“Zionism will fail, the experiment to which the noble Earl referred will fail, the harm done by dumping down an alien population upon an Arab country – Arab all around in the hinterland – may never be remedied … what we have done is, by concessions, not to the Jewish people but to a Zionist extreme section, to start a running sore in the East, and no one can tell how far that sore will extend.” – British Government, Hansard, House of Lords, 21 June 1922.
Although Palestine fell under the sway of the British Empire more than twenty years after what became the Uganda Protectorate (1894) and Kenya Protectorate (1895), the rationale and methods of effecting the conquest were the same. Southern Rhodesia, now Zimbabwe (1923) became a British colony in the same month and year the British Mandate over Palestine came into force. Like Palestine, Tanganyika (1919) was put under British Protection by the League of Nations, having been confiscated from Germany, a previous imperial power that had lost its colonial territories to reparations in the Versailles Treaty.
To understand how Palestine became a British Mandated Territory it is necessary to return to the 19th century when, together with what became Iran, Iraq (Mesopotamia), Syria, Jordan, Lebanon and Palestine were part of the Ottoman Empire. Angelos Chotzidis’s paper indicates that in 1917 the Ottoman Empire was heavily in debt on the international money market as well as to domestic banks. Much of the debt arose from persistent budget deficits consequent on the extravagance of the Sultan (who had no difficulty borrowing on the international market despite his known poor governance). The Ottoman Empire’s participation in the Crimean War (1854-56) added to the unsustainable debt burden.
Interest payable on the debt reached 56 per cent of revenue in 1874 causing the Sultan to default in 1876. He decreed (without consultation with his creditors) that interest payments were to be halved. His domestic creditors pushed for an agreement under which the Ottoman Empire ceded six sources of revenue to the bankers: tobacco and salt monopolies in the empire (for a decade), stamp duty, and some commodities’ taxes. Using these revenues, the banks were able to bring the interest payments up to date. European creditors then exerted pressure for the creation of the Ottoman Public Debt Administration (OPDA) to manage the OE’s revenue collection and debt payments on behalf of the European bondholders and other creditors, a sort of precursor to the International Monetary Fund (IMF). The Ottoman Empire fell after its defeat in the First World War, after which the League of Nations made its constituent parts, including Palestine, mandated territory.
THE OPDA board members were so enterprising that they hired contractors to invest in sectors from which the OPDA collected revenues. Many of the contractors who were awarded concessions had members on the OPDA board of directors. The firms were paid to run these enterprises as well as share in the profits. The terms were more than favourable: guarantees of minimum weights of cargo to run on the railways they built, failure to meet which resulted in the balance having to be paid to them in cash. Railway companies were given ownership of oil and other minerals found twenty kilometres on either side of the tracks; sheep tax and commodity tithes (taxes) collected along the tracks were to be paid directly to the OPDA and the amounts were also guaranteed.
Once the Palestine Mandate took over, the Ottoman Empire contractors demanded compensation from the British government – i.e. oligarchs profited during boom time, while the taxpayer bore the losses once the businesses failed.
Palestine as a Mandate Territory: 1918–1948
Britain applied this business model in Palestine, now a territory independent of the Ottoman Empire. Palestine’s status as a colony is clear. In the debates in the British Parliament, Palestine is referred to throughout as a conquered territory, a colony, and a possession. When demanding that British firms be allowed some concessions for development projects in Palestine, J. Butcher MP stated: “We are in Palestine as a conquering nation,” and demanded that British workers and manufacturers have a share in the spoils. In defending the award of two major concessions to one Pinhas Rutenberg, Winston Churchill, Colonial Secretary said, “This concession follows in every respect the regular lines of Colonial Office procedure. It has been framed in the Colonial Office in exactly the same manner and spirit as if it related to East Africa, Nigeria, Ceylon or any other of the Crown Colonies.”
What are the regular lines of Colonial Office procedure? Beginning with the rationale for a colonial presence in a region, colonial subjects needed protection and their assets needed to be held in trust for them. The East Africa Report of 1925 by the Colonial Office put it this way: “During our tour of East Africa we were frequently told by Europeans, officials and unofficials alike, that the African native is a ‘child’. Without questioning the truth of such a generalisation, it at any rate suggests that the position of the European race ruling in Africa is that of a guardian to a ward, and that our duty is to protect the interests of someone less capable of safeguarding his or her own interests.”
