PALESTINE ECONOMIC CORPORATION

PALESTINE ECONOMIC CORPORATION (now known as PEC Israel Economic Corporation), a public company, incorporated in the United States through the merger of two agencies interested in the economic development of Palestine. According to its charter, its principal purpose was "to afford financial aid to commercial, banking, credit, industrial, and agricultural enterprises, cooperative or otherwise, in or relating to Palestine." In 1922 a group of prominent Jews headed by robert szold formed a corporation called Palestine Cooperative Co., Inc. In 1926 another group of non-Zionist American Jews, headed by bernard flexner , formed the Palestine Economic Corporation under the laws of the State of Maine. The purpose was to combine the assets of Palestine Cooperative Company, Inc. and the assets in Palestine of the Reconstruction Committee of theamerican jewish joint distribution committee into a single corporation. Flexner and Szold both had a close personal relationship with louis d. brandeis , and his urgings and inspiration were probably the most important factor leading to the foundation of the company. The initial authorized capital was $3,000,000. The object was to establish an organization to which American Jews might give material aid on a business basis for productive enterprises in Palestine. At first the corporation invested and operated through the Central Bank of Cooperative Institutions in Palestine, Palestine Mortgage and Credit Bank Ltd., Palestine Water Company Ltd., Bayside Land Corporation Ltd., and Loan Bank Ltd. The Central Bank for Cooperatives was a major factor in financing diversified cooperative institutions and furthering the cooperative movement in Palestine. For many years, it was the only credit institution dealing solely with kibbutzim and cooperative societies introducing tested cooperative principles developed in western Europe. Apart from building low-cost housing and developing large urban areas, the Bayside Land Corporation was responsible for the preparation of a master plan by eminent British town planners for the future development of the city of Haifa, which was subsequently adopted by the Palestine government and is the plan pursuant to which the modern city of Haifa has been developed. The Mortgage and Credit Bank engaged in the construction and financing of houses for workers, both urban and rural. It was instrumental in reducing costs of construction, through competitive bidding, supervision, inspection of building materials and methods, and building houses in large groups. The Loan Bank made loans to artisans, farmers, and small businesses. The Water Company introduced modern American well-boring   machinery and greatly contributed to the enlargement of new wells for domestic and agricultural use. The company also engaged in geological, hydrographical, and geophysical investigations of the country and trained early settlers. It participated in the initial capital of the Palestine Electric Company and in the formation of Palestine Potash Ltd., which received the concession for the exploitation of mineral deposits in the Dead Sea. Over the years these activities were expanded, and by 1971 the company had investments in some 50 different corporations engaged in industry, construction, transport, marketing finance, and agriculture in Israel. Its stock was purchased by investors throughout the United States. In 1931 it increased its authorized capital to $10,030,000, and this was subsequently increased to $25,030,000. As of the end of 1970, its capital and surplus was close to $25,000,000 and its stockholders numbered many thousands. The company paid regular dividends from 1933, with the exception of the years of World War II. In 1969 Albert Levinson was president of the corporation, Robert Szold honorary chairman, and Joseph Meyerhoff chairman of the board. In later years, PEC merged with the IDB Corporation, one of the largest in Israel. Its last president was Joseph Ciechanover. In the 1990s the company was involved in a broad cross-section of Israeli companies engaged in various fields of business, including high tech and communications, manufacturing, building and construction, shipping and consumer products. Among PEC's holdings were the high-tech firms of Scitex Corporation Ltd. and Elron Electronic Industries Ltd.; the cell phone company Cellcom Israel Ltd.; the cable television company that serves the Tel Aviv metropolitan area and two other areas in Israel, Tevel Ltd.; the largest paint factory in Israel, Tambour Ltd.; the canning factory Caniel-Israel Can Company Ltd.; the Property and Building Corporation Ltd.; El-Yam Ships Ltd.; and the Super-Sol Ltd. supermarket chain. PEC is also involved in several venture capital funds and early stage development companies. (Julius Weiss / Shaked Gilboa (2nd ed.)