Public Hearings Before Anglo-American Committee of Inquiry – Mar. 11th 1946 Part II

[31] Q. So that on that point I do see certain differences between you and Doctor Weizmann, who said “I resent them; I hate them; I will fight them.”

A. There is a Hebrew saying about two prophets. I’m certainly not a prophet and cannot speak in the same style. I would put it differently. If I did say it, I wouldn’t say it eloquently. My English is much poorer than Doctor Weizmann’s.

Q. I noticed the difference in substance and not in style!

Mr. Crick- Mr. Ben Gurion, may we come down to the realm of political philosophy, which is rather more mundane. There are three matters I would like to take up with you.

The first one is this question of the relevance of the concept of economic absorptive capacity in immigration policy. You would agree that for the greater part of the period between the two wars, the test for the determination of the volume or rate of immigration was the economic absorptive capacity of the country?

A. Yes.

Q. You would agree also that that test was set aside by the White Paper of 1939?

A. Yes, sir.

Q. Therefore, the test holds good today?

A. No, sir, it doesn’t follow. It is illegal not because of setting aside absorptive capacity. It has nothing to do with that. There is no absorptive capacity principle at all. The White Paper is illegal for other reasons, because it is illegal to deny that we are here as of right. The Mandate said that recognition was given to the historical connection of the Jewish people with Palestine, to be created for reconstituting their national home there. The White Paper is a denial of that.

Q. My point was this- Since you regard the White Paper of 1939 as illegal, then you must surely regard economic absorptive capacity as being the valid test still in the principle of immigration.

A. No, sir, it doesn’t follow.

Q. Well, then, may we go forward from that point. It is perfectly clear that the Jewish Agency, which is ultimately to establish a Jewish State in Palestine—I’m not quite sure whether I should say in Palestine or out—can you tell me?

A. I don’t see that there is any difference.

Q. You don’t see any difference in that little preposition which has caused so much dispute?

[32] A. No.

Q. Well, then, you propose that a Jewish majority should be established in Palestine at the earliest possible date. And in order to achieve that, you propose that immigration procedure should be placed at the free discretion of the Jewish Agency?

A. Yes, sir, but not for that reason. I think there are other more important reasons.

Q. And that discretion of the Jewish Agency should apply to immigration both as to numbers and as to type of immigrant?

A. Yes, sir.

Q. In the course of carrying out that policy of immigration designed to establish an early majority of Jews in Palestine, would you suggest any attention at all should be paid to economic absorptive capacity?

A. Here again I say yes and no, because I think the economic capacity is an artificial invention. It isn’t a thing which exists. If it is, it is being made. We want the control of immigration in order to create absorptive capacity by development and by bringing in new immigrants. When a Jew comes to Palestine, he increases absorptive capacity because he belongs and he is creating new wealth.

Q. So you say there would be no economic difficulties whether you brought in a hundred thousand immigrants in one year or 500,000 immigrants in one year?

A. Yes, sir, but you need not only bring in more, you must give them the opportunity and means to work and to develop the country and to build. It isn’t only bringing in people. You bring in the means also for making these people productive.

Q. Would you agree with my definition of economic absorptive capacity as meaning that there must be a reasonable prospect of providing employment and livelihood for the incomer without damage to the standard of living of the people already here?

A. Yes, sir.

Q. Supposing on that test, at some stage when the Jewish Agency is in charge of immigration, you arrive at the stage where it would be dangerous to bring in more and you still, at that stage, did not have a majority in Palestine and there were still people anxious to come here? Would you then conceive it to the duty of the Jewish Agency to do a little stopping of immigration for the time being?

A. Your question implies something which I don’t accept. It [33] implies we will bring in people for the mere purpose of having a majority. I don’t accept that. We are bringing in people for another reason.

Q. What is that other reason?

A. The other reason is that these people have reasons, which I am not going to discuss now, for wanting to be here. They want to be here; they have the right to be here; and a place for them can be created here. That is the other reason and this is the test.

Q. So that we really come back to this point- The economic absorptive capacity as a test of the rate or volume of immigration has no meaning and no relevance?

A. In a certain sense, it has no meaning.

Q. There will not be a great deal of purpose in discussing at length this long pink memorandum that the Jewish Agency was kind enough to prepare?

A. What is the memorandum?

Q. It is on the economic absorptive capacity of Palestine! (Laughter).

A. I am afraid it is a play on words. What is in the memorandum is they are trying to show the economic potentialities of the country if certain conditions are applied. There is a great reason to study it. It is a very important problem.

Q. You are aware that the Mandate required that the Mandatory Power, in controlling immigration, should have regard for the interests of the people already in Palestine?

A. Absolutely.

Q. Would you agree that that obligation entails having some regard for what the people in Palestine think to be their interests, as distinguished from what the Mandatory Power judges objectively to be their interests?

A. Except one thing. Except their right to deny our right to this country. This view must not be taken into consideration, because otherwise the whole thing is nonsense.

Q. Would you think that that provision in the Mandate should be carried into any new trusteeship which might be arranged by the United Nations Organization?

A. It is only a new name. It will be instead of the League of Nations. I don’t want to say the fate of the League of Nations will be the fate of the United Nations. This depends on factors which I don’t know about. It means simply there should be a Mandate with a new name and a League of Nations with a new name.

[34] Q. But you would agree that that particular clause should have a place in the trusteeship agreement?

A. Yes, certainly.

Q. In that case, would you think it proper that the duty of regulating immigration should be taken away from whatever country is appointed trustee under the powers of the United Nations?

A. Yes, sir, and I will tell you why. Because we will do it better and more faithfully than anybody else, because we have these interests which are implied in Article 6—these vital interests which are to us more than they are for any Mandatory Government. The first part refers to facilitating Jewish immigration and the second part deals with the rights of other people in Palestine. We are more interested in that than any other Mandatory Government. It is our vital interest that the right of the Arab should really be preserved; that they should feel and know it is so; that our coming here is not at their expense.

Q. May I ask you one or two questions about land which follow from that? I gather that rather less than one-fifth of the Jewish population at the present moment is engaged upon the land or depend upon the land.