As with other colonies, Palestine had to be made to prosper economically and where possible to cover its own costs. Colonies were required to maintain a reserve fund at the Exchequer, something that the Uganda Protectorate had no trouble doing. Uganda and most of the other colonies balanced her own budget through revenues from Native Poll Tax, an array of commodity taxes and monopolies of the export of those commodities (colonists were exempt from income tax). Ancillary industries such as cotton ginning were prohibited for Africans in Uganda (which later caused political unrest). Indigenous Kenyans were not allowed to grow coffee and other crops considered profitable.
For example, total revenues for Uganda in 1939 and 1940 were from local sources:
The Imperial strategy was well practised by the time Palestine moved to the top of the Imperial agenda: acquire a territory by buying out a royal chartered company like the Imperial British East Africa Company (Kenya and Uganda) or the British South Africa Company financed by Nathan Rothschild (Rhodesia). In West Africa there was the Royal Niger Company. Colonies were acquired by treaty with conquered nations, e.g. the Ottoman Empire, or by treaty later subdivided by the League of Nations Mandate – the means are of no importance. Then followed the assessment of the viability of developing infrastructure for the provision of services, extraction of minerals, agricultural and other opportunities, sale of concessions for those developments, and where possible, putting in motion an immigration programme for a ‘superior race’ or races to manage the territory (displacing the indigenous population). Finally, every means at their disposal were put in the service of the settler community until that community acquired a momentum of its own, growing in size and dominance until it became a forever grateful ally. Zionists suggested they could provide protection for the Suez Canal and provide a ‘bridge’ between Western and Eastern civilisations.
In the case of Kenya and Rhodesia the “superior races” were sourced from Britain, her Western wartime allies, and India. European veterans were offered package deals involving selling their assets in the UK and relocating to Kenya to govern and farm. Indians traded and manned the mid-level civil service. Once there they were allocated farms at almost zero cost.
In all these territories there were varying degrees of apartheid: segregated schools and medical facilities, residential zones and licenses to carry out different categories of business. The natives in settler states were herded into Native Reserves which were more or less open-air prisons; exit passes were required. By 1920 Rhodesia’s 48,000 white settlers had been allocated 48 million acres while the 800,000 Africans had the ‘right’ to reside in (but not own any part of) reserves totalling 8 million acres – in the beginning. Later, whenever a project such as the Uganda Railway in Kenya was required, the colonial government had no qualms carving further tracts out of the Native Reserves. The allocation of gold concessions in Kakamega in western Kenya to Australian, American and other migrants led to overpopulation in the shrinking Native Reserves. Kenyans were not allowed to prospect for gold.
Palestine was unique among Britain’s colonies in that it had a source of immigrants who did not need to be incentivized financially or otherwise to resettle in the territory (Kenya’s settlers struggled to gain critical mass, and in the end, many who had failed to prosper petitioned the Governor for compensation and passage back to the United Kingdom).
The Palestinian concessions
During the House of Commons Egypt Debate of 14 March 1922, two issues were extensively debated, the selection of concessionaires and the creation of a Jewish Homeland. The concessions matter was dealt with first, the charge being led by the Secretary for Overseas Trade. On the table was the question of the manner in which concessions had been granted to one Pinhas Rutenberg, a prominent Zionist. Members of Parliament alleged that concessions were being granted only to this applicant. The Trade Secretary wanted a Select Committee to examine the Rutenberg concessions. He argued that to grant a concession for seventy years after which it would be renewable for another seventy by the stroke of a public servant’s pen, was irregular. He also noted that no British firms were granted concessions and would not benefit from the development of Palestine despite the expenses Britain had incurred as administrators of the territory.
