Josefowitz Gold

To the Liberty Street branch of Manhattan's Chemical Safe Deposit Co. last week went Captain William H. Houghton, U. S. Secret Service chief in New York, and two assistants. They had received, a tip that one Zelik Josefowitz was hoarding a large store of gold coin. Armed with a search warrant, they opened the safe deposit box held by Zelik Josefowitz and two other members of the Josefowitz family. Inside were four bags, the weight of which convinced the agents that their search was ended. Opened, the bags revealed a treasure in the form of $20 gold pieces. For three hours the agents counted, found 10,000 coins in the Josefowitz treasure trove. At present gold prices, the metal was worth about $338,000.

In August 1933 President Roosevelt signed an order calling in all gold held by individuals, and in January 1934 the Gold Reserve Act stipulated that gold held contrary to U. S. law should be forfeited to the U. S. Government.

Shortly after the gold seizure Joseph T. Higgins, local Collector of Internal Revenue, slapped income tax liens for $740,000 on Zelik Josefowitz, Z. Josefowitz and Frieda Josefowitz of Zurich, Switzerland; for $258,000 on Gregori Josefowitz, care of Lawrence Mead, 20 Place Vendome, Paris; for $24.50 on Selman Josefowitz, also of Zurich. The two major items consisted of 1934, 1935 and 1936-- taxes of $573,000 plus penalties of $425,000.

Nobody in the U. S. seemed to know much about the Josefowitz family, but last week Zelik Josefowitz turned up in Zuerich, claimed that as a nonresident alien he was not affected by U. S. gold legislation. He said that he had no other U. S. gold hoardings and that his Manhattan attorneys, Katz & Summerich, engaged by transatlantic telephone, were confident that his gold pieces would soon be returned to him. He protested against "fantastic" U. S. newspaper reports of his income, said that neither he nor his family had any U. S. income in 1934 or 1935.

Most plausible Josefowitz biography said that the family was originally neither Lithuanian nor Swiss but Russian. They were said to have engaged in a wide-scale business of discounting Soviet bills. From 1924 to 1931 U. S. exports to Russia totaled about $600,000,000. These purchases were handled through Amtorg Trading Corp., the Soviet purchasing agency in Manhattan. Amtorg paid some cash, gave notes for the greater part of the Soviet obligations. Many a U. S. industrialist, suspicious of Soviet credit, was willing to sell his Soviet notes at a large discount. The Josefowitz', confident that Russia would pay its bills, bought the notes at from 25% to 40% less than their face value. As the Soviet Government redeemed its obligations, the Josefowitz family was said to have prospered hand over fist.

*The 1936 for January and February. The Internal Revenue Department keeps strictly up to date on taxes owed by aliens.

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