On friday, June 16, 1933, Chaim Arlosoroff, the Histadruth leader, was assassinated while scrolling on the beach of Tel Aviv with his wife. Leading personalties declared that the dying Arlosoroff said his assailants were not Jews. The socialist press, however, immediately exploited the occasion by charging the Revisionists with the murder.

Captain Harry Rice, Deputy Inspector-General of the Palestine Police and intimate friend of Mrs. Arlosoroff, arrested a Betari named Stavsky, who was promptly identified by Mrs. Arlosoroff as one of the murderers. The three other Betarim - Zvi Rosenblatt, Yehuda Mintz, and Abba Achimeir were taken into custody. Mrs. Arlosoroff, with equal promptness identified them as accomplices.

During Achimeir's trial, collusion between the police and the witness was proved. The evidence was shown to have been deliberately falsified and his release was ordered by the embarrassed Government.

At Mintz's trial, Mrs. Arlosoroff was caught in a whirl of self-contradiction. Mrs. Arlosoroff was accused by the court of lying and Mintz was freed.

During Rosenblatt's trial, it was established that he, whom Mrs. Arlosoroff has branded as the actual killer, had been addressing a mass meeting in a different city at the time of the murder. The court acquitted him.

On June 10th, 1934 the government condemned to death the last available victim, Abraham Stavsky. The idiocy of the verdict was at once evident from the fact that Mrs. Arlosoroff had charged Rosenblatt with the killing and Stavsky with holding the torch for him. It was not possible, therefore, for one to be guilty without the other, yet Rosenblatt had been cleared and Stavsky sentenced to hang.

The chief Rabbi of Palestine, Hacohen Kook declared his belief in Stavsky's innocence. His cable to world Jewry said "Strive with all your might for the triumph of justice." Jabotinsky, Jacob De Hass, Col. Wedgewoood, and Horace Samuel rallied to Stavsky's defence.

The case was brought before the Palestine Court of Appeal and Stavsky was set free. The Mizrachi issued declarations of satisfaction. The Zionist Organization of America greeted the acquittal.

On the other hand, Hashomer Hatzair, the extremely anti-religious and socialist youth organization, was so incensed at the development that they stoned the synagogue in which Stavsky was praying and carried posters condemning Rabbi Kook - "Pity the nation whose priests protect murderers."

After the Stavsky case, the Jewish Agency, controlled by the Mapai, intensified the bitterness by depriving Betar of certificates to enter Palestine, thus hindering Betarim from obtaining employment. The Jewish Agency also collaborated with police in deporting Betarim who had arrived in the country without visas, even though many of their own members had arrived the same way. The Mapai acted as if Eretz Israel was not the property of the Jewish Nation, but of a special class.

The Histadruth contemptuously rejected the Jabotinsky-Ben Gurion pact which had endeavored to restore peace to the tortured Yishuv. The Stavsky scandal and its repercussions eventually led to the establishment of the New Zionist Organization.