From Voluntary Funds to National Loans: The Financing of Israel's 1948 War Effort

The funding of the 1948 Israeli War of Independence illustrated the importance attributed to the support of the Yishuv in the war effort. In addition to recruitment of man power and mobilization of the economy that support also included the public's participation in raising the means to fund the war. This article discusses the characteristics of this process, which began with the voluntary loan For the Security of the People in November 1947 and ended with the national loan in December 1948. The effects of the change and transition brought about by acceleration of the fighting and the establishment of the State of Israel, and at its core the increasing involvement of the State and its centralist power, are apparent in the public's participation in raising the funds. This paper focuses on the mobilizing role of the civil organizations and at their core the middle class economic organizations and the Histadrut. The paper delineates the manner in which the structure of the society, the effort to widen the scope of the mobilization, and the endeavor to obtain the public's support in the war effort required setting cooperative arrangements and economic and political coordination. Evasion of fund raising was revealed and the demand for increased involvement of the State as part of the realization of the "equality in sacrifice" principle during war was brought to the forefront of the public agenda.