Banking and Philanthropy in Pre-State Jewish Palestine: Particularist Sephardic Philanthropy Disguised as Support for the General Zionist Cause

Riki Galia. Israel Affairs. Volume 23, Issue 2. April 2017.

This article examines the roots and characteristics of business and financial elite philanthropy in pre-state Jewish Palestine. It focuses on the privately owned Palestine Discount Bank Ltd., as the institution was called at the time of its establishment in 1935 and throughout its founder’s decade-long tenure as Chief Executive Officer (CEO). The latter, a Jewish immigrant from Thessaloniki, engaged in extensive philanthropic activity, using both personal and corporate funds and drawing on a long tradition of charitable giving.

The idea of businesses as social actors committed to the public good came to prominence in the United States in the 1950s. Earlier philanthropic practices took the form of wealthy individuals donating from their own personal funds rather than from corporate capital. According to some accounts, corporate involvement in community initiatives had begun earlier, with the rise of industrial capitalism and the advent of technologies of mass production. In their eagerness to find new markets for their rapidly growing production, corporate leaders grew increasingly aware of the importance of public opinion to business. They therefore initiated charitable and philanthropic programmes, taking advantage of the new possibilities offered by modern public relations, advertising and electronic media. According to some, corporate philanthropy in the United States was motivated by the rising political and economic power of big business, leading to a legitimation crisis and loss of confidence on the part of the American public. In response, corporations developed programmes of philanthropic and charitable giving as part of their public relations and advertising strategies.

Whereas the history of corporate and private philanthropy in the United States has received ample scholarly attention, studies on the same phenomenon in Israel are few and far between. This dearth of research is particularly perplexing given the impressive economic growth experienced by Palestine’s Jewish society during World War II and the final years of the British Mandate era, which most likely led to philanthropic activity among Palestine’s Jewish business and financial elite. This lack of research seems to be related to the neglect in Zionist historiography of Jewish Palestine’s middle and upper classes in general and its business sector in particular.

To date, most studies on the middle and upper classes, or the ‘bourgeoisie’ in pre-state Jewish Palestine have focused on the political contribution of these classes to the Zionist project, mainly through the party-political mechanisms of the Zionist workers’ movement. Other avenues of political engagement (e.g. municipal politics), let alone economic and professional activities outside of formal politics, have received almost no scholarly attention. Most extant studies have portrayed the local bourgeoisie as politically weak, attributing to Jewish capital investors only a passive role in the shaping of Zionist ideology. Other studies focusing on the role of industrialists described them as shaping Zionist ideology in such ways that could promote their own private interests. The claim recurring in such studies is that the Jewish capital investors of the British Mandate era exploited the Zionist ethos in order to advance their own financial ends and legitimize their commercial activities. The chief contribution of such studies is their emphasis on the role of capital investors in shaping a discourse of national justification within the business world, as distinct from their influence in the realm of party politics.

As this brief survey indicates, the literature on the bourgeoisie in pre-state Jewish Palestine has neglected both banking and corporate philanthropy. The scholarly focus on politics and political ideology led not only to the neglect of commercial and financial activity, but also to the perception of certain activities as entirely subject to the dictates of the Zionist establishment. As a result, Zionist historiography has posited an almost complete identity between private philanthropy, on the one hand, and ‘national capital’ dedicated to ‘nation-building’, on the other, distinguishing between ‘private’ and ‘national’ capital, but not between private capital put to productive uses and private capital donated to philanthropic causes.

This ideological distinction was the product of political struggles between competing Zionist groups over the Jewish-Zionist nation-building effort. From 1919 to 1921, two of Zionism’s foremost political leaders, Chaim Weitzman and Louis Brandeis, clashed over the proper sources and targets of capital investment in the Zionist cause. Weitzman was in favour of keeping all such capital under the centralized control of the Zionist establishment and donating it to cultural and political endeavours, whereas Brandeis supported the development of a self-sustaining Jewish economy in Palestine, preferring viable financial investments over charitable donations. The resolution of the Zionist leadership to establish the United Israel Appeal as the World Zionist Organization’s central fundraising division in charge of funding Jewish settlement, education and immigration marked the victory of Weitzman’s approach. More generally, it marked the victory of the socialist current of Zionism which supported the use of ‘national capital’ for land-building purposes. As a result, all private capital donated to the Zionist cause was rebranded as ‘national capital’. Given these developments, it is little wonder that the historiography of Israeli society has neglected the characteristics, sources and motivations of private philanthropy, as distinct from charitable giving through the Zionist establishment.

