Israel Pound Devalaution Speeded by Nixon Policy
(Continued from Page 1)
appliances and including used
cars, was continuing.
Some prices were marked up,
others were unchanged, and shops
selling at pre-devaluation prices
heavily advertised that fact.
Israel's reserve bank, the
Bank of Israel, announced
a new record interest rate
for deposits by banks which top
the liquidity rate laid down in
the law.
more of their assets with the cen-
tral bank than is legally required.
Bank Leumi, Israel's largest
commercial bank, published new
exchange rates of the Israel pound,
showing some with large differen-
ces between buying and selling of-
ferings.
Banks throughout Israel were
reopened Monday after being
closed Sunday, the first full day
of the devaluation of Israel's
pound. Long lines were seen at
the banks, but there appeared to
be no panic withdrawals, observ-
ers reported. Stepped-up buying
continued in stores selling im-
ported products, appliances and
even such staples as sugar and
oil. Some observers suggested
that consumers were continuing
to buy even though posted prices
on all products reflected the
changes brought by devaluation,
because of fears of further de-
valuation.
Economic experts said that the
upsurge in buying had been taken
into account in the planning by
finance ministry officials for de-
valuation and events stemming
from it. The special government
committee on prices approved in-
creases in prices charged by the
two top grades of hotels in Israel.
The effect will be that overseas
tourists will pay in their currency
about the same amounts as before
devaluation but Israelis staying in
those hotels will pay more.
bates to 77 nations classified as de - ated dollars) while its exports are
veloping, which excludes Israel.
toward strong-currency European
U. S. Officials See Israel
countries.
Devaluation as a Way to
Keep Her Trade Position
WASHINGTON (JTA)--Israel's
devaluation was seen by American
officials as being primarily a
means to maintain and possibly
bolster its trade position in the
U. S. and other countries. An In-
ternational Monetary Fund spokes-
;;man, however, told the Jewish
Telegraphic Agency that the Is-
raeli devaluation was mainly
directed at Israel's domestic econ-
omy, noting that the Israeli gov-
French and German trade offi-
cials said that Israel has not actu-
ally suffered from the dollar de-
valuation and that its decision is
mainl y. "preventive." General
Agreements on Tariffs and Trade
(GATT) officials, who are current-
ly preparing for a general confer-
ence on the subject of tariff bar-
riers which will open on Tuesday
The new rate of 16 per cent will
in Geneva, said that Israel's de-
be paid to commercial banks as
cision to increase taxes on imports
a special reward for depositing
will be discussed at the confere -
"It is to be expected that a
SEO.k,
ernment Sunday had increased do- ber of countries will find the 1,
mestic prices of commodities at an raeli decision to the contrary of
Boris Smolar's
average of 15 per cent. The IMF
the GATT agreements," these
officially announced near midnight sources
said.
Saturday night that it had concur-
red with the Israeli monetary move. Israel's Devalued Pound
Israel was seen as having prob- Causes 10-20 Per Cent
lems both in its balance of pay- Price Hike Of Goods
Medium and low-priced hotels ments and in inflation in its do-
TEL AVIV (JTA)—Israeli con-
have not been allowed to in- mestic economy similar to those
Editor-in-Chief Emeritus, JTA
crease their rates but the gov- in the U. S. which caused Presi- sumers awoke to a new economic
(Copyright 1971, JTA Inc.)
ernment is trimming the pre- dent Nixon to adopt a new econo- situation, in the wake of a sudden
mium they had previously been mic policy. Both U. S. and foreign devaluation and wage and price
PERSONALITY PROFILE: Meet Irving Bernstein, the able and
freeze, in which they found them-
given for every dollar they turn-
amiable executive vice chairman of the United Jewish Appeal, now the
officials refrained from speculating selves hit by higher prices for
ed
over
to
the
treasury.
New
air
executive head of the UJA in the United States succeeding Rabbi Her-
on the outcome of the Israeli meas-
fares were posted. People leav- ure which stems directly from the most basic commodities, such as
bert A. Friedman, who moved to Israel for settlement there.
d
milk, eggs, sugar
ing Israel were allowed to go on Nixon policy.
Rabbi Friedman, who currently also carries the title of executive
and fish.
their
pre-devaluation
tickets
vice chairman, has long nurtured the dream of settling in Israel. He
A devaluation such as Israel has
New prices were posted Sunday
will conduct the Israeli end of the UJA operations from newly estab- without paying the 20 per cent made will mean Israel goods morning for a variety of staple
difference
but
those
leaving
lished headquarters in Jerusalem. From time to time, he will visit the
will be cheaper in the American foods. Bread prices were up 10
after midnight had to pay it.
