JEWISH COLONIAL TRUST

JEWISH COLONIAL TRUST, the first Zionist bank. The Jewish Colonial Trust (Juedische Colonial Bank) Ltd. was incorporated in London on March 20, 1899, in accordance with the decisions of the First and Second Zionist Congresses. theodor herzl had been the leading proponent of this decision, as from the beginning he had foreseen the need for a powerful financial instrument for the political and economic realization of Zionism. In Der Judenstaat he had proposed the establishment of the "Jewish Company" for the orderly liquidation and transfer of the immigrants' capital; in his Diaries Herzl repeatedly spoke of the need for a strong financial instrument able to offer aid to Turkey in return for the granting of the desired "charter." Herzl's vision was of an organization like the East India Company, which had achieved a para-governmental status. The various aims of the institution are reflected in the Trust's Objectives, as set out in its statutes: „ To promote, develop, work and carry on industries, undertakings and „ colonization schemes… migration from or immigration into any country „ or countries… and in particular of persons of the Jewish race into „ Palestine, Syria and other countries in the East… To carry on the „ business of banking so far as… considered expedient incidentally to „ any other business of the company… To acquire from any „ state or other authority in any part of the world any „ concessions, grants, decrees, rights and privileges „ whatsoever… to seek and obtain openings for the employment of „ capital in Palestine, Syria and in any part of the world, and, with a „ view thereto, to prospect, examine, explore, test and develop any „ mining, landed, agricultural and other properties, and to dispatch and „ employ expeditions, agents and others. The political-economic character of the Trust made it necessary to vest control over it, by way of Founder Shares, in the bodies of the Zionist Organization. The Trust's authorized capital was £2,000,000 in shares of £1 each, but it took three years (until 1902) before the statutory minimum of £250,000 that permitted it to commence operations was paid up. In that year in London the Trust incorporated the Anglo-Palestine Company, now Bank Leumi le-Israel BM, as its subsidiary for operations in Ereẓ Israel. Banking, considered an incidental business in the Trust's Objectives, became its main activity. Although the JCT planned to open branches and agencies in various Jewish centers, such as New York and Odessa, only one branch, in Whitechapel, was actually opened in 1905. The various Balkan wars slowed down the development of business in its early years, and the Trust suffered considerable losses in Russia during World War I. With the advent of the British Mandate, the Trust invested in new ventures in Palestine, such as the General Mortgage Bank, the Workers' Bank (Bank ha-Po'alim), the Palestine Electric Corporation etc., and became deeply involved in some Jewish banking ventures in Eastern Europe, such as the Lodz Deposit Bank and the Jewish Central Bank, Kovno. In consequence of the economic depression, most of these latter assets, exceeding £550,000, became frozen or doubtful. Thus a reorganization of the Trust became necessary in 1933, and as of Jan. 1, 1934, the Trust handed over its banking business and investments in Palestine to the Anglo-Palestine Bank (formerly Anglo-Palestine Company). Profits on a share issue of the latter enabled the Trust to recover its share capital of £395,000 and £95,000 of its reserves. Since then the Trust has been solely the holding company for Anglo-Palestine Bank (Bank Leumi) shares. In 1955 the Trust was converted into an Israel company under its original Hebrew name of Oẓar Hityashevut ha-Yehudim. Its share capital in 1969 was increased from IL. 7,000,000 to IL. 10,000,000 by issue of bonus shares, and a 12% dividend was declared for 1968. The Trust holds 23.5% of Bank Leumi's outstanding share capital, but 88.3% of the (controlling) ordinary shares (as of March 31, 1969). (Kurt Grunwald)