A. Yes.

Q. I gather also that you would regard that as due to purely ordinary factors operating in a modern economy? There is nothing particularly unusual about it?

A. I would not say that. I myself would like to see more people on the land. I think Dr. Weizmann explained that point, and I entirely agree with him.

Q. The question occurs to me, because in this paper of yours on economic absorptive capacity much the same proportion is accepted as a basis for calculating the quantity of land the Jews would need to acquire in the process of settling a million people in Palestine.

A. Yes, Sir. These things were written by economic experts who are going according to a certain experience and saying “This will happen.” I would like to see something better happening, and I believe it can happen, but these people are hard-boiled.

Q. May I ask you one or two questions about a remark made by Dr. Weizmann on Friday, when he very clearly outlined to us that Palestine contained three distinct sectors of economy- the Jewish, the Arab and the Government. May I assume that you [35] would see advantage to all parties if we could bring about an integration of the Jewish and Arab economies?

A. Yes, Sir, but this can happen only when there is a Jewish calendar.

Q. May I ask you, that being your position, what steps you would take from your side in order to bring about that integration of the two sectors of economy? What positive steps would you take?

A. I will give you a few instances. At the moment I cannot give you an entire programme, but first of all I would establish a minimum wage for all workers in this country; a decent living wage.
Q. Would that wage be the same for both Arabs and Jews?

A. That is what I say, a minimum for all workers in this country, but a decent living wage; not to bring it down but to bring it up for all workers. This is the first thing which I would do.

Q. And the next thing?

A. Next I would improve the sanitary conditions, the health conditions, of the people in this country, I would open schools. We shall be able to do it when we shall be in charge of the country, and we will do it.

Mr. Buxton- There are two or three questions I would like to ask, Mr. Ben Gurion, one of which you or your associates may think it improper that you should answer. In referring to the British military forces in Palestine, on the question of the number necessary to secure domestic peace, you referred to other interests than those. Would you are care to specify what those other interests are?

A. You mean the other interests in Palestine?

Q. Yes.

A. I can give you a few instances, yes. I consider the most important interests in Palestine are the Jewish and Arab interests, but there are other interests. There are religious interests; there the British interests; there are the interests of the Holy Places; there are the interests of the Christian religions; there are the interests of pilgrims; there are a great number of interests which I can enumerate. If you will give me some time I can give you a memorandum on that.

Q. Certainly large numbers of armed men and block-houses are not necessary to protect those interests.

A. No, I do not think so.

[36] Q. What interests have you in mind where a military force is necessary?

A. I must leave that to Mr. Crossman. He told me I should not discuss British interests, and he is right, because I am not supposed to know them, and no Britisher would accept my view on British interests, but I take it there are those interests. I consider them legitimate, but I must leave it to them, Sir.

Q. I am not implying that they are illegitimate, but I am curious to know what they are.

A. You should not really question me; I am only the poor Chairman of the Jewish Agency.

Judge Hutcheson- I should like to say I do not think it is relevant at all to the Inquiry unless you think that those interests are in some way interfering with what you are trying to do, and you do not say you think they are. I do not think it is for the Committee to go into the question of what British interests are in this or any other part of the world. You may appeal from the ruling of the Chair, but I consider that has nothing to do with this part of our inquiry.

Mr. Justice Singleton- There has been no appeal for any ruling, as far as I know. The witness has something to say with regard to British interests. I do not think there is any British member of the Committee or anyone else who would mind whether we spoke of British interests or any other interests.

Judge Hutcheson- All I am saying is that as Chairman of this Committee I rule that the question of what interests are concerned, whether British or American or any other interests, is not a matter for this Inquiry. I recognise that the Chair can be overruled, but unless it is that is my ruling.
Mr. Justice Singleton- The only remark so far has been as to British interests.

Mr. Buxton- If I may say so, Sir John, as I asked the question, I am quite willing to discontinue questioning on that line. I accept your ruling, Mr. Chairman. There is another question, Mr. Ben Gurion, on which I should like illumination. A great deal has been said about the Jewish Agency in reference to immigration, but I should like to ask you a question in regard to emigration. A large number of skilled artisans have come to Palestine in the last year or two especially to engage in war work, and previously to that to engage in diamond cutting. It has been brought to my attention by two persons that the Jewish Agency is [37] now using pressure, improper pressure, to prevent the emigration from Palestine of trained workmen who wish to go back to Europe. Do you know of any such activities on the part of the Jewish Agency in Palestine?

A. This is the first time in my life, Sir, that I have heard of such a story. I should like to get instances of this.

Q. There is no such activity taking place, as far as you know?

A. Not as far as I know, or as far as the Jewish Agency knows.

Q. You probably would know if there were such efforts.

A. I certainly would know.

Q. The Jewish Agency has no say at all as to who shall leave Palestine unless somebody wants to borrow money from them to get out of Palestine?

A. We have not even a say as to who should come, unless he wants to come himself, and we certainly like Jews to come, but unless a Jew wants to come we have no say in it, whether he should come or not.

Sir Frederick Leggett- To continue on that point, Mr. Ben Gurion, we did meet in Europe statements from Governments that letters had been received from Jewish residents in this country saying they were being prevented from leaving this country.

A. That they were being prevented?

Q. That they were being prevented from leaving this country and returning to those countries. Can you tell us what would be the agency or the power which would prevent Jews from leaving this country to go to other countries?

A. I believe I know something of the Agency and its so-called powers. I do not see what power it has, nor do I see how it can do it nor why it should do it. If a Jew wants to leave Palestine I think it is better for himself and everyone else that he should leave.

Q. I should have thought that, but is there any other influence or power, do you think, that is preventing these people, in a fairly substantial number, if letters are to be believed, from leaving this country?

A. Sir, I know only of the power of preventing Jews from coming to Palestine. I know of no power for preventing Jews from leaving Palestine, either Jews or non-Jews.

Q. We are left in a difficult position, because we know of [38] actual letters from Jews in this country who wished to return to countries in Europe.