United States to lend a helping hand in the UJA campaign.
market, and other foreign goods per cent; milk, 13 per cent; eggs,
(In Paris, travel agents told the in relation to them will be more 20 per cent; sugar, 14 per cent;
Bernstein is different from all former top executive officers
of the UJA in that his predecessors came to their high positions in JTA that though the devaluation expensive. This will help Israel to and fish, 10 per cent. Gasoline
the UJA from other high posts. He comes from UJA ranks. He has measures will most probably po- maintain its price levels and com- prices went up only two cents a
been with the UJA since 1947 and started in field work with the tentially increase the number of petitive position in the American gallon but those prices had been
smallest communities, some with only two or three Jewish families. tourists to Israel "such an in- market. Israel goods also will boosted 12 per cent in July. Tele-
He ascended higher and higher in the UJA system. From field crease is not practically feasible nrobably have a competitive ad- vision sets were un in price by
representative he was elevated to the post of director of the West due to the shortage of hotel ac- vantage in other countries which about $100 each and small import-
use dollars to pay for American ed cars up in price by $400. In-
Coast Region. In this position he served successfully for 12 years. commodation."
(The travel agents said that even goods. Both the U. S. State and creases of about $100 are expected
He was then summoned to New York- to become assistant executive
vice chairman, which post he held for eight years. In 1969, he was before the devaluation they were Treasury department spokesmen in the price of most household ap-
unable to satisfy all requests and again vigorously denied that Mr. pliances such as washing ma-
named executive vice chairman.
that
the thousands of European Nixon's new economic policy re- chines, refrigerators and air con-
An excellent administrator, he worked hand-in-hand with Rabbi
would-be
tourists had to be turned stricts fund raising for Israel in ditioners. The sophisticated Israeli
Friedman. Doing a very efficient job, he nevertheless held himself
the. U. S. through the sale of Israel
always in the background. His modesty won him many friends among down due to a shortage of hotel Bonds and private contributions. consumers, anticipating a signifi-
the UJA lay leaders as well as among the top professionals in the rooms. A spokesman for one of the Capital flow from the U. S. to cant changes in Israel's price --
largest travel agencies in Europe
communities throughout the country.
structure since President Nixon
said that "luckily, the devalua- countries abroad is not restricted announced last Sunday his sweep-
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*
*
tion was decreed toward the end by the policy, they said; indirectly, ing program of changes to defend
SHARING PROBLEMS: Executive directors in the Jewish com- of the tourist season as otherwise however, the flow of funds to Is- the dollar, had been buying heavi-
munities consider Irving Bernstein a man of their own. Having grown we would have to turn down an rael might be affected since a ly through the week.
up with many of them in the field of social work, he is looked upon even larger number of would-be weaker American economy would
Some people hunted feverP -- •
presumably reduce sales of Bonds
by them as a member of their intimate family of communal workers. visitors.")
for products at the pre-.devaluL,
and
contributions.
This is no small asset to the UJA. In the fund-raising campaigns
The devaluation of Israel's
prices with no success.
The spokesmen, however, took
of the UJA the personal friendship of the executive director in each
pound by 20 per cent was ap-
When Israelis were told that an
a
positive
view,
saying
that
Nixon's
community is as important as the good will of "big givers." It is the
proved at an emergency session
action would result in an improved important .announcement would be
executive director that carries the burden of the day-to-day hard work
of Israel's cabinet.
American economy and thus pro- broadcast around 11 p.m. Israel
in conducting the campaign in his community.
Finance Minister Pinhas Sapir vide a better market for Israeli time Saturday night, they tuned
Because of his close relationship with many of the executive listed a series of regulations as
in en masse on their radios- _to
heads of the communities, Bernstein, stepping into the new posi- part of the new economic program. goods and greater fund-raising hear Finance Minister Pinhas
tion, made it clear that he intends to open—and maintain—a new line He said no new taxes would be prospects. The spokesmen at both Sapir announce—after a two-hour
of communications with the executive directors in each community. imposed and that planned tax re- departments also said that no de- delay—the devaluation and the con-
His intention is to share with them—in an informal way—the prob- forms will be implemented on .1 cisions have yet been taken on the trols accompanying it. At 2 a.m.
lems and issues of various magnitudes that he will face in his daily schedule. All existing stocks of President's order to cut foreign they were still listening to com-
work and to consult them, so as to have the benefit of their thinking products in Israel are to be sold military and economic assistance mentaries on the devaluation and
by 10 per cent. Funds for foreign
on matters of mutual concern.
at pre-devaluation prices or be sub- aid for the 1971 fiscal year budget, its likely consequences.
