Israel's Early Years ••• 307whom many were transferred under complex secret agreements. Absorbing
these new Israelis, perceived as alien in language and culture by the earlier
settlers (who had come from Europe), placed severe strains on the country.Problems of the Jewish State
Economic problems were daunting. The currency, cut loose from the
British pound, plummeted in value. The new government could not bor¬
row much money to pay its bills, but large amounts of US government
and private Jewish assistance, later augmented by German restitution pay¬
ments to Jewish survivors of the Hitler era, eased the strain. In an extraor¬
dinary act of statesmanship, West German Chancellor Konrad Adenauer
made an agreement with Israeli Premier David Ben-Gurion to pay huge
reparations to Israelis for the Holocaust. All this financial aid provided
capital for Israel's development and reduced (though it could never elimi¬
nate) its balance-of-payments déficit.
Equally crucial to the country's survival was the Israelis' conviction that
the Jewish people must never again face the threat of extinction, whether
by Christian fanatics, totalitarian dictators, or Arab nationalists. If any
skeptics asked how the existence of tiny Israel, with a million Jews and as
many problems, better guaranteed Jewish survival than the continued
presence of 10 million Jews in the West (of whom few chose to move to Is¬
rael), the Zionists countered that Germany's Jews had prospered too, but
who had rescued them from Hitler? If others accused the Israelis of creat¬
ing an Arab refugee problem, they in turn blamed the Arab states. Israel
was taking in Jewish refugees from Europe and the Arab countries as well.
If it could not have peace without letting the Palestinian refugees return,
as the UN insisted, then peace would have to wait.
Because the Israelis view their war against the Arabs as a struggle for in¬
dependence, we forget that up to 1947 few Jews in Palestine or anywhere
else really expected the Jewish state to be born in their lifetime. As a minor¬
ity group within a mainly Arab land, the early Zionist settlers had toiled to
start farms in the wilderness; to build Tel Aviv amid the sand dunes north
of Jaffa; to transplant the schools, theaters, and newspapers they had
known in Europe; and to found new institutions, such as Histadrut, that
combined labor and capital within a collectively governed organization.
They had formed political parties espousing various combinations of so¬
cialism, nationalism, and Judaism. They had revived Hebrew as a spoken
language and modernized it as a medium of written communication. But
they had assumed that the Jewish national home would remain in the
British Commonwealth, that most of its inhabitants would be European,