To fill this lacuna in the literature, this article will examine the contribution of one private bank owner to the expansion of local philanthropic discourse and practice beyond the confines of either self-interest or Zionism. It will begin by exploring the owner’s philanthropic practices and his justifications for them, as reflected in the bank’s official historiography. What the analysis shows, it will be argued, is that much of the bank’s early charitable giving targeted the Sephardic Jewish community to which the owner himself belonged.

Founding a Sephardic Bank

In the bank’s official historiography, the institution’s establishment has been presented as an act of patriotism rooted in the founder’s Zionist ideology and designed to help ‘develop a healthy economy in Eretz Yisrael’. The privileging of national-ideological over financial considerations was reiterated by a retired bank worker: the founder, he claimed, ‘settled in Eretz Yisrael because he viewed it as the homeland, not because he was planning to establish a bank’.

As the founder’s eldest son has suggested, however, financial considerations seem to have played a role in the Thessalonian businessman’s decision to leave behind his tobacco factory and resettle in Palestine:

The tobacco business was becoming increasingly risky. Tobacco factories abroad began to make their orders conditional upon close inspections. […] Since tobacco is sensitive to climate conditions and vulnerable to damage, my father preferred to avoid these risks and cease all business activities. In addition, the depreciation of the Greek Drachma, the conduct of Greece’s tax authorities, and the close monitoring of all foreign currency exchange all made life unbearable for decent businessmen. … [My father] therefore opted for a country with stable currency and sound government administration. And so it was that we relocated to Palestine, where part of our family had already settled.

This account of the founder’s financial motivation balances the one-sided view of his actions as motivated by ideological considerations alone. Studies on the economic history of Mandate-era Palestine shed further light on the founder’s decision to immigrate to that country and found a new bank there. The British administration’s assurance of legal and political stability, good governance practices and a laissez-faire approach to economics in general and banking in particular all contributed to Palestine’s economic development during this period. Together with the era’s stable exchange rates, they helped draw private overseas capital and entrepreneurship to Palestine. Meanwhile, Greece’s economic deterioration in the 1930s, the Greek government’s increasingly interventionist economic policies, and the exclusion of Jewish businessmen from profitable business initiatives all drove Greek-Jewish entrepreneurs to leave their native country.

The few dozen workers employed by the bank in its early years were mostly Greek in origin, many of them from Thessaloniki. Employee recruitment was heavily nepotistic and largely based on personal acquaintance with the Recanati family. With new hiring often consisting of relatives of older employees, the ethnic demographics of the bank’s workforce were sustained over time. A now-retired employee recalls the sense of intimacy and familiarity between the founder and his employees, linking it to the latter’s sense of loyalty towards the bank: ‘Those hired early on had roots in the families of Thessaloniki … [The founder] knew and trusted them. He knew they would be very honest and highly committed to [the bank’s] financial interests.’

The bank’s roster gradually expanded to include employees with roots in other Balkan countries such as Bulgaria and Turkey. In the 1950s, during the founder’s second-born son’s tenure as CEO, the bank hired many recent Jewish immigrants from Islamic countries such as Iraq, preserving the institution’s predominantly Mediterranean and Middle Eastern ethnic character. An employee hired in the early 1950s recalls:

Early on there was preference for people from the same region as the family—fellow Greeks and Thessalonians. The bank was run like a small, young family… In the years that followed Israel received [Jewish] immigrants from Bulgaria and Turkey; many of the bank’s new workers and managers were at that time from the Balkans. Highly educated Iraqi Jews—accountants, lawyers, etc.—arrived in Israel in the 1950s; many of them were soon hired by the bank. So, you might say there was undeclared preference: quite naturally, [the owners] wanted the bank’s workers to be like them—’part of us’.

Many of the bank’s early clients, too, were recent immigrants from Thessaloniki, some of them the founder’s personal acquaintances. As the bank’s clientele expanded, it increasingly came to include Ladino-speakers from other Sephardic communities in Palestine and abroad. Some of the bank’s Thessalonian clients had taken loans from the bank before immigrating to Palestine in order to meet the British government’s immigration certificate requirements. As one of the founder’s grandchildren (later a senior executive at the bank) recounted: ‘Prospective immigrants to British-governed Palestine had to prove they had sufficient money or property; my grandfather would loan them the money to help them prove they had the requisite £1000.’