A. Well, Sir, I think you should invite those Jews to give evidence. Why not invite them? They will come to you and tell you. Invite them to give evidence in camera and you will get their evidence. I think you should ask for it . . .

Q. It may be that that will be done.

A. . . . because I know there is no power to do that.

Q. We assure you we are endeavouring to get the actual facts for the good of everybody.

A. I appreciate that.

Q. And if there are in existence a good many communications from Jews who wish to return to those countries we cannot laugh it off; we ought seriously to get to the bottom of it for the sake of this free society of which you have told us.

A. I can assure you that we shall be grateful if you will get at the facts, and if there are such facts you should know them.

Q. The only other point I would put to you is this- I am sure you will agree, although it was the subject of great laughter among the audience here, that these measures which day by day threaten the lives of soldiers and other people are not things to be laughed at?

A, No, Sir. I can tell you one thing; our children are comrades in arms with these soldiers, and there is no-one more dear to us than a British or American or any other soldier who fought in this war.

Q. I am sure of that.

A. . . . and our children are with them. Nothing pains us as much.

Mr. McDonald- I have just one question, Mr. Chairman. Possibly Mr. Ben Gurion will prefer to answer it in a written form, if it has not already been covered in some of the documents submitted. I will read it because I am anxious to have it put quite as I meant to put it to you. Pending a possible decision by the proper authorities about the establishment or the non-establishment of a Jewish State, what changes, if any, would you favour in the constitution, the powers and the functions of the Jewish Agency. Perhaps you would prefer to answer that in writing? It is a long question and rather involved.

Judge Hutcheson- It is a very good question.

Mr. Buxton- Excellent.

[39] A. Sir, I think I will answer it in writing, but I will say, very briefly, I would not say it is necessary to change the Mandate; in my view it is not necessary to change it at all, but according to the Mandate it is a good thing that the Jewish Agency should have authority to regulate immigration, especially as was agreed between us and the Mandatory Power, and this is a reply to your question, because I understand you must have some certain economic tests. When I say I do not agree to the estimate of the country’s absorptive capacity, I mean there are certain economic views and laws to be taken into consideration, so the best plan, I would agree, would be to bring over a certain number of people, and that those should be regulated because we know their needs. The second thing is that we should be vested with authority under Article 11, also on an agreed plan; not that we should be given everything we want, but there should be an agreed plan for the maximum development of the country in the shortest possible time, both for raising the economic level of the Jews and Arabs, and making it possible for new settlers to come in large numbers.

Q. Do you think the document already submitted gives that answer?

A. I think so, more or less. Certainly we should be happy to supply to you a more detailed memorandum than that if the question is not sufficiently covered in the existing memorandum.
Lord Morrison- You will be very pleased to know that the questions have been completed through the whole circle of the table, and we now come to the fellow at the bottom of the class, and I will not detain you for very long. As you know, we have been moving around part of the world and asking a great many questions of a great many people, but what perhaps you do not know is that a great many people have been asking questions of us, and the one too which I should like to direct your attention, and ask if you could perhaps get your Agency to give some information, is one that I have been asked scores of times. I might read out what came to my notice this morning in the local newspaper, “The Palestine Post,” on the back page, and I will read two quotations to show you what I am trying to ascertain. It is from “The Palestine Post,” “Kibbutz Buchenwald Diary.”
“July 25.

A representative of Unrra visited us. She said that the Jewish [40] Agency in Paris had set aside immigration certificates for our Kibbutz, for Palestine.”—

and a little later on in the Diary, from someone else’s contribution, it said-

“July 15.

Last night Rabbi Marcus arrived . . . (He) informed us that in the Jewish Agency in Paris there were already seventy certificates set aside for our Kibbutz in the first allotment of 500 certificates soon to be received, but we were asked to remain where we were until the certificates should arrive. We asked how long this might be, and the Rabbi answered perhaps six weeks.

This was the most important news he had for us.”

What we found whether we went was there were a great number of people, particularly young people, who seemed to be uncertain, and what I am endeavouring to get is this- You take young Mr. A.B., a young fellow, or a young woman. How are the actual names selected? I am not talking about numbers, but when you get the numbers and you have to allocated them, I gathering from something you said your representatives are now going into different parts of Europe—what I wondered was if the Agency could give us some information as to how this comes down to the actual person, and whether they have to apply, or how they are dealt with. What is the preference that they get? Are there special preferences for orphan children who have lost both parents, and are there special preferences for people without relatives living? Are there special privileges for people who have very deep religious desires to come here? In short, how does the figure come down to the actual persons? If you could give us some information about that it would be very helpful. I do not know if you want to answer now. Arising from that is this important point, to me- This Committee found its work very, very difficult, because, as you know quite well, there is a constant movement going on in Europe from camp to camp; people who are in one camp one week are in another camp the next, and therefore I would like to know what is the opinion of the Jewish Agency as to whether in certain places where the people’s lives are no longer threatened there could not be something of a standstill order so that they could stay long enough to try and get this problem sorted out. There is one final point arising out of the same thing. There seems to be a feeling amongst some people that if they will only come [41] as far down Europe as possible they are gaining an advantage, and otherwise getting in front of the others, and correspondingly those who stay behind and wait for their turn are going to—excuse the expression—miss the boat by staying behind and being patient while the others get away. I would like to get the opinion of the Agency on that kind of thing, because it does seem to me that that might result in people who are less deserving and less patient getting here before the more deserving and more patient people.

A. I would say there is the question of the very difficult living conditions also to be taken into account. We have a small number of certificates and a large number of people. Before the war we had training centres in all the countries for young people, They learnt to work, they learnt agricultural work, they learnt Hebrew; they did this for several years, and we had hundreds of thousands of such people training, and we had only 10,000 certificates, so we chose those who had the longest training and the best training, and they were sent out and the others had to wait. We had to make this selection, and we elected the best people through the different kinds of tests. Now it is terribly difficult, for the reasons you know, but also now we are trying to work out a system, and we shall be glad to supply you with information as to how it works and how we want it to work.
Lord Morrison- Thank you very much.

