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An unresolved shell game

The Seventh Educational Graphic Arts Exposition took place with great fanfare at the New York Coliseum in Manhattan. From September 6 to 12, 1959, the city of New York hosted what was billed as America’s largest graphic arts fair since the late 1940s. To take advantage of the over 200,000 visitors, a rival show, Spectra ’59, was organized to run consequently, and within walking distance, at the New York Trade Show Building. However, this odd set of events would take a back seat to the commotion at the booth of Montreal-based firm Printing Material.

Gaston Lefebvre, the 36-year-old owner of Printing Material, was the Canadian agent for Polygraph-Export, which included exclusive selling rights for all graphic arts products produced in the German Democratic Republic (GDR). By all accounts, he was well educated, with a B.Comm degree from McGill University and a sales pitch that could convince most printers to hand over their cash. To crack the U.S. market, Lefebvre deviously booked space at Spectra ’59 and installed a Universal Webmaster RZO (offset half-web made in Leipzig, GDR) at his booth.

You’ve stolen our press!

Not surprisingly, there was already a Webmaster RZO dealer in the U.S.—the Acme Litho-Plate Graining Co. Acme was owned by New York-based Milton Berg, who, in 1949, craftily chartered a ship loaded with wastepaper from New York to the East German port of Rostock. Berg then bartered the paper, desperately needed by East Germans, in exchange for machinery made by Planeta, Brehmer, Universal, and Perfecta. The Universal, quickly renamed the Milton, was being displayed at Acme’s booth at the 1959 Graphic Arts Exposition.

Since 1950, Berg’s company had been the official U.S. importer of over 53 lines of Polygraph machinery produced in the GDR. Planeta was the diamond of the bunch, and since 1954, Berg had successfully racked up U.S. sales of the popular Planeta PZO-6 and PZO-7 presses (49 and 55 in., two-colour) while at the same time reminding prospective clients that Planeta had indeed designed and sold its drawings to the English firm George Mann. The resultant 1932 design facsimile known as the “Mann Fast-five” had then seen brisk sales all over the U.S. through local agent, American Type Founders.

Where did the money go?

It wasn’t long before Berg caught wind of the cheeky Canadian. He showed up at Lefebvre’s booth yelling, “You’ve stolen our press!” and sharing with passers-by the lurid details of the betrayal. This incident ironically helped expose what would soon become Canada’s largest bankruptcy among printing industry suppliers. After the dust settled, a $4 million deficit (worth $41 million today) would be uncovered.

In 1943, Printing Material, trading as Matérial d’Imprimerie Ltée in Quebec, was a subsidiary of Lefebvre & Sorin Ltée, a company formed in 1937 by Lefebvre’s father, Achille. 

In 1955, Lefebvre gained sole ownership and immediately sought to take advantage of the growing Canadian printing industry by lining up many European graphic arts agencies, such as Kiekebusch, Grafopress, Nebiolo, Koenig & Bauer, Johannisberg, Sadolin & Holmblad, Buhler Bros (Swissplex), GMA Tirfing, and Parisolith.

In 1957, Montreal firm Barer Engineering & Machinery, which held the Canadian rights to all East German machinery, agreed to sell Polygraph-Export rights along with their remaining inventory to Printing Material. Now with even more lucrative lines to sell and at exceedingly low prices due to East German companies’ desperate need for hard currency, Lefebvre signed crazy deals, offering long-term repayment plans, extending credit, and inflating the value of trade-ins, and basically anything to secure a sales contract. The financing firms of the day were delighted to extend loans to Printing Material after they saw the potential of fat margins on East German equipment. All Lefebvre needed was to show a copy of a sales contract along with a customer deposit. Air travel back and forth to Europe and California, expensive hotels, and fast cars became a part of Lefebvre’s life: an addiction that has been the downfall of many salesmen.

A ponzi scheme

As debts piled up, Lefebvre felt the screws tightening and pushed his sales staff to write contracts with even more generous terms to appease bankers. The ruse worked for months, but there would be no escaping reality. On the surface, Printing Material was a successful venture ensconced in a palatial building on Montreal’s Park Avenue and employing over 80 people. The dam finally burst on October 28, 1959, when Lefebvre orchestrated a “voluntary bankruptcy with only hours to spare.” Over 520 creditors discovered they’d be whistling for pennies on the dollar and had been duped by Lefebvre’s hyperbole. Polygraph-Export had the most to lose and flew a representative to Montreal to salvage remaining inventory, but their $608,000 ($7 million today) had already vapourized.

Further bad news awaited the appointed receiver when substantial cash sums paid to the company by finance companies “were never entered in the company books,” and individual sales were “financed not only once, but twice, and, in some cases, three times.”

Oddly, Lefebvre was listed as a creditor, but he would vanish from the scene by the end of November, after transferring his house in the affluent town of Hampstead, outside of Montreal, to his brother-in-law.

The saga of Printing Material would haunt the industry for years to come. On a personal note, my father had to look for a new job after the sudden bankruptcy.

Lefebvre never materialized again nor did the money. To add insult to injury, the Statler Hilton Hotel in New York never got paid for Lefebvre’s stay during Spectra ’59.

Milton Berg, on the other hand, had some terrific years selling East German machinery. By 1957, he had delivered 135 Universal RZOs alone. Still, by the end of 1960, he relinquished his agency to Royal Zenith. 

Royal Zenith would hold on to the agencies until 1990 when Koenig & Bauer purchased Planeta and the Iron Curtain finally imploded under its weight.

Nick Howard, Graphic Equipment and Howard Iron Works, is a printing historian, consultant and Certified Appraiser of capital equipment. Email him at nick@howardgraphicequipment.com.

An edited version of this article originally appeared in the March/April 2023 issue of PrintAction.