Every Great Cocktail Has Two Essential Ingredients: Moderation And Responsibility -- Click Here
Home | History of Prohibition | Legacy of Prohibition | Industry Responsibility | State Repeal Votes | Media | Contact
Excerpts From The Book Of Bourbon
  • An Uncivil War and Its Aftermath
  • The Boy From Kentucky
  • Whiskeygate
  • Reconstruction of the Whiskey Business
  • A Matter of Trust
  • The Noble Experiment
  • The Roaring Twenties
  • The Reawakening of the American Whiskey Business
  • The New Deal
  • America "Lightens Up"
  • Whiskey at the Close of the Twentieth Century
  • A Matter of Trust

    Though the whiskey industry might have started on a small scale, during the years following the Civil War, it developed into a form of commerce in which a substantial amount of money was to be made. Major distilleries had been founded, whiskey families had staked their claims, and the foundations for many a whiskey empire had been laid. There was, however, yet another whiskey scandal looming, later in the 1800s. This time it came from within the industry itself and had a direct effect on which brands of whiskey are available to us today.

    You would think that you could trust something called the Whiskey Trust. But, no, this grand-scale scam featured characters whose aim was to control production and prices in the whiskey industry. John D. Rockefeller Sr., had paved the way with Standard Oil, and all it took after that was a few clever men in Peoria, Illinois. These men created the Distillers' and Cattle Feeders' Trust, lU10fficially known as the Whiskey Trust, with an eye to buying up small-scale distilleries-whether or not they wanted to be bought-and thus controlling the price and quantity of whiskey on the market. Once a small distillery became part of the Trust, it was either dosed down or production was cut back, the aim being to control production at as many distilleries as possible.

    Other such organizations within the industry existed in various parts of the country around this same time, but the distilling industry in Peoria, having starred with one distillery in 1844, had actually outgrown its counterpart in Kentucky by 1880. According to William L. Downard, author of the Dictionary of the History of the American Brewing and Distilling Industries, Peoria's whiskey business was an offshoot of the city'" active grain mills-surpluses were used to make whiskey. And although distillation of many different spirits continued in Illinois right up until Prohibition, the years that followed Repeal saw Kentucky, once again, become the whiskey center of America,

    Greed, of course, was the motivating factor in all of these shenanigans, and what the Whiskey Trust didn't count on was that some of the smaller distilleries within the Trust would make as much whiskey as they desired and simply lie about their production figures. The Trust had effective ways of dealing with these offenders and with those who wanted to remain independent-they destroyed their distilleries. Russian businessman Peter A. Demens wrote about their nasty business in Sketches of the North American United States, 1895, "Several weeks ago the Illinois whiskey trust by hired agents dynamited a distillery in Chicago that refused to enter the combine."

    Federal and local investigations into the Trust, which changed its name to the Distilling and Cattle Feeding Company in 1890, finally forced the company into receivership in 1895. It was split into many smaller entities, but some of these companies then joined together again as the Distilling Company of America, and in 1899, that company found itself under federal investigation. To cut a long, complicated Story down to a minimum, the company finally gave in to legal pressure and dissolved in 1902. A similar "trust" of that time was the Kentucky Distilleries and Warehouse Company (KDWC), formed in 1899.

    The most unfortunate outcome of the Whiskey Trust was that many small distilleries simply disappeared, while others were left under the control of large concerns. Back in 1850, both Old Pepper and Old Crow whiskeys were made at the same distillery. Whether or not they were one and the same whiskey, bottled under different labels, is not known-but is certainly possible. By the end of the century, however, because of the consolidation of so many distilleries during the days of the whiskey trusts, many different whiskeys emanated from relatively few distilleries, a practice still common today. We should mention, however, that some modern distillers go to great trouble to differentiate their various bottlings, by using different recipes and/or by selecting whiskeys that have developed particular styles during aging.

