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 unravelling 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 fulfil 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:
- protracted discussions that took place over a ten-year period regarding new designs;
- preparations for local emergency printing due to the cutting-off of supply lines from Britain during WWII;
- declaration of the notes as legal tender in Cyprus, an emergency measure during WWII;
- counterfeiting by underground organizations.
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.