Ep. 68 - Has Too Much Focus on Kentucky Bourbon Caused a Misread of American Whiskey History?

Transcript

Drew (00:00:09):
Welcome to Whiskey Lore, the interviews. I'm your host, drew Hennish, the Amazon bestselling author of Whiskey Lores Travel Guide to Experiencing Kentucky Bourbon. Just back for my trip to Ireland. And man, I've got a lot of content coming up for you about that. Turns out it was a historic journey, the likes that the world has not seen in 135 years, and I'm going to have lots of stories for you coming up, lots of interviews, all sorts of Irish content coming up. Irish whiskey is exploding, and it is definitely something that I am excited to dive into with you coming up. But first we're going to wrap up my conversation with Laura Fields of the Fields Foundation, talking all about Pennsylvania whiskey history. And in this episode she's going to dispel some myths about distilling during prohibition. We're going to talk about how the word pure was lost over time, and she's also going to give us a vision of Pennsylvania going in and coming out of Prohibition. So let's jump right into the conversation. By that time period in the 1870s, 1880s, we're still in Western Pennsylvania or were they Oh, no. Spread throughout the state or

Laura (00:01:26):
No, Pennsylvania. The entire state of Pennsylvania had large, one of the interesting ones actually, and the brand has returned Kinzie, right? JG Kinzie started out as a dairy farmer and he, so basically King of Pria, right? You're talking about that's the area you were from. That's kind of where Distillery was out near Pottsville. What is the name of the town he was in out

Drew (00:01:54):
That way? North northwest of Philadelphia somewhere.

Laura (00:01:56):
Yes. Yes. So his distillery he started by himself made a name for himself, and the distillery is just, the history there is incredible. He ended up partnering in 1892 with this guy named Angelo Myers. He was such an incredible character and had such an impact on Pennsylvania whiskey because he was incredibly entrepreneurial and led the Philadelphia Liquor firms basically as president of that association and worked with the distillers in New York and had just connections everywhere. His tentacles were into everything. And right around 1892 is when Pennsylvania started fighting back against the whiskey trust. And so he ended up putting a lot of money into Kinzie's operation and making that a competitive location to produce lots of whiskey for the Philadelphia market. That and Philadelphia Pure Rye Whiskey Distillery, which is in Edington closer to Philadelphia, or was in those two distilleries, were both built in 1892, specifically to fight the whiskey trust and, which is an incredible story in itself.

(00:03:17):
But here's this old dairy farmer <laugh>, who's got some land along the river and sets up his still and find success, and then all of a sudden, here's this guy from Philadelphia who goes, Hey, you're a train right away. You wanna get involved, but maybe let's make this happen. And then now they've got this monster facility where they're producing all this whiskey for the Philadelphia market, and it just takes off. And then he comes back even after prohibition. Meanwhile, Angelo Myers is now playing with the whiskey trust because he's a smart man. He knows where the money is. So he kind of switched after fighting the whiskey trust now kind of joins them and is now trying to talk the Pennsylvania distilleries into joining the whiskey trust. Wouldn't this be a great idea? And everybody goes, yeah, pound sand. So thank

Drew (00:04:06):
God they

Laura (00:04:06):
Did that. But yeah, I mean, yeah, such large distilleries in Philadelphia and in the eastern part of the state, obviously you had bomb burgers that you've already mentioned. I don't even know where to start McHenry. And

Drew (00:04:27):
There's like brain saturation after a

Laura (00:04:29):
While, you know, have no idea. So

Drew (00:04:30):
Many. Yeah, I'm about to go travel to see 45 distilleries in three and a half weeks, so we'll see how much I remember about each distillery by the end of that.

Laura (00:04:40):
No, it's funny that one of the big ones that I wanted to tell you a story about too is Publicar in Philadelphia Continental, which is then also became associated with the Kinsey Distillery and Puer Harry Puer, such an amazing guy. He first got started, he lived in basically the swamps in South Philadelphia. There used to be swamps in South Philly along the river and he lived in this neighborhood where basically there was drainage and pig farms, and the pig farmers were very hostile people. They were just keep outta my neighborhood. You're not coming in here city. Even though as many times as the city tried to go, let's move in and get rid of this pig farmer disgusting area and put in our nice buildings and blah, blah. And they just said, get outta here with pitchforks and stuff. And he was one of those people.

