Shell Game


A Shell Game That Ended In Mystery
The Rise and Fall of Gaston Lefebvre’s Printing Material Ltd.

BY : Nick Howard, C.E.A., President, Howard Graphic Equipment Ltd.

The 7th Educational Graphic Arts Exposition took place with great fanfare at the New York Coliseum in Manhattan. From 6 to 12 September 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 concurrently, 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 the Montreal firm, Printing Material Ltd., and their American affiliate Printing Material Corporation.

Gaston Lefebvre, the thirty-six-year-old owner of Printing Material Ltd., was the Canadian agent for Polygraph-Export of East Germany, holding the Canadian rights to all graphic arts products produced in the GDR. By all accounts, he was well educated, with a Bachelor of Commerce degree from McGill University and a sales pitch that could convince most Printers to hand over their cash. But Lefebvre wanted even more, and as all Canadians grew up learning, the United States was the “big time.” To crack the US market, Lefebvre deviously booked space at Spectra ’59 and installed a “Universal Webmaster RZO” (offset half-web made in Leipzig) on his booth.

But there was already a Webmaster RZO dealer in the US: the Acme Litho Plate Graining Co. Acme was owned by a colourful New Yorker, Milton Berg. It was Berg who, in 1949, craftily chartered a ship from New York loaded to the brim with waste paper and set sail for the East German port of Rostock. In a bold move, Berg then bartered the paper, desperately needed by the East Germans, in exchange for machinery made by Planeta, Brehmer, Universal, and Perfecta. The Universal quickly renamed the “Milton” and was now displayed on Acme’s booth at the more extensive Exposition.

Fast Five ad
Planeta ad by Acme Machinery Division of Acme Litho Plate Graining Co. in GAM Feb 1951
Acme Machinery Division ad
Ad by Acme Machinery Division of Acme Litho-Plate Graining Co. in GAM May 1954

Two identical machines under two very different names with only Berg’s company in a legal position to take orders. Berg had been, since 1950, the official US importer of over 53 lines of “polygraphic” machinery produced in the GDR. Planeta was the diamond of the bunch, and since 1954 Berg had successfully racked up US sales of the popular Planeta PZO-6 and PZO-7 presses (49 and 55” two-colour) while at the same time making sure to remind every prospect that it was “Planeta” that had designed then sold its drawings to the English firm George Mann, The resultant 1932 design facsimile known as the “Mann Fast-Five” had seen recent brisk sales all over the US through local agent American Type Founders (ATF).

“You've stolen our press!”
Milton Berg - upon discovering that Printing Material Corporation was showing the same press at Spectra '59'

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

Where Did the Money Go?
Printing Material Ltd. (Matérial d’Imprimerie Ltée) was, in 1943, a subsidiary of Lefebvre & Sorin Ltée, a company formed in 1937 by Lefebvre’s father, Achille. In 1955, Gaston gained ownership and immediately sought to take advantage of a rapidly growing Canadian printing industry by lining up a vast array of European graphic arts agencies: some quite famous, most unknown to Canadians.

The opening of Printing Material new facility in Montreal
This photo was taken in 1957 at the official opening of Printing Material's new head office and showroom on Park Ave., Montreal. From L to R: John Peloquin, CA, of Peloquin & Hunter (the company’s accountants), Gaston Lefebvre, and Lucien Viau, Deputy Secretary of the Industrial Development Bank.

Kiekebusch, Grafopress, Nebiolo, Koenig & Bauer, Johannisberg, Sadolin & Holmblad, Buhler Bros (Swissplex), GMA Tirfing and Parisolith were just a few of the agencies held by Printing Material up to 1957.

The same year a Montreal firm, Barer Engineering & Machinery Co Ltd., who held the Canadian rights to all East German machinery since the early 50s, agreed to sell the Polygraph-Export rights along with their remaining inventory to Printing Material Ltd. Now, with even more lucrative lines to sell and at exceedingly low prices due to the iron curtain’s desperate need for hard currency, Lefebvre went wild doing crazy deals, offering long-term repayment plans, extending credit, and inflating the value of trade-ins - anything to secure a signature on a sales contract.

Printing Material ad
Ad by Printing Material Limited in CP&P Oct 1958

The financing firms of the day, including Canada’s largest bank, were delighted to extend loans to Printing Material once 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 part of Lefebvre’s life: an addiction that has been the downfall of many a salesman.

It looks like a Ponzi Scheme to me . . .
As debts piled up, Lefebvre felt the screws tightening and pushed his sales staff to write more and more contracts with even more generous terms to appease the increasingly panicked bankers. The ruse worked for months, but there would be no escaping the realities that had, on the surface, displayed Printing Material Ltd as a successful venture ensconced in a palatial building on Montreal’s Park Avenue and employing over eighty people. The dam finally burst on 28 October 1959 when Lefebvre orchestrated a “voluntary bankruptcy with only hours to spare.”

Over 524 creditors soon 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 try and salvage whatever equipment remained in inventory, but their $608,000 ($7 million today) had already vaporized.

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.” Individual sales were “financed not only once, but twice, and in some cases three times.”

Oddly, Lefebvre was listed as a creditor but would vanish from the scene by the end of November, only after he transferred his house in the affluent town of Hampstead to his brother-in-law. The saga of Printing Material would haunt the industry for years to come.

What happened to all the money? Where is Gaston Lefebvre? How could reputable finance companies, accounting firms, governments, and machine suppliers be so gullible in extending massive loans and machinery without a second thought? The answers were the same in 1959 as today. Thousands of off-colour business deals that should not have passed a “smell test” have been uncovered since the Printing Material fiasco, and tomorrow there will be more.

History is a good teacher; unfortunately,
the lessons will soon be repeated elsewhere.

In 1957, my father went to work for Lefebvre, and years later, I can still hear “Gaston Lefebvre!” passing my dad’s lips around the house. I was too young to know why. My dad had to get another job, just like the 80-plus other people who found themselves abruptly unemployed. Lefebvre never materialized again, nor did all the money. One can only guess where both ended up. To add insult to injury, the Statler Hilton Hotel in New York never got paid for Lefebvre’s stay during Spectra ’59.

Milton Berg had some terrific years selling East German machinery. By 1957, he had delivered one hundred and thirty-five Universal RZOs alone. Still, by the end of 1960, he relinquished his hard-fought agency to Royal Zenith, a firm well-connected with print. Royal Zenith would hold on to the agencies until 1990, when Koenig & Bauer purchased Planeta, and the “iron curtain” finally imploded under its weight. History is a good teacher; unfortunately, the lessons will soon be repeated elsewhere.