JEWISH COLONIAL TRUST, THE (Jüdische Colonialbank):
By: Joseph Jacobs, J. de Haas
The financial instrument of the Zionist movement. Its establishment was suggested at the First Zionist Congress, held at Basel in 1897; the first definite steps toward its institution were taken at Cologne, May, 1898. It was conceived by the political Zionists as a financial instrument which should hold in trust the moneys of the Zionists for the direct purposes of the movement, and, at the same time, should act as a bank and carry on business according to the methods of the commercial world. These slightly conflicting ideas rested on a basic principle of the Zionist movement, namely, that it must not serve as a charity, but must teach and foster independence. On the other hand, it was recognized by the Zionists that financial power is needed to support diplomatic negotiations.
Origination.The idea of founding the trust met with Zionist sympathy from the start, and in May, 1898, the preliminary committee, consisting of David Wolfsohn and Dr. M. Bodenheimer of Cologne, and Dr. Rudolph Schauer of Mayence, issued the first statement of the proposed institution and the first call for subscriptions. The purposes of the trust were described as the economic development and strengthening of the Jewish colonies in Palestine and Syria, the purchase of land for new settlements on a "publicly and legally recognized" basis, the development of trade, industry, and commerce in the colonies, the loaning of money on bond and mortgage and the making of advances for colonization, and the establishment of savings-banks or banking-offices in the colonies. The statement also referred to the purchase of concessions, etc., in Asia Minor, especially in Syria and Palestine, particular consideration being given to railway concessions and the building of harbors. Other points mentioned were the administration of the National Fund (see Zionism) and the carrying on of ordinary banking and exchange business.
It was decided that the principal office of the bank should be in London, that it should be registered under the English Companies Acts, and that the capital stock should be two millions sterling, issued in one-pound shares. Prospective shareholders were permitted to secure shares by a payment of 10 per cent per share, the balance to be subscribed within a stated period. These preliminaries were terminated on July 15, 1898, and the chairman of the committee was able to submit so gratifying a report to the Second Zionist Congress that the establishment of the bank was immediately decided upon. A numerous financial committee was appointed to represent Zionist interests in every country, and the institution was incorporated as a limited company under the English Companies Acts on March 20, 1899. The sum of £2,051 5s. was paid in stampduties.
At an extraordinary general meeting held in Aug., 1899, the shareholders revised the first paragraph of the memorandum of the articles of agreement as follows: "To promote, develop, work, and carry on colonization schemes in the East, by preference in Palestine and Syria, and further to promote, develop, work, and carry on industries and undertakings in Palestine, Syria, or in any other part of the world."
The predominance of the council of administration was assured by the allocation of the first hundred shares as "founders' shares," which are entitled, at any general meeting of the company, or at any poll, to as many votes as there are ordinary shares represented at that meeting or poll.
The first governors of the trust were Dr. Schauer of Mayence, Leib Schalit of Riga, and Abraham Hornstein of Kiev.
The prospectus, which stipulated that the company should not make an allotment until 250,000 shares had been subscribed, was issued April 29, 1899, from the offices in Broad street, London. The largest number of applications were for single shares, from applicants who undertook to pay for their holdings in five instalments, at a premium of 2½ per cent, within one year. Even the single shares were divided, especially in Galicia, between from four to eight persons. The applications, which, by the end of the following month, had made the establishment of the trust certain, represented over 100,000 shareholders; and special accommodations for the register at Somerset House, London, were necessary. The application for shares, above the necessary minimum, did not proceed very rapidly, until, in 1900, a system of share clubs was invented by an independent organization to facilitate the purchase of holdings on a still smaller allotment scheme. At the Zionist Congress of 1900 the deposits from various countries having been drawn into the central office, the trust was declared ready to transact business, and it was decided to devote part of the capital to the eventual founding of branches in Russia and Palestine.This plan was taken in hand in 1902, and a subsidiary corporation, the Anglo-Palestine Company, was formed and a branch opened in Jaffa.
At the 1903 annual general meeting, held in Basel,the directors recommended, and the shareholders approved, the payment of a dividend of five pence per share; and it was decided to found branches of the trust in the East End of London and in New York, and to take steps for carrying into effect the resolution relating to the Russian branch. The trust is made directly responsible to the Zionist movement by the fact that the council of administration is selected from among the members of the Grosses Actions Comité, and that one of them must report to each Zionist Congress. The council thus directs the policy of the trust in accordance with the resolutions of the Zionist congresses.