(00:05:32):
And he would take old barrels and refurbish them and found that he could take old whiskey barrels, saturate them with water, turn them, and basically withdraw whatever was still left in the STAs back into that water and was selling that and was making a good deal when he was a little, a young guy, and was making a lot of money off of that because his father had a cooperage and he got involved in Cooperage, and that's kind of where his start came from. But then he started making money off of this whiskey, and then that kind of began to snowball into him building a business and him building a distillery. And that same area of South Philadelphia is actually where he ended up setting up his distillery and where it grew and grew and grew until it became what we recognize as public or industries. And it's just one of the absolute largest distilleries, <laugh> in the country, and was one of the companies that's not given credit for being able to distill during prohibition. And one of the ones that survived prohibition, this is another thing, the list of six. Have you ever heard the six distilleries that were allowed to distill bef during prohibition? Yeah, is absolute. I don't wanna say it's not true. It is. Those six did, but plenty of others did. Yeah. Well

Drew (00:06:53):
The other thing about that too, I was going to bring it Cuz Old Overhaul was one of the Andrew Mellon, yes. Had one of those licenses. And then when American Medicinal Spirits bought them out that's how they ended up with their license. But there were 10 licenses and only than that six were taken.

Laura (00:07:12):
No, and that story is actually more connected to and I, I've talked to Chris Morris about this too, because I found evidence that there were actually 26 licenses that were given during prohibition and the list was given in Congress. So during a deposition, and they talked about, and even the interviewer in Congress was like, I thought there were seven. And he went, no, the seven were actually the ones that contributed to the formation of the Distillers Association, which was born out of prohibition and was formed in 1933. So those were the people that kicked in the money to basically formed this association, the Distillers Association. But there were many more actually even between 1920 and 1922, there were two distilleries, large distillery in Pennsylvania and Gwen Brook in Maryland they produced prolifically during those two years. And they were large, was an unofficial concentration warehouse because the whiskey that they distilled during that period was kept in their warehouse, even though they weren't really considered a concentration warehouse because they only held the whiskey that they made during those two years. They're not on that list. They certainly were distilling. So

Drew (00:08:39):
Were they distilling though that, see, that's the thing that is, the other piece of history is that no one was allowed to distill and that the story goes that all of them had, I mean we're talking about a constitutional amendment and constitutional amendments up to that point had never been repealed. So to many people at the early stages, their feeling was that this is the law, it's not going to change, and we might as well get rid of all of our distilling equipment. And that it wasn't until a distiller's holiday in 1928 when they were running severely low on medicinal whiskey that they wanted to start back up. But only a pH tsel had equipment that everybody else's equipment had been dismantled. And so that's why I wonder about the stories about distilling, because when they talk about the distillers holiday, it makes it sound like they couldn't have been distilling. No.

Laura (00:09:38):
This

Drew (00:09:39):
Is

Laura (00:09:39):
Why during that time, these stories that keep getting repeated over and over and over and over again, we all can't kind of take it for granted that that's all true. Not there. Were people distilling, like I said, those two specific distilleries, large, and Gwen, I think it's pretty sure it was. I think that's the name. I'm picturing it in my head, like G w y n Brook. But I know for a fact, one in Maryland and one in Pennsylvania large distillery were producing whiskey between 1920 and 1922. That is very much before, after prohibition had taken place, they were producing large quantities of it and had it stored in their warehouses. They were not distilling. However, after 1922, that's when they stopped. But that's, that counts as during prohibition. You also had what I have, where's my list of those 26? Because one of the things that's interesting about the list, even though there are 26, and I think why they're still able to rationalize that it was only those six companies is because a lot of the companies that are on the list were owned by those companies. But the statement is that there were only six distilleries but even that list is not accurate with the six, because you're excluding the distillery in Maryland. You're excluding the one. And when I spoke to Chris Morris about this, he said, well, Laura, you need to understand that the history that I'm studying is only Kentucky. And that's all he had to say, right? So I'm like, okay, well that makes sense. So if you're only really focused on the history of Kentucky and you're excluding the rest of, and the more it like Indiana, Illinois, New York, Pennsylvania,

