The American Civil War had a large impact on the Bourbon Industry. Before the war there a few large distilleries, but the majority of the distilleries were still smaller farm distilleries. This changed after the war. To understand why, we have to look at what happened during the Civil War.
In the Confederate States there was Prohibition. It was illegal to distill whiskey or brandy. The official reason for this was that the government needed the grains and fruits to feed the soldiers and sailors fighting the war. The real reason for Prohibition was that the government needed the copper from the stills to make war materiel. Everything from brass buttons for uniforms to brass cannons needed copper to make so if you owned a still, the government came and took it to make war supplies. When General Bragg invaded Kentucky in 1862, he had a shopping list that included copper stills to be sent back south to be manufactured into needed items.
In the United States, Lincoln passed a tax on distilled spirits to pay for the war. There had not been a Federal tax since 1817. It was written to be a tax just like the one passed in 1814, but Senators and Congressmen from the distilling States like Kentucky, Pennsylvania and Maryland objected. It could not be a tax on spirits produced because whiskey was an aged product now and the barrel absorbed whiskey. Distillers would be taxed on whiskey that would never be sold. The compromise was to create Bonded Warehouses where the whiskey could be stored for a year before the tax was paid upon what was remaining in the barrel. This tax is still with us today.
The war also increased the popularity of Bourbon in America. Before the war, Bourbon was most popular in the South and West. Rye was the spirit of choice in most Northern States. As United States troops marched through the South, they became exposed to Bourbon and developed a taste for the whiskey. Rye was still the drink of choice up North, but Bourbon gained popularity there after the war. This larger demand called for larger distilleries.
After the war, it became more feasible to build a big column still distillery and warehouses. It takes a lot more money to build such a distillery, but the larger market makes it economically possible to do so. Also, with the necessity of having a Bonded Warehouse and paying the taxes also meant that more money was needed to stay in the distilling business.
Distilleries became more of a full time manufacturing industry and moved away from farmer distilleries that only distilled in the winter months. There were still farmer distillers existing, but they found it harder and harder to compete with the larger companies who used the economy of scale to make whiskey cheaper and to sell it cheaper than the farmer could do and make a profit. Most farmer distillers turned away from making whiskey and made brandy instead. Brandy is seasonal product that could only be made when the fruit is ripe whereas whiskey could be made all year long.
The American Civil War changed the Whiskey industry in the United States. The war achieved Alexander Hamilton’s dream of large, industrial distilleries, forcing the small producers out of business. Prohibition would finish this process 65 years later as legal farm distilleries became extinct.
Photos public domain, from the New York Free Public Library online archives