Pensioners, Orphans, and Widows versus the Banks: The Financial History of Palestine (1917–1948)

·        In an article by researcher Dr. Srimiti Mitter, Assistant Professor of Middle Eastern History and International Affairs at Brown University, titled "Pensioners, Orphans, and Widows versus the Banks: The Financial History of Palestine (1917-1948)," published in the Journal of Palestine Studies on 13-7-2021, the researcher in her study attempted to correct the state of silence that surrounded the deliberate confiscations carried out by British and Israeli forces of Palestinians’ private financial assets. By placing the stories of ordinary Palestinians at the center of analysis, the study explores how they were stripped of their bank accounts, bonds, shares, pensions, salaries, and safe deposits boxes during the two moments of the establishment and termination of the British Mandate over Palestine (in 1917 and 1948). The study argues that the underlying financial architecture of colonialism, which deprives colonized peoples of protection by sovereign financial institutions, facilitated these expropriations. It also notes that financial rules that are presumed to be neutral served as a cover to justify these confiscations. Based on archival research and oral histories, the study offers a new social history of money, focusing on the experiences and consciousness of non-elite Palestinians who sought to defend themselves and assert their rights, individually and collectively, during pivotal moments of upheaval, violence, and historical rupture, and from some of these experiences, the following:

·        In February 1936, two retired Palestinians from the city of Haifa, Clement Manny and Anis Mansur, filed a lawsuit against their former employer, the “Ottoman” Bank owned by the British, accusing it of seizing part of their wages and pensions due to them over nearly two decades.¹ The pensioners alleged that the bank had been using an incorrect exchange rate when converting their wages from Turkish lira to Anglo-Egyptian pounds since December 1917, when British forces occupied Palestine during World War I, and that, relying on the Enemy Property in Time of War laws selectively enacted by the British Parliament, the Ottoman currency was banned in all areas under its control.

·        Four years later, in April 1940, two brothers from Bethlehem who described themselves as orphans and gave only their names—“Mohammad and Manwar, sons of Bikar, wife of Ahmad”—submitted a petition to the High Commissioner, the highest colonial official in Mandatory Palestine, demanding the release of their late mother’s savings account from the Ottoman Agricultural Bank.² The orphans claimed that their inheritance “had remained with the British Treasury” since December 1917—the same date that marked the beginning of the Haifa pensioners’ case—when British forces forcibly closed the Ottoman institution and seized its assets, relying on the same Enemy Property laws that they used to justify the ban on the Ottoman currency.

·        Eight years later, in November 1948, two merchants from Haifa, Khaled Khabaza and Mustafa Aoudeh, submitted a petition to David Ben-Gurion, the first Prime Minister of Israel, demanding the release of their bank accounts and safe deposits boxes in the Ottoman Bank.³ The merchants claimed that their assets had been frozen in compliance with the emergency regulations concerning Enemy Property issued by the new Israeli government rapidly in June 1948, a month after the British Mandate ended.

·        In June 1951, a group of five Palestinian refugees identifying themselves as the “Committee of Palestine Bearer Bondholders” sent a petition to the British monarch George V, asking for his intervention to recover their bearer bonds in Palestine, which they said had been frozen since June 1948 under the same Israeli laws that were no longer considered "emergency measures" but had become the Absentees’ Property Laws enacted by the Israeli Parliament.

·        In 1952, Bahiya Barakat, a widow from Jaffa, and Wahba Jabbai, a retired physician from Jaffa as well—both refugees since 1948—brought separate lawsuits against the British banks Barclays and Ottoman, seeking the release of their bank accounts that had been frozen under the same Israeli Absentees’ Property Laws, as had occurred with the bearer bonds and the accounts of Haifa’s merchants.

·        Little is known about these “financial tragedies,” as the bondholders described them in their letter to the British king, although each of them represents a basic element in the two moments of historical rupture, violence, and regime change that define Palestine’s twentieth-century history: December 1917, when Palestine moved from Ottoman rule to the British Mandate; and May 1948, when the emerging State of Israel took control.⁶

·        Economic studies of Palestine’s history during the Mandate period have mainly focused on peasants’ indebtedness, the provision of credit, land markets, and labor conditions. The ongoing seizure, since 1948, of Palestinian immovable property such as houses and agricultural land, and of crops, has received the lion’s share of attention. However, the theft of Palestinians’ private financial assets, whether by British or Israeli forces, has largely remained outside the scope of research, except for what was documented by those orphans, widows, physicians, merchants, bondholders, and others who undertook long years of struggle to recover their funds without success.