Drew (00:11:33):
Ohio, Ohio,

Laura (00:11:34):
Virginia, I mean California for heaven's sakes, huge producers of brandies and other things, big distilleries functioning all over the country. And if you're just focused on Kentucky, you could see how they might miss a lot of this. So as on, this is why these revolutions I have in my research are just kind of like, wait a second, you can knock me over with a feather. This can't be right. And so then I go to experts that I know and trust, like Chuck Ery and Chris Morris and my friends John and Linda Lipman and Steve Bayshore. I bounce ideas off of people whose opinions I trust Chuck out. Are you wonderfully? Because I know he'll tell me to go to hell. But these experts in their field, I don't doubt the things that they say. What I do doubt is that they've done the research themselves. I know that Chris Morris has, I know that he has. But I think that what happens is we end up kind of saying, well, I trust entirely such and such a source what they're saying, so then I'll just repeat it because that's obviously true and a lot of the information is true. It's just limited in its scope. And this is just one of those examples.

Drew (00:12:49):
I bump into that a lot actually. And that's what I mean, I fed five seasons of whiskey lore, the Stories podcast off of stories that I started out thinking that it was going to be one way. And as I dug in and started doing research, come to find out that's not true at all. And it's one of the, you're right, there is a perception or perspective bias that comes in when you are hunting and trying to come up. You have a thesis already, and you are trying to fit your information to fit that thesis. And when you find somebody who agrees with you that you trust, then you're just going to jump in there and accept it. Because if it's your thesis and you say, ah, yeah, right, it must be true. But I found it with the story of Old Crow and the fact that Ulysses s Grant, I was going to do a whole episode about why it was his old crow was his favorite whiskey, and I went down this rabbit hole and discovered that the whole saying of that Abraham Lincoln said, what does he drink? Old crow was barrel of it to all my generals, right? Right.

(00:14:13):
There was actually a telegraph operator who had asked Abraham Lincoln about it and about that quote and wrote it in his book on being a telegraph. And he said that, he said, no, it wasn't true. It was just a paraphrasing of a story of King George II and the Duke of Newcastle talking about Major Wolf becoming general Wolf in Canada and saying that they thought he was mad. And he said, well, tell me what dog bit him, because I'd like him to bite all my other generals. Right?

Laura (00:14:50):
And so

Drew (00:14:50):
That's all so Lincoln. So Lincoln goes, yeah, I love that quote, but he said, and I wish I had said it, but I didn't. No. And so you have to think that with history, and this is something that I am definitely finding in my research and in doing my whiskey lore episodes, is that history is the fact that you have right now and sooner or later, something else is going to come along. And so what it does is it makes you say, I can never 100% say I know this to be true. I have to almost with everything, say I know this to be true with the amount of information I have right now, but it may be challenged someday down the road.

Laura (00:15:36):
Well, one of the things I'm really lucky with is that the research that I'm doing on Pennsylvania, there is none. I have no reference material,

Drew (00:15:45):
No biases story about, I'm

Laura (00:15:47):
Coming at it from a completely blank canvas. And there, as much as I try and look for information on these distilleries, there is none. Which is why I tell you I have to take all these different angles to get to the meat of the story. But boy, when you're trying to find a fact about Pennsylvania, and I know it to be a fact and it's written, I find multiple references that all jive. And then I look at what I've always known to be true about whiskey and through bourbon's lens, and I can go, I see how they got to where they did. But because I'm coming at it from a Pennsylvania perspective, which is older and rooted in rye whiskey, not in bourbon I'm able to see it more clearly because, and then I go after it from a new angle. I'm looking at congressional records, I'm looking at, I'm not just going to take for granted that straight whiskey is what it is.

(00:16:50):
No, straight whiskey was concocted by the bourbon industry. Pennsylvania never used that term. Actually, Kentuckians didn't even wanna use the term. I quotes from Taylor where he's like, don't make me use straight. I should be able to call my whiskey whiskey and no one else should be able to call their whiskey whiskey because it's not as pure and as good as mine. That's smart marketing. But they didn't Straight is a bourbon thing. We called our whiskey in Pennsylvania, pure rye, which in my mind is actually more sensible <laugh> like if you're calling something pure. It was, and you get a lot of bad press about this. A lot of people say things like, well, pure rye wasn't pure. No, that's absolute a fallacy. They also say that Pennsylvania whiskeys and rye whiskeys were rectified. Well, let's look at that. Pennsylvania whiskeys were made in a distillery that were out in the country.