Applications had begun to trickle in before Britain’s mandate went into force in September 1922. Applicants were informed that no concessions could be granted until the mandate became operational, which it did in 1923. There were expressions of interest from the Jaffa municipality asking for the use of the Auja River to generate hydroelectricity to light their town and district, and that was turned down. Messrs Hanna Dabdoud and Handel, wealthy Arabs vouched for by the Deputy Governor of Palestine, were interested in providing electric lighting and electricity in Jerusalem and the surrounding district, the agricultural development of the Jordan Valley, and a motor transport service. They had £500,000 of their own capital and access to a further £2,000,000. The reply was that no concessions could be given pending the granting of a mandate. One Arif Beyel Namani applied for a concession to clear certain swamps in Palestine and received the same response. Several Australian war veterans who had ‘helped conquer Palestine’ wanted free land as in Northern and Southern Rhodesia (today’s Zambia and Zimbabwe, respectively) but were rejected with the standard response.
In 1918, an English engineer, Mr Bicknall, put forward a proposal to the British Overseas Trade Department (BOTD) for sole rights to develop certain minerals and electric schemes. The BOTD promised to back him once the proposal had been refined by government-nominated professors. It was ignored. He made a second application in 1920. Finally, he travelled to Palestine, where Bicknall found that the eventual awardee of the concession, Rutenberg, was in possession of all his proposals and other plans. In fact, Rutenberg was eventually awarded all of the above in addition to his own applications.
A major irrigation scheme not proposed by Rutenberg came from a pair of British engineers. It was to serve a catchment area of 1,200,000 people but was rejected. Numerous applications for banking facilities in Palestine were made, but only one was granted in addition to the Bank of Egypt (at the time British-controlled), and that was to the Anglo-Palestine Bank, in which all the directors were non-residents of Palestine and Zionists.
Rutenberg had letters of introduction from Mr Edmond Rothschild, a philanthropist and financier. Rothschild undertook to advance him £100,000 to £200,000 indefinitely on non-commercial terms. His concessions were granted in 1921, incorporating as we have seen, some of the proposals of other applicants. The projects included building harbours at Haifa and Jaffa, building a number of railway lines, and the exclusive supply of electricity throughout Palestine and Jordan.
The Colonial Secretary explained this by saying Rutenberg’s proposals were very thorough, and that after an announcement by the High Commissioner, they had received no competing bids – despite Bicknall’s experience. Whether there had been a formal tendering process or not was never satisfactorily answered by the Colonial Secretary. The House was simply assured that anyone in Palestine, without discrimination, could invest in the Rutenberg companies if they so wished.
The generous terms given to Rutenberg further surprised members. He was given two years in which to form a company with capital of £1 million, with £200,000 paid up. During that time no concessions would be granted to any other contractor (perhaps explaining why no other concessions were granted), and existing concessions belonging to other people could be cancelled on the request of the Rutenberg company.
Similarly, land and buildings could be expropriated, albeit with compensation. A tax holiday was included if revenue fell below a certain level, but above that level, the company would share in the profits (Colonial Office, HC Deb 04 July 1922).
In fact, an existing concession to electrify Jerusalem within a twenty-mile radius, and to supply water and tramway services, had been granted in 1914 to a Greek citizen and was owned by one Euripides Mavromatis by the time the Ottoman Empire was deposed (Rachel Neiman November 4, 2019, Israel21c). Mavromatis opposed Rutenberg’s electricity concession and was successful in his suit at the International Court of Justice in 1926 after which the Mandate granted him the electrification concession, which he sold.
Churchill disposed of all these objections by pointing out to each objecting member that they had all supported the Jewish Homeland in Palestine scheme three years earlier. He brushed aside efforts to separate the Homeland question from the concessions and handing the control of the economy to immigrants without so much as consulting the Palestinians. First, he responded, Britain did not have the money to develop Palestine and needed the foreign direct investment. (It is a fact that the Colonial Office had a budget of between £80,000 and £100,000 per year to run between forty and nearly sixty colonies. Britain herself had to resort to borrowing from the IMF in 1959. Like the Ottoman Empire, she had to privatise some assets, e.g. sugar plantations in the West Indies.) But Rutenberg had access to capital, on non-commercial terms, from a global movement.
Then Churchill fell back on the superior race theory:
“I am told that the Arabs would have done it themselves. Who is going to believe that? Left to themselves, the Arabs of Palestine would not in a thousand years have taken effective steps towards the irrigation and electrification of Palestine. They would have been quite content to dwell – a handful of philosophic people – in the wasted sun-scorched plains, letting the waters of the Jordan continue to flow unbridled and unharnessed into the Dead Sea.”
