Ottoman Brothers: Muslims, Christians, and Jews in Early Twentieth-Century Palestine (36 page)

To that end, in late 1908 the chamber of commerce in Jerusalem established an investment society, the Commercial Society of Palestine (Société commerciale de Palestine; Bank Filas
īn al-Tijārī; SCP) as an effort to mobilize private, local capital and investment.
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At a time when most of the empire's finances and public works concessions were in the hands of foreign banks and firms, the chamber of commerce was committing itself to a national Ottoman economic policy, a spirit which was certainly aided by the ongoing boycott against Austro-Hungarian goods explored in
Chapter Three
. In fact, when the SCP was finally legalized by the Ottoman government in the summer of 1909, one of the conditions on the imperial
ferman
was that they employ “as far as possible” Ottomans with diplomas from Ottoman upper schools.
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Although the French Consulate claimed that the idea behind the SCP was spearheaded by “Christians of diverse rites,” the SCP was a mixed society. Leading members included the chamber of commerce president, Hajj Yusuf Wafa, Isma'il al-Husayni, Albert Antébi, and Selim Ayoub. Jerusalem's two parliamentarians were also rumored to be leading forces behind the society's founding.
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The SCP was a shareholders' bank, and it raised money from leading merchants, members of the chamber of commerce, and through the sale of smaller-scale shares to local Palestinians. Out of the six thousand individual shares sold by January 1909, five thousand had been sold to Muslims and Christians, while Jews purchased the remaining thousand. Another report stated that the largest group of shareholders was the investors affiliated with Hajj Yusuf Wafa (who owned two thousand shares); Isma'il al-Husayni and mayor Husayn Hashem al-Husayni (two thousand shares); Antébi, Tagger, and Abuchedid (two thousand shares); and Ayoub, Batatu, Jean, and Homsi G (two thousand shares).
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The society's objectives were banking operations and financial, commercial, industrial, and agricultural affairs. More specifically, the SCP set out to engage in five major areas in finance and commerce: applying
for and securing concessions of public works in Palestine and the empire, in transportation, electricity and water; undertaking all agricultural and financial enterprises; financing industry; offering discounts on commercial matters, such as advances on titles, merchandise, and precious metals, current accounts, deposits of accounts, and so on; and securing titles for its enterprises or those of other concessionary societies.
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By September 1909, the bank had officially opened its doors to customers; Selim Ayoub, a Christian, was its branch director, with Yeroham Elyashar, a Sephardi Jew, as assistant director. Little is known of the bank's day-to-day activities, although it reportedly was engaged in mortgage loans, real estate investment advising, credit lines, and foreign currency and stocks. In addition it seems to have pursued commercial interests as a broker between foreign and local business. In 1912, for example, the SCP expressed interest in purchasing American-made mowers, plows, and harvesting machines for sale in the Jerusalem region. The SCP was also a dues-paying institutional member of the American Chamber of Commerce for the Levant.
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The jewel of its investment activities, without a doubt, was the pursuit of public works concessions in Palestine. Because the society was composed of highly influential individuals, it very early on enjoyed a strong relationship with the local Ottoman governor, who “promised it would have preference over all other entrepreneurs in all governmental enterprises.” Because of the governor's assurances and because of its political commitment to economic nationalism, the founders of the SCP thought they would have a distinct advantage in soliciting the public works concessions in Jerusalem.
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Therefore, the SCP submitted a proposal to provide running water for Jerusalem via a canal from the al-Arroub springs twenty-one miles south of the city. According to the terms of its proposal, it would provide water free of charge to all of Jerusalem's residents, irrespective of confession or nationality, up to a certain limit; water would also be distributed freely to the city's public fountains. Beyond that stated limit, the SCP would charge for additional water use. The SCP also agreed to local and central government oversight, submission to the Ottoman courts, and responsibility vis-à-vis the populace. Their proposal was approved by the provincial administrative council on May 1, 1909.
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The chamber of commerce praised the progress on the water project, arguing that it was necessary for economic development, political emancipation, and intellectual regeneration.

Soon thereafter, however, negotiations broke down. The SCP had proposed a tax on tanneries in Jerusalem in order to subsidize the water concession and ensure that the bank would be able to fully amortize the
loan. However, MP Sa‘id al-Husayni informed them that the Ministry of the Interior intended to tax the sale of meat in Jerusalem instead, a step which was vigorously opposed by the mayor, Faidi al-‘Alami as well as Wafa, speaking on behalf of the chamber of commerce. Without warning, the mayor promptly signed a separate agreement with a German concessionaire to provide running water from ‘Ayn Farah, another spring, located eleven miles north of Jerusalem, undercutting the SCP as well as acting against the decision and authority of the administrative council.

The SCP protested vigorously, and its objections, voiced through the chamber of commerce, were phrased in national and reformist terms. The chamber expressed surprise that a deal had been hastily and secretly achieved between al-‘Alami and the concessionaire Franck, in contrast to the extended and very public negotiations the SCP had carried out. The chamber argued that it would carry out “its imperative duty to translate public opinion and to present the general interest, despite all opposition and against all constraints. This is the essence of the principle of a constitutional government and its raison d'être, and its guarantee is the public discussion of everything that deals with the life of the nation.”
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The chamber criticized the municipality's contract with Franck on technical terms, arguing that the chosen spring was located at an inhospitable elevation. More important, however, the financial terms of the contract were suspect. On the one hand, the contract avoided the tax on either meat or tanneries, but on the other hand, the contract would allow the Franck firm to charge high prices for the sale of water to the city's residents. In contrast to the SCP's proposal to sell water that exceeded the free quota at fifty cents per cubic meter, the Franck contract would charge residents 1.25 francs per cubic meter. The chamber opined: “Here is the antidemocratic side of the matter. The sacrifice of the vital interests of the masses for the egoism of the rich should be banned in a constitutional government.”
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Moreover, whereas the SCP was a “local and Ottoman” project that would look after local and Ottoman interests, the other party was a European concessionaire who was apparently interested in the project solely as economic exploitation. The double standard applied was apparent: “Why was it not imposed on M. Frank as it was on the Commercial Bank to favor the industry and commerce of the country? Is this unimportant now?” The chamber demanded a public referendum to decide which plan Jerusalem would accept.