The image reflected in the latter account is one of a publicly responsibly businessman, a banker at once committed to his own private interests and to the general Zionist cause. But though this is not stated explicitly, the founder’s commitment was evidently not to all Jewish immigrants but only to those coming from Thessaloniki, perhaps even just to his trusted personal acquaintances. His motivations were not detached, then, from his own ethnic attachments. As a senior bank executive put it: ‘This bank was founded by a family whose aim was to make loans available to Sephardic individuals—working people, common people, not the elites.’

The image emerging from the bank’s official bulletin—that of a Zionist bank motivated by universal Zionist rather than particular ethnic aims—is inconsistent, then, with the bank’s special Sephardic character; indeed, with its orientation as Jewish Palestine’s first ‘Sephardic bank’. This orientation is evident in the founder’s son’s account of his father’s decision to establish a bank following his failed effort to purchase Tel Aviv’s San Remo Hotel:

It was then that a delegation of Thessalonian Jews living in Palestine came to my father, suggesting that he establish a bank ‘of the Sephardim, for the Sephardim, and responsive to [their] preferences’. The Ashkenazim, they claimed, did not hold us in esteem; steps had to be taken to remedy this predicament.

On interpretations of this sort, the bank’s owner viewed the founding of the bank as an act of social responsibility designed to benefit a Sephardic public derided by the local Ashkenazi elites. For the latter, the Jews of the Balkans were ideologically inferior since their immigration to Palestine was ostensibly motivated by socioeconomic necessity, not by the lofty ideologies that had motivated the Ashkenazi Zionists, founders of the socialist Kibbutzim. The lowly status accorded to the local Balkan Jews is echoed in a report by a retired bank employee, an immigrant from Thessaloniki, according to which the bank’s founder encouraged his Sephardic acquaintances to become involved in public affairs in order to battle ‘the exclusion of the Sephardim from public affairs’. Sephardic Jews, he continues, ‘were ostracized. … In fact, you could not find a single Sephardi individual in politics’.

Sephardic Public Activity and Sephardic Banking

According to the bank bulletin, the bank’s founder engaged in the following public activities following his immigration from Thessaloniki to Palestine:

A member of the United Israel Appeal, the Israeli Tuberculosis Association, Friends of the Hebrew University, [and] Friends of Habima National Theater. Donated funds and contributed his time and energy to numerous public committees and associations. […] Recruited many of his clients and acquaintances to a variety of public causes.

This summary of the founder’s public activity is representative of his image in the eyes of employees and bank executives alike. His activities as a banker and a businessman are presented here as secondary to his broader public activities. A retired bank employee who had worked directly under him described his public involvement as follows: ‘Back then, I recall, he was hardly working on bank affairs. He was constantly seeing community activists, especially those from Thessaloniki who were coming to him for help.’

The bank’s business activity throughout the 1930s was limited in scope, leaving the founder ample time for public activity. ‘He was living the bank’s business; he knew banking inside out’, the same employee added, ‘but he was preoccupied with other issues, since he knew that the bank’s future development depended on the community’s willingness to come to us.’ On this account, the founder foresaw accurately—almost prophetically—the importance of ties between the bank and the community (or, as in the bank’s early terminology, ‘the public’). The community in question was not amorphous, however, but had a definite ethnic identity, one strongly associated with the Jews of Thessaloniki.

In the bank’s official publications, the founder’s public activities in the years following his immigration to Palestine were portrayed as an almost natural continuation of his earlier activity in Thessaloniki. His public activity in Thessaloniki was portrayed in turn as an integral aspect of his Zionist activity. In Thessaloniki, the bank bulletin reported, he had served as ‘President of Bnei Brith and member of both the National Council and the Jewish Agency. Wholly committed to the Zionist cause, he put the Zionist effort above all else’. And yet, despite his continued devotion to the general Zionist cause following his immigration to Palestine, many viewed him as the representative of a distinct ethnic group. His Zionist activities in Palestine, even as part of the mainstream Zionist establishment, were often seen as conducive to his efforts to help his Thessalonian brethren and the broader Sephardic community—’those of Balkan origin, but also Jews from North Africa and the Near East’.

These perceptions were reinforced by the founder’s elder son, from whose perspective the father’s public activity was not distinctly Zionist in nature. In his narratives, the father is presented, pre-immigration, as a businessman who divided his time between his private business and his activism ‘within the Jewish community [of Thessaloniki], which eventually appointed him as its president in 1928’. The founder’s son adds: ‘When we came to Tel Aviv, my father was involved, in addition to his professional activities, in the affairs of Sephardic Jews in Palestine.’

