Shatzky began publishing on Polish-Jewish history in 1913, but during World War I, enlisted and fought in Pilsudski's Legion, where he received several military decorations and was appointed lieutenant. In 1918 he was asked by the Polish Foreign Ministry to report on Jewish affairs in Poland, particularly the April pogroms in Vilna. When the Ministry did not react to his report he resigned from his post and taught history in Jewish high schools in Warsaw.
In 1923, Shatzky emigrated to the United States where he lived until his death. During this latter period of his life, he established himself as a prominent Jewish historian. Although his deepest interest was the history of the Jews in Poland, he published numerous studies on Jewish culture, writing extensively on Yiddish theater. In New York City, from 1930 to 1956, Shatzky was affiliated with the New York State Psychiatric Institute where he was chief librarian and, as such, acquired the private library of Sigmund Freud for the Institute in 1939.
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