Philip Teitelbaum Creates a Money Making Machine
Gerber the tailor's desperation for money made him vulnerable to Philip Teitelbaum's scam, and he involved some of his friends before the police arrested Teitelbaum.
In prosperous times, Gerber the tailor sewed hard and long, but this was the frigid January of 1910, and business was slow at his small shop in New York City’s garment district. He had to pass the time somehow while he waited for customers, even if he did come out on the minus end of the Magic Money Making Machine.
Gerber the Tailor Meets a Stranger at Joe Block's Saloon
Gerber’s downfall began the day a well dressed stranger walked into Joe Block’s restaurant and saloon at Hanover and Baden Streets in Brooklyn. Every day for two weeks, the stranger bought drinks and paid for them with new National Bank bills. It seemed to Gerber that the stranger spent 15 hours a day in the saloon, flashing a roll of new currency. Every round of drinks he bought he paid for with a new bank note and he even bought meals for everyone. Hanover and Baden Streets had never seen such a dangerous man. Gerber had never seen such a generous man.
Philip Teitelbaum Tells Gerber the Secret of His Wealth
Finally, Gerber asked the stranger his name and background. The stranger told Gerber that his name was Philip Teitelbaum and that he originally came from Poland and had been a chemistry professor at the University of Warsaw. He took Teitelbaum home for dinner and cultivated his friendship. He watched Teitelbaum spend dozens of new $10 and $20 bills. One day in the back room of the saloon when Gerber thought he couldn’t stand another minute of being a friend, Teitelbaum told him the secret of his wealth.
Teitelbaum told Gerber that he had learned to make money by electrolysis of chemicals He told Gerber that his machine’s money was so real that the banks couldn’t tell that it was machine and not government made. Teitelbaum took several ten dollar bills from his pocket and tossed fifty dollars at Gerber. He told Gerber to take them to the bank to see if the cashier would change them into $1.00 notes.
Gerber the Tailor Contributes His Own Money
Gerber hurried to the East Side Savings Bank. With scarcely a glance at the five $10 bills, the cashier handed Gerber a package of fifty $1 certificates. Gerber hurried back to Teitelbaum. He insisted that Teitelbaum tell him the secret of making money.
Teitelbaum promised to make Gerber a batch of money, but he told Gerber to bring him all of the real money he could. “I have to have real money to make money. There is enough dye in the bills, so we can take part of it away and still pass the bills. I soak the money in chemicals and take off the printing and color on plain paper. But it requires new money all the time, for if you took off a print of a bill the second time, it would make the bill so faint that we couldn’t pass it again. So bring me all the money you can and I’ll make you as much more. I’ll double your money in twenty four hours,” Teitelbaum promised.
Quickly Gerber the tailor collected $300, all of the money he had, and gave it to Teitelbaum.
Teitelbaum Pockets Gerber's 300 Dollars
Teitelbaum produced a cardboard box that he said was his money making machine. He stacked the bills between sheets of plain, heavy paper, laying them all the same way. Then he dipped the roll in chemicals, put it in the machine and turned on an electric battery. Teitelbaum gave Gerber the tailor special instructions. He told Gerber to take the machine home with him and leave it sit for 24 hours at an even temperature, warm but not too hot. At the end of 24 hours, Gerber would have twice as much money as when he started, Teitelbaum promised him.
Gerber the tailor carried the money box home, cradled like a baby in his arms. He followed the directions to the letter, but the next evening when he opened the box there was no money inside, just a roll of water soaked paper. Teitelbaum had switched the rolls when Gerber wasn’t looking and slipped the $300 in his own pocket.
Teitelbaum and Gerber Make a Deal
Gerber the tailor hurried to the saloon where Teitelbaum was operating as usual. “You swine pig, you cheat! I’ll have you arrested!” Gerber cried.
“No you won’t. You are guilty as I am. You planned to counterfeit money. If I go to prison, you’ll go too, and stay there as long as I do.”
Gerber tore his hair in despair and frustration.
“What would you do for me if I give you a part of your money back?” Teitelbaum asked him.
