From its inception, the Bank raised funds through the issue of stock, both in the Land of Israel and abroad. For this purpose, the bank opened bureaus throughout Europe and the US, in order to convince local Jews to purchase shares and open accounts with the bank. With no securities exchange in place, this was an accepted means of raising funds and forming a connection between members of the Mizrahi movement and the bank.
In order to meet the religious prohibition on paying or receiving interest, the bank used a method adopted by other banks as well. A client asking for a PP 100 loan would receive PP 95 and an acknowledgement for having paid a PP 5 advance on the purchase of shares. Thus, upon repayment by the borrower, the bank would receive an additional PP 5 for the “loan” without considering the extra payment as interest, but rather as prepayment for the shares. This method was revoked with the receipt of a “transaction permit” (“heiter iska”) – which created an effective partnership between the bank and the client, where both parties share profits but the bank receives the lion’s share.
In 1963, the bank’s shares began trading on the Tel Aviv Stock Exchange. In 1969, the bank merged with Ha’Poel Hamizrahi Bank, established in 1928 by a movement bearing the same name, which blended religious faith with social principles. The merger created the United Mizrahi Bank, which retained its religious character until it was sold following the 1983 bank stock crisis.
In the 1930s, many stocks of local companies were designed by artists from the Bezalel Academy in Jerusalem. The certificate shown here was designed by Herman Struck, who also served as a member of the bank’s board of directors. Thus, the certificate bears his signature.
Struck (1876-1944) was a Jewish Zionist painter and print artist, one of the most important Jewish artists in Germany. In addition to his artistic endeavors, he was a Zionist activist, participated in the 5th Zionist Congress, served as a member of the board of the Jewish National Fund (Keren Hakayemet), member of the Zionist General Council, and drew one of the more famous portraits of Theodore Herzl.
Struck signed his work with initials CABD: “Chaim Aharon Ben David”, with a Star of David next to it, but also added his German name. In 1922, Struck and his wife made aliyah, making their home in Haifa.
Struck also revived the activity of the Bezalel Academy in 1934, where he served as a member of the managing committee.
(From Barlev collection of Securities Certificates)