Judge Hutcheson- I would just like to ask you one question, which follows on from Sir Frederick Leggett’s question, and that as to whether there are people who wish to leave Palestine and who feel that in some way or other they are being prevented, because in my file I have a memorandum of that kind which was sent to me whilst I was in the States, and I am still carrying it around, and I know these complaints are being made. I am not asking you whether they are being soundly made, or unsoundly made; whether these people are telling the truth when they are saying they are interfered with, or not; I just want to ask you this question- Is there any action of any kind on the part of the Jewish Agency, or of certain of its volatile supporters to try to prevent, by disturbance, or by intimidation or in any other way, people from leaving Palestine, because they think it may be a confession of weakness of their cause? That is the point I want to ask you. Has the Agency discovered anything of that kind?

[42] A. I can assure you not only on behalf of the Agency, but of all the other Associations—which I know very well—the Manufacturers’ Federation, the Labour Federation, and so on, as far as they are concerned it has no foundation. But I must make one remark. You mentioned supporters of the Agency. As far as I know, all the Jews here are criticising the Agency; I hear only criticism, I do not know of support. I go among the parties and among the sections and everywhere they have complaints and complaints of the Agency. It is not that they are supporters. I will tell you what happened. A young fellow of 19 tried to go to Palestine some 40 years ago—it was myself. I came then to Odessa to the leaders of the Movement—it was not the Jewish Agency then. They laughed at me and told me not to go. I did go. I do not believe that any Jew comes to Palestine, not because he does not want to but because someone is pushing him. I do not believe that any Jew who wants to leave does not leave because somebody does not let him. It is not easy to keep a Jew here if he wants to go away.

Q. As far as you know the Jewish Agency does not discourage them?

A. Not as far as I know.

Q. There is no policy of any kind which discourages people from leaving if they want to, or is advising them to stay?

A. The Agency has nothing to do with it.

Q. I might advise somebody; I might not have any authority, but I might say, “Don’t do this,” or “don’t do the other,” and I would like your opinion as to whether your Agency or any other institution is doing anything to discourage them. As I understand you, there is no movement here trying to make people stay here if they do not want to stay?

A. If anyone wants to leave he is free to leave; nobody will keep him here.

Q. I will tell that to these people who have been writing to me, that they can go?

A. Yes, but do not tell them that I am sending them away.

Judge Hutcheson- I think we have now finished with this very interesting evidence, and we will adjourn until two o’clock, when Mr. Hoofien will continue his evidence.

(The Inquiry adjourned until 2 P.M.)

[43] ON RESUMPTION.

STATEMENT BY MR. S. HOOFIEN (Contd.)

Judge Hutcheson- I should like to say this to you. In view of the fact that we have the benefit of your memorandum given to us last week, and I know some members of the Committee have read it very carefully, some not so carefully, I would like to suggest to you, if the matters you wish to speak on go beyond or are in addition to that memorandum address yourself to them, otherwise it might be best if you would submit the memorandum and than give the Committee the opportunity of asking questions rather than having what would be a mere repetition; if that is satisfactory to you.

A. Entirely.

Q. I think it would be a good way for us to proceed.

A. I have no intention whatsoever of referring in my evidence at this moment any further to the memorandum. The Committee will remember that there were one or two points left over which are not dealt with in the memorandum which I believe the Committee would wish to hear about, and apart from that I have not anything else.

Before I come to that, Sir, may I refer for a moment to something which according to my strong belief has a bearing upon the point and it is this. When I quoted from the Hebrew a certain text from the Bible I got a strong impression that it was felt by members that they did not understand where I took it from and I would like to read it in the text of the Authorised Version. It is Deuteronomy Chapter 16, verse 20-

“That which is altogether just shall thou follow that thou mayest live and inherit the land which the Lord thy God givest thee.”

And if I refer to such a text, gentlemen, and if I admit that I give considerable importance to the economic facts, figures, percentages etc. which it is within my province to explain to you, I entreat you to believe that the spirit of this text is more important to me, and I hope to you and I am sure to all those for whom I speak here than the whole of my figures taken together, and I do feel that the way in which the Jewish Agency has attempted to present that part of its case which I am to explain to you is permeated with that spirit.

However, may I now come to the point which was left in the [44] middle when I closed my evidence on Friday afternoon. I had attempted to give a rough idea of what the immigration of the magnitude which was pictured might cost, and I came to the point of saying it is not really the total amount which is so difficult to estimate with anything like exactitude which counts, but it is whether money can be found and means can be found to do such a thing, and on that I want to say a few words now. I want to bring out two essential points. The Jewish people even after all that has happened is not a beggar. It will make great sacrifices to realise its historic aim. The Jewish population of Palestine saves, has saved in the past, will save and will invest its savings. That is one point. The other one is this. The civilised world I am confident will not refuse its help which will have to be given mainly in the form of credit. I am not speaking of charitable contributions at all, not at all, our problem being to a large extent a world problem.

Let me work out these two main points in some slight measure of detail. I want to start with the Palestinian Jewish contribution, if I may again refer as I did on Friday, to Mr. Nathan’s ideas you will see he himself considers it entirely possible that the population of Palestine can save annually something like 15 per cent of the national income as it has done, I may say, during recent years.

Mr. Crum- I did not catch that, will you repeat your whole statement?

A. The entire statement is this. Mr. Nathan considers it entirely possible in the future that the Jewish population of Palestine might save and invest something like 15 per cent of the national income and I added, this is not Nathan but myself, that they have done that in the past, in the recent past. Then he has himself on estimates of the national income and he arrives at total savings during a decade of £170 millions, total savings of Palestine not Jewish alone, but I am interested for our present purpose in Jewish savings alone. It would not be realistic at this moment to speak of Arab savings being invested in the upbuilding of the Jewish economy. By the time we are at the end of our period I think, Jewish money will go into the Arab economy and Arab money into the Jewish economy, but I shall be laughed at if I held that out as a prospect at this moment, and I do not. I am speaking therefore only of the Jewish savings and out of such £170 millions given by Mr. Nathan they may easily be put at [45] something like 60 per cent that would be around £100 millions. If that is considered optimistic which is everybody’s guess, I would not like to quarrel about it. I could produce but I want to be economical with the Committee’s time, I could produce other calculations. I will do so only if challenged orally or in writing, which lead more or less to similar results. I am open to argument on the part of whoever wants to put it at a somewhat lower amount, but it is bound to be of that order of magnitude and you will appreciate the relation between an amount somewhere around £100 millions and an amount somewhere around £400 millions or anything like that. The whole case which I want to make out is it is a notable contribution.
The second point, it is true immigrants’ capital will hardly reach the highest average level of the inter-war period, but it will not be at all negligible.

