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Telfed Tiyul Lecture

The talk on the bus on the Tiyul to the Atlit Salt Works, Salt of the Earth

  • By Peter Bailey

With Israel salt Industries having been owned by the Dankner Family since 1957 and by Arison Industries since 2007, I decided to have a look at the connection between the two families. This in turn led me to a fascinating story on the origins of the Israeli diamond industry

While the Dankner family, which has had a chequered history in the Israeli business world of late, both the Dankner and Arison families hail from what can be termed the pre State aristocracy of Mandate Palestine. Shari Arison ‘s late father Ted, who was born in Tel Aviv in  1924, served with the Jewish Brigade in the Second World War and with the IDF during the War of Independence. He was discharged as a Lieutenant Colonel, having served with the 7th Brigade during the Battle of Latrun. He inherited his father's shipping company, founded in the early 1920,s, which later provided the financial muscle to grow an enormous industrial and banking empire,a large portion of which his daughter Shari inherited.

The Dankner family controlled Israel Israeli Salt Industries which owned 15% of Bank Hapoalim with Arison Investment owning 20%. Arison eventually purchased the salt company from the Dankner’s, making her the largest shareholder in Bank Hapoalim. Thus both Israel Salt industries and Bank Hapoalim are common denominators connecting the two families.

Meir Dankner, the patriarch of the Dankner family, was one of the founders of Petach Tikvah in 1878. Meir’s son, Moshe, born in 1898, negotiated for the purchase of diamonds from the De Beers Company, allowing him to establish a diamond-cutting factory in Netanya. Moshe’s brother, Oved Ben-Ami, born in 1905, had   founded Netanya in 1929, and was its mayor for nearly 40 years. Ben-Ami and Alexander Aaronsohn, brother of Aaron and Sarah Aaronsohn of the  Nili Spy Ring Fame, had gone to the United States to raise funds for the establishment of Netanya, named after Jewish Philanthropist and owner of Macy’ Stores, Nathan  Strauss.

The diamond processing factory in turn provided the funding for Moshe Strauss to purchase the Atlit Salt Factory, in 1957. We will no doubt hear more about that history during our visit. Having made the connection between Moshe Dankner and the Atlit Salt Works, I will continue with my story which uncovers a fascinating South African Jewish connection to Moshe Dankner, Oved Ben-Ami, Netanya. and the Diamond Industry in Israel.

Unknown to Adolf Hitler and his cronies, the Nazi German violation of Belgian neutrality with its attack on, and occupation of Belgium in May 1940, would have a most positive spin off for the Jewish Community of Mandate Palestine and later for the nascent State of Israel.

Until the Second World War, the diamond industry rested on three legs: production, centered in Africa; distribution, based in London; and diamond cutting, based almost exclusively in Antwerp. The German invasion of Belgium, however, knocked out one of the legs of the tripod-Antwerp. Sir Ernest Oppenheimer, via De Beers Mines, and his brother Otto, via the London diamond cartel, had provided the Belgian cutting factories with the lion's share of De Beers diamonds, allowing the Oppenheimers to control the global diamond market.  The fall of Antwerp, and the subsequent disruption of  the diamond-cutting industry endangered the control De Beers exercised over the Diamond Market.

Most of the cutters in Antwerp were Jewish, which made British Mandate Palestine a natural focal point for the disrupted diamond industry. The birth of this industry in Palestine began in 1939 with the arrival of two Jewish refugees at the port of Haifa. The customs officer on duty searched through the The birth of this industry in Palestine began in 1939 with the arrival of two Jewish refugees at the port of Haifa.The customs officer on duty searched through their meagre personal belongings, discovering an envelope containing what looked like hundreds of tiny bits of broken glass. Not knowing what he had found, he questioned the refugees about these odd glass like fragments.

They nervously explained that they were both diamond cutters who had escaped from Antwerp, and the objects in the envelope were, in fact, rough diamonds which they hoped to cut and polish in Palestine.They explained further to the customs officer that they would need a small loan to set up a workshop.They asked him whether he knew of anyone that could assist them. The customs officer, like most residents of 1939 Palestine, had never ever  seen an uncut diamond. Not knowing what to do, he took the packet of diamonds to Oved Ben Ami, the mayor of Netanya, at that stage the only large town between Haifa and Tel Aviv.  Ben-Ami had put all his energy into raising money and recruiting settlers, and by 1939 had succeeded in developing Netanya into a small city, which however, had no industries. On seeing the diamonds, and hearing the story of the refugees, Ben Ami saw the potential of establishing a diamond cutting industry in Netanya, and arranged to meet the two diamond cutters that very little capital was necessary for cutting and polishing diamonds. All that was really needed was good sunlight, skilled labor, a few basic tools, premises and a supply of rough diamonds. They demonstrated the diamond cutting process and Ben-Ami was sold on the idea of starting a diamond cutting factory in Netanya. He provided the men with premises in Netanya for their work and brought his brother Moshe in to establish and fund the new enterprise. Oved Ben-Ami had been born as Oved Dankner and had changed his surname.

Ben-Ami and Dankner soon realised that their biggest problem would be ensuring a steady supply of rough diamonds. They established that the De Beers cartel controlled virtually the entire world's supply of diamonds. They also found out that the cartel had an agreement with the government of Belgium, which specified that the bulk of De Beers diamond production would be sent to Antwerp, to be cut in the  factories there.

