Charges and Counter Charges Made in Zionist Controversy; Rosensohn and Lipsky in Clash

The controversy within the ranks of American Zionists, which came to the foreground following the opposition conference held last Sunday in Washington, assumed larger proportions as the fight between the opposition and the administration found expression in statements published partly in the metropolitan press containing serious charges and countercharges.

Samuel J. Rosensohn, former chairman of the Finance Committee, in a statement issued to the press concerning the affairs of the American Zion Commonwealth, declared that the criticism directed against the Zionist administration was not due to the assistance given the Commonwealth by the United Palestine Appeal but to “gross mismanagement” which created the condition that made that assistance necessary. Declaring that Mr. Lipsky’s statement was “so gross a distortion of the facts as to call for an answer,” Mr. Rosensohn contended that it is the present administration which “must bear full responsibility for this mismanagement.”

In reply Louis Lipsky, president of the Zionist Organization of America declared that the Commonwealth is finally extricated from its difficulties He charged Mr. Rosensohn with being “deliberately interested in confusing the issues.” Mr. Lipsky’s statement denied the assertion made by Mr. Rosensohn that the president of the Zionist Organization of America had, without the knowledge or consent of the Administrative Committee, signed notes to the extent of $285,000 with the Central Mercantile Bank in behalf of the Zion Commonwealth. It was a misconstruction of Zionist policy to confuse the Zionist administration’s attitude toward the Commonwealth with the acts of the Commonwealth. The statement declared that the Zionist administration’s moral responsibility for the Zion Commonwealth was inaugurated, not during Mr. Lipsky’s administration, but as early as 1915 and was continued until 1921 when Judge Mack was the president.

Mr. Lipsky also charged that Mr. Rosensohn who it was believed acted as a volunteer, received from the American Zion Commonwealth fees amounting to $6,000 for his servies as attorney in attempting to extricate the Commonwealth from its difficulties.

Mr. Rosensohn, in his statement declared: “The American Zion Commonwealth, which was organized as a business corporation under the laws of the State of New York with only a nominal capital, incurred obligations in America and Palestine in excess of $3,000,000.

“It sold land to purchasers when it did not have title to that land.

“It speculated in the purchase of lands in Palestine with moneys received from American purchasers without giving the purchasers what they had paid for.

“It used those moneys to finance the Haffa Bay project, to go into a partnership with another land company and into a partnership for building a hotel.

“For the aggrandizement of the persons in control of the affairs of the company in Palestine, moneys received from American purchasers were, in violation of the rights of those purchasers, used not to acquire the land sold but to save the investment of persons in no way connected with the American Zion Commonwealth.

“Notes were issued and obligations were incurred by the American Zion Commonwealth without the slightest regard to the ability of that company to meet these obligations.

“In addition, Mr. Lipsky without the authority or even the knowledge of the administrative committee of the Zionist Organization of America, guaranteed on behalf of the Zionist Organization of America to the Central Mercantile Bank $285,000 of notes of the American Zion Commonwealth.

“It is that mismanagement, constituting as it does a gross breach of trust, which was the subject of criticism by the Washington conference,” Mr. Rosensohn stated.

In his reply Mr. Lipsky declared:

“He (Mr. Rosensohn) does not prefer to remember that at no time, either in 1919-21 when Judge Mack was a director of the American Zion Commonwealth, as well as President of the Zionist Organization of America, or, in 1925, when the difficulties became apparent, was the Administrative Committee of the Zionist Organization of America responsible, directly or indirectly, for the management of the American Zion Commonwealth either in New York or in Jerusalem. From the time of its establishment in 1915, the American Zion Commonwealth, although a corporation not conducted for profit, was managed by a board of directors selected by its stockholders. Every certificate holder became ipso facto a stockholder and a voter. After the Cleveland Convention in 1921. when the Brandeis group withdrew from the Zionist Organization, and for a number of years thereafter, the American Zion Commonwealth was regarded as being neutral toward the new Administration of the Zionist Organization of America. Nevertheless from 1919 through 1921 up to 1925-26. the entire Zionist Organization was engaged in giving full moral support to the activities of the American Zion Commonwealth.