The next point, investment in Palestine on the part of Jews abroad has been held up for years through the war, through currency restrictions and to some extent through the uncertainty about the country’s political future, and there exists, I have many proofs of it, there exists in business a large pent up willingness to invest in Palestine on the part of Jews abroad. I cannot give an estimate of that. The Zionist funds about which you will hear more if that is your wish from the Treasurer of the Jewish Agency will at least maintain their present level of income which is in the neighbourhood of some £8 millions per annum. During the hypothetical development period another £80 millions. The reserves in hand in the form of the Jewish people in Palestine sterling balances abroad can hardly be less than £60 or £70 millions and they ought not to be overlooked.
I have to qualify that I know. First of all a good part of that will be used for current needs of the existing population. Secondly, I have carefully studied what is written about sterling balances in the Anglo-American loan agreement and have, like everybody else probably, been lost in admiration of the term adjustment.

Now even this is not all. One may with confidence, confidence based on experience, count on large amounts of non-Jewish foreign investment, moved by some measure quite possibly of sympathy, but mainly by sound business considerations. We have been able to make this Jewish economy of Palestine a sound business proposition in the eyes, not to mention other circles, at least [46] in the eyes of the City of London and it has been at no time deterred by political doubts. Once the position becomes stabilised and Great Britain, as I am very sure she will, gradually begins to build up again its foreign investments, then one can confidently assume it will show the same sensible and friendly interest for which in the past we have had so much reason to be thankful.

I may perhaps here express the hope and the confidence that the United States will enter into friendly competition in this particular respect.

I must say a further few words on reparations from Germany. Germany which has declared a war of extermination on the Jews and who is responsible, to put it at its lowest, for the acute form in which the Jewish problem has been raised, that this Germany owes the Jewish people reparation up to the total amount that would be needed for the proposition which I am expounding to you, that to my mind is beyond doubt. I am under no illusion that the whole of this debt within a short time, or any large part of it, can be collected, but I am not of the opinion that the nations of the world may forget this particular problem when the matter of reparations owed by Germany will be finally disposed of and in whatever form it is decided even for reasons of expediency to collect these reparations, our particular case I submit to this Committee deserves particular consideration, and to the extent to which reparations owing to the state in which Germany is will not be forthcoming now, they ought to come forth later and I say it is perfectly aware of the general conception that the reparations problem should be disposed of as quickly as possible in some final way; even then I submit that this case of ours is a particular one and that payments by Germany over a certain term of years, even if they would come too late in order to help us now, would come in helpful in order to lighten the burden of such demands as this economy would have to make against credits which it would receive.

Then it will be seen that there remains only a balance for which we would turn to a body like the new International Bank, the Import and Export Bank, direct possibly to the Governments which will take a practical interest in the solution of our problems, and while that balance will still be fairly large, as you may in a general way calculate from what you have heard, it ought to be entirely manageable and moreover surely there would be no reason to provide it at once. A fraction, if that were [47] provided at once, would see us through to give us a good start, and on the strength of the results which we shall see it would then be, I would almost say a matter of routine, anyhow a comparatively simple thing to continue.

I come to my last point. Will the economy which we are attempting to set up be a sound one; will it show a reasonably solvent balance of payments, and I am confident this will be the case. I might possibly not even have raised the question and taken up your time on this matter if it were not that the so-called adverse balance of trade, trade please gentlemen, not of payments, in the past has formed the subject of a great deal of comment. I economise in time and I shall refer you as to the past first of all to an explanation made in some measure of detail by the Government of Palestine who in their Annual Report for the year 1935 have in view of these comments gone out of their way to deal with the matter. For the sake of your records, pages 201 and 202, paragraph 29.

I might also refer you to the report of the Peel Commission, chapter VIII, paragraph 16, pages 212 and 213 where they deal in a similar way, not in that measure of detail, with the question whether the country as a whole is in a sound position from the point of view of balance of payment. I might add that more or less at the same time there appeared various articles in monthly economic bulletins of London banks which were written more or less in the same spirit.

So much for the past. As to the present, the present meaning the war period more or less, the only thing I would say is we have been able more or less to build up a fair nest egg. That does not look like insufficiency in our balance of payments, a nest egg which has the honour of being frequently referred to in the financial press.

During the development period the problem can hardly arise because the balance of payments will all the time be under the influence of the capital imports. The only thing I submit to you gentlemen you can then ask is, what will the position be when the economy becomes less expanding in the theoretical end of that development period.

I might first of all refer you to the same paragraph in the Peel Report which I have just quoted. It deals to some extent with the point inasmuch as it emphasises the resilience of the economy to adapt itself to varying situations. I might point to the [48] accumulated effect in the development which will have been brought about by those capital imports. Import of capital comes again at the end of that hypothetical period will become smaller and export potentialities will grow through the considerable capital investments which in the meantime will have been made.

Thirdly, the economy of the whole of Palestine has to be considered, not only of the Jewish population. As I have said before the Jewish population will be, by the whole nature of the tiling, the more industrialized part of the population! You could not lake a group of branches of the economy out of the whole economy and then say what is the balance of payments in such of that group towards countries abroad. You will have to take the country as a whole and it is difficult enough, as those of your Committee who may possibly have dealt with these things, will appreciate to draw up a really reliable balance of payments for last year. I have never found it an easy thing to follow and to believe when I saw it done. Surely to go into any detail as to a balance of payments of ten years hence I can hardly be expected to do. Until the present day we have managed. That for the next ten years we shall be able to manage if things go as I have shown is also clear enough and that there are many reasons to believe we shall be able to manage after that seems to me evident.