“Anything, anything,” Gerber said.
“Get me three of your friends who have money and fix it up so they’ll believe my story. Then I’ll return you $150,” Teitelbam promised Gerber the tailor.
Gerber the Tailor Finally Goes to the Police
Gerber introduced Teitelbaum to three of his closest and richest friends and reclaimed his $150. Not satisfied with this, he demanded the rest of his money back. Teitelbaum refused, so one day in the middle of January 1910, Gerber made his way to police headquarters. Gerber explained to the police that he had been kind to a stranger and in return for his kindness, the stranger took $150 from him. He gave an accurate description of the man who had taken his money, but he couldn’t explain the man’s method of taking it. Detectives Nagle and Spillings were assigned to his case and questioned Gerber. All Gerber would so was shrug his shoulders and say, “Oh, he got it. That’s all. He got it.”
Gerber Still Introduces His Friends to Teitelbaum
The detectives didn’t believe Gerber and he knew they didn’t. Afraid to tell them the real truth, Gerber dropped the complaint and returned to the tender mercies of Teitelbaum and his magic money making machine.
Gerber continued to introduce his friends to the man with the magic money making machine. One of Gerber’s friends was a contractor Sam Jacobowitz and another was a cloth manufacturer named Isaac Marks. Taking a giant step, Gerber introduced a “Mr. X,” one of the most prominent clothing manufacturers in the country to Teitelbaum. All of his friends believed in the magic money making machine and after they were relieved of their money, Teitelbaum would make them a proposition. “Introduce me to two of your friends. If they become customers, I’ll return one-half of your money to you.”
The Police Return to the Case
Then one of the money machine’s clients decided it was time to bring the police back into the case. One March morning in 1910, in the quiet before the 8 o’clock rush of business at police headquarters, Detective Dockstader was at his desk taking a complaint over the telephone and Detective Chief Whaley was in his private office dictating a grand jury statement. The quiet was punctured by a pounding on the door. Dockstader opened it and Sam Jacobowitz stood there. Although it was cold outside, beads of sweat ran down Jacobowitz’s face.
“He’s gone with my $3,000, “ Jacobowitz said. He staggered into the room and headed for a chair.
Detective Dockstader took his arm and led him to the door of Chief Whaley’s office. For a moment Jacobowitz followed, and then suddenly he twisted out of Detective Dockstader’s grasp. “I won’t tell a thing,” he muttered. Before Detective Dockstader could stop him, he ran out of the building.
The Detectives Compare Notes
The detectives in the precinct compared notes. For months now they had been hearing rumors about people in the Jewish District being cheated by a flim flam man, but the victims had refused to divulge any information. Detective Captain McDonald, Detective Sergeant Nagle, Detective Sergeant Dockstader were assigned to the case and were assisted by Detective Captain Whaley, Detective Sergeant Maguire and Detective Spillings. Detectives Nagle, Spillings, Maguire and McDonald went down to the District to pick up the gossip of the neighborhood. They inquired about any stranger who may have been seen associating with Jacobowitz and Gerber and they learned that a Philip Teitelbaum had been friendly with both men. They discovered that Teitelbaum wasn’t really a professor at the University of Warsaw, but had been born in Russia and educated in the United States.
Philip Teitelbaum is Arrested and Convicted
As a result of this investigation, Teitelbaum was arrested on March 17, 1910, by Maguire and McDonald on a charge of grand larceny. Jacobowitz, Gerber and Marks were promised immunity and they made full statements about Teitelbaum’s activities. Seeing the evidence was against him, Teitelbaum confessed. In three months he had earned about $30,000 from his magic money making machine, not a bad profit for a Russian immigrant and a cardboard box!
Philip Teitelbaum was convicted on the grand larceny charge and sentenced to Auburn Prison for a four to eight year term. After he served his time, Teitelbaum and the magic money making machine disappeared, but eventually Teitelbaum resurfaced, charged with other crimes.
Stephen Mihm, A Nation of Counterfeiters: Capitalists Con Men and the Making of the United States, Harvard University Press, 2007