Ben-Ami and Dankner became aware of the fact that most of the world's diamond business, including the De Beers cartel, was, as Ben-Ami put it, "in Jewish hands.” They also believed that most of these Jews would be sympathetic to the idea of creating a diamond industry in Palestine. Ben-Ami further was sure the the Nazi armies were on the verge of overrunning Belgium and the Netherlands, and that many of the Jewish cutters, like the two refugees, might seek refuge in Palestine. Shortly before the Nazi invasion of Belgium, Ben-Ami received a letter from a Jewish industrialist in Belgium who had obtained Ben-Ami's address from the mayor of Antwerp. This industrialist offered to pay for the relocation of sixty Belgian diamond cutters to Palestine, if Ben-Ami could arrange the necessary entrance visas.

Since the British authorities had placed strict restrictions on the number of Jews allowed to enter Palestine, Ben-Ami's first task was to persuade the British to waive these quotas on immigrants. He asked Ben-Gurion, then head of the Jewish Agency, for help. Ben-Gurion's first priority was saving Jews from the nations that had already been overrun by the Germans, and not from neutral countries such as Belgium, and was of no help.

Ben-Ami went to the British High Commissioner for Palestine. In presenting his case, he argued that since most of the diamonds in the world came from the British Empire, it was in the national interest of Great Britain to make sure that the skilled diamond cutters in Europe were not all captured by the Germans. As there was a distinct possibility that Germany would invade Belgium and Holland in the months ahead, he proposed that the British facilitate the immediate transfer of sixty diamond cutters to Palestine.

Convinced by Ben-Ami’s reasoning, the High Commissioner agreed that some precautions should be taken to protect the diamond trade. Cutting through the red tape surrounding Jewish immigration to Palestine, he issued Ben Ami with sixty visas for Belgian cutters.

The next problem for Dankner and Ben-Ami was persuading De Beers to supply diamonds to their company in  Palestine. De Beers took the attitude that they had a binding agreement with the Belgian Government which prevented De Beers from sending diamonds to be cut anywhere else. Diamonds for Palestine they were told “was simply out of the question."

The brothers were not so easily dissuaded and approached Otto Oppenheimer, with whom Moshe Danker was acquainted,  and appealed to him as a fellow Jew to assist his brethren in  Palestine. After much persuasion, Otto Oppenheimer offered to intercede with De Beers on their behalf. Ben-Ami then flew to Antwerp to recruit the sixty cutters. Even though war with Germany seemed imminent, he found it impossible to persuade the Jewish cutters to go to Palestine. They believed, conversely, that the Germans forces led by General Rommel, were on the verge of capturing Egypt and Palestine from the British. Furthermore, they had no intention of leaving neutral Belgium. He managed to recruit the grand total of six diamond cutters who returned to Palestine with him.

Ben-Ami returned to Netanya considering his mission to establish a diamond cutting industry in Netanya a failure, not having recruited sufficient diamond cutters. Adolf Hitler intervened, and within a week of his return, the Nazi armies blitzkrieged their way through Belgium and Holland. The British Government was forced to send a naval destroyer to Antwerp in an attempt to seize as much of the diamonds stocks  possible, before they fell into German hands. Several  of the Jewish cutters escaped with the British raiding party., making their way to Palestine. The important diamond cutting centers of Antwerp and Amsterdam were lost to the British and to De Beers.  Palestine suddenly  became the most viable alternative

By the end of the war, Palestine had become the world's largest manufacturing center for diamonds, providing cut diamonds of excellent quality. Moshe Dankner’s fortune was made. During the war years, almost 5,000 refugees had been trained as cutters, and De Beers had shipped more than $100 million worth of diamonds for beneficiation to Palestine. The current equivalent  would be $1.4 billion worth of diamonds.

Once the Second World War had ended, the rise of the Palestinian diamond cutting giant was a cause of great concern in the reestablished traditional cutting centers of Antwerp and Amsterdam. However, when the State of Israel was established in 1948,diamond cutting was the major industry and played a huge role in the economic development of Israel in its early days.

Although Sir Ernest Oppenheimer had converted to Christianity, while the London branch of the family retained their Jewishness, the family as a whole provided vital support to the Jewish community in Mandate Palestine and later to the the State of Israel.The National Diamond Centre in Netanya ensures that the city remains the leader in Israel's Diamond cutting industry. The diamond sales centre in Israel is  the Diamond Bourse in Ramat Gan.   It is no accident that the Harry Oppenheimer Diamond Museum in Ramat Gan honours a great family that has provided vital and ongoing material support to Israel and Jewish people.

This quote from the official publication of the Israeli Diamond Industry says it all, “ Ernest Oppenheimer actively supported the diamond industry in the Land of Israel and included it in the Syndicate’s list of customers. He also continued to provide the Israeli diamond industry with diamonds after World War II, despite the opposition of certain countries, including Belgium.”

“Although his father, the son of a Jewish cigar maker from Friedberg, Germany, converted to Anglicanism in the 1930s, Harry Oppenheimer had a formal Bar Mitzvah at a synagogue. When he married, he entered the Anglican Church, yet remained a staunch supporter of Jewish causes as well as the Israeli diamond industry.” This comment about Harry Oppenheimer was by global diamond expert Ehud Laniado.


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