(00:17:45):
Why was it out in the country? Because it needed to be near a mill. It needed to be near a water source. It needed to be near the farm where it was getting its grain. It was located elsewhere. It didn't need to be in the city. The city, however, was in demand for it. And so they had to have set up distribution lines from the city, from the hub. So they created distribution networks in places like Philadelphia, New York, Baltimore all along the eastern seaboard California, Michigan, all these places right along the lakes and rivers and whatnot. So in Philadelphia, you had people buying large amounts of whiskey from pure rye whiskey mines you from these distilleries, which was pure from the distillery, taking it to the city and then rectifying it and altering it in whichever way they felt would sell best. Would they sell a product to a consumer that understood what pure rye whiskey was, is anything other than pure rye whiskey?

(00:18:44):
If the consumer tasted it and went, you're full of it, I know what my whiskey's supposed to taste like, and this is altered, this is bad, this is not good. The whole thing about tobacco spit, I can't even <laugh> like the Pennsylvania rye whiskey, even in Philadelphia where it was being rectified rectification merely means that you're altering the spirit that is given to you as a pure rye. So you're taking it, either you're reds distilling it or you're blending it. There were blending houses in Philadelphia that were so highly respected on par with things in Europe where now you have blending houses in Europe that are very highly respected, and everybody goes to them, and Char pays a lot of money for those blended whiskeys. There were people in Philadelphia called Rectifier who were actually blenders, who were blending these high quality spirits that were coming from distilleries.

(00:19:33):
They had warehouses of their own in Philadelphia. They were taking all of these barrels from these distilleries out in the country, bringing them to Philadelphia and storing them in their own facilities. Those they didn't make that whiskey. Some other guy out in the countryside did, but they now own it because they bought it. It was the distilleries bread and butter to have relationships with rectifying in the cities. It just made good sense for them to have those relationships because those were the bulk buyers. Obviously. All of those distilleries sold locally. They had retail locations on site. They sold to their general stores and downtown. A lot of them as the cities got bigger with the railroads, you had them setting up their own storefronts in their towns and making a really good living for themselves. But you could not make an excellent living, and you could not become the big industrial kind of producers without a distribution network.

(00:20:27):
So you must have either an association with a city or your location in the country has access to a railroad to a river, to a canal, whatever the case may be on a waterway. That's why you end up with the Monongahela River being so popular, because the Monongahela River had immediate access to the Ohio and all of the money out west and all of the money down south because it had access to those rivers and all of the people in Philadelphia having access to the boats that were shipping over to Europe and now going north and south and every other way. You have to think of those locations as commerce centers. And so yes, rectification now gets a bad name because it flies in the face of straight whiskey. But in reality, rectification was a time honored tradition that was 250 years old before it was wiped out by prohibition in favor of the people who won <laugh> after prohibition and came out Rosie. But the rectifier were the distribution networks simple. Yeah.

Drew (00:21:36):
Well, I think the other challenge too was the Bottled in Bond act. We go back to Colonel Lee h Taylor, because once that came along, even in reading Bourbon history, we talk about Old Forester was rectifier as was for roses, and they both suffered their reputations for a short period of time because of rectified whiskey having a bad name, because a master marketer said, Hey, we have to do this law and make this law to allow people to be able to trust whiskey. So that's going to create that bad name. I think the other thing that I've researched in terms of the word pure is that time period, right before the Pure Food and Drug Act, the marketers, the snake oil salesman, were using those terms and it was creating an issue. And that's where Taft had to come in and say, Hey, here's what we're going to call this. Here's what we're going to call that, and try to make some sense of it because it was being abused during that first. Well, I