As part of his effort to promote Sephardic causes, the bank’s founder helped establish the Qadima (Forward) Club, an organization meant to advance the socioeconomic status of Greco-Balkan Jews and to ‘facilitate their integration’ in Palestine’s Jewish society. ‘The club offered its members various social, cultural, and communal activities and provided new business opportunities and contacts with local merchants, business owners, and public officials.’ Reflecting on his father’s reasons for establishing an ethnically oriented club, the founder’s son noted: ‘[My father] believed that [the status of Sephardic Jews in Palestine] was a thorny problem: mentally, intellectually, and technologically, the Sephardic Jews almost invariably differed [in his view] from their Ashkenazi counterparts.’ Given these difficulties, the founders of Qadima resolved to take action in three directions: first, to collaborate with the Jewish Agency in establishing Sephardic agricultural communities, in order to prove to the Ashkenazim that we, too, can work the land; second, to offer young Sephardic individuals academic scholarships in order to help them join the professions; third, to establish a support center for needy Sephardic Jews.

‘A large majority approved the plan’, the founder’s son reported, yet a small but loud group [of Sephardic members] believed that the problem was not genuine; it would take no more than two generations, they claimed, for ethnic intermarriage and shared schooling to remove all differences between Sephardic and Ashkenazi Jews – a prediction strikingly similar to that of cultural sociologists claiming that ethnic differences among Israeli Jews would eventually diminish due to the social and cultural integration of Sephardic (or ‘Mizrahi’) Jews.

The founder’s son concluded:

This ideological clash provoked fiery debates during endless meetings. [My father] would return home exhausted and miserable. In Thessaloniki, notables like him had enjoyed total reverence; no one had dared contradict them. This was a new and humiliating experience for him. But despite these difficulties, my father carried on with his philanthropic and public activities to his very last day.

Sephardic Villagers and Sephardic Banking

One of Qadima’s main aims was to finance new agricultural settlements by Sephardic Jews and to represent their interests in the Zionist establishment. To this end, the bank’s founder helped establish the joint stock company Lasadeh and the association Banim Ligevulam, many of whose functionaries and donors were Balkan in origin. From their inception, these organizations sought to help establish and develop ethnically oriented Balkan settlements. A prominent example was the communal settlement Kefar Hittim, founded in the mid-1930s by Jews of Bulgarian origin. According to Marco Erwin, then treasurer of Kefar Hittim, the bank’s founder supported and financed the opening of a local textile plant in order to help the villagers ‘overcome their economic hardships’, but also in order to take advantage of ‘the great success enjoyed by that branch of industry at the time’. Describing his first meeting with the founder in the latter’s office, Erwin reported:

We shared with him … the story of the Kotzer [Harvester] organization and our entire brief history since we first settled [at Kefar Hittim]. We also told him of the unique, pioneering communal form we chose to give our community.

‘Shortly after that meeting’, Erwin continued,

we were informed that [bank founder] Mr. Recanati and [bank co-founder] Moshe Karaso wished to visit our village together with their families. […] From their gestures and responses, we could see they were deeply impressed with what they were seeing and proud that young Sephardic men and women had been able to establish such an exemplary settlement. Mr. Recanati then proposed that we start a textile plant in partnership with Mr. Karaso.

The two businessmen’s genuine commitment to their co-ethnic Balkan-Jewish villagers took the form, then, of a significant entrepreneurial investment. According to Erwin’s account, the relationship between Kefar Hittim and the bank’s founder was lasting, with the banker making available to the villagers not only financial support but also his considerable social and political connections. ‘Our relationship with [bank founder] Leon Recanati lasted many years. Mr. Recanati was of special help to our friend Haim Crispin during the many years he served as our representative in the [Zionist] establishment.’ For the Kefar Hittim villagers, the bank’s founder was one of

the good people, heads of the Balkan Jewish community, who were happy to help. […] Kefar Hittim was not just another settlement for them; they felt a sense of familial affinity [to it]; it was a settlement for young Sephardic Jews who were reared on Ladino culture.