It is worth noting that although Jaffa Municipality’s application for a concession to light their town was given to Rutenberg, Rutenberg instead supplied generators there. Ugandans and others familiar with Bujagali Dam and Lubowa Hospital will recognise the phenomenon.
Churchill was disingenuous even in his assessment of Palestinian agricultural capabilities. He claimed that since 1917 Zionist immigrants had buoyed the economy with, among other things, Jaffa oranges. It is a documented fact that the cultivar was developed by native Palestinians who were exporting them as far back as 1881, and from which they earned more than from cotton. By 1939, thirty thousand hectares was under orange groves and fifteen million crates exported. After the Nakba, Palestinian orange groves were appropriated by Israel as ‘abandoned property’.
The Homeland Project
It was agreed at the Paris Peace Conference at Versailles (1919) that the area previously a colony of the Ottoman Empire should be overseen as League of Nations mandated territory. The question arose: Who should be the mandated administrator/s? By that time Britain had already made an agreement with the Zionist Organisation to help their members establish a Jewish Homeland in Palestine – the Balfour Declaration of 1917. Balfour had representation in Parliament through a member, H. Samuel. Samuel was an associate of Chaim Weizmann and had published The Future of Palestine in 1915 after his first meeting with Weizmann during which they discussed building schools and other services. In the first draft, Samuel outlined his vision for a Jewish commonwealth/homeland in Palestine. The paper, also known as the Samuel Memorandum, called for Britain’s annexation of Palestine and was circulated to the British cabinet a day after Britain declared war on the Ottoman Empire.
The Zionist Commission was formed to make presentations to the League of Nations and had the opportunity to present its arguments for a homeland based on historical claims. The General Syrian Congress representing Lebanon and Palestine was formed in 1919 and made its opposition to the Zionist project well known. Palestinians found an ally in the United States-convened King-Crane Commission (1919–1920), to which both they and the Zionist Commission made representations.
Regarding the nature of a Mandate, the commission recommended that it be distinct from that of a colony. Its duty would be to advise the mandated territory, ensure the population is prepared for self-rule by building administrative and educational institutions and handing them over to the indigenous population. This was to be done for a limited time. What Mandatory powers were not to do was to treat the territory as an old-fashioned colony. Furthermore, the Mandatory was to avoid incurring dangerous levels of debt, or entangling the mandatory territory in financial arrangements. Finally, the Mandatory was cautioned against “forc[ing] a monopolistic control at any point to the detriment either of Syria or of other nations; but it should seek to bring the new State as rapidly as possible to economic independence as well as to political independence.” (King-Crane Commission). As we have seen, Palestine had already been financially entangled with the Zionist Organisation by the time King-Crane reported in 1919.
The “Syrian General Congress” representing Lebanon and Palestine submitted this view:
“We oppose the pretensions of the Zionists to create a Jewish Commonwealth in the southern part of Syria, known as Palestine, and oppose Zionist migration to any part of our country, for we do not acknowledge their title but consider them a grave peril to our people from the national, economical, and political points of view. Our [indigenous] Jewish compatriots shall enjoy our common rights and assume the common responsibilities.”
They wanted Greater Syria to remain one decentralised political entity with Amir Faisal – a hero in the 1916 Arab Revolt – as their king. The King-Crane Commission supported them in this based on the cohesion among the peoples and existing administrative structures present.
Regarding the selection of the Mandatory, the King-Crane Commission based its recommendations on the results of a survey it carried out showing that a vast majority preferred the United States to be administrator of Palestine, Syria and Lebanon, and on the submissions of the General Syrian Congress; the King-Crane Commission was not in favour of Britain and recommended the United States. The Syrian Congress feared being ruled as an old-school colony and as an inferior race. It was also concerned that the British would favour an expensive expatriate civil service (as in Kenya) that Greater Syria would find burdensome.
America’s taking the job was not without its obstacles, chiefly the potential embarrassment caused by the “vague but large encouragement given to the Zionist goals” by American citizens. Failing the appointment of the USA, Britain, the runner-up, should become the Mandatory because she was already on the ground and “because of her trained administrators” and “long and generally successful experience in dealing with less developed peoples”.
