When Prohibition went into effect in January, 1920, Lewis Rosenstiel and some other investors created the Cincinnati Distributing Corporation to distribute medicinal spirits. Rosenstiel had worked in the Bourbon industry as the superintendent of the Susquemac Distillery in northern Kentucky and had acquired the Joseph S. Finch Distillery. The company was later joined by D.K. Weiskopf, who owned the Schenley, Pennsylvania distillery and they changed the name of the company to Schenley Distillers Corporation. During Prohibition the company made ties with the Geo. T. Stagg Distillery in Frankfort, Kentucky, the James E. Pepper Distillery in Lexington, Kentucky, and the Squibb Distillery in Lawrenceburg, Indiana. They sold the brands associated with these distilleries and purchased whiskeys from other brands to add to their portfolio of spirits for medicinal use.
For example, Schenley purchased the last of the Jack Daniel Old No. 7 barrels, distilled in St. Louis, in the late 1920s. Most of the Jack Daniel whiskey had been stolen by George Remus during the early years of Prohibition but Schenley had found the last 100 barrels and bought them. They applied to sell this whiskey as Old No. 7, but was stopped from doing so by Lem Motlow, who owned the trademark and wanted a fee for using the brand name. Rosenstiel’s lawyers however, found out that Motlow owned the trademark on “Old No. 7”, but not Jack Daniel’s name, so they released it as “Jack Daniel Old No. 8” without paying Motlow a dime. Schenley gained a reputation for this type of business and kept that reputation for its lifetime.
Prohibition was coming to an end and Rosenstiel wanted to be ready when it happened. Schenley acquired the Stagg, Pepper and Squibb distilleries. They also had a Canadian distillery produce barrels of Bourbon for them in 1930. This is long before Bourbon became a product exclusive to the United States. This Bourbon was brought to the United States after repeal and became the Ancient Age brand. When repeal happened, Schenley was in a good position to compete in the spirits market.
In the 1930s, Schenley started to expand. Many brands and distilleries were available for purchase. Some of these brands and distilleries had started to enter the market, but eventually were sold for a variety of reasons, usually because they lacked the money to survive until they had aged whiskey to bottle. Schenley also entered into the import business, bringing in spirits from overseas. They purchased the New England Rum Distillery in Covington, Kentucky in 1935. In 1936 Schenley became the distributor of Dewar’s Scotch whisky. In 1937, Schenley acquired the Bernheim Distillery in Louisville with its I.W. Harper and Old Charter brands and the Geo. A. Dickel brand from the Shwab family. They moved their corporate headquarters from Cincinnati, Ohio to the Empire State Building in New York. In 1938 Schenley acquired a brandy distillery in Manteca, California and became the distributor for Bacardi rum.
By the end of the decade, Rosentiel could see war on the horizon. As a Jew, he was upset with what he saw happening in Nazi Germany. He ordered plans to be made to put his distilleries on wartime production and his engineers designed a still head that would allow even smaller stills to reach industrial alcohol proof levels. He then made this design available to any distillery that wanted it during the war.
For many distilleries, the war proved to be too much of a burden with the limited profits made from making wartime alcohol for the government. Their businesses failed and they were forced to sell. Schenley was an eager buyer. In 1939, Schenley acquired the American Eagle Distillery in Phoenix, Arizona. In 1940, they acquired the Oldetyme Distilling Corporation with their distilleries – Limestone Springs Distillery in Chapeze, Kentucky with its Green River brand and the Three Feathers Distillery in Cedarhurst, Maryland. The year 1941 saw the acquisition of Cresta Blanca Wine Company, the John A. Wathen Distillery in Lebanon, Kentucky, and the Buffalo Springs Distillery in Stamping Ground, Kentucky. In 1942, the Pan American Distillery near Phoenix, Arizona was purchased. In 1943, Roma Wines was acquired along with Blatz Brewery, but the Bacardi distributorship deal ended. In 1944, Schenley purchased Louisville Cooperage, but also started shipping penicillin made at the Squibb distillery in Lawrenceburg, Indiana.
The year 1945 was an eventful year for Schenley. Many of Schenley employees were away serving in the military. One of their engineers made a vital contribution to the war effort – Curtis G. Culin designed a plow made from iron obstacles the Nazis had placed on the beaches in France, to mount on tanks to plow through hedgerows. A bomber also hit the Empire State Building near their main offices. They also purchased a distillery in Bardstown, Kentucky and Quebec Distillers, Inc., Many, Blanc & Co. with its DuBouchett brands and Ron Carioca Destilleria in San Juan Puerto Rico.
By the end of the year, Schenley had become the largest spirits company in the United States.
To Be Continued – Find Part Two Here
Images from the Archives of Michael Veach