Meanwhile, the bank’s official publications stressed the more universal aspects of the founder’s public activity and downplayed its more particularist aspects. The bank’s bulletin emphasized the founder’s contribution to the collective national good and downplayed his support of Balkan-Jewish settlers ostensibly neglected by the Zionist establishment. The bank’s founder was described as a supporter of mainstream Zionist projects associated with and funded by the Zionist workers’ movement. In particular, he was described as lending support to settlements already funded by the Jewish Agency, ones that conformed to mainstream Zionist criteria concerning settlement structure and settlers’ demographics, political affiliation and occupations in the countries of origin.

Ethnic Philanthropy?

Many Thessalonian immigrants viewed the bank’s founder as a true heir to the traditional Jewish community president—someone with whom they could share their hardships and to whom they could turn for help. Describing his father’s charitable giving in the late 1930s, the founder’s elder son recounted:

The crisis in Palestine was becoming graver, and many were leaving the country. Among those leaving were quite a few Thessalonians. Most of those staying were unemployed and repeatedly came to ‘Mr. Leon’ for help, as they had done in Thessaloniki. My father tried to ease their hardship by offering them some modest assistance within our limited means.

Indeed, the founder considered himself responsible for the welfare of the local Thessalonian community, many of whose members ‘had come to Palestine destitute’. He also sought to recruit assistance from among his fellow Thessalonian-Jewish businessmen and entrepreneurs. In 1936, several years after immigrating to Palestine and ‘in direct continuation of similar projects in Thessaloniki’, he helped establish a soup kitchen for Jews of Greek origin, ‘in particular for those working at the Tel Aviv seaport’. According to several interviewees, the kitchen charged its needy customers a symbolic fee ‘in order to preserve their honour as Sephardim’. Later, in the late 1950s, it was the foundation around which the founder’s family established a home for the elderly in order to help the impoverished Balkan Jews who had survived the Nazi death camps of World War II.

As the above account suggests, the bank’s official narrative of its activity during this period muddles the distinction between the bank’s corporate philanthropy and its owners’ personal charity. It also blurs the line between donations to the general Zionist cause and contributions to particular Sephardic causes. A senior bank executive recounts, for example, that ‘the Recanatis held the bank’s first earnings presentation at the bank’s soup kitchen’. In her view, this gesture showed that the owner ‘drew no distinction between the bank’s enterprise and the community’. The executive’s choice of words is revealing: by ‘community’, she seems to be referring to the general public, although the soup kitchen was privately funded and intended primarily for Jews of Greek origin; and by ‘the bank’s enterprise’, she as well as other interviewees seems to be referring to charitable projects financed by the bank’s corporate resources but also by the founder’s personal funds.

The bank’s founder died unexpectedly in 1945. His sons helmed the bank after his passing, following his philanthropic lead in the decades to come. Their extensive public activity included membership in the boards of various national, cultural and financial institutions, and personal as well as corporate donations to various causes in culture and the arts, health, education, welfare and poverty relief. Their important activities are beyond the scope of this paper, however, which focuses exclusively on the bank’s activity in the pre-state era.

So far, we have sketched in broad outline the founder’s philanthropic activity, indicating its particularist ethnic character and its broader Zionist justifications. We have also shown how the founder’s sense of responsibility for his community of origin helped shape his business activity. The next section will offer an in-depth analysis of the processes that led to the establishment of the bank’s investment company—an unprecedented step in the banking environment of pre-state Jewish Palestine. This initiative was a product of the founder’s network of social and business relationships with Egyptian-Jewish clients and investors. As we hope to show, our analysis supports the conclusion that the founder’s philanthropic endeavours and business activity relied on largely overlapping social circles and were thus mutually reinforcing.

The Bank’s Investment Company: Collaboration with Sephardic Investors

In the bank’s official historiography, the founder’s sons’ establishment of the bank’s investment company in mid-1949 is presented as an important contribution to the Zionist cause, an effort to advance local (in particular hi-tech) industry in the fledgling State of Israel. In one interview, a now-retired bank employee praises the founder’s two sons for their supposed use of private capital in order to further the national Zionist cause:

The brothers’ contribution to this country’s economy was also without precedent. They established major basic industries in many fields. Already in those early days, they foresaw the importance of the hi-tech industry, encouraging and financing enterprises in this branch which was still in its embryonic stages.

