February 5, 1930

Source: Heinrich Margalith to Felix Rosenbluth. February 5, 1930. Record group S25/file 7619,

Central Zionist Archives, Jerusalem

Central to linking Jewish immigrants to the establishment of a Jewish state was essential ability for Jewish arrivals and Zionist organizations to acquire land to build villages, settlements, small industries and urban suburbs. Critical to the process of obtaining lands for a Jewish national home was its purchase from Arab owners, be they small peasant farmers or large owners; demand for land provided Arab owners and land brokers every incentive to find available land, sell directly to Jewish buyers, or accumulate smaller parcels and aggregate them into larger real estate blocks for sale offerings. We learn from these two letters by a Jewish Agency official that the competition could become keen between potential Arab sellers and Jewish buyers, sometimes tenant and small peasant owners found themselves having been maneuvered by Arab ‘bundlers’ to sell at prices far below market prices, sometime motivated to do so because of growing indebtedness to Arab grain merchants or money lenders. This particular Jewish Agency official shows empathy for the individual peasant, even claiming that directly or indirectly Jewish land purchase is causing some peasants to get deeper in debt. The land sale process quickened as the 1930s moved forward, with Arab newspapers in Palestine full of ridicule for those Arabs willingly selling what some termed as their ‘patrimony’ to Jewish buyers.  

Mr. Rosenbluth:

This summary provides a general overview. Within this framework follows observation of the private economy in general, and that of the Arabs in particular. That is to say, the question concerns which parts of the Arab population have profited, in what form, and what special causes have brought about the profit.

This leads then to the most difficult point: as a result of the (1929 Shaw Report) various political hindrances are contained in the Inquiry Commission, presented in an inadequate and alarming fashion. This points to the question, which Arabs have suffered economic disadvantages from (Zionist) colonization. I shall leave this point out entirely in the provisional wording of the manuscript, as I assume that the doubts which have prevailed against its discussion here are also prevalent there.  Just in case, however, I am adding my observations concerning the matter in this letter, so that you and your colleagues may form an idea of its importance. Should you find it opportune, you may transmit instructions to me by telegraph.

The nature of the distribution of Arab interests concerning land purchases has only recently become clear in connection with the negotiations by the (Shaw) commission. Those effendis (landlords) who sold their own land to the Jews have profited. However, since the cessation in sales of large effendi landholdings by the owners themselves, the effendi have concentrated increasingly on intermediary dealings, which means, quite bluntly, nothing less than a base robbery of the fellaheen. The fellaheen have musha kushans which, as pertains to the numbers used, are written in such hieroglyphics that no one knows how many dunams (one dunam equals ¼ acre) he actually owns or where the exact borders lie. The effendis redeem such musha claims, naturally with the application of corresponding pressure, and offer the Fellah a lump sum. The Fellah cannot judge the relationship between the price and the number of dunam. The fellah is attracted by the price, which at least has a clearly numbered and convertible value. For this he exchanges a possession of a worth unknown to him, and which is additionally difficult to liquidate. According to notorious cases, such effendis have recently bought land areas in this manner. Later measurement revealed that the dunam has been bought with 20 Pt. The effendis needed the land in order to form larger complexes which they had sold earlier to the Jews for approximately £6 – P.D. This method of selling is evidently widespread. These sales take place on the basis of a set dunam price, while the effendis, on the contrary, subsequently supply themselves with musha kushan. Having parted with their land ownings in such a manner, the fellaheen may very easily fall into poverty.  Even more so as the effendis drive them off the land in a more disproportionately inconsiderate and brutal manner than the Jewish purchasers would ever dare.

The fellaheen, who learn amazingly quickly through the propagation of the educational system, etc., have recently grasped these connections and begun to sell directly to the Jews, thus eliminating the effendis. In this way they have obtained the high prices which the Jews are accustomed to paying and become rich as a result. Hence, an extraordinary disturbance of the lucrative intermediary dealings threatened the effendis, and there are people — I almost number myself among them — who are of the opinion that the entire unrest has been contrived by the effendis as a large-scale land speculation maneuver. Since they know perfectly well that the Jews will always buy land in the long run, they have no fears for their business, but they must force the fellaheen to sell only to effendis and not to Jews. If they succeed in this, they will have attained two things: they may purchase even more cheaply from the fellaheen and sell even more expensively to the Jews. That this argument is not totally unfounded may be seen in the fact that all the effendis currently at the head of the inflammatory movement have been concurrently pursuing selling negotiations with the Jews. In any notable family, there is usually one who agitates and one who sells, obviously by agreement. The PLDC (Palestine Land Development Company) and the KKL (Keren Keyemeth LiYisrael, or JNF) have, for fear of disturbing these purchase negotiations, hindered exposing these connections during discussions with the (Shaw) commission. We had prepared an entire blacklist of “Arab leaders” who were incriminated in this manner and guilty of indescribable corruption; however, upon intervention (by the Zionist leadership), presentation or use of this list was not made. 

I myself view this development with great apprehension, as it makes us abettors, instigators, or accomplices to this corruption of the effendis, and can only endanger our position with the fellaheen, who are becoming increasingly alert of the situation.

Palestinian Arab Peasant Indebtedness and Arab Land Sales 

as seen by a Jewish Agency officials

March 12,1930

Source: Heinrich Margalith to Abraham Granovsky,  February 5,  1930. Record group S25/7619,  CentralZionist Archives, Jerusalem Israel, 

Dear Dr. Granovsky,

Yesterday I received from your office a publication of Dr. Siman: “Facts About the Jewish Colonization of Palestine.” It is certainly convincingly written and difficult to dispute. But I must inform you that I find it increasingly necessary to criticize the handling of the effendi-fellaheen question. In discussions of this question, I have had to state repeatedly that the people who have been entrusted with this matter have failed to recognize sufficiently certain economic and resulting political consequences.