·        There are several explanations for this neglect in studying the expropriation of Palestinians’ financial property. Individual narratives of loss have been overshadowed by the broad geopolitical focus that dominates much of Palestinian (and Israeli since 1948) historiography, which concerns states, elites, and great-power policies. The theft of private financial assets often involved relatively small sums: the orphans’ inheritance amounted to thirteen Palestinian pounds; the monthly pensions of the retirees were ten Palestinian pounds; while the value of each bearer bond was ten Palestinian pounds. The enormity of the Nakba eclipsed these “ordinary” but devastating losses. Also, British and Israeli attempts to conceal their illicit financial practices produced a fragmented and scattered archival record.

·        Finally, the victims of these crimes were ordinary people who did not belong to Palestine’s economic, social, or political elites, nor were they peasants whose history of indebtedness, dispossession, and displacement constitutes a core part of the Palestinian narrative.

·        Nevertheless, the stories of these ordinary and disempowered Palestinians, who struggled through litigation and petitions to retrieve their property, deserve to be known and studied, not only for their intrinsic importance, but for three broader reasons:

·        First: They expose the superficiality of the existing literature regarding the growth-gap between the European Jewish sector and the Palestinian sector during and after the Mandate, literature that often resorts to unconvincing cultural explanations about Palestinian “backwardness” or lack of financial experience compared with their Jewish counterparts. This literature ignores how British colonialism and Zionism, and the intertwined processes of decolonization and state-building of Israel, directly destroyed Palestinian private savings and financial investments, and thus the very basis that could have constituted a viable postcolonial Palestinian economy; although the amounts in each case were small, together they amounted to millions of pounds.

·        Second: These stories provide rich empirical data, urging us to take the financial impact of colonialism on colonized peoples seriously. They show how easily private property rights of the colonized can be undermined due to the absence of sovereign financial and legal institutions, institutions to which expropriation can appeal for redress. In each case, the victims had no option but to direct their complaints to the very authorities—far more powerful than they were—that had confiscated their property: British banks; the Israeli prime minister; the British High Commissioner; the British monarch; and British courts. There was no independent monetary authority that could have ensured the correct accounting of exchange rates in 1917 or rescinded the ban on the Ottoman currency and thus protected the wages and pensions of retirees. There was no banking authority to prevent the liquidation of the Ottoman Agricultural Bank by the British in 1917 and thereby protect the orphans’ inheritance. And there was no central bank to order Barclays and Ottoman to unfreeze Palestinians’ accounts in 1948, or to deem the Israeli action unlawful from the outset.

·        Third, and perhaps most importantly: These stories reveal how the rules and standards of the financial system, with their supposed neutrality, efficiency, legitimacy and scientific objectivity, conferred on these events a sense of “apparent legitimacy,” and in practice provided a cover to justify the dispossession of property. The systems of “Enemy Property,” the laws on “Absent Persons' Property,” the rules of fixed versus floating exchange rates, and the rules governing the transfer of unclaimed liabilities, all helped facilitate the freezing of Palestinian financial assets, their liquidation and then their transfer. The nature of these assets themselves—being intangible and easily transferable—together with the complexity of the financial rules used to seize them, made the British and Israeli thefts more concealed.

·        We do not know whether Munni and Mansur ever received any compensation or restitution for the years of salaries and pensions that were miscalculated. We do not know whether Muhammad and Munawwar, the two orphans from Bethlehem, recovered their late mother's deposit. Nor do we know whether the merchants of Haifa, Khabbaza and Awideh, were able to access their funds, or whether the principal and accrued interest on Palestine bonds were ever repaid to the bondholders at all. The colonial archive is silent on all of these questions; these matters disappeared from the records, and it is likely that the funds themselves disappeared along with them.

·        Nevertheless, the stories of loss and dispossession embedded in these “financial tragedies” remain valuable because they show that colonialism does not only seize the land of colonized peoples, their labor and raw resources, but also seizes their modest savings and financial assets, which constitute the core of their possessions — the very means that allow them to build their present and their future!