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"Do Not Touch the Currency!" was the unequivocal ruling of one of the senior officials in the Mandatory government of 1921 when the plan for the introduction of a new currency to Palestine was presented to him (Hoofien, S. Currency Reform, Palestine Economic Society, 1923).
This statement well reflected the reluctance, particularly of the British Colonial Office, to deal with the topic of reform, at the centre of which was the issuing of currency notes for Palestine. Indeed, it took ten years following the original proposal to issue a local currency on November 1, 1927. The original suggestion had been put forward by the Anglo-Palestine Company in October 1917 but was rejected by the British government on political grounds for fear that it might appear one-sided vis-a-vis the Arab population.
What is fascinating is not only the details of the discussions regarding the reform and the unraveling of events, but the fact that the currency notes of Palestine, ostensibly merely a form of payment, have always played a central role in extraordinary events.
The first of these was in May 1917 when Ahmed Jamal Pasha, commander of the Fourth Army and governor of Syria and Palestine, declared the penalty of deportation as a means of punishing those found guilty of refusing to accept Turkish government treasury notes as a means of payment, or for redeeming them at less than their face value.
The Egyptian pound became legal tender in Palestine beginning January 1918, and won the complete confidence of the public, which raises the following, key question. Why, after almost ten years of monetary stability, did the British government decide to create a new currency for Palestine?
In fact, the answer, as presented by the Colonial Office, was purely economic. At the time, the profits resulting from trading in the Egyptian pound were benefitting the Egyptian government and the National Bank of Egypt. The introduction of a currency unique to Palestine would lead to a situation in which the resulting profits would benefit the Government of Palestine.
Interestingly, this argument was first raised in 1927 around the time of the currency’s introduction into circulation, prior to which there had been no interest in this essential issue, not even on the part of the various currency committees that had convened between 1919 - 1925.
In November 1927, the first notes ever to be issued specifically for Palestine entered into circulation, but despite their historical significance, their appearance immediately caused an uproar among all sectors of the public. The Jewish population expressed its disappointment that the notes did not fulfill their symbolic and historic purpose; the Christians complained that they were not represented in the illustrations on the notes; the Arab press, across-the-board, complained that the notes, as they were issued, were an insult to the Arab population. Arab dignitaries in Jaffa called on the population to boycott them and leave their funds in Egyptian currency.
Even after the storm abated and the new notes were already in circulation, they led to other extraordinary events, including:
Ultimately, in 1948, history would have it that the notes of the Currency Board entered circulation in three politically-divided areas, Israel, Trans-Jordan, and the Gaza Strip, which in a short time found themselves at war.
Although within less than fifty years of their original issue the Palestine currency notes dropped out of use, they remain fascinating in their uniqueness and in the historical monetary role that they played.
Today, there are dozens of collectors of these notes, and collection specialties vary. Some collect by denomination, some by date, some by the prefixes on all the series of all the denominations and all the dates.
The numismatic history of Palestine dates back to the fourth century B.C.E., with the minting of the first coins, issued in Persian-dominated Judea, known as the province of Yahad.
The history of paper money in Palestine began some 2300 years after the minting of these first coins, during the WWI, with the local and unofficial issue of paper tokens and cheques. Although these notes were not actual banknotes, they are a cornerstone in the numismatic history of Palestine.
The idea of issuing a unique currency for Palestine, and particularly paper money, was proposed as early as 1917 by the Anglo-Palestine Company (APC), and between 1917-1923, the topic was discussed no less than five times. Most of the proposals and discussions pertained to the issue of banknotes, which related to the problem of currency as a whole.
The first suggestion was proposed at the end of WWI, while the others came under discussion by virtue of necessity created by the post-war state of affairs.
The second, third and fourth proposals were initiated by officials in the British administration. The fifth proposal was initiated by the APC.
Between 1924 -1925, the Currency Committees convened. Their work laid the foundations for the Palestine Currency Board, the body that ultimately issued currency notes for Palestine.
The preparations for the introduction of the new currency began in 1926, and were carried out in two stages:
The official stamp of the Palestine Currency Board was actually a drawing of the royal arms with an inscription of the Board’s title.
It was usual for a body of this nature to use the royal arms in conjunction with its own title; it can also be found in other currency boards.
The official stamp was printed or embossed as headed notepaper and probably also produced as a rubber stamp, to give its correspondence and documents a distinctive and official appearance.
Between 13-15 October, the government published announcements in the post offices around the country depicting for the first time the currency notes and the coins, with a notice specifying the values, sizes and
(Size 498x549 mm).
The currency notes of the Palestine Currency Board were introduced on Monday, 1 November 1927, and included the denominations of 500 mils (£P½), and £P1, £P5, £P10, £P50 and £P100. These were the first currency notes issued for Palestine.
This series of currency notes ended up being the only series, and throughout all the years of the Mandate and the activity of the Currency Board, notes were issued with no changes in design, only the dates and the signatures of Board members.
Specimen notes, as their name implies, were intended to serve as samples of the actual notes, and were generally distributed to banking and judiciary institutions, etc., close to the time of first issue, so that they would be known and identified within these contexts.
The notes of the Palestine Currency Board were not ignored by the counterfeiters, and at the end of November 1927, only three weeks after their introduction into circulation, counterfeit notes were discovered.
The counterfeits fell into two main categories:
The topic of new designs and color trials is a complex matter involving the following categories.
In 1941, Europe was in the throes of the Second World War; Germany and its allies on the continent were in almost complete control of Europe; the submarines of the German and Italian fleets were in almost exclusive control of the Mediterranean basin. This reality seriously impeded the supply lines from Britain to Palestine (as it did with the supply lines to Cyprus), giving rise to a fear that the reserves of local notes and coins would be exhausted, making it impossible to respond to public demand.
Given the above, two simultaneous initiatives were taken regarding the matter:
The study of thousands of archival documents, perusal of newspapers from the period in question and interviews with people connected with the topic, have uncovered not only much information regarding banknotes of the Palestine Currency Committee, but have also turned up some interesting stories, curiosities, and entertaining tidbits.
On 29 November 1947 On 29 November 1947 the United Nations voted to partition Palestine and establish two states, a Jewish state and an Arab state, one alongside the other.
At the end of that same year and during the first half of 1948 the Currency Board moved the currency reserves from Palestine to Britain and closed the currency centers across the country.
In the second half of 1948, the currency notes became “Notes without a Country”, and in effect served as legal tender in three separate areas: the State of Israel, Trans-Jordan, and the Gaza Strip, until they were eventually demonetized in 1951.
In 1952 the Palestine Currency Board was dissolved.