*
*
*
ject to a tax equal to any price in- which was closed out June 30, are
Officials of foreign airlines oper-
THE 1972 OUTLOOK: Bernstein is very optimistic about the crease. He said bank credit was not affected, he said. The new ating in Israel decided to approach
economic and military aid budget the government with a request for
outlook for the 1972 WA campaign, of which he will be the chief being frozen at present levels.
Labor unions are being asked not for fiscal 1972 totaling $3,200,000,- a reduction in the travel tax. Is-
engineer. He expresses his optimistic view in no uncertain terms.
His optimism is based on his belief in the quality of the UJA to present any new wage demands 000, has been adopted by the House raelis now pay 600 pounds plus -
leadership. He also believes strongly that the American Jewish com- before expiration of existing col- of Representatives. The bill is per cent on ship and air tray
now in the Senate Foreign Rela- tickets. The officials expref-
munity is now sure of itself, of its identification with Israel's human- lective wage pacts next year.
itarian needs and of the importance of meeting the needs of the Jewish
Sapir announced new rates for tions Committee. Congress is in concern lest new taxes in
recess, until Sept. 8. The Nixon sharply reduce overseas travel
communities in other overseas lands. He expects that the UJA cam-
grants to low-income families.
Until now they have been 48 administration's decision on how to Israelis. With banks and other
paign will bring close to $300,000,000 in 1972, which Is the same sum
anticipated in 1971—the largest sum ever raised in any year in
pounds a month for families put the 10 per cent reduction into lending agencies closed, except for
the past.
whose total income did not ex- effect—by an over-all worldwide currency exchanges at Lydda air-
ceed 490 pounds monthly. The cut, regionally or country by coun- port and Haifa port, the only l`free
Without saying so, the young-looking executive head of the UJA
rate of payments was on a pro- try—probably will not be taken un- market" operating was the black
indicates that in his opinion there will be no going back in con-
gressively declining base until a til after Congress decides on the market where the dollar was sell-
tributions to the UJA.
new aid budget appropriations, the ing at 4.35 pounds, only slightly
family had, or reached, a month- officials
predicted.
Bernstein is especially encouraged by the fact that the
above the new official rate.
ly income of 586 pounds per
top leaders of the UJA campaign in New York and Los Angeles
Europeans
Not Surprised
Israeli financial circles welcom-
month, which disqualified it for
—two communities that have especially distinguished themselves
ed the new economic policy. Im-
the monthly grants. All such pay- by Israeli Devaluation
in the fund-raising drive this year—have already indicated their
PARIS (JTA)—Common Market porters were reported angry be-
ments have been increased by
o fficials declared they "were not cause of a ruling requiring them to
readiness to remain at their leadership positions for 1972. He
a flat boost of 30 pounds tax free.
also lays great hope on Paul Zuckerman, the incoming national
urprised" by .Israel's decision to pay a 20 per cent surcharge on
In reply to a question, Sapir said
d evaluate although they saw "no goods in stock, declaring they had
UJA chairman. Zuckerman, a Detroit and national Jewish leader,
the Histadrut, which had asked
is a man of great energy and strong dedication to the UJA, which
for such action, had been inform- r eal reasons for doing so." These been promised they would not
he has exhibited for years in most active work locally and
0 fficials told the Jewish Telegra- have to pay more taxes. A spokes-
ed of the new grant scales and
nationally.
p hic Agency that, for some time man said the importers might seek
had acknowledged them.
n ow, they had felt that Israel was relief from Israel's Supreme
Born in New York 50 years ago, Bernstein came from a family
Sapir cited three basic causes waiting for the first available op- Court.
deeply interested in matters Jewish. He received his general educa- of the new Israeli economic policy: p
Cab fares are expected to rise
tion in the City College of New York and in Columbia University the new United States 10 per cent c ortunity in order to devaluate its
where he received his degrees. During 1942-45 he served with the surcharge on imports; restrictions t urrency. They said, however, 10 per cent. Public transport fares,
U.S. Army and later in the New York City Department of Welfare. of the European Common Market n hat the opportunity chosen "does slated to be increased by 18 per
of seem to be logical" as most of cent on recommendation of an in-
customs union; and the fact that I
48—Friday, August 27, 1971
THE DETROIT JEWISH NEWS the Common Market gives duty re- U srael's imports are from the vestigating committee, will go up
nited States (payable in devalu- an additional 2 per cent •
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