We make much of the fact that we have bought estates from the effendis and have satisfied the fellaheen through agreements. We would appear to have fulfilled a worthy sociological function by destroying deleterious feudal estates and dividing them up into smaller farms. Unfortunately the facts of the case are not so simple. It would be well and good if we were only to buy lands owned by foreigners or by people from the city who run exploitative leasehold estates, leaving vast areas uncultivated. That such an effendi would sell his own land is both his right and is indisputably a desirable act. What if, however, the effendi is not selling his own land, but rather, as a land speculator, makes a sales contract with the Jews without first owning the land and afterwards pieces together the property?  

       Take the typical case of Qubeibeh, the facts of which you are well acquainted.  I. Moyal  never owned 8000 dunams in Qubeibeh, but when he signed the contract with the PLDC ( Palestine Land Development Company), he did not even have backers to finance the buying of the land. He, in connection with a group of speculators and land-robbers, pieced together an at that time still imaginary estate of 8000 dunams. They first made a sales contract on the basis of a dunam price that would guarantee a hefty profit and intended to brutally exploit the fellaheen, who were not tenants, but were in fact musha (share) owners. The number of these musha-owners was, as you know, extraordinarily large. None of them knew how much land he owned or where it lay. Even if the effendis were unable to exert pressure upon the fellah, he presumably would have in most cases made his profit by giving up his problematic musha claim for a lump sum. I need not tell you, however, what sort of pressure was exerted by the effendis. It is, for example, notorious that a member of this Arab notable group had as early as 1928 acquired a complex within our 8000 dunams for a sum — which, when assessed, was found to be a price equal to 20 piasters per dunam.

In the whole Qubeibeh affair we, the buyers, have nothing to do with the fellaheen and their settlement. We get land that is free and unoccupied with fellaheen.  All the compensation that the fellaheen have received — the tenants of the land and those with rights of ownership to the musha alike — were paid (or, as the case may be, not paid) by the effendis. What has been revealed about the expropriation and impoverishment of fellaheen by the Arabs is exemplified here in one situation, which is far worse than the complaints brought before the (Shaw) Inquiry Commission.

The business procedure of which I speak, and of which Qubeibeh represents only a small part, of the overall picture.  The effendis are engaged in large-scale speculation with short sale — that is, they sell a piece of merchandise that they do not have for a high price, in hopes that they can obtain this piece of merchandise for a low price. It is a well-known procedure in the grain and securities businesses. Those who are aware of such evils know that all over the world the speculative “short salesmen” use all legal and illegal means, after the successful completion of a sale, to place pressure to artificially depress the price, to make a cheap and lucrative purchase. If these short salesmen see that they have speculated poorly, and the prices rise so that they can no longer purchase free of cost, their selection of methods of influence becomes increasingly unscrupulous. There is certainly no doubt now that it has become more and more difficult for the effendis in the past two years to expropriate land from the fellaheen in this known way, and if,  the Qubeibeh affair, after ten years of continuous work, is still unsettled, then I must attribute it to a miscalculation by the effendi- notables. They were simply unable to put together the 8000 dunams as cheaply as they thought they could.

If we keep in mind that there are probably several or dozens of cases such as the Qubeibeh that await settlement, then we can well imagine what kind of mentality among the notables results from this: they looked forward to with great uneasiness the initial attempt on the part of the Jews and fellaheen to form a business alliance that excluded the effendis and seek to counteract the tendency of the fellaheen to profit from the high prices of the Jews. Something has to happen to make it more difficult or impossible for the fellaheen to sell land to the Jews, so that the price demands of the fellaheen would lower, and their willingness to sell to and their general dependency on the effendis would increase. The Jews would be made anxious and would become more willing to pay additional premiums to gain possession of the land.

I now wonder whether we can play politics with the land question when we ourselves are not clear about the economic and political consequences of the problem.  

        You know, of course, that the relevant material, which we prepared for the Inquiry Commission and which was to be presented by Mr. Hoofien, was not in fact presented because the PLDC along with KKL supposedly placed pressure on his contact with them, declaring that discussions with the commission (on this topic) as  inopportune. I have the strong impression that we thereby committed a catastrophic error and further erred by continuing our policy of cooperation with these speculators. There is certainly no doubt that the fellaheen are damaged by this and the small farmers (including all of those who owned a musha kushans of unknown size) see us more and more as an ally in this expropriation caste and, that they actively oppose this, and it is equally clear that the fellaheen are capable of doing so in a most effective manner all over the world.

I would like very much to speak to you about this last point another time, but for the moment I can only ask to hear from you if you have any arguments to refute my basic understanding of the issue.

Some 65% of the arable lands of Palestine were held in a form of musha’ ownership. Mushakushans, or musha’ title deeds held by a collective entity, usually a village as common ownership in order to prevent village lands from slipping out of the control of the village entity. Over time these musha kushans, due to inheritance became fractions of the sizes that they may once have been 50 or 150 years previously. If the kushans were so fragmented, it made sense to have all the owners in a village collect their title deeds and offer then to a broker or bundler, who we then in turn sell them to a another person, broker or landowner, who in turn might offer them to a Jewish buyer or land purchasing agent. With parcels of land so small at times, and alternative employment available in a Jewish settlement, urban area, or in the building trades- constructing roads, ports, railroads, or general construction, one-time farmers gladly took regular daily wages in positions that could earn two to four times an annual income after taxes and regular indebtedness which habitually was endured by the Palestinian peasant. The rural economy of Palestine before, during and after WWI was perennially uncertain, with impoverishment always close to a peasant’s existence. The Arab uprising against Zionism and the British in 1936-1939 had highly detrimental impact upon Palestinian rural society.