Lost in Yonkers is set in 1942 Yonkers, New York, in the living room in Grandma Kurnitz's upstairs apartment. Downstairs is Kurnitz's Kandy Store, where Grandma and her daughter, Bella, work. As the scene opens, two boys, Arty and Jay, sit uncomfortably on the couch waiting for their Father, Eddie, to emerge from Grandma's bedroom, where an important conversation is taking place. The boys are strangers to this place since Grandma Kurnitz never liked the boys' mother, a feeling that was completely mutual. The boys' discomfort escalates when their father tells them that they'll be spending the next 10 months with their Grandmother. Eddie's wife's death from cancer has left the family deeply in debt, and Eddie has taken a job that requires him to travel for several months. Grandma Kurnitz has reluctantly agreed to keep the boys, only after Bella, who is mentally and emotionally challenged, threatens to leave.
A voice-over of Eddie's letter to Arty and Jay opens this scene. It is clear that Eddie is working himself to exhaustion, and the letter mentions that his doctor has diagnosed an irregular heartbeat, probably caused by stress. Bella stealthily enters the apartment so as not to rouse Grandma, but the old woman hears her and chastises Bella for wasting money on movies and movie magazines. To Grandma's way of thinking, those things do nothing but create unrealistic dreams in the imaginations of people who have no way of attaining them. Grandma takes the magazines and retreats to the bedroom.
Arty and Jay have received another letter from their father who tells them that he has been treated for exhaustion. The boys are settling in to their new environment and a new intrigue, a black Studebaker with two men inside who have been looking for the boys' Uncle Louie. Not sure of their uncle's occupation, the boys let their imaginations work overtime. Bella arrives home from another afternoon at the movies, this time bursting with the good news that she...
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