will not mature until 1966.
Reporting on the impact of redemption on the current drive to sell $75, 000, 000 in Israel bonds during the current year, Dr. Schwartz said that the 1963 results to date are running substantially ahead of any previous year in the twelve-year history of the Israel bond program. Abraham Feinberg, President of the Israel Bond Organization, termed the redemption of Israel bonds “proof positive of the fact that we can have faith in the capacity of Israel to grow and to prosper.”
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