Original prospectus from the State of Israel
printed in 1951. This 46 page historic booklet was issued by theAmerican Financial Development Corporation for Israel. This item has information for the $500,000,000 Independence Issue Bonds and is over 58 years old. This is the first time we have had this for sale.
State of Israel Bonds refers both to securities issued by the government of Israel and to the commonly-used name of the company that is the exclusive underwriter for Israel bonds in the United States. The formal name of the company is the Development Corporation for Israel (DCI).
The idea of floating an overseas bond issue was conceived by Prime Minister David *Ben-Gurion in 1950 and was endorsed by Finance Minister Eliezer *Kaplan and Labor Minister Golda *Meir. Israel was in desperate need of an infusion of financial resources, as the new nation was mired in a severe economic crisis precipitated by the 15-month War of Independence. In the aftermath of the war, a nation needed to be built. Every sector had to be developed, strengthened, or modernized.
Compounding the crisis was the arrival of hundreds of thousands of new immigrants. With no more impediments to immigration, the Jews of Europe, including Holocaust survivors and internees from *displaced persons camps, immediately set sail for Israel. Moreover, thousands of Jews from the Middle East, either expelled or rescued from their countries of origin, also poured into Israel. Due to the chronic lack of absorption funds, Israel was forced to house the ongoing wave of immigrants in primitive shelters called ma'abarot – in essence, refugee camps. Food was scarce and severely rationed.
In September 1950, Ben-Gurion convened an urgent meeting of American Jewish leaders at Jerusalem's King David Hotel to discuss the viability of issuing Israel bonds. Among the early advocates of Israel bonds were former secretary treasurer Henry *Morgenthau, Jr., Rudolf G. *Sonnenborn, Sam *Rothberg, Julian Venezky, and Henry *Montor.
The following spring, Ben-Gurion traveled to the United States to personally launch the sale of Israel bonds, beginning with a mass rally at New York's Madison Square Garden. Ben-Gurion subsequently traveled to other cities throughout the U.S. to encourage investment in Israel bonds. Although Ben-Gurion was hopeful that initial sales would reach $25 million, first year purchases were more than double his projections, topping $52 million.
Development funds generated through the sale of Israel bonds were quickly put to work. Towns were built for new immigrants. The National Water Carrier irrigated nearly half a million acres, allowing Israel to become agriculturally self-sufficient. The Dead Sea Works became Israel's first major industrial undertaking. Power plants helped alleviate Israel's lack of energy resources. New ports were built to receive vital imports and increase Israel's export potential. Transportation networks were constructed and expanded throughout the country.
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