Scope and arrangement
Correspondence, memoranda, minutes, reports, financial statements, printed matter, maps, drawings, and photographs. Materials document activities of PEC and its subsidiaries relative to the agricultural and industrial development of Palestine. Subsidiaries include Central Bank of Cooperative Institutions in Palestine, Ltd.; Palestine Mortgage and Credit Bank, Ltd.; Loan Bank, Ltd.; Boosted Land Corporation, Ltd., and Palestine Water Company, Ltd.
The records of the Palestine Economic Corporation (subsequently PEC Israel Economic Corporation), 1921-1944, document its activity as a private organization facilitating investment in the development and resettlement of Jewish Palestine. By stimulating the growth of the cooperative movement in the country, PEC fostered Palestine's agricultural and industrial development along business lines. The bulk of the collection dates approximately from 1926 to 1938.
Most of the material comprises the records of PEC's activity through its subsidiary companies, namely, Central Bank of Cooperative Institutions in Palestine, Ltd.; Palestine Mortgage and Credit Bank, Ltd.; Loan Bank, Ltd.; Boosted Land Corporation, Ltd.; and Palestine Water Company, Ltd. These and other records document PEC's work in agricultural development (most notably, its support of Palestine's orange industry), land development, housing, and the establishment of credit unions and cooperative societies in Palestine. Most of the material is in the form of correspondence and memoranda, with minutes, reports, financial statements, loan applications, printed matter, drawings, maps, and photographs also present.
The collection affords a unique perspective on the Jewish resettlement of Palestine, emphasizing commercial development over philanthropy in laying the country's economic foundation. The statistical information and descriptive narrative contained within the records of PEC's credit activity, with both individuals and cooperative societies alike, further illuminate the names and industry of many of the early settlers of Palestine.
The Palestine Economic Corporation records are arranged in thirteen series:
Correspondence, memoranda, minutes, reports, financial statements, telegrams, radiograms, cables, printed matter, newspaper clippings; drawings and maps.
The records comprising Series 1, PEC General and Administrative Files, represent various of the corporation's interests and activities over the years, and frequently extend the documentation available within subsequent series devoted to the records of PEC subsidiaries. In addition, the colonization of Jewish Palestine is reflected more generally within this series, as in a miscellany of government and private reports ("Reports on Palestine") dating from 1922 to 1930; and in the records of early Jewish industry in the country ("Palestinian Industries" [sic]).
With respect to subsidiary activity, files for Boosted Land Corporation, Ltd., contain correspondence to and from PEC for the years 1936-1938; for Central Bank of Cooperative Institutions in Palestine, Ltd., incoming and outgoing correspondence for 1938; and for Palestine Mortgage and Credit Bank, Ltd., outgoing only for 1936 to 1938. The Annual Report files contained within Series 1 are another source of information about PEC's activity through its various subsidiaries, as these contain drafts of the subsidiaries' own reports (1935-1939) for inclusion in those of PEC. While there are no drafts or printed copies of the coloration's annual reports within the collection, balance sheets for 1930-1940 may be found within the "Resources and Commitments" files.
Other files within Series 1 which significantly extend documentation available within other series include those for Agricultural Long Term Loans (1926-1933) and Intermediate Credits (1929-1939), respectively, representing two of PEC's chief activities through the Central Bank. Similarly, the groups of files contained under "Haifa Bay", "Housing", and "Jewish National Fund Leasehold" each constitute an essential complement to the records of Series 5 (Haifa Bay Development Company) and Series 6 (Boosted Land Corporation, Ltd.), which document PEC's appropriation and development of land in the Haifa Bay region.
Also represented within this series, in the form of minutes and correspondence for the years 1931-1934, is the work of the American Economic Committee for Palestine. The committee provided an information, rather than a financial, service for prospective settlers, who needed recent and reliable economic data on Palestine. The committee members' interest in the country's developing economy also found expression in service on the boards of directors of many of the country's financial institutions and enterprises, including that of PEC.
Of particular note among individual correspondents in this series is PEC president Julius Simon, from whom letters and reports dating from 1935 to 1938 are present.
Series 2, the records of PEC's relationship with the Central Bank of Cooperative Institutions in Palestine, Ltd., consists primarily of correspondence, memoranda, reports, minutes, financial statements, and statistical information. Central Bank was organized in 1922 by the Palestine Cooperative Company, Inc., in conjunction with the Reconstruction Committee of the American Jewish Joint Distribution Committee (JDC), the Jewish Colonization Association (ICA), and the Economic Board for Palestine of London. Its object was to facilitate the development and growth of the cooperative movement in Palestine, by granting credits exclusively to societies and credit unions formed on a cooperative basis. Funds from these loans were then made available to the cooperative's members, who were collectively responsible for the loan's repayment.
