State of Israel Bonds

Ben-Gurion proclaiming the birth of Israel Bonds in 1951.

CELEBRATING A 60-YEAR LEGACY OF ACHIEVEMENT

By James S. Galfund

Throughout 2011, State of Israel Bonds celebrated its 60th anniversary, highlighted by the dedication of Israel Bonds Way in Jerusalem in the presence of cabinet ministers and dignitaries. 

The organization’s remarkable success—worldwide sales exceeding $33 billion, the sweeping development of the land and a global partnership united in common cause with Israel—originated with two historic speeches.

On May 15, 1948, David Ben-Gurion stood before a microphone at the Tel Aviv Museum of Art to proclaim the birth of the modern Jewish nation.  Almost exactly three years later, on May 10, 1951, Ben-Gurion stood before a microphone at New York’s Madison Square Garden to proclaim the birth of State of Israel Bonds. 

The period between the two momentous speeches was perhaps the most challenging in Israel’s history. Independence had been won, but at a high cost. The War of Independence had taken 6,000 lives and left the nascent economy in shambles, yet every sector of the new nation needed to be developed, strengthened or modernized. Compounding the crisis was the arrival of hundreds of thousands of new immigrants, including Holocaust survivors, internees from displaced persons camps and thousands of Jews from Arab nations.

The Beginning

On September 3, 1950, with his country financially overwhelmed, Ben-Gurion convened a meeting of American Jewish leaders at Jerusalem’s King David Hotel.  He then articulated a dramatic proposal: to engage Diaspora Jewry in economic development through creation of a company that would sell securities issued by Israel’s government. It was a fateful moment that President Shimon Peres hailed as “a vital chapter in Israel’s history.”

Eight months later, Ben-Gurion announced to twenty thousand cheering advocates inside Madison Square Garden—as well as thousands more listening via loudspeakers outside—that they could now invest in the reborn Jewish nation through the purchase of Israel bonds. The underwriter was the new American Financial Development Corporation for Israel (now the Development Corporation for Israel), forever known as State of Israel Bonds.

A 60-Year Legacy of Achievement

As it celebrates its 60th anniversary, Israel Bonds takes pride in its impressive legacy of achievement. From the moment the organization started selling bonds, proceeds began transforming the face of Israel. Towns were built for new immigrants. The National Water Carrier made Israel agriculturally self-sufficient. The Dead Sea Works became Israel’s first major industrial undertaking.  Power plants helped alleviate Israel’s chronic lack of energy resources. Ports were constructed and expanded to receive essential imports and to increase export potential. Transportation networks connected all parts of the country.

Today, proceeds from the sale of Israel bonds are being utilized to help fuel a nation of extraordinary technological innovation and limitless potential. Dan Senor, co-author of Start-Up Nation: The Story of Israel’s Economic Miracle, a revealing look at Israel’s cutting-edge high-tech prowess, noted the significance of the Bonds organization when he declared, “The spirit of Israel Bonds is reflected in this book.”

A Well-Earned Reputation

The organization’s well-earned reputation as a consistent and dependable source of funding has been acclaimed not only by successive Israeli leaders, but also by international ratings agencies and the International Monetary Fund.

The Bank of Israel put the organization’s singular importance into perspective when it observed, “Israel Bonds is unique to the State of Israel, and no other country has a similar organization.”  Indeed, many countries have sought to emulate the Bonds business model.

Today, Israel bonds, which can now be purchased online, not only continue to strengthen Israel’s economy, but also provide tangible benefits for investors. Israel bonds can be utilized for numerous financial goals, including preservation of capital, retirement planning, portfolio diversification and more. In fact, Israel bonds can be found in the portfolios of a wide range of investors, including individuals, state and municipal governments, unions, universities, foundations, corporations, and financial institutions.

Most importantly, an investment in Israel bonds is a connection to one of history’s greatest success stories. President Shimon has declared: “The strong ties between Israel Bonds and the State of Israel…have been as resilient and as fruitful as the land of Israel itself.”

For further information about the Development Corporation for Israel/State of Israel Bonds visit www.israelbonds.com or call the Miami office at (305) 895-4700.  *This is not an offering, which can be made only by prospectus. Read the prospectus carefully before investing, to fully evaluate the risks associated with investing in State of Israel bonds. Member, FINRA.

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