Laura (00:22:46):
Wanna add something to

Drew (00:22:47):
That actually, 19th Century,

Laura (00:22:48):
Because everything you're saying is true, but I wanna add that this was driven, including the Bottle and Bond Act. Again, if you're coming at it from a bourbon perspective, and you're only thinking of this as being bourbon, doing good for the world the Bottled and Bond Act, and that era was coming out around the time that the Whiskey Trust was flailing, they had just been basically deemed illegal and were forced to dissolve in 1895. And so they were restructuring. And how did they do that? They bought 52 distilleries in Kentucky because yeah, coming from Peoria and knowing that they needed to buy up production facilities that had distribution networks, they knew that those well established distilleries down there were easy to get. The reason they were easy to get is because everybody was failing that the bourbon market was actually really struggling. Market prices were low, and grain prices were high, and a lot of those distilleries were not doing well. And here comes the whiskey trust on their white steed. We're going to buy you, and don't worry, we're going to give you stock options in our company and you'll, you'll be under our umbrella and be safe. So at all, 52 of those distilleries said, okay. And then some of the other Frankfurt distilleries, like George t Stag and oh God, I know drawing a blank at the moment, but there were three major ones down there that were actually bought by Duffy. You familiar with Duffy's? Pure Malt?

Drew (00:24:30):
Yeah. Yeah. Oh yeah. Yeah. There's a story on him. I actually

Laura (00:24:32):
Have a bottle.

Drew (00:24:33):
Walter Duffy. Are you here? Yeah. So Oh, you have a bottle,

Laura (00:24:36):
An old bottle. Yeah. Duffy's Pure Malt. I love Nice, love that story behind Duffy. He's New York, right? So this guy,

Drew (00:24:42):
Rochester,

Laura (00:24:43):
New York, the ultimate snake salesman, the snake oil salesman, sorry,

Drew (00:24:48):
He even got Congress to actually validate his snake oil sales. Oh, he was a genius,

Laura (00:24:53):
Absolute genius. One of those kind of cult of personality kind of characters that always got his way. And he bought those Frankfurt distilleries and took them under his wing. So those distilleries actually belonged to a New York firm while the rest of the distilleries were coming under the umbrella of what later would become United Distillers. But was

Drew (00:25:17):
Julius Kessler was the guy, Kentucky Warehouse Association, it was called, yes. But that was the whiskey trust,

Laura (00:25:23):
But that was the whiskey trust. So there were four parts of the whiskey trust as it reformed itself. There was the American Spirits Company, our American Spirits Distribution company, the American Spirits Products Company, that was the big head honcho company that basically controlled all the other arms. It had the Kentucky Distillers and Warehouse company and the distribution network, and then it had another company that was the buyers. They went around and picked everybody up. That's where Angelo Myers from Philadelphia got involved, cuz he was one of those guys manipulating the rest of the industry. They had a plan in 1899. It was actually building up after, as they're restructuring themselves and they had purchased all those distilleries in Kentucky. They're like, now we have to buy all the distilleries in Maryland and all the distilleries in Pennsylvania. And so they start sending their minions into Pennsylvania. They start flooding the newspapers with false information about how they're forming these combines that are going to fall under the umbrella of the American Distilling Company, or what was it called? The

Drew (00:26:39):
Yeah,

Laura (00:26:39):
I'm sorry, I'm blanking on the company name, but

Drew (00:26:41):
I was going to say something. Spirits it, the United States Spirits

Laura (00:26:44):
Still in company or whatever, and it was supposed to be 125 million seed money, but Pennsylvania was doing so well. Rye whiskey was still the most popular and the most desirable whiskey on the market. They had a strong market, and even with the failing prices or the falling prices in whiskey and in the grain shortages, they held a meeting with the New York distillers and well, actually, all the Philadelphia distillers got together at the beach <laugh> nice. And basically said, Hey let's all get together and all kind of limit production for a little while. We'll be able to bring our prices down and we'll all be okay. They did that. They stopped production from 97 to 98 and started Red distilling again that September. And they did fine. They came out of it smelling fine. Well, the way that the Whiskey Trust went at it was very interesting.

(00:27:46):
They went for the big guys, because those are the ones they wanted with the big distribution networks. Now, you remember John Gibson that I told you about, who I have a huge love him. He was the big one. He was the big fish, right? Because he was the guy in Philadelphia who everybody knew if Gibson goes, we're all going, he's got the biggest distillery in the state. Warren John Gibson was dead by the time this is now, now dealing with Mr. Sinnott, Joseph Sinnott. But Sinnott's sitting there in a meeting with them, and the Whiskey Trust guys are all like, Hey, we'll make a deal with you. We'll pay you $2 million for your distillery, which let's be honest is a good price. And not only are we going to give you that, but we're going to give you percentage of stock options and blah, blah, blah, blah, blah.