Cooperatives entered nearly every aspect of economic life in Palestine. Through them, farmers, laborers, merchants, and artisans obtained loans to carry on their businesses. These businesses, in turn, depended upon the resources of other cooperatives for their sustenance and growth - such as the special water cooperatives through which water for irrigation was obtained, or the various cooperatives created for the marketing of goods.
PEC took over the merged Palestine assets of the JDC and the Palestine Cooperative Company in 1926, most of which pertained to the operations of Central Bank. Under PEC's direction, the bank concentrated its credit activity on young and otherwise struggling cooperative societies, an endeavor of calculated risk that, in the absence of similar support by more established and conservative institutions, served as the principal stimulus for the growth of the cooperative movement in Palestine. The Bank's support was far more inclusive than the provision of credit, and extended to assisting the organization of new societies, supervising their activities, and providing instruction in cooperative principles and practice.
An important feature of the Bank's lending, instructional, and supervisory activity was the involvement of Advisory Committees. Their members shared in the supervision of the loan-granting process, and were active in the formulation of lending policy.
Agricultural operations were the locus of most of Central Bank's activity, and short-term loans were extended for operating capital, seed purchases, and crop advances. Beginning in 1926, with PEC's acquisition of interest in the Bank, capital funds for farm loans of the intermediate- and long-term repayment class were supplied by PEC. These funds were put to machinery and livestock purchasing, building construction, irrigation system installation, and the development of orange and almond groves. The provision of this type of credit for agricultural development was unknown before its instigation by PEC through the Central Bank.
Correspondence, financial statements, memoranda, reports, minutes, printed matter, photographs, maps, and drawings.
Palestine Mortgage and Credit Bank, Ltd. (PMCB) was organized in 1922 (as, simply, Mortgage Bank) by the Palestine Cooperative Company, Inc., at a time when no mortgage legislation had been enacted in the country. With the takeover of that company's assets in Palestine by PEC, the bank become another of its subsidiaries, in the same way as had Central Bank.
PMCB was the first institution to provide mortgage loans in Palestine; but its pioneering work was not bounded by lending activity. The bank was involved in the construction as well as the financing of low-cost housing for workers, in both rural and urban areas. From the outset of its operations, PMCB began establishing means of governing relations between borrowers, lenders, and contractors. It was also the first to set standards for construction: for example, that houses must be planned by architects, competitively bid for by contractors, and supervised in their construction by qualified experts. Last but not least, the bank required that the purchase price of the resulting home be within the financial means of the owner.
Toward that end, standardized houses, whose design was the result of prize competitions among architects, were built in groups of 25 or more, so that costs could be brought down and the savings passed on to the buyers. All phases of a housing project, from the preliminary drafting of plans, to financing and construction and the provision of public amenities, to the organization of the new community's settlers, were closely administered by PMCB.
With respect to rural settlements, the aim was to enable agricultural workers to own their own home, along with a plot of ground for raising their own food. PMCB supplied loans to borrowers of the lowest economic strata, who had been denied loans from existing credit cooperatives whose funds were provided by PEC through the Central Bank of Cooperative Institutions, Ltd.
Correspondence, memoranda, reports, financial statements, and minutes.
Loan Bank, Ltd., began as a loan fund (the "Kupath Milveh"), administered as a philanthropy by the Reconstruction Committee of the Joint Distribution Committee (JDC) as one of its relief activities. The fund's operations gradually became more business-like, acquiring the authority to charge interest and to demand repayment of monies borrowed. Formal reorganization of the fund into a business institution was realized in 1924, when its administration was turned over to the Governing Board of the Kupath Milveh, created by an agreement entered into between the Reconstruction Committee and the Palestine Cooperative Company. Emmanuel N. Mohl (who served Palestine Mortgage and Credit Bank in a similar capacity) was appointed Managing Director; and stockholders and directors of the newly organized loan institution, now known as Loan Bank, Ltd., included Judge Julian W. Mack, Bernard Flexner, Herbert H. Lehman, and Julius Simon. The bank's stated purpose was to "graduate" its borrowers to eligibility for funds from other appropriate credit institutions. In 1932, it was taken over as a wholly owned subsidiary of PEC.
Loan Bank granted very small loans (averaging $75. 00) to such borrowers as artisans, teachers, shopkeepers, tradesmen, and clerks, who were not able to obtain funds from the commercial banks. Many of these clients were first-time borrowers from a lending institution, experiencing the requirement of timely repayment for the first time. Eventually, the bank's clients became members of the growing number of credit cooperatives in the country.
