Government Finances: Loans, Grants-in-Aid, Colonial Development Fund in Palestine. British Mandate: A Survey of Palestine: Volume I - Page 126. Chapter IV: The Central Government and Its Finances

CHAPTER IV.

Loans.

57. In 1927, the Palestine Government raised a 5% loan of £P.4,475,000, issued at 100!!, and guaranteed by His Majesty's Government._ This was converted on the 1st November, 1942, to a 3% Guaranteed Loan , 1962/67 of £P.3,600,000, the accumulated sinking fund being utilized to repay stockholders who did not desire to continue as holders of the stock under conversion terms. The principal and interest are guaranteed by His Majesty's Treasury under the Finance Act, 1934. Except for the expenditure of £P.188,l26 on telegraphs and telephones and £P.60,642 on Government buildings and sites, the proceeds of the loan were devoted to rail ways and harbours.

58. In 1944 and 19'J.5,a total of £P.5,000,000 has been borrowed in Palestine by three issues of bearer bonds, bearing interest at 1 % and redeemable at par in twenty years unless earlier redeemed at quarterly drawings. Prescribed premia are payable on redemption by draw. The primary purpose of these loans is to enable the Palestine Government to meet budgetary deficits and, as has been mentioned above, it was necessary to draw on the proceeds of the first issue for this purpose in respect of 1944-45.

Grants-in-Aid.

59. From 1924-25 to 1944-45 a total of £P.13,748,248 has been granted to this Government by His Majesty's Government. In the first two years the grant-in-aid was in respect of the cost of the Gendarruerie (which was then disbanded) and thence until 1938-39 it represented His Majesty's Government's share in the cost of the Trans-Jordan Frontier Force for services performed outside Palestine. This contribution continued until 1040-41 but from 1938-39 His Majesty's Government also made a substantial grant-in-aid in respect of additional expenditure incurred on special measures for internal security purposes. A proportion of the latter grants-in-aid represents the reimbursement of expenditure incurred by this Government on behalf of His Majesty's Government.

Colonial Development Funds,

60. Palestine is eligible for assistance under the Colonial Development and Welfare Act. Between 1933-34 (when the first grant was made) and 191-l-45, a total of £P.133,094 has been made available for specific schemes in Palestine. Only a provisional assessment as to the amount to be allocated for the forthcoming period has been made.

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