    Taxes have long been the bane of the whiskey business’s existence, and toward the end of the nineteenth century, demand was high for a fair policy that would benefit the country without crippling the entire liquor industry. The taxes, when they were reintroduced in 1862 to help pay for the Civil War, had been set at 20 cents per "proof gallon" (one gallon at 100° proof), but by 1865, they had risen to a whopping $2 per gallon, the exact same amount that would be levied after Repeal, almost 70 years later. It was too much for the industry to bear. Fact was that when the taxes were passed on to the general public, whiskey became too expensive for the common man. But, as we well know, if the public wants whiskey, it shall jolly well have it, and the people who profited most from this very high tax were none other than the moonshiners.

    The term "moonshine" was probably coined by the Scots when new laws introduced in 1781 drove them to establish "till" way up in the hills of Scotland that could be operated surreptitiously, literally by the light of the moon. There are still "shiners" in America today, and apparently, the greatest concentration of such people is probably in the Carolinas. But back when the government'" excise tax was raised to $2 in 1865, the moonshiners of Kentucky and Tennessee began making white lightning in abundance and cashing in on the woes of the legitimate distillers. Fortunately, however, government officials rethought their actions when they realized that much of the whiskey being consumed at the time wasn't being taxed at all. If they couldn't get the public to pay high prices for legitimate whiskey, they would have to reduce the tax and help the whiskey business back onto its tax-paying feet. While they had the government's attention, the distillers rook the opportunity to point out the fact that paying taxes on unaged whiskey, a product that couldn't yet be sold, was another problem that should be dealt with.

    In 1868, Congress passed a bill that reduced the excise tax to 50¢ per gallon, required a tax stamp to be put on all American-made spirits and gave distillers a grace period known as the "bonding" period-of one year before having to pay taxes on liquor that was aging. During this time, the liquor was kept under governmental supervision in "bonded" warehouses. Bonding helped the whiskey producers a little, since it meant that they didn't have to pay their taxes as soon as the spirit ran out of the still, but 12 months wasn't a very long grace period considering that whiskey under two years old isn't worth drinking and that it doesn't really gain much character until it has been in the wood for three to four years. So although the new law did help somewhat on the financial side, the distillers still paid taxes on their product considerably before they could sell it at a decent price.

    Still, the government had made some changes and provided a modicum of relief for the whiskey industry, and the years that followed were to shape the business into what it has become today. The bonding period was increased to three years in 1879, and in 1894, after the nation had just suffered a massive depression known as The Panic of 1893, it was increased again, this time to eight years. This time period remained in effect until the Forand Act of 1958 increased it to 20 years. To help the distillers further, the government agreed that stores of whiskey could be used as collateral for taxes when they came due. Whiskey bonds became a very valuable commodity.

    However, much whiskey was being sold in bulk to rectifiers and bottlers of the time, and the problem of unscrupulous wholesalers (and retailers) adulterating good whiskey had to be tackled. Enter Colonel Edmund Haynes Taylor Jr.

    Taylor, the man responsible for giving us Old Taylor Bourbon in 1887, was known as a discerning distiller who focused on the high quality of his products. Along with many other reputable distillers and rectifiers, Taylor was worried that the bad whiskey in the marketplace would reflect on the whole industry. Thus he teamed up with Secretary of the Treasury John G. Carlisle, and together, they lobbied for the Bottled-in Bond Act of1897.

    This act stipulated that bonded whiskey must be made at one distillery in one batch, aged for at least four years in warehouses supervised by the government and bottled at 100° proof (50 percent alcohol.) It also stated that only straight whiskey could be bonded, although distillate other than whiskey-rum, for instance-that met the requirements could also be Bottled in Bond. The act gave legitimate distillers the ability to prove the quality of their products, and though it was a step in the right direction, the fight for honest labeling was only just beginning.

