6 banknotes full of history ...

or the monetary issue of Palestine from 1927 to 1952.

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The historical context

For 400 years, from 1517 to 1917, Palestine was under Turkish influence. The territory is an integral part of the "Province of Damascus", ruled from Istanbul and included in a huge Ottoman Empire covering much of the Middle East region. Despite Turkish domination, the Muslim, Christian and Jewish communities managed to retain a certain autonomy. The Ottoman pound is the circulating and dominant currency. The First World War and the British victories accelerated the collapse of the Turkish Empire and the dismantling of its Arab territories. The Egyptian pound became the new currency in Palestine from January 1918 and very quickly gained public confidence. In 1920, the League of Nations placed Palestine under a provisional British mandate. It is from this moment that it is seriously considered to create an issue of banknotes for Palestine. However, this suggestion had already been put forward by the Anglo-Palestine Company in October 1917 but rejected out of hand by the British government for political reasons but above all for fear of the reaction of the local Arab population.

But in the end, the British government changes its mind for purely economic reasons, because it quickly understands that the profits resulting from trade are linked to the Egyptian pound and primarily benefit the Egyptian government and the National Bank of Egypt. The introduction of a currency specific to Palestine would lead to a situation in which the resulting benefits would rather go to the Palestinian government and thus to Britain behind the scenes. In 1926, the British Secretary of State for the Colonies founded the Palestine Currency Board, finally opening up the creation of an official currency for the territory. The Palestine pound is launched the following year, on November 1, 1927. The currency, divided into 1000 millimes (mils), is aligned with the pound sterling with its equivalent weight in gold.

It will therefore have passed a decade to finally discover this Palestinian currency ... whose entry into circulation of the first banknotes causes a general outcry among the various communities. The Jewish population claims that the banknotes do not serve their symbolic and historical purpose. The Christian community complains that it is not represented in the illustrations of the banknotes. Finally, the Arab population feels insulted and calls for a boycott and the exclusive use of the Egyptian pound. This controversy will last over time with new events which will be added, in particular, endless discussions concerning the new models of banknotes which will remain unissued (see below), the question of an impression of urgency local because of the supply cutoff to Great Britain during WWII or how to stem the counterfeit attempts of local underground organizations.

History accelerated in 1946, when the UK announced the independence of Transjordan and in February 1947, when the British handed over the question of Palestine and their provisional mandate to the UN. On November 29, 1947, the United Nations voted to partition Palestine into two states, a Jewish state and an Arab state. This plan is rejected by the Arab countries and the Arabs of Palestine. At the end of that same year and during the first half of 1948, the Currency Board moved foreign exchange reserves from Palestine to Great Britain and closed exchange centers across the country. In the second half of 1948, banknotes became “countryless notes” by serving as legal tender in three very distinct areas: the newly proclaimed State of Israel by David Ben-Gurion, Transjordan and the Gaza Strip. But this unprecedented situation cannot continue. The banknotes were finally demonetized in 1951 and the following year the Palestine Currency Board was dissolved.



The issued notes

The Palestine Currency Board banknotes came into circulation on Monday, November 1, 1927 and consisted of the following 6 denominations: 500 mils Type 1927, 1 pound Type 1927, 5 pounds Type 1927, 10 pounds Type 1927, 50 pounds Type 1927 and 100 pounds Type 1927. These banknotes have the particularity of being denominated in three languages, English, Arabic and Hebrew and of having an identical back with a view of the Tower of David also called the Citadel of Jerusalem, a fortification located at northwest of the Armenian Quarter of the Old City of Jerusalem.

palestine_5_pounds_type_1927_back.jpg

Above: detail of the back of the 5 pounds Type 1927.


These banknotes are the first ... and the only banknotes issued for Palestine. Despite proposals for new models (see our next chapter “The unissued notes”), these denominations will not undergo any major design change during their existence, except for the dates of issue and changes in the signatures of the members of the Palestine Currency Board.



The unissued notes

We have added a specimen of 100 mills dated 1943 and a series of 5 single-sided proofs taken from the catalog of the sale of the Shlomo Tepper Collection, sale offered by the English house Spink in April 2018. These proofs dated September 20, 1933 (for the 500 mills), June 29, 1934 (for the 5, 10 and 50 pounds) and March 18, 1938 (for the 100 pounds) have a new visual of a historic building on the front. These proofs are undoubtedly one of the attempts to respond to the general discontent of the population when the first banknotes were put into circulation in 1927:


palestine_100_mills_type_1943_specimen.jpg

Above: front of the specimen of 100 mills Type 1943. Dimensions: 115 x 69 mm.




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