1941: Palestine

Palestine, a British mandated territory in the Near East, consisting of two parts, the land west of the Jordan, or Palestine proper, and Transjordania, a country stretching east from the Jordan into the desert. Palestine is under direct British administration, a land with an Arab majority, but where under the mandate the immigration of Jews has been facilitated with the view to the building up of a Jewish national home. Transjordania, on the other hand, is an Arab principality under a native ruler, Emir Abdallah, who is assisted by an executive council of ministers and a legislative council of elected deputies. The Arabs in Palestine had frequently revolted against the policy of the mandate to facilitate the building of a Jewish national home in Palestine. The most violent and long-lasting of these revolts occurred in 1936 and lasted until the British statement of policy in May 1939 which declared that it was not part of British policy for Palestine to become a Jewish state, and promised to establish within ten years an independent Arab state and to grant to the population progressively democratic rights of self-government.

Political and Defense Situation.

The outbreak of the war and the large concentration of British troops in Palestine for the protection of the vital imperial routes in the Near and Middle East brought about further pacification, and during 1941 the country was quiet. The same can be said, thanks to the policy of Emir Abdallah, of Transjordania, in spite of the fact that Axis agents tried to foment trouble against Great Britain, particularly at the time when in the neighboring kingdom of Iraq a pro-German government was in control and worked hard to incite the Arabs of all the neighboring lands to go to war against Great Britain. It was then the wise Arab policy of the British Government which forestalled the spread of this dangerous agitation throughout the Arab lands, especially in Transjordania and Palestine.

It also allowed Great Britain to liquidate the pro-German government in Iraq with relatively very small sacrifices, and so to secure peace in Palestine and throughout the Arab lands, which was of fundamental importance to the British at a moment when the Near and Middle East could become the decisive theater of war.

The number of Jews in Palestine was estimated by the government at 456,743 in June 1940, while the Jewish Agency estimated the number of Jews in Palestine on Sept. 30, 1940, at 488,667, or 31 per cent of the settled population of the country. Of this population almost 70 per cent or 328,000 lived in three large cities, 177,000 in Tel Aviv and Jaffa, 82,000 in Jerusalem, and 69,000 in Haifa. (See also RELIGION: Jews.)

On the whole the year was rather uneventful. The attention of Palestine was concentrated on the events of the war which with the struggle in Libya, the German conquest of Crete, and the British occupation of Syria, came relatively near to the frontiers of Palestine. A War Supply Board was appointed on Feb. 26, to organize production in Palestine and to enable the country to make a maximum contribution to the general war-effort. The defense budget for Palestine for the current year was set at £3,654,015, covered by grants-in-aid in the Middle Eastern Services section of the estimates for the British colonial office. The war effort was helped by many of the newly-founded Jewish industries, though some of them were hampered by the lack of certain raw materials. A Transport and Trade Coordination Center, and a new Standing Committee for Commerce and Industry, appointed by the High Commissioner Sir Harold Alfred MacMichael, helped in facilitating the mobilization of the resources of the country for the war effort. For the first time, an income tax was introduced for the fiscal year 1941-2, after a careful study and a lengthy discussion extending for well over a decade. Exempting £250 for bachelors and £400 for married people, there will be a 5 per cent tax as a basic assessment, rising to 30 per cent on incomes over £3,500. According to a provisional estimate only 7,000 people will be liable to the payment of the income tax. Companies will be charged a flat rate of 10 per cent. As the government declared, it hoped by additional taxation to be able to finance the essential social services. It was anxious that in finding additional sources of taxation 'it should be insured that all classes of the people of Palestine shall make a maximum contribution to revenue according to their taxable capacity.... It is generally recognized that the incidence of indirect taxation falls heaviest on the income of the poor and middle class, and this in one of the principal reasons for the present consideration by the government for the imposition of an income tax in Palestine.'

Economic Situation.

The economic position, especially among the Jews, remained critical. Unemployment was widespread. The peace in Palestine made also some collaboration between Arabs and Jews in economic matters possible. This was seen in joint conferences of the citrus growers. The citrus industry, Palestine's most important, in which many Jews had invested large capital sums, was in a most dangerous position and almost threatened with collapse. While the exports for the first quarter of 1940 had amounted to £1,386,665, of which £1,161,545 were citrus fruit, they had fallen in the first quarter of 1941 to £250,625, of which only £7,379 for citrus fruit. The budget for 1940-41 foresaw an expenditure of £8,858,000 as against an income of £4,194,000. The deficit was partly covered by a grant-in-aid from the British Government. The expenditure for the fiscal year 1941-42 reached an all-time high, it was estimated at £10,500,000, of which nearly £2,000,000 was for public works.

At the beginning of the year the general officer in command of the British forces in Palestine and Transjordania was Lieut. Gen. Philip Neame, who was taken prisoner of war in Libya and was replaced by Gen. Sir Henry Maitland Wilson, who, in December 1941, was placed in supreme command of the newly formed British Ninth Army to which was entrusted the protection of the British positions in the Middle East. The commanding officer in Palestine became then Maj. Gen. Douglas Fitzgerald McConnel. At the same time, the British High Commissioner for Palestine was authorized to raise a war loan, locally or abroad, either through bonds or through war savings certificates. The Government also began in the late fall a campaign against the sharp rises in commodity prices which had resulted in large scale profiteering. On the whole, the food and supply situation in Palestine remained highly satisfactory, much superior to that existing in European countries, and there was no rationing. Industries founded by Jews in the last years, supplied goods for the amount of almost £3,000,000 to the army. The number of industrial workers employed amounted to 10,500 in July 1941.

Capt. Oliver Lyttleton who is the representative of the British Cabinet for the Near and Middle East and has the rank of Minister of State, visited Palestine in the middle of September, where he discussed the political situation. Before coming to Jerusalem he had gone to Amman, the capital of Transjordania, where he had conferred with the British resident, Alexander Kirkbride, Emir Abdallah, and the prime minister, Tewfik Pasha Abu el-Huda, on the questions of Arab policy and the solution of the Transjordanian and Arab problem within the framework of the declarations and promises made by leading British statesmen. An official statement issued by the Transjordanian administration revealed a unity of views and the expectation that nothing would disturb the implementing of promises and the fulfillment of Arab national aspirations. Britain would assist the Arabs with all her means, as the Anglo-Arab interests in this war were jointly opposed to forces of oppression and tyranny. While many Zionist leaders pressed for the establishment of a Jewish state in Palestine at the conclusion of this war, others favored the establishment of an autonomous Palestine in which Arab and Jew would live on the basis of equality within an Arab federation. See also IRAQ; SYRIA AND LEBANON.