“This moral support and the assumption of a moral responsibility is all that entered into the situation, and there never was any thought of a legal responsibility. It was in 1926, when it became apparent that the American Zion Commonwealth management–whether it was good or bad is not relevant to the issue–was involved in financial difficulties that I, as President of the Zionist Organization of America, with the unqualified consent of my Administrative Committee, intervened in the affairs of the American Zion Commonwealth. This was done first, to protect the interests of the American land purchasers; second, in order that land in Palestine, purchased by Jews, should not be returned into the hands of Arabs; third, to protect the interests of general creditors in Palestine. Mr. Rosensohn forgets to mention that it was I, as President of the Zionist Organization of America, who took steps for the removal of the managers of the American Zion Commonwealth, and appointed, with the approval of my Administrative Committee, a reorganization committee, in which Mr. Rosensohn was a member. Mr. Rosensohn has been retained as an attorney for the Jewish Colonial Trust of London, with regard to a claim that bank had against the American Zion Commonwealth. Mr. Rosensohn subsequently became the attorney for the American Zion Commonwealth, and for four months was paid a fee of $1,500 per month, or $6,000, for the services he then contracted to render. It is not in place to refer to the kind of service rendered by Mr. Rosensohn, but it is sufficient to say that he have been struggling ever since with the problems of the American Zion Commonwealth and have overcome some of the obstacles placed in the way of success by Mr. Rosensohn himself, and only now are we in a position to say that the American Zion Commonwealth is finally extricated out of its difficulties.

“The American Zion Commonwealth was organized under the auspices of the Zionist Administration preceding 1921. Its articles of incorporation, the form of its land certificate, its method of operation, were all determined upon before the present American Zionist Administration took office. The absence of legal relationship between the Zionist Organization of America and the management of the American Zion Commonwealth was a device of the Zionist Administration preceding 1921. The management of the American Zion Commonwealth was then segregated from the management of the Zionist Organization, and whatever influence we had with the American Zion Commonwealth was purely a moral influence, just as our responsibilities were purely moral. To attribute the alleged bad management of the American Zion Commonwealth to the present Administration, with out taking into account the sins of omission of the preceding Administration, is the reverse of fairness and justice.

“With regard to the statement made by Mr. Rosensohn that I guaranteed, on behalf of the Zionist Organization of America to the Central Mercantile Bank, $285,000 worth of notes of the American Zion Commonwealth, I desire to say that this statement is absolutely unfounded and contrary to the facts. It is untrue. The truth of that incident is this: That Mr. Charles Topkis, of Topkis Brothers, Wilmington, Del., as an individual interested in the American Zion Commonwealth, and purely from philanthropic motives, came to the assistance of the American Zion Commonwealth by opening a credit for it in the Central Mercantile Bank. It was his own personal responsibility. This credit which was opened by him for the American Zion Commonwealth, upon notes made and executed by the American Zion Commonwealth itself, at no time ever exceeded $187,000 all of which was forwarded to Palestine to meet obligations for the purchase of land. The only way in which I was involved in this matter was that I had given a personal assurance to Mr. Topkis that the Zionist Organization of America regarded itself as morally responsible for the American Zion Commonwealth. This assurance was satisfactory to Mr. Topkis, and was all that he required of me, and when the Finance Committee of the United Palestine Appeal, of which Mr. Rosensohn was the chairman also, learned of the facts, it was agreed by all persons concerned that the United Palestine Appeal should, among other notes of the American Zion Commonwealth, include also the notes of the American Zion Commonwealth deposited in the Central Mercantile Bank, for which Mr. Topkis was personally responsible.

“By turning a question of Zionist policy into a matter of recrimination and vilification, Mr. Rosensohn clearly dmonstrates his lack of understanding of the true purpose of the Zionist movement,” Mr. Lipsky stated.

Nine Little Theatre groups, representing Jewish organizations in New York, will present one-act plays in the annual dramatic contest conducted under the auspices of the Metropolitan League of Jewish Community Associations. This tournament will be held this afternoon and evening. May 6, at the Young Men’s Hebrew Association, 92nd street and Lexington avenue. New York City.

The judges will be Miss Henrietta Prentis, head of the Department of Speech and Dramatics. Hunter College, and Moritz A. Yagendorf, director of the children’s Play House.