In 1975, Israel issued two commemorative coins to celebrate the 25th anniversary of the Israel Bond Program. Since the conception of the Israel government-issued bonds from the first Israeli Prime Minister David Ben-Gurion, the program had helped develop the state of Israel and its infrastructure, as well as brought in funds from across the world.
A bond is a debt security – a promise to repay a loan at a later date with interest. Often bonds can be issued by any entity ranging from small municipalities to large countries and corporations. These bonds are a way for the issuer to get money upfront for a development or project and defer the cost to a later time. Bonds and their concept have existed for thousands of years, however the practice to issue bonds and take on debt, especially for a fledgling state or company, can be a hard decision to make.
When it birthed the Bond Program in 1950, Israel had just won a terrible war for independence in which more than 1% of the population of the country had been killed. Adding to the pressure of the new independent state, hundreds of thousands of immigrants were arriving to develop their promised land. Israel was short on economic and physical resources. The new immigrants found themselves in primitive shelters with food shortages and forced rationing imposed on all citizens. Prime Minister Ben-Gurion believed that the international Jewish community would help fund the State of Israel with its national construction and infrastructure needs. Ben-Gurion proposed issuing bonds from the State of Israel to achieve this funding. The hope was to raise $25 million dollars from sales, but in 1951 the bond sales had exceeded $52 million dollars, mostly from sales in the United States. These funds helped Israel build housing for the new immigrants and develop farmland to provide food security for its people.
With the success of the Israel Bond Program and its expansion to across the United States and Canada, the money for Israel’s development flowed in. Within six years the bond sales accounted for 35% of the Israel budget for special development projects. Israel’s industrial and agricultural sectors thrived with money coming from bond sales and developments including the Dead Sea Works and the National Water Carrier projects. People who supported Israel would buy bonds to help the country especially in times of desperation. During the 1967 Six-Day War, the sale of Israel’s Bonds exceeded $250 million dollars. During the 1973 Yom Kippur War, the sales of bonds exceeded $500 million dollars.
By 1975, 25 years had passed since the launch of Israel’s Bond Program and the money that came from the program had helped develop Israel into the successful country it had become. To commemorate this, Israel issued two commemorative coins to celebrate the program. A silver 25 Lirot was issued in both uncirculated and proof finishes with a final mintage of 49,140 uncirculated and 39,847 proof. A gold 500 Lirot was also struck in proof with a final mintage of 31,693. Both coins share a common design of overlapping Stars of David. Both the silver and gold versions of the coin sell for small premiums over their melt value. However, due to the lack of demand on the secondary markets, unknown quantities of both have been melted for their bullion value.
The Israel Bond Program is a success story for the country and the initiative continues to today. With the 1991 Persian Gulf War, the Bond Program exceeded $1 billion dollars in funding and continues to sell at that level yearly. With the stability of Israel, it has become a sound investment for individuals, financial bodies, and even retirement accounts. Yet with commemoratives issued in 1975, we can take a glimpse at the importance of the program for the State of Israel and its vitality.