On Zionism, the King-Crane Commission stated that it began its study in favour of Zionism as an option and that it had interacted extensively with the Zionist Commission and seen the achievements of Zionist colonies in Palestine. However, it continued, the “extreme” Zionist policy of unlimited immigration which would lead to establishing a Jewish State needed “serious modification”. It was clear to the Commission that Zionists were preparing to expropriate the non-Jewish people by ‘forms of purchase’.
The King-Crane Commission recommended that, in principle, Palestine should have the decisive voice in shaping the future of the country. The survey showed that ninety per cent of Palestinians were emphatically against the entire Zionist programme. That the Commission concluded that “unlimited Jewish immigration” to Palestine and “financial and social pressure to surrender the land, would be a gross violation of the people’s rights, though it kept within the forms of law”. It noted that even British army officers thought it could only be accomplished by force of arms.
Britain went on to become the mandatory power over the objections and warnings of likely violence from Palestine and her allies like the Muslim-Christian Association. H. Samuel, a British cabinet member, went on to become British High Commissioner to Mandatory Palestine and his son, an assistant governor of Jerusalem. He arrived in 1920, three years before the Mandate became legally effective, and before the contents of the Balfour Declaration became officially public. Zionists were appointed to key government positions in Palestine: the Legal Secretary, the Director of Commerce and Industry, the Director of Central Stores, the Director of Labour, the Assistant Director of Public Security, the Assistant Director of Railways and Traffic Manager, the Assistant Director of Emigration at Jaffa, the Director of Emigration at Haifa, the District Engineer at Haifa, the District Engineer at Jaffa, the Director of Companies Registration, the Senior Quarantine Officer at Jaffa, the Assistant Public Custodian at Haifa. Weizmann, who became head of the World Zion Organisation the following year, and first president of Israel, claimed that it was he that had secured Samuel’s appointment. Another member of parliament and of the Mandate Commission, Ormsby-Gore, who contributed to drafting the Balfour Declaration, later became Colonial Under Secretary, enabling him to defend the inclusion of the Balfour Declaration in the Mandate in parliament.
In the House of Commons, W. Churchill, the Colonial Secretary, argued, as did his Under Secretary and others, that Britain could not go back on assurances for the new Homeland that Balfour had given the Zionist Organisation. That undertaking, he went on, could only be fulfilled by granting the concessions they did in the way they did. To succeed, professionals and labourers would be needed and so increased immigration was being encouraged. At this point all three issues were merged; the Jewish Homeland, the economic development of Palestine and the granting of concessions for the same. (Note that there were arguments against mass Zionist immigration at the League of Nations too, but it was included as a right under the Mandate.)
Numerous assurances were made to the Palestinians – who Churchill, Colonial Secretary, refers to as “the Arab inhabitants of Palestine” or “the Arabs of Palestine” – that “their civil and religious rights would be effectively safeguarded, and that they should not be turned out to make room for new comers”. He did not mention Palestinian sovereignty. An Arab delegation had visited the UK in 1921 and voiced its anxieties about the impact the Mandate’s openly Zionist policy would have on them. A member accused anti-Zionist MPs of planting the seeds of division in the delegation’s mind.
When it was pointed out that parliament had not had the chance to debate either the Balfour Declaration or the Mandate, which the Trade Secretary likened to a ‘title deed and a Constitution combined’, Churchill breezily responded that members had approved the principles when they approved the terms of the Treaty of Versailles and related matters. His Under Secretary, Ormsby-Gore, said, “I believe that that definition of policy, and the correspondence which has passed between the Zionist organisation and the Government, will be ample to ensure the rights – privileges, even – of the non-Jewish people in Palestine, and I am certain that they have absolutely nothing to fear from such a policy.” He opined that under Ottoman rule, Jewish people were prohibited from owning land and holding public office, and were allowed no political rights but that the Balfour Declaration (which Ormsby-Gore and associates had inserted in the Palestine Mandate) would change that. He went on to say that all Jews everywhere should be permitted to return to Palestine, “I am confident that the Arab has absolutely nothing to fear from it in Palestine, and that the Arab and Jew can and will get on well together.”
