It may be under the influence of German (where z represents the sound /ts/, so it's unavailable for this purpose).
The first director of Merkos was R' Chaim Mordechai Aizik Hodakov ע"ה, who in the '20s and '30s was the principal of the Torah Im Derech Eretz school in Riga; and one of Merkos' early influential employees was Dr. Nissan Mindel ע"ה, who had been a student at the same school. It followed the principles of R' Samson Raphael Hirsch זצ"ל (hence its name), so I would guess that they used German orthography for Hebrew transliterations.
It's also possible that this was simply the standard at the time. I don't have his sefarim handy, but I seem to remember that R' Avigdor Miller זצ"ל also occasionally used S for zayin (though he never studied in any German-influenced school).