The George Lustig
and the Pipe Bender Story
1974
This
is a true story that has been confirmed to me by several people.
Written
2/2012, and Re-written 05/02/2016
Howard Yasgar
This
is an interesting and true story, its is all about how a person that I had met
in Chicago, had gotten his start in the very unusual business of buying excess surplus
government merchandise.
His name was George Lustig.
I
personally met George, and I did business with him in 1975 until he passed away.
The following story was told to me by
several of his friends, all of them were people that knew George very well when
he was a young man, and was just starting out in business. So I am sure the
story is 100% true, and it’s a classic.
After WW2, there was a large quantity of
excess military surplus equipment available, and the government did their best
to auction off as much as thy could.
The
government’s method of disposing the excess merchandise was usually by public
auction.
Many major cities like Chicago had warehouses
filled with this excess military surplus material so the government held weekly
auctions to dispose of it.
Chicago,
Illinois is where George was located it was one of those cities that auctioned off
government material weekly.
After the war, and all through the 1950’s and
the 1960’s, the government surplus business in the United States was booming,
some of what was auctioned off could sold and reutilized, but a lot of what was
auctioned off was very specialized equipment made for the military only, so it
took a lot of fast thinking, entrepreneurial guys to figure out how to make
money from it, and George Lustig was one of those guys.
In 1974, I was doing business with a company that was located on Canal Street in Chicago. The
company was Automotive Supply owned by Abe Greenstein, and Abe was the first to
tell me this story.
Later this story was corroborated by
another one of my suppliers in Detroit, Barney Kaplan.
In
the early days, after WW2, around 1950, George Lustig, Abe Greenstein and
Barney Kaplan, were out of the army and they had little or no money.
Barney
told me they were so broke, that he or Abe got invited out for supper by a
customer, they would save half the meal and heat it up on a radiator in their
office the next morning so they had breakfast.
They both told me that every week, their
friend and rival George Lustig, would go to the docks in Chicago where the
government was auctioning off surplus material.
George
religiously attended the government auctions every week and he always came
early to inspect what the government was selling. Inspection was important
because George had very little money, and he had to make sure that whatever he
bought, he was able to sell and turn into cash right away.
Usually Georges bankroll back then was about
$50.00
One
morning George overslept and he arrived at the government auction late.
By
the time he got there the auction had already started, and he had no time to
inspect any of the items being sold.
Unable
to inspect what he was bidding on, he decided to bid blindly on a few lots. But
by not having inspected them beforehand, he had no idea of their value.
As the sale went on George wasn’t having any
success.
By the afternoon the final items were being
auctioned off, and it seems as though most of the bidders had disappeared.
George listened carefully as the last item
was being offered. They were supposed to be two, new and unused pipe bending
machines.
Well George certainly knew what a pipe
bending machine was. They were probably just a couple of bending tools that he could sell to a plumbing
company or anyone that bent pipes.
George
raised his hand, he was planning on bidding a maximum of $15.00 for each
machine, it was all the money he had to spend.
His
thinking was that if he was successful, he could load the pipe bending machines
on to his pickup truck that very afternoon, and try and peddle them to some
company the next day
Well George was lucky and there were no other
bidders, so he easily won both machines for only $12.00 each.
As
it was getting late, George was anxious to load up the pipe bending machines and
hit the road.
He found the site manager and they walked
to the rear of the long Chicago storage warehouse, where the two benders were supposed
to be.
But as hard as they both looked they
didn’t see anything that looked like a pipe bending machine.
However, what they did discover at the
very end of the warehouse were two big monster machines.
The two machines must have weighed several
tons.
George double checked all his papers, could it
be possible these were the machines he had just bought for twelve dollars each.
George felt it wasn’t possible, perhaps there
was a mistake.
He knew that if it wasn’t a mistake, he
was in trouble. He neither had the money or equipment to move these giant
machines, and he started to get very nervous just thinking about it.
George knew that if he defaulted on his
bid with h government it would cost him twenty percent which would be five
dollars, and that was money he could ill afford to lose.
However, on the other hand, George knew he
certainly couldn’t afford to pay anyone to come and move the machines.
He knew it would take a lot of expensive heavy
equipment to do it, besides, where would he move the machines to.
George was really sweating now.
As he walked around the giant machines he
saw that each machine had a metal data plate on it with the name of the pipe
bending machine manufacturer who was located Akron, Ohio.
George drove back to his office, where he was
using an old wooden crate as a desk.
He called information in Akron Ohio and
got the phone number of the company that had made the two machines.
He called them up and a young man answered
the phone.
George told him that he had two machines
that had been made by his company years ago and he gave the fellow the serial
numbers off the data plates.
The fellow was less than enthusiastic, he
said, he knew the company had made the machines many years ago, but it was way
before he ever went to work for them.
George, had that bad feeling in the pit
of his stomach, he felt that he had hit a dead end.
He now realized that he would have to
default on the government sale and lose his five dollars.
But as a last resort, George asked the young
man if he knew of anyone that might be interested in buying the pipe bending
machines, the fellow said no, but he said that George could ask his grandfather
who was the owner of the company.
He
told George that his grandfather was ninety six years old, and he only comes by
the office for a couple of hours every day, but George could call him on the
phone in the morning.
The next day George got the boys grandfather
on the phone, and the grandfather said, he remembered the pipe bending machines
very well as he had built them himself.
He said that the machines were very old
but he would love to see them again, as they were his first government
contract.
He
asked George, if he got on a train in Akron, would George pick him up in
Chicago and take him to see the machines.
He said he didn’t want to buy them, he
only wanted to see them.
George wanted to say no, but he George relented
and agreed to pick the old man up at the Chicago train station.
The next day George met the old man at
the Chicago train station, and brought him to the government warehouse.
At
the warehouse, the old man saw the machines and he said, they were the first
machines he had ever made, he had tears in his eyes.
So again George asked if he would be
interested in buying them back. The old man said, “Yes I would, but I can only give
you twenty for them.”
George was stunned, as he never
expected the offer, that’s twenty for each machine George asked, “Yes” the old man replied, “forty
for both”.
Well George quickly calculated, he had $24.00
invested and $40.00 would give him a $16.00 profit. It wasn’t much, but it was
a profit.
George decided to give the old man one last
try, perhaps he could get the old man to go up to $50.00 for the two machines.
Are you sure forty is your best offer
George asked, “Yes” the old man replied “$40,000.00
for the two machines is the best I can offer you”.
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