This gentlemen is more or less what I have to say. I have had to deal with a dry outline of economic facts and figures, but let me finish as I started this afternoon. I hope you will see through these facts and these figures and see what lies behind them and see what lies underneath them—the effort of a great ancient people to regain a normal existence, to take in dignity and freedom its place among the community of nations, to make in its own way its contribution to the struggle of the civilised nations for a better way of life, for peace in the world, peace in this country first of all, for decency, for human progress, so that at some time it may be said of us what has been so rightly said of a great nation to which we owe so much and which in spite of any grievances we honour, and I say that out of a full heart, believe me we honour and admire, that we have saved ourselves through our exertions and the world through our example. Thank you, Mr. Chairman.
Judge Hutcheson- If I may I will take the same privilege that I did earlier and reserve any questions until the end, if then I feel I would like to ask any.

[49] Mr. Justice Singleton- One or two general questions only because others will ask you upon details. Suppose you bring into Palestine one immigrant today how much does it cost him, a man?

A. I cannot answer the question with a figure.

Q. The cost of living in Palestine is fairly high?

A. It is.

Q. I suppose it would be £3 a week?

A. For a man?

Q. To keep one man?

A. It would be that at least, Sir.

Q. Perhaps more?

A. Certainly.

Q. I was thinking of how it went, I am thinking of a year as a period, assuming the man was not employed within a period of 12 months, to keep that man would cost £150.

A. Let us assume that.

Q. To keep ten, it is quite an easy sum.

A. Quite.

Q. To keep ten thousand would be a million and a half or two millions?

A. Yes, Sir.

Q. To keep 100,000.

A. Would be an astronomical figure.

Q. I am thinking of the cost, the actual monetary cost, assuming a large number of people are put in; that is one side of it.

A. Yes.

Q. Now another side, I wonder if you have thought of the cost of housing?

A. Yes.

Q. Have you?

A. Yes.

Q. What would be the cost of housing, finding housing accommodation for a thousand people?

A. Shall we work to that in a moment in the course of my whole answer if I may, or would you like to hear it at once.

Q. I was wondering what your idea was, what your idea would be of the cost of housing a thousand men, or men and women put it whichever way you like, if you have to find accommodation for a thousand people in Palestine today what would that cost?

A. Also a very large amount. If they were housed in 500 [50] rooms with prices as they are at present would hardly cost less than £30,000.

Q. It would cost £30,000 to house them?

A. To house a thousand people only.

Q. £30 a head, is that what you mean. It seems to me to be a bit low in a place where the cost of living is high.

A. £300.

Q. If you have not considered it, I will not trouble you.

A. It has been fully considered but not on the unit of a thousand.

Q. £300,000 for a thousand; for ten thousand you get to £3 millions on the same basis. There is a housing shortage in Palestine I am led to believe, is that right?

A. Yes, there is.

Q. Again I have heard, I do not know if it is right, that there is a shortage of huts even for soldiers who are demobilised now?

A. That may be.

Q. Only one other generality I would like to have your comment on. Do you know per chance how many people in Palestine were at the peak employed on war work?

A. I think that I could make a fair estimate, yes.

Q. What is your estimate.

A. By war work you mean only in direct employment by military authorities, is that what you mean?

Q. War work generally which includes the making of things necessary for war purposes, not merely employed by the military.

A. That would be at least 40,000 or 50,000.

Q. The figure I had in mind which someone gave me was 50,000. I do not know and I do not put figures for that reason, reason, 40,000 to 50,000.

A. Yes.

Q. Do you know whether those 40,000 to 50,000 people have yet found other profitable employment?

A. Yes, Sir, I know.

Q. They have?

A. Yes.

Q. All of them?

A. Yes.

Q. Is there in Palestine at the moment no unemployment?

A. We estimate it at 0.3 per cent, one-third of a per cent.

Q. That is your estimate?

[51] A. There is practically nothing. On the contrary there is a considerable shortage of labour.

Q. Palestine is an unusual country in a sense.

A. It is in every respect.

Q. In the ordinary course in most lands after a war there is considerable unemployment.

A. Yes.

Q. That is a factor to be borne in mind?

A. Yes, but may I say that there is something left yet for me to answer.

Q. By all means. I hope I never stop anyone answering.

A. There is no doubt you will arrive at a very large cost if you assume large numbers of persons being brought into the country who will not be able to sustain themselves and for whom a budget will have to be found to sustain them, and then there is no end to the cost. It is very remote from what we call economic absorption. If we speak of immigrants, we do admit that a number of the immigrants for some short time may not, a man will not always, it has happened very often but not always, on stepping from the boat, will he be absorbed in the economy. It has never happened in the United States or in any other country, but it must happen quickly enough and we must adapt our whole way of life to that and that is what is planned, therefore the whole question of how much it will cost to sustain him when he does not earn for himself, on the whole does not arise.

Q. That may be right, I appreciate what you say, but there must be a period before they are all in occupations.

A. Yes, Sir.

Q. And if there is unemployment the further question arises too, may I remind you, if you bring in a large number of people some will not very likely be fit for work at all.

A. That, Sir, calls for an explanation of the truth. May I say I hope it is clear to this Committee that throughout in the whole discussions a refugee problem is being mixed up with Zionism, with economically sound, sensible immigration into this country. We shall not refuse unhappy brethren to come in whether they can support themselves or whether they cannot support themselves. That is not the essence of Zionism. That is help to refugees.

Q. I was not talking about the essence of Zionism one little bit. I was seeking to direct your mind to certain economic problems, and these matters I have mentioned to you are factors to [52] be borne in mind in considering how many should be put in from the economic standpoint.

A. Yes.

Sir Frederick Leggett- I should only like to ask some questions relating to the conditions in industry. Am I right in thinking that wages as a rule are time rate wages here and not piece work in industry in this country except perhaps in the cotton industry?

A. I am not sure whether that is so. There is a general attempt to go over more and more to piece rates. You will have before you at some time I think a representative of the Jewish Manufacturers Association and he will be more qualified to give details on that.

