<html><P>R. Harvey Benton writes:</P>
<P><Rav Pinchas Teitz, writing in Hapardes some 30 years ago, rationalizes the practice of selling Israeli bonds without a Heter Iska on the basis that Ribis implies a known creditor and debtor. Here, however, one cannot identify the individuals backing the bonds. Nor at the time of the transaction does the lender know the debtor's identity. Furthermore, it could be argued that all bonds are sold through a broker, invoking Rashi's opinion that is not prohibited. And: However, a respondent in the periodical Hamaor (Jubilee Volume) strongly disputes Rav Teitz's assertion and requires a Heter Iska for bonds.?[http://rebeltraderpopcollar.blogspot.com, posted by Rebelwithacause]></P>
<P> The source to which the above is attributed seriously misquoted what my father wrote (which, incidentally, was in 1951, within a year of the introduction of Israel Bonds -- not 30 years ago).</P>
<P> He did not invoke the lack of a known debtor and creditor. Rather, he referred to an older machlokes about the halachic status of a corporation (or, in the case of the bonds, a state). The question is whether halacha recognizes the existence of an entity such as a corporation, or whether it has no standing, and corporate act is actually the act of the owners of the corporation. </P>
<P> If the former is true, then there is no problem with paying interest to, or receiving interest from, a legal entity such as the State of Israel, since ribbis is prohibited only between two Jews, not between a Jew and a State.</P>
<P> My father's chiddush was to point out that if halacha does not recognize the legal fiction, then the borrowers are the citizens of the Israel -- all of them -- for whom the government acts as elected representatives. In that case, the amount of money borrowed must be divided by the number of Israeli citizens. This works out to less than a p'ruta per citizen, and for a loan of less than a p'ruta there is no issur ribbis. </P>
<P> Thus, mah nafshach: either there is no Jewish borrower at all, or each borrower borrows less than a p'ruta. Either way, a hetter iska is unnecessary.</P>
<P> For a very large bond, the per capita amount might be more than a p'ruta, so his suggestion was to buy several smaller bonds rather than one large one. Each bond represents a separate loan, and for each individual loan, each borrower receives less than a p'ruta.</P>
<P>EMT</P></html>
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