Thus, with credit needs satisfied elsewhere, Loan Bank's resources were freed for other activity. Among its pioneering endeavors was the granting of three-to-five-year credits for household farming to rural workers (see Series 11, Housing). The funds were typically put to planting a kitchen garden and purchasing and feeding a few chickens and a cow, thereby enabling these workers to support themselves and their families during periods of unemployment.
In addition, Loan Bank was the first to grant three-to-five-year credits to small manufacturers ("Small Industrial Credits"), for a variety of needs: the purchasing of machinery and tools, physical expansion, and the general facilitation of greater production and increased employment. While the loans were executed and installments collected through Loan Bank, the overall administration and follow-up activity relating to this type of credit work was shared by the Palestine Mortgage and Credit Bank.
Commercial banks were unwilling to assume the risks attending activities such as these, at the time Loan Bank was beginning its operations. Yet the success it enjoyed inspired other institutions to apply similar administrative procedures to similar ventures; and these regular commercial sources and cooperative-credit institutions began then to absorb the small borrowers who had been initiated into credit activity by Loan Bank. This movement eventually led to PEC's liquidation of the bank, as its work was increasingly carried forward by commercial institutions.
Correspondence, minutes, reports, cables, maps, drawings. Some material in German.
The Haifa Bay Development Company was a Palestine corporation, with most of its stock held by the American Zion Commonwealth. It was formed for the purpose of developing a large stretch of land lying along the coast from the City of Haifa to the Bay of Acre, significantly extending development possibilities for the country as a whole. The largest industrial concerns in the country at that time were situated on adjoining land, and it seemed that further industrial development in Palestine would be in the direction of the Haifa Bay region.
Around 1927, PEC, interested in these larger development possibilities as they related to the country's economic future, took up the question of acquiring an option on some unsold land held by Haifa Bay Development Company. Then, in 1928, the company defaulted on its mortgage with the region's Arab landowners. PEC made the necessary payments, retaining approximately 5,000 dunams (one dunam equals 1,000 square meters) for industrial and residential development, and ceded the remainder to the Jewish National Fund, taking a mortgage in payment. The land retained by PEC was the heart of Haifa's developing industrial section.
Together, the two companies made thousands of swampy and malarial acres available for settlement by drainage and amelioration. PEC formed a wholly owned subsidiary (also in 1928), Boosted Land Corporation, Ltd., to hold title to the land and carry on its development.
Correspondence, reports, minutes, printed matter, maps, and drawings.
This wholly owned subsidiary of PEC was formed in 1928, for the purpose of acquiring (in conjunction with the Jewish National Fund) the stretch of land extending from Haifa to Acre known as Emek Zebulun.
PEC's primary purpose in acquiring the land in Haifa Bay was to promote the development of sound land policy in an area which promised to become of great importance to the economic development of Palestine. The records comprising this series document the activities of this subsidiary of PEC in reclaiming the land for settlement, and in facilitating its industrial and economic development.
Significant among these activities was negotiating the obstacle of a lease on part of the property held by the Iraq Petroleum Co. The Palestine Government had granted the company the right to erect oil refineries along a stretch of sand dunes extending several kilometers along the seashore. The leasehold cut off a large area of land from access to the sea, and the proposed refineries threatened to block any residential development of the area. Ultimately, an exchange of land was effected by Boosted Land Corporation, Ltd., which freed the shore area for development.
Other major areas of the subsidiary's activity included drainage and sewerage, town planning, and the establishment of railways. The "Summary Monthly Reports", covering the period 1935-1937, provide a detailed view of the corporation's activity for those years.
Correspondence, memoranda, reports, statistics (immigration figures); radiograms, cables, financial statements; maps and drawings.
The materials contained within this series document the activity of PEC in the administration of public works loans during a period of extensive unemployment in Palestine. Relief in the form of these loans meant not only work for the unemployed, but the continued development of the country. Loans for the construction of roads, streets, and highways, for example, connected existing settlements and opened up land for new settlements. Funds were also granted for the continued development of irrigation and drainage schemes. These monies took the form of special credits extended by institutions such as the Central Bank, the Palestine Mortgage and Credit Bank, and the Palestine Building Loan and Saving Association.
Correspondence, memoranda, reports, cables, radiograms; statistical information (e. g., rainfall, distribution of wells); maps and drawings.