Q. But it would be the case, would not be, if the rates of wages are chiefly time rates, then the increase that has taken place would be almost completely an extra charge on industry. It would not be made up for example by more production. That would be true I think. For example, in building, where the increase has been 329 per cent over 1939; that would mean the wages are four times what they were.

A. Higher wages in building mean no doubt a higher total cost of building; is that what you mean?

Q. What I mean is, being time rates and not piece rates that does mean the actual cost for wages is four times what it was in 1939.

A. I think four times is too high a figure.

Q. The increase is about 300 per cent.

A. It is certainly something like that.

Q. I understand again ,we have not been in Palestine long so we have not been able to gather much information, but I understand there is still a movement for increasing wages in Palestine.

A. I think on the whole that is so. It is not so strong as it was when the cost of living went up all the time, but to put it at its lowest there is no sign of wages going down at this moment.

Q. In the memorandum that you kindly put in while there is criticism of full deflation programme, I think the general idea of the memorandum is it will be necessary to bring down costs; etc. to a reasonable level in due course.

A. If you will allow me slightly to qualify that. The idea of that particular paragraph in the report is to bring out that it will [53] not be so much a matter of bringing down the level, but that the level will go down.

Q. Now that is just the point I was coming to. One of the important items of costs of production are wages, in the buildings industry, for example, it is somewhere around 50 per cent.

A. Yes.

Q. In other industries it is nearly as much and wages, at least in my experience do not go down; they need a good deal of pressure to bring them down.

A. Yes, Sir.

Q. And the fact that at the present time there is pressure still to put wages up seems to indicate that the unions are getting into a position for that. The two points I am coming to are these, one is it will be necessary if Palestine is greatly to increase its present economy to have a very considerable foreign trade; am I right in thinking that?

A. Yes.

Q. And its wages have gone up, accepting that in the Middle East countries they were very low rates, they have gone up by a considerable percentage; wages have gone up very much higher in proportion to the wages in countries likely to compete with goods coming from Palestine.

A. Yes.

Q. And if prices are high, as they are in Palestine, I imagine there will be very considerable pressure on goods to be produced more cheaply in other countries?

A. Yes.

Q. In those circumstances is it going to be an easy matter to increase that trade so as to absorb a very large number of people.

A. Sir, it will not be an easy matter; it will be a difficult matter, but it will be feasible. This whole matter of the difference in price levels between this country and the countries, the industries of which would compete with us, I have attempted to deal with in the paragraph on inflation and deflation which is in that memorandum, and I would respectfully refer you to that. What we have to bring out is that difficulties of this kind are of a temporary nature. We shall arrive together with the whole world at a sound economical position, at a free flow of commodities and money. That is bound to bring down, I dare not take your time by repeating what has been stated in that memorandum, it is bound to bring down our price level. There will be some measure [54] of opposition against bringing down wages to a pre-war level, and as to that I can only say that the members of the Committee on returning to their respective countries will find very similar conditions.

Q. In our country, Lord Morrison will agree I think, a cost of living scale is all right going up, but when the cost of living scale starts coming down, there is resistance to it.

A. Of course there is.

Q. I am not suggesting that the economy will not be expanded, I am only suggesting with that factor in question it will affect the period before which production to compete elsewhere will be possible.

A. May I say this, before we go to a high degree to rely for our economy on exports we must have disposed of this deflation problem. If that is what you mean I entirely agree, but it is of the nature of an immigration of the kind which we are speaking of that a very large proportion of it will first of all he employed in the creation of capital goods and there the problem does not in the same measure arise though it does arise in some measure inasmuch as it is better to produce them cheaply than to produce them expensively.

Q. Now may I take it just a little further. In circumstances of that kind it would help to increase the labour force because a part of the present position is caused by the fact that the demand for goods is greater than your labour supply can supply, therefore from immigration would greatly assist in bringing down wages etc. to a more reasonable level, but would there not be resistance from the unions to the introduction of a factor of that kind.

A. On that, Sir, I suggest with great respect that you will hear the representatives of the labour union and they will tell you much more emphatically and much more eloquently than I with the greatest possible exertion can do, that nothing of the sort will be the case. Let them explain it, they will do it better than I can do.

Q. I said that because I realise there are special conditions in Palestine. Now as regards building, at the moment there is very great pressure on housing accommodation. With that I think you will agree. I remember the position in my country and I remember in discussing the housing problem there was a certain reluctance to build houses which are to be occupied by working people [55] if prices are to be on such a high level that the rent of them for a long time to come will press hardly on the working people. If your building wages are four times what they were in 1939 and if the 1939 wages were anywhere near a reasonable level, it means any building undertaken now will be very, very costly.

A. Yes.

Q. Is that so?

A. That is so. Would you like me to go on?

Q. I think it is quite sufficient if you agree. I do not want to expand this greatly. What I am driving at all the time is that with the best will in the world and without discounting the fact that Palestine can have a much more extended economy, when one thinks of the coming twelve months you have some serious obstacles to overcome.

A. We have.

Q. Before you can absorb a whole lot of workpeople in the economy under conditions which are likely to remain. That is the only point I wish to make.

A. We have at no time contended there will not be a large number of serious difficulties, and the extent to which in this oral examination I am not able to deal with all these difficulties, and if it will not put too great a burden on this Committee, it may happen to you that you will still get some memorandum.

Q. May I say we hope, besides the public hearings, we shall have the pleasure of perhaps having a further discussion with you in a less public meeting.

Judge Hutcheson- In smaller groups.

Sir Frederick Leggett- Yes.

Mr. Buxton- A large part of the money for the development of Palestine has come here mainly from Jewish sources?

A. Yes.

Q. You spoke of the desirability of the possibility that funds might be attracted from non-Jewish sources.

A. Yes, Sir.

Q. That presupposes first of all it seems to me prolonged peace in the country, a cessation of strife between Arabs and Jews; that is, the ordinary investor who has no interest, no particular interest, no pecuniary interest in Zionism or Palestine would hesitate to make investments in a field which might be torn by internal dissension?