Such interpretations privilege national-Zionist motivations, however, at the expense of explanations rooted in financial self-interest. Another account of the bank’s early period, provided by the founder’s elder son, sheds a different light on the family’s motivations in the years prior to the establishment of its investment company. (The son began working with his father two years after the bank was founded.) Of particular importance is the son’s description of his father’s early business contacts with Egyptian investors. These were initiated by one of the bank’s most important clients, a Turkish Jew who was ‘the representative in Palestine of a business group from Cairo—three Sephardic Jewish families which jointly owned Egypt’s most important commercial enterprise’. In 1941, the founder and his ‘passionately devoted’ client travelled to Cairo in order to raise capital for the bank. Their trip was ‘highly successful’, with the three local families agreeing to ‘invest much of their company’s capital’ in the bank. The founder’s son reported:

Egypt’s economy was booming in those days; its businessmen profited handsomely, and many became rich fast. Our new partners benefitted considerably from these special circumstances. Our Egyptian friends were bringing us more and more stockholders from among their many associates, until our capital grew to more than 300,000 liras [pounds].

It was the founder’s acquaintance with these well-to-do Egyptian Jews that opened up broader circles of business contacts with Sephardic investors, helping bring capital to the fledgling bank.

As noted earlier, the founder’s early partnership with the three Egyptian investors led to his sons’ establishment of an investment company during the bank’s second decade. The eldest son described the process:

There was a local real estate development company with serious capital called Buildco Ltd., which, after investing in lands all over the country, froze all its activities. Its Egyptian stockholders grew impatient with the lull in activity and with the lack of dividends.

As a result, the bank’s Egyptian-Jewish partners urged Buildco’s officer of capital investment, an Alexandrian Jew, to seek financial support from the bank as part of his company’s recovery plan. ‘The plan seemed realistic’, the founder’s son continues, ‘because, with few exceptions, both companies had the same stockholders’ (that is, because the owners of the development company had already invested in the bank).

If contemporary rumours are to be believed, the emerging deal faced a potential threat from Buildco’s CEO, Eliyahu Elishar, a ‘Sephardic notable from Jerusalem known for his public activity’ and a ‘domineering and aggressive businessman’. According to the founder’s son, however, his meeting with Elishar was encouraging ‘beyond all expectations’:

I immediately felt that I was dealing with a clever, cultured, and highly persuasive individual. Besides, Mr. Elishar displayed a keen Sephardic consciousness. He deeply resented the Ashkenazim who, he claimed, were striving to remove us from all key positions in the country. He spoke and argued with a passion that astonished me. It was then that I understood why Mr. Elishar was so well-received and well-liked by the local Sephardic community.

The two businessmen began with two hours of small talk about ‘general issues’ before finally approaching the matter at hand. The deal was then concluded without special difficulties. The founder’s son recounted:

Mr. Elishar was relieved to be released from this liability. His business consisted entirely of real estate and lacked liquid assets that could be invested in development. Furthermore, he said, he wished to devote himself entirely to politics.

The bank’s investment company represented innovative entrepreneurial practices. It was ‘the first investment company affiliated with a [particular] bank and under its total control’. ‘Three significant independent investment companies operated in Palestine at the time’, but none were financially associated with a particular bank. From its inception, the company focused on generating profit for its investors. According to the founder’s son, ‘we were careful to diversify [the company’s] investments in order to generate substantial dividends for its stockholders’.

As these reports indicate, the bank’s early history was marked not only by preferential hiring practices which privileged Sephardic employees, but also by a special effort to establish contacts with Sephardic clients and investors. The founder’s tenure as CEO and that of his elder son were characterized by what may be termed an ‘ethnic consciousness’ which helped shape the bank’s business practices and public activities. It was not long, however, before a more ‘bourgeois’ and national-oriented consciousness began to develop alongside this more particular Sephardic consciousness. Starting in the mid-1950s, under the founder’s two younger sons, the bank increasingly sought to justify its activities in ways that identified the bank’s interests with the national good. This justificatory discourse became prominent in the bank’s official historiography, gradually supplanting the bank’s more particularist ethnic perspective. In this spirit, the bank reported in its bulletin that ‘[our] investment company has contributed to the national immigration and economic development effort by participating in several new industrial and financial projects and by creating new jobs for the incoming immigrants’.

In his own reflections on the bank’s history, the founder’s son stressed the self-interested aspects of the family’s decision to establish its investment company. Like others, however, he presented the company’s self-interested business goals as intended to benefit the fledgling State of Israel:

I wanted to spread the risk more broadly; I wanted to take advantage of the possibilities [opened up by the company] and collaborate with foreign investors of the highest order in order to start new serious initiatives in various branches of the Israeli economy. By drawing international capital and developing new technologies, I believed we could help the State of Israel.