    In Britain at the turn of the century, blended Scotches were the cause of much controversy when single-malt-Scotch producers sued certain retailers of blended Scotch for selling "an article not of the nature and substance demanded." Blended Scotch, they said, was a "silent spirit," whereas a pure malt "went down singing hymns." The Distillers Company, a group of blended-Scorch producers, fought back, claiming that because single malts contained many more impurities (flavor-giving congeners) than blends, theirs was the purer spirit. The battle eventually was won by the blenders, and the word "Scotch'• was legally allowable on bottles of blended Scotch whisky. Back on this side of the Atlantic, similar battles were being waged.

    In the early years of the twentieth century, large food companies had started shipping foodstuffs all over the country, and there was growing concern about the preservatives and dyes being used as well as the sanitary conditions in the packaging and processing plants. Laws that would properly define foodstuffs and pharmaceuticals and help protect consumers were, therefore, presented to Congress; luckily for us, whiskey was one of the items under discussion. Just as their counterparts in Scotland had done, American production of blended whiskeys argued that their products were purer than straight whiskeys, since they contained fewer impurities. They didn't seem to care that these very "impurities" were responsible for the distinctive flavor of the whiskey. However, the blenders had to contend with a certain Dr. Wiley, head of the Bureau of Chemistry, a part of the Department of Agriculture, and a true believer in straight whiskey.

    At one point, Wiley is rumored to have taken a bottle of had whiskey to President Theodore Roosevelt, who examined the product and declared that if people could no longer get a decent glass of whiskey, it was time something was done about it. Well, something was done, and when the law was enforced in 1907, all grain spirits other than straight whiskey had to be labeled "compound," "imitation" or "blended." Consumers interpreted this language to mean that the only true whiskey was straight whiskey. This wasn't entirely fair to the producers of blended products, so when Taft took office in 1909, he decided to establish further standards of Identity and clarify the definition. All whiskeys were, once again, whiskeys-some were blended, and some were straight-but the label had to declare which type was in the bottle.

    It's tempting to think that with that law under their belts, Grant out of the way and a somewhat standardized method of production, the whiskey distillers of America were able to sit back and make some money. However, those nineteenth-century temperance movements had been gaining momentum, and the whiskey industry was about to confront it’s most formidable enemy. Here's what was happening to the brand names at this time:

    • I.W. Harper Bourbon won a gold medal at the Exposition Universal, in Paris, France, in 1900, and another at the Louisiana Purchase Exposition in 1904.
    • J.T.S. Brown and Sons (J.T.S. Brown Bourbon) bought the Old Prentice Distillery in Anderson County sometime during the early 19005.
    • Cabin Still and Kentucky Tavern whiskeys were both trademarked in 1903.
    • Old Fitzgerald whiskey started being marketed in Europe in 1904.
    • In 1904, the Cascade Distillery (George A. Dickel) was enlarged, making it the largest distillery in the whole of Tennessee at that time.
    • Jack Daniel's No.7 whiskey won a gold medal at the Louisiana Purchase Exhibition of the 1904 World's Fair in St. Louis, and the brand would soon be marketed overseas. The following year, Jack Daniel injured his toe while kicking a safe, and strange as it may sound, the wound led to his death in 1911.
    • The Ripy brothers opened a distillery in 1905 that would later be known as The Wild Turkey Distillery.
    • Lem Motlow, who took over the Jack Daniel Distillery when Jack retired in 1907, introduced Lem Motlow's Tennessee Sour Mash, Jack Daniel's No. 5 whiskey and Lem Motlow's Peach Brandy shortly after gaining control of the distillery. Lem's peach brandy was made in an old pot still. He died in 1947.
    • Tennessee enforced statewide Prohibition in 1910. Jack Daniel's whiskey continued to be distilled in St. Louis and Alabama, while George A. Dickel's whiskey transferred to Louisville, where huge leaching vats to facilitate the Tennessean Lincoln County Process of charcoal mellowing were erected at the Stitzel distillery.
    • J .B. Dam (Yellowstone Bourbon) built a distillery at Gethsemane, Kentucky, in 1912.
    • Colonel Albert B. Blanton became plant manager at the George T. Stagg Distillery in 1912.
    • n 1913, an article appeared in The Louisville Courier-journal's special "Southern Prosperity" edition wherein whiskey dealer S.C. Herbst proclaimed that his Old Judge and Old Fitzgerald brands of bourbon were the last "Old Fashioned Copper Pot Distilled Whiskeys."