A. That seems quite correct, yes.

[56] Q. Would it also be necessary to change somewhat the regulations which prevail today. As I understand Palestine limits the profits of certain enterprises more than other countries do. It sets out the terms must not be more than a certain percentage or a certain amount.

A. I am not aware of that except if you refer to certain wartime price regulations, but on the whole, no, I am not aware of that.

Q. I understood there was a provision that profits must not exceed a certain reasonable amount, that there was not quite the free field for high profit in Palestine that there was in other countries.

A. You may be referring to the Prevention of Profiteering Ordnance which very sensibly made an effort to limit the sales price of those articles which could not specifically be brought under ceiling price, but I am not aware of any general tendency of this Government to go to so far into the country’s economic life as generally to lay down profit margins.

Q. There is another question not relating to this document which has come to my attention in the following passage- “In fact, a review of the condition of congestion of Arab and Jewish rural areas carried out in 1938 had indicated serious congestion in almost the whole of the Arab area, whereas Jewish lands supported fewer families in proportion to the acreage.”

I assume from your memorandum the Jewish land supported more persons in proportion to the acreage. Is that correct, sir?

A. Yes sir, that is correct. While the gentlemen of the Committee have, I suppose, perused the memorandum, I am not quite sure whether they have been able to peruse the somewhat more intricate appendices to the memorandum, and I should invite your attention to one of the appendices which gives an idea of the density of the Jewish population on the land.

Mr. Justice Singleton- Which number is it?

A. It will be looked up, and in the meantime—

Mr. Justice Singleton- I will attest I haven’t had time to read all the documents we have had. I have looked at some of these. I don’t remember this one in particular.

A. It is 7, sir, Appendix 7. There is perhaps one reply of a general nature, and it is that Jews hold 6 percent of the total land area and constitute 30 percent of the population.

Mr. Buxton- This sentence, “Jewish lands supported fewer [57] families in proportion to the acreage,” that is in direct contradiction to your conclusion, is it?

A. Yes. We shall maintain our conclusions if we are asked.

Mr. Crick- Mr. Hoofien, I think that from the language of this memorandum and from the terms of your own statement you would agree with me that any attempt to assess economic absorptive capacity over a period of 10 years is a highly conjectural economic exercise?

A. Yes.

Q. Would it be true, do you think, to say that one could produce an equally convincing memorandum to establish the reason-ability of settling, let us say, 5 million people in the United States or Canada in the next 10 years?

A. Yes, I would.

Q. So that there is nothing special about the position of Palestine that makes this argument sound, whereas it would be unsound in the case, let us say, of Canada or the United States?

A. Certainly so. The whole reason why this memorandum has been produced is that other people have thought differently and thought that they could produce a sound argument to the effect that Palestine has a very limited and small economic absorptive capacity. If the whole question had been left open by everybody we could have left it open, but this is a defense, if I might put it that way, against those who found that there is soundness in the argument that there is no absorptive capacity.

Q. Now I want to say that I have spared my colleagues a very severe strain this afternoon, because I was proposing to ask you some questions on the subject of which you have in effect dealt, particularly because I was disappointed to find in this memorandum no reference either to the important question of financing the expansion or to the question of the probable effects upon the balance of payments. I would very much like to read over the transcript of your remarks, and if you would be good enough to send us anything fuller, if you have compressed your remarks in order to gain time. But there are one or two things I want to ask about, nevertheless, and I hope you will agree with me in regretting that in modern usage the word “economics” has come to attain greater frequency in preference to the old term which I regard as much more realistic, namely, “political economy.”

I make that little observation because it sets the term of what I want to ask you. The balance of payments in past years, that [58] is, in pre-war years, was affected very largely by the huge inflow, so huge as to make Palestine unique, of foreign capital which might be called free capital in the sense that it involved no subsequent remittances across the exchanges, in interest and amortization. Is that true?

A. Yes, it is true.

Q. Under what conditions could you imagine them continuing that indefinitely in the future?

A. To the extent of the inflow that would come from Jews abroad I think that on the whole the better part of the yield of that capital investment would be reinvested in the country. To the extent that it comes out of local savings you are not even asking the question, I assume. To the extent that it comes from non-Jewish investors and that it comes from a loan of some sort that they have been reverting to, it is entirely admitted that we would get into the position of every other country that has been developed from abroad, that in our balance of payments we would have to take into account payments to go abroad on account of capital borrowed and invested here. That is perfectly clear. With the progress of our own prosperity we would certainly try to repatriate like all countries in a similar situation have gradually tried to do.

Q. Would you suppose that the size of that inflow would be to any extent governed by alternative decisions as to Palestine’s political future?

A. I think as far as the Jews are concerned I take it that only a solution generally favourable to the will of the Jewish people would induce them not introduce money. As far as capital generally is concerned, I am ready to admit that political tranquility of any sort, the belief in political tranquility in case the verdict does not go on the whole as we expected, the political tranquility of any sort is what it asks for.

Q. Now on the question of finance, there was something I wanted to ask you to this effect, and I ask it because of certain observations made in the book that you quoted so frequently by Robert Nathan. Would you say that the development of Palestine is hampered in any way by the fact that the Palestine pound is tied to the pound sterling?

A. That is a very broad question. I think I ought to speak of the past and of the future. As to the past, may I for once quote myself. In a reply which I gave to Mr. Nathan I said, “The [59] sterling pound is a commodious mansion in which for 25 years we have found ourselves perfectly comfortable.” It has been a great advantage for this country in terms of the 20’s and 30’s not to stand alone in its monetary matters and to have its country linked up for better or worse with sterling. As to the future, there is no aspiration that I know of in this country on the part of the responsible people to consider at this moment any change in the present position.

Q. Then you do not feel, I take it, that the development is hampered at all by the absence of a central bank in Palestine?

A. I have no such feeling.

Q. Do you feel that it is hampered in any way by the separation between Jewish and Arab resources in Palestine?

A. I do not believe that that is the case.

Q. Now I want, if I may, to move away from this strenuous programme and to talk about very much more immediate and realistic problems, namely, the possibilities, if