From the time of its incorporation, PEC demonstrated interest in formulating solutions to the problems Palestine's water supply posed for the country's development. Success depended upon the united effort of the major institutions engaged in building up the country, including the Palestine Government itself; PEC took the initiative in securing their interest and soliciting their cooperation.
The files comprising Irrigation - General within this series, illustrate the beginnings of organized efforts to extend the water supply's capabilities. Without irrigation, the semi-arid soil in Palestine was suitable only for the sparse production of cereals. With irrigation, productivity of soil tripled or quadrupled, permitting the sowing of more valuable crops. The country's orange groves, for example, were entirely dependent upon an artificial water supply.
The water activities of PEC were conducted through the Palestine Water Company, Ltd., organized in 1933 as a wholly owned subsidiary of the corporation to help provide an inexpensive, adequate supply of water for irrigation and domestic use. The principal aim of the company was to reduce irrigation costs by establishing centralized regional water systems. By eliminating the duplication of pumps, water mains, and reservoirs, lower water rates for the farmer could be attained, and resources freed for other farm improvements. Some of the methods employed by the company and illustrated by the records making up this series include: preliminary investigations and planning for central water installations; the devising of sound administrative and technical means of distributing water and erecting water plants; and the continuous effort to adopt newer methods and machinery.
As early as 1930, PEC brought to Palestine, jointly with the Palestine Jewish Colonization Association (PICA), water drilling machines from America; and PEC alone secured a rotary drilling machine, which revolutionized drilling in Palestine. These were the first such imports of modern machinery into the country. American methods of well drilling were carefully studied, and various types of equipment compared, in the process of culling the most effective methods of drawing water from Palestine's soil. American techniques and equipment would continue to be utilized by PEC in Palestine, as illustrated by the Water Drilling Unit files, spanning the years 1931 to 1939.
Correspondence, memoranda, reports, minutes, policy statements, financial statements, statistical information, cables, telegrams, radiograms, news clippings, printed matter; maps and drawings.
PEC's involvement in Palestine's orange industry began generally with its granting of long-term and intermediate agricultural loans through Central Bank. Some of the borrowers taking advantage of the availability of those new credits were small orange growers, who needed the funds to develop newly planted groves. With the establishment of these new groves came an increase in the demand for labor, and the need for an expanded market. These considerations led to PEC's inquiry into the status of the entire industry in Palestine, particularly its marketing and distribution components. The orange plantations represented the country's greatest success in primary production, flourishing in spite of many years of unsystematic cultivation.
Working through Central Bank, PEC established standards for seasonal financing, and advocated the cooperative marketing of oranges. The corporation also made available the experience of other citrus-producing countries, particularly that of the United States. In cooperation with the Palestine Jewish Colonization Association (PICA), and the Pardess Cooperative Society of Orange Growers, Ltd. (the oldest citrus cooperative in Palestine, organized in 1900), PEC brought American citrus experts to Palestine to investigate its concerns on the spot. Among the areas benefitting from such expertise were the selection of machinery, improvement of growing methods, watering and irrigation, and the need for a central packing plant.
Correspondence, memoranda, reports, minutes; newspaper clippings.
A stipulation of the League of Nations Mandate for Palestine was the naming of an organization to be generally responsible for advising on matters affecting the establishment of the new Jewish homeland. The World Zionist Organization was selected to fill that role, and its representative within the country was the Jewish Agency for Palestine.
The records comprising this series document some of the activities of the Jewish Agency relating to the economic and social development of Palestine. Much of the material bears on the proposed formation of a "Business Corporation for Palestine", in which those interested in building up the country on a business basis could invest funds. PEC's record of achievement is noted as a singular example of the potential success of such an enterprise. Also documented here is the formation of the agency itself, discussions as to its organization, and recommendations for development activities in Palestine, such as purchasing land and acquiring concessions for natural resources. The agency concerned itself with all phases of colonization activity, however, as witnessed by reports prepared on such matters as the provision of health care, water supply and irrigation, employment, and immigration. In addition, the Advisory Committees of Central Bank, charged with supervising the granting of credits, included a representative of the Jewish Agency among their members. Central Bank also worked closely with the agency's Agricultural Colonization Department, whose reports for the period 1930-1932 are a part of this series.
Oversize documents from Series 1, 2. 1, 2. 2, 2. 3, 2. 4, 2. 5, 3, 5, 6, 9, and 10. This series also includes map drawers, holding oversize material from Series 1, 2. 1, 2. 4, 2. 5, 3, 4, 6, 9, and 10.
Map drawers holding materials from Series 1, 2. 5, 3, 5, 6, 7, 8, and 9.
Photographs from Series 2. 1, 2. 4, 3, 4, 5, and 8.