    According to Patricia M. Rice, author of Altered States, in 1873 Eliza Jane Thompson, a woman with a passionate distaste for the drinking classes, led 70 women to drugstores and bars in her hometown of Hillsboro, Ohio, where they stood outside and sang hymns and prayed. After news of the occurrence reached the ears of similar-minded women around the country, over 50,000 promoters of temperance followed suit. The movement became known as the Women's Crusade and led to the 1874 formation of the Women's Christian Temperance Union (WCTU) in Cleveland, Ohio.

    One of the women who had joined the Women's Crusade-and was president of the WCTU from 1879 until her death in I 898-was Frances Elizabeth Caroline Willard, born in Churchville, New York, in 1839. Willard fought for more than temperance; she was also involved in other "women's is.mcs," such as suffrage and civil rights, and she had some further attributes that frustrated the antitemperance folk. At that time, women involved with women's rights often were characterized as "plain," but Willard was anything but plain. Indeed, not only was she a very attractive woman, she was also known as an effective speaker who was "soft-spoken and womanly."

    The antics of the famed Carry Nation, who was also a member of the Women's Christian Temperance Union, are recorded by Oscar Getz in his book Whiskey-An American Pictorial History. No tale of Prohibition would be complete without a few words on this colorful woman. Carry Amelia Moore, who stood almost six feet tall and weighed around 175 pounds, was born in Kentucky in 1846 and raised there, in Missouri and in Texas. In 1867, she married a physician and alcoholic, Dr. Charles Gloyd and was widowed when her husband, despite her remonstrations, reaped the rewards of drinking too much. He was buried in a drunkard's grave. Less than 10 years later, Carry married David Nation, a lawyer and minister, who eventually divorced her because of her slightly insane ways of demonstrating her distaste for alcohol. Not that she hated only alcohol; Carry also hated sex, tobacco and Teddy Roosevelt.

    Nation believed that she had conversations with Jesus and that He had directed her to destroy saloons. And that is exactly what she set out to do. In 1900, she gathered a group of supporters, stormed a drugstore in Kansas, rolled out a cask of brandy and smashed it to smithereens with a sledgehammer. Not content with that, she then set fire to the contents. Later that year, she actually smashed up an entire saloon in Kiowa, Oklahoma. We must give a little credit here to the lady; her tactics certainly had an effect on the illegal bars at the time-many of them closed. But it wasn't until the following year that Carry Nation actually wielded the hatchet that became her trademark when she destroyed a saloon in Wichita. In her spare time, Nation published a newsletter called Hatchet and another known as Smashers Mail.

    Of course, her actions weren't without drawbacks; Nation was jailed in Wichita and a few other towns, but it never stopped her from going out and smashing more saloons whenever she was released. Her ways became too radical for the WCTU, which eventually rejected her, leaving her without financial support. Not one to be sidetracked for long, Carry Nation took to lecturing on the vaudeville circuit to raise money and traveled to every state in the country, breaking up bars as she went. In 1908, she even ventured to Britain and Ireland, where she spread the word of Jesus and His dislike of neighborhood taverns. Carry Nation died of a stroke in 1911.

    Previous Page | Next Page

    Home | History of Prohibition | Legacy of Prohibition | State Repeal Votes | Media | Contact | Sitemap
    Website Design & Maintenance by KTC Digital | © 2015 Distilled Spirits Council of the United States