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Agency would continue to handle issues of Aliya, absorption and settlement. As is well known, these were key issues during the first years of the state.
On issues of Aliya and absorption, the Agency had two designated departments, whose executives resided in the National Institutions Building in Rehavia. Those who were closely familiar with the issues knew that there was no love lost between these two – the Aliya Department and the Absorption Department – and the building experienced a great many tensions, arguments and even shouting on these issues. The root of the dispute was the question of whether to bring to Israel anyone who wanted to come and anyone who could be brought – as the Aliya Department had maintained, or to plan the Aliya in accordance with Israel's absorption capability – as the Absorption Department preferred.
During the first years of the state, the Aliya Department was headed by Yitzhak Rafael, a member of the religious Zionist movement, while the Absorption Department was headed by Giora Yoseftal, a member of Kibbutz Gal'ed and Mapai. Both were members of the Jewish Agency Executive. Another member in the Executive was Meer Grossman, a man of Revisionist Zionism, who broke with it and established the "State Party". Already in the winter of 1949, Grossman was the first to come out against unrestricted mass Aliya, which had reached 20-30 thousand people per month (!), and demanded that it be stopped and that they focus upon the Aliya of young people of means who would not become a burden on the state's treasury. He emphasized that otherwise, the hundreds of thousands who would arrive in a short period of time, most of whom were penniless, would lead to a situation whereby "instead of a blessing, it [Aliya to Israel] would become a curse upon us."
Yitzhak Rafael, the Head of the Aliya Department, disagreed with him. He was among the school of "expanders", who wished to bring to Israel as many Jews as possible without checking their age, origin, family and health situation or earning ability. For 1949, he planned for the Aliya of a quarter of a million people, a remarkable figure when you take into account that the population of the state had reached 750 thousand that year. Rafael was not alarmed by the opposition of the Absorption Department, which believed that the state could only absorb 50 to 60 thousand Olim. Nor was it the only opposition. In a meeting of the Agency Executive in the spring of 1949, in which members of the Executive overseas had participated, fierce criticism was heard regarding the "unfettered" Aliya as its detractors had defined it. A survey conducted among residents of Israel in 1950 discovered that over 80 percent believed that the Aliya should be restricted and adjusted to the needs of the young state.
Towards 1950, the Aliya Department had planned to bring 150 thousand people, not including the Youth Aliya and the Olim with means who could managed on their own. At the end of the year, that forecast was confirmed – about 170 thousand people had made Aliya. Between the start and the end of the year, loud voices and fierce arguments were heard within the walls of the National Institutions Building, between the "expanders" and the "reducers" as the representatives of the various sides were called. Both sides knew the opinion of the leader of the pack – Prime Minister David Ben-Gurion: Bring in as many as possible, without distinction.

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