A Place to Make Money

For Israel, even more than for most new nations, charity has never begun at home. For 15 years the struggling Jewish homeland has depended for financial help on outsiders, mostly in the U.S. American Jews have poured in $568 million in Bonds for Israel, $1,035,000,000 through the United Jewish Appeal and another $250 million in private investments that were often motivated by conscience. Both Israelis and Americans have tired of the endless hoopla of the "parlor meetings" by which such funds are raised. Last week, after ayear's discussion, the Securities and Exchange Commission approved the First American Israel Mutual Fund, a $27.5 million investment that promises to replace charity with a solid bet on Israel's industrial future.

Stop the Singing. To make sure that there will always be ready cash to redeem shares in the fund, one-fifth of it will be invested in U.S. industries. The remainder will be fed gradually, so as not to rock the young Tel Aviv stock market, into Israeli government-held stocks as well as into private insurance, banks, utilities and such land development projects as the nourishing Dead Sea Works (TIME, March 1). The new money, the biggest single block ever to enter Israel, will help to expand growth projects, while charity will continue to cover such ventures as the resettlement of Jewish refugees.

The idea for an Israeli mutual fund originated with Michael Haft, a 39-year-old Israeli economist sent to the U.S. to plead for investment funds at parlor meetings. Haft did not like the unbusinesslike approach. Says he: "The time has come to stop singing the Hatikvah [Israel's anthem] to raise a dollar." Instead Haft settled on mutuals, hoped that $10 million might be raised. He took his idea to Boston Movie Exhibitor Lawrence Laskey, who had large holdings in Bonds of Israel and was equally tired of parlor meetings. Impressed, Laskey bypassed Jewish-controlled investment houses to avoid any further tinge of sentiment, persuaded Manhattan's Paine, Webber, Jackson & Curtis to underwrite the plan. Visiting Israel, he also persuaded Finance Minister Levi Eshkol and the socialist Labor government to make concessions to the fund, including below-market-value sale of government-held stocks and an option eventually to purchase $50 million in such securities.

No Mere Gesture. First American Israel's birth auspiciously coincides with the due date of the first Bonds for Israel issue, and its backers hope that American bondholders will reinvest their earnings in the new fund. If they do, it should no longer be a mere gesture of charity. After a tough currency devaluation last year, Israel is increasing its gross national product 10% a year, has record foreign reserves of $640 million and a stock market on which the value of shares has risen twelve times in three years. Insists an Israeli investment counselor: "Israel is not merely a place that is sentimentally attractive. It is now a place where money can be invested and money can be made."

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