Immigration to Palestine nearly doubled between 1923 and 1924. It nearly doubled again the following year. Palestine’s population in 1922 was 757,182 (590,390 Muslims, 83,694 Jews, and 73,024 Christians).
Others saw the Balfour Declaration for what it was. Lord Curzon had said to Balfour, “… while Weizmann [SIC] may say one thing to you, or while you may mean one thing by a national home, he is out for something quite different. He contemplates a Jewish State, a Jewish nation, a subordinate population of Arabs, etc. ruled by Jews.” Elsewhere Curzon said, “The Zionists are after a Jewish State with the Arabs as hewers of wood and drawers of water [….] So are many British sympathisers with the Zionists.”
It is no wonder that discontent began to grow among indigenous Palestinians and Jews. As in other British colonies, the British police became increasingly heavy-handed. Weizmann himself lamented that even indigenous Jews were against Jews with a “foreign past”. When a workers’ strike could not be broken up by turning Palestinian and Jewish workers against one another, they were all sacked and the ensuing riots left over three hundred dead.
The Palestine Royal Commission concluded in 1937, as many have today except the British, American and most European governments, that the Zionist experiment could only be sustained by violence: “The moral objections to maintaining a system of government by constant repression are self-evident. Nor is there any need to emphasise the undesirable reactions of such a course of policy on opinion outside Palestine … However vigorously and consistently maintained, it will not solve the problem.”
An immigrant militia called Irgun was formed by Ze’ev Jabotinsky, a close associate of Rutenberg (the two were also co-founders of the Jewish Legion to fight alongside the Western and Arab Allies in WWI, and Haganah, another militia that massacred Palestinians in 1947 and 1948). Irgun attacked Palestinians and British targets over thirty-five times arguing that the territory could only be taken from them by force and that even terrorism was justified.
Palestine’s total descent into a cycle of violence led Britain to apply to the United Nations to surrender its Mandate. While the UN was considering a plan to partition Palestine, Israel’s subsequent unilateral declaration of independence in 1948 led to its invasion by the Arab allies who had been promised self-determination for all Arabs including Palestinians, in return for support in World War I. The subsequent violent expulsion of Palestinians from Palestine in 1948, the Nakba, saw over 700,000 Palestinians expelled from their homes. It is these that reside in Gaza, Jenin, and other refugee camps in and around Palestine and Israel.
What did Britain get out of the Palestine Mandate? Influence on the world stage – always a useful thing. British influence was such that Ormsby-Gore, member of the Permanent Mandate’s Commission, in his correspondence boasts, “The whole Commission took anything from the British member largely because he was the British member.”
Under the mandate Britain was able to recoup some WWI costs: a railway line built to move troops and ordnance; the maintenance of a squadron even after the war; and the compensation of the Ottoman Empire contractor. To meet the costs, a loan was needed. The terms were that Britain would guarantee a loan of £4,500,000 (£315,333,533.08 in 2023) taken out and repayable by the Mandate administration. To cover expenses, £3,500,000 of the funds were paid immediately to the UK while the remaining million was for use by Palestine.
The only objection to this sleight of hand came from two sources. Mr Shapurji Saklatvala, MP was scathing in his denunciation of corruption. He argued that the fake development loan was worded to create the impression that a new railway was planned. He further alleged that the arrangement was a bribe in return for allowing the Zionists to have a second legislative chamber in which Palestinians were not to be represented: “Under the term ‘mandated territory’, you find a new means for enslaving other people and interfering in other people’s countries and dominions.” And Captain Foxcroft, MP: “I believe that the Zionist Jews of Palestine should receive financial support as much as they need, but I feel also that the native Jews and Arabs of Palestine should likewise receive such financial support as they need. From personal experience I cannot say that British Governments think quite as much of the native Palestine Jew or the native Palestine Arab as they do of the imported Zionist Jew.”
It is fair to say that like other British colonies, the colonisation of Palestine was achieved through corrupt financial dealings, influence peddling, and violence, justified by notions of racial supremacy. Like Kenya, Zimbabwe, South Africa it is proving people never give up the fight for self-determination in their homeland.
At the time of writing in November 2023, Palestinians are being driven out of Gaza by Israeli bombardment. Egypt reportedly has an offer from the United States to accept the relocation of the Palestinian population to the Sinai in return for debt cancellation.