Discussion

This article attempted to shed light on certain aspects in the activity of privately owned financial businesses in pre-state Jewish Palestine, which have yet to be discussed in the literature. In particular, it discussed the contribution of one entrepreneur—the owner of a private banking firm established in 1935—to the emerging discourse and practice of philanthropy in pre-state Jewish Palestine. More specifically, the article focused on ethnic-oriented philanthropy as distinct from more general (in this case national-Zionist) aid. The charitable activities of the bank and its owner were examined in depth, as were the justifications with which they were furnished.

Contribution to the public good was a prominent value at the bank from its inception—the product of a longstanding family tradition which celebrated philanthropy, charitable giving and public engagement. Having served as the head of Thessaloniki’s Jewish community, the bank’s founder remained committed to public activity after his immigration to Mandatory Palestine in 1934.

As this study reveals, however, the founder’s charitable activities were quite particular in scope, targeting Sephardic and, even more specifically, Thessalonian Jews. From 1935 to 1945, during the founder’s tenure as the bank’s CEO and board director, the latter assisted in the establishment of agricultural communities by Jews of Balkan origin, set up a scholarship fund for Sephardic youth, helped establish the Qadima Association to promote the socioeconomic interests of Sephardic Jews, and financed a soup kitchen which mostly benefited Thessalonian Jews. Indeed, the founding of the bank itself was motivated not purely by financial considerations but also by the wish to have a bank ‘of the Sephardim, for the Sephardim, and responsive to [their] preferences’.

Although the founder’s philanthropic activity was often particularist in nature, the bank’s official narrative often described it as contributing to the national Jewish collective. In the bank’s rhetoric, charity earmarked for Sephardic causes was often presented as contributing to the general Zionist cause. This fact suggests not so much the founder’s commitment to Zionist values as his sincere devotion to his community of origin. In the bank’s historiography, ‘Zionism’, despite its political-ideological character, was construed as a universal, apolitical term, and typical Zionist goals such as ‘settlement’ and ‘Jewish immigration’ were represented as transcending the narrow political interests of any particular subgroup within the Jewish people.

The founder’s sincere commitment to the Sephardic Jewish community stemmed, as already noted, from a deeper worldview rooted in a longstanding tradition of charitable giving and philanthropy. It seems, however, that his philanthropic activity for the benefit of the Sephardic public was not without its self-interested motivations. The decision to found a bank ‘of and for the Sephardim’ and to assist agricultural settlements populated by Balkan Jews was motivated not only by the founder’s commitment to this public but also by entrepreneurial thinking, by the expectation of returns on investments. From the bank’s early days, its business and philanthropic activities relied on highly similar, mutually reinforcing social circles. The members of the Sephardic community were the beneficiaries of the bank’s philanthropic activities and provided the pool of employees, clients and investors on which the bank’s business depended—a reality only reinforced by the establishment of the bank’s investment company, an unprecedented initiative that owed much of its existence to the founder’s early contacts with Sephardic investors from Egypt.

The conclusions of this article may serve as the basis for further inquiry into the seldom-studied topic of corporate philanthropy and the relationship between business and the ‘public’ in pre-state Jewish Palestine. In particular, it will be worth investigating in more depth the way in which a private bank could survive and even flourish by relying on an ethnically distinct market shaped by philanthropic activity. The bank, which would later become the second largest bank in the fledgling state of Israel, operated during the period studied here (1935-1945) in a secondary labour market and in a competitive market environment, whereas competing banks, such as Bank Hapoalim or the Anglo Palestine Company (today Bank Leumi), operated in a primary labour market and in a relatively stable state-dominated market environment. To ensure the bank’s survival, its owners may have attempted, already at an early stage, to create a distinct market segment for their business—a conjecture supported by the findings of the present article. The owners’ philanthropic family tradition, as well as their membership in the Sephardic and Thessalonian communities whose members had yet to associate themselves with a financial institution, probably contributed to the success of this strategy.

In conclusion, from the bank’s inception, its owners combined profit-driven business activity with a philanthropic commitment characterized by particularist preferences. The present study of the owners’ philanthropic activities may lay the groundwork for further inquiry into the roots and character of philanthropy by businesses and their owners in Israel—especially the ways in which such philanthropy was distinct from Zionist philanthropy, which was largely based on private capital channelled through the Zionist nation-building institutions.