In its own direct appeal to the governor, the SCP reaffirmed its hope that its “status of being a local and indigenous bank [would result in its] preference.”
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Indeed, this was an important point for Jerusalem's investors
and merchants, as was further evidenced in a public exchange in a French commercial newspaper that took place the following year. The paper,
La Vérité
, published an article praising the new director of the Jerusalem branch of the Ottoman Imperial Bank, which, despite its name, was in fact owned by French and British investors. According to
La Vérité
, director Fenech was an instrumental force in pushing forward public works in Jerusalem. The article elicited the angry response of “JD,” a reader from Jerusalem intimately familiar with the SCP and the water concession, who argued that Fenech “is unknown” in Jerusalem and that
La Vérité
was ignoring the dozens of local figures—from the governor and parliamentary deputies to the municipality, chamber of commerce, and SCP—who had been involved in the Jerusalem public works project, not to mention the numerous local studies that had been undertaken in recent years to address the problem of bringing running water to Jerusalem.

La Vérité's
editors responded by sarcastically noting that “even Pontius Pilate had studied the [water] issue,” but that was a far cry from having the technical know-how and financial capacity to undertake such a project, which apparently only European capitalists did. “JD” wrote back one more time, arguing more clearly for a national economic policy.

Constitutional Turkey [sic] and its [finance] minister, Cavit Bey, are rightly searching to emancipate our democracy from the financial oligarchy which pressured it [under] the old regime. It favors the development of independent national groups constituted of small savings. In this it follows the example of republican France. All our wishes are with the efforts of Cavit Bey in his battle against these powerful groups, because the independence of a nation resides foremost in its financial independence.
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However, for all its talk of being a local, national society, the truth is that the SCP was unable to raise enough capital in Palestine, forcing it to turn to the Anglo-Palestine Bank, a Zionist bank based in London with branches in Jerusalem and Jaffa, to secure its operations, which the bank did via the sizable collateral put up by the SCP board's leading members.
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As well, the SCP was involved in secret negotiations with the Zionist movement to raise additional, significant sums of capital. In one meeting, Antébi proposed that the Zionist movement purchase up to half of the SCP's shares. The director of the movement's Palestine office, Dr. Arthur Ruppin, was intrigued by the possibility. First, there was undeniable political significance to being involved in public works in Palestine. As Ruppin put it to skeptical officials in Europe, “This will strengthen our position here so that Jewish interests cannot be ignored.”
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In addition, by becoming large shareholders the Zionist movement could ensure that people “of our beliefs” would sit on the
board. However, Ruppin's desires on that score were disappointed when he was informed that non-Ottomans could not serve on the board of the SCP, and given that they could not be assured of a sympathetic majority on the board, the Zionist leadership decided against formalizing ties.
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Despite the collapse of talks with Zionist officials, it was clear to everyone involved that the sensitive issue of foreign financing and shareholding in the SCP should be discreet. As Ruppin delicately conveyed to another European Jewish organization, the Palestine Industrial Syndicate, “We kindly note that the recruitment of European capital should be entirely quiet and should happen without the involvement of the press. If the government felt that European capitalists stand behind the Ottoman society, it could spoil the whole thing.”
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Indeed, later attempts by the Zionist movement to secure a public works concession to modernize the natural baths in Tiberias and to mine the salt of the Dead Sea were severely criticized in the Arabic press on national patriotic grounds.
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As well, despite the enthusiasm displayed by some Zionist officials in Palestine for the project, the rumored cooperation also elicited Jewish opposition. One of the Yiddish newspapers in New York published a story about the establishment of an “Arab bank” led by Antébi and demanded an investigation by Z. D. Levontin, the director of the Jerusalem branch of the Anglo-Palestine Bank, presumably based on the assumption that cooperation of a Jewish, Zionist institution with an Arab bank bordered on treason, despite the fact that Antebi and other Sephardi Jews were involved in the project. In turn, Levontin responded that he hoped it would help Jewish-Arab relations. “We can and need to walk hand-in-hand with our neighbors the Arabs, residents of the land, in all matters relating to the flowering of our country, and it saddens me to see articles such as those that cause a rift between the residents of the land and the good leadership.”
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In the end, the lobbying efforts of the SCP, aided by the Jerusalem Administrative Council and Chamber of Commerce as well as by influential Jewish figures in Istanbul, led to the collapse of the Franck concession. The Public Works Ministry in the capital objected to any local initiative in this matter, and took over the granting of concessions in Jerusalem. In the fall of 1911, the SCP hired a German engineer to study the issue further, hoping that the subsequent report would bolster its own renewed concessionary bid.
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However in early 1914, the concession to bring water, electric tramways, and electricity to Jerusalem was awarded to an Ottoman Greek Orthodox developer, Euripide Mavrommatis, who was tied to a French banking firm. The SCP, which had failed in its own bid for the concession, succeeded in reserving 40 percent of the capital shares of the concession for “sons of the homeland.”
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