The History of Israel Bonds
In The Beginning... The end of the War of Independence in 1948 found the newly-reborn State of Israel in a state of economic exhaustion. From Europe and North Africa, Holocaust survivors and displaced persons flooded into Israel by the tens of thousands. Its treasury was empty, its economy was in danger of collapse and its already meager resources were drained.
During this difficult time, the government of Israel had to conceive a way to raise capital for its continued survival. On September 3, 1950, David Ben-Gurion, Israels first Prime Minister, met with a group of 50 American and Israeli leaders in Jerusalems King David Hotel. They ultimately decided to bring the idea of Israel Bonds to the American public; in October 1950, Golda Meir met with American Jewish leaders in Washington, DC to lay plans for launching Israels first bond issue in the United States.
The Development Corporation for Israel (originally founded as the American Finance and Development Corporation for Israel) was created in February 1951 to offer the securities in the United States. The Knesset, acting on the proposal from the September 1950 conference, adopted a law authorizing the flotation of Israels first bond issue, known as the Israel Independence Issue. This action was significant, for it was the first time Israel had asked for a public loan instead of a philanthropic gift.
In May of 1951, David Ben-Gurion launched the Israel Bond sales drive in the United States. He arrived in New York on the third anniversary of Israels statehood and officially launched the Israel Bond Organization at a rally in Madison Square Garden. A coast-to-coast whirlwind tour to build support followed and the response to his call was overwhelming -- $52.6 million in bond sales was generated for Israel. That first year was clearly a harbinger of things to come, as the increasing success of the Bonds program enabled Israel to accelerate its unprecedented development program.
Golda Meir, the late former Prime Minister of Israel and also a founder of Israel Bonds, in making a tribute to the Israel Bond organization once said, "You have a stake in every drop of water we pour into our land, in every mile of road built, in every kilowatt of power, in every field, in every factory." When asked about what collateral she could offer, she said the only collateral she had was the children and future of the State of Israel.
Today, it is difficult to imagine the modern and dynamic State of Israel without the economic foundation provided by the Israel Bond organization. Thus, while it took nearly 2,000 years for Israel to be reborn, with the help of Israel Bonds, it took only a few short decades for the new nation to become a leader in many fields of human endeavor and to provide a stable and vibrant home for its people.
Source: Israel Bonds