(00:28:28):
Then they start going with this, the newspaper campaign flooding the newspapers with the news that they had purchased Gibson, that they had purchased the Philadelphia Pure Rye Whiskey Company in Edington that they had purchased God, I can't forget what the other one was. There were a couple of them that they were really wanting to get a hold of so that everybody else would fall on the line. Well then the option was only until June to buy June passes, they start going to Gibson or to Mr. Sinat going like, Hey, congratulations on the sale. I understand you're part of this great big company. He goes, what are you talking about? I think I know if I sold my own company, he goes, they told me they'd give me 2 million, get back to me again with a bigger price because that doesn't come close to the value of my company, and it's not a chance in hell I would sell to these people.

(00:29:18):
And of course, when that happened, and the Whiskey Trust had to say in the newspapers that their efforts to take the Pennsylvania distilleries completely failed. Now, this is where the dominoes start falling, because when they can't buy Pennsylvania and they can't buy Maryland, they were successful with Hannah's distilling, but that's another story entirely. But they weren't able to buy Baltimore. They weren't able to buy Pennsylvania. And that took the wind out of their sails, and they weren't able to form this 125 million company. They started getting a lot of complaints from their stockholders. Everybody's going, where's all the money you promised me? And so this is where you see the whiskey trust flip failing again, and having to restructure again and become national distill that prohibition comes and kind of saves everybody's behinds. Yeah.

(00:30:10):
But all of this trouble that they had, there was one thing that the whiskey trust never failed at, and that is keeping their myths on Washington and making sure that their money went to lobbying efforts to maintain the integrity of their needs and their desires. So when they say things like, we need the Bottle Demo Act because we need, our straight whiskeys need to be respected for the high quality that they have. Why do you think this is happening? It's because these are their companies which they need to bolster and make more popular and bring up the value of what I mean. And of course, Pennsylvania jumps on this bandwagon too. This is great. Bottled and bond wonderful. So rye whiskeys become bottled and bond as well. The whole nation embraces it. It's a great thing. But then you have if you wanna jump in, I'm sorry, I know so much about this

Drew (00:31:05):
Trust. No, that's fine. Yeah, no, I'm up to the point where, I mean, I've done the research on the whiskey trust, but I did more of the story of when they were in Peoria and when they were in Peoria, they were more about there's two things that am misnomer with that. Name the two words in the name. Cuz they weren't about whiskey, they were about nutragrain spirits. They didn't want to buy out distilleries that were making rye whiskey in that original incarnation because at that point, we're more interested in making lots of money, producing that grain spirit as quickly as they could just add flavor to it, whatever you have to do. But we just wanna pump this stuff up, flood the market, and put all of our competition out of business. So they were looking for other places that were creating something similar. And so there's this myth that they owned every distillery north of the Ohio River. And in talking to a bishop, of course, we find out that that's not it entirely true. And then the other thing is that they weren't a trust. They were acting like a trust. But they actually had changed into a company by the time an antitrust act came along, because they saw the writing on the wall and said, we can't call ourselves a trust. So they turned themselves into a company, but just kept doing trust things in what they were doing. Well,

Laura (00:32:40):
They were the ultimate corporation. They right, the manipulation of politics and money and banking and an entire industry, which was, by the way, the most lucrative industry in the country. That one was it half of the United States income that was coming into the coffers in Washington was coming from whiskey, Texas. And after 1880, the power dynamic shifted to the West. And you had, pardon me, Peoria, basically taking the reins of what the Eastern establishment had for themselves for so long. The nice thing is that even if they went and they became this corporation that was very focused on lesser products and pumping more of it into the consumer market the Eastern companies maintained the integrity of their products. They could have fallen suit and gone that route. You know what I mean? But the same thing happened in Europe, had the Irish were like, well, we're not jumping on that bandwagon with the column still we're good <laugh>. Like Yeah. And yeah, exactly. I think that's kind of what they did. The whiskey trust, we can always associate with the column still and the grain spirits. But in Pennsylvania and in Maryland, it was always the chamber, still the doubler and the worm. And that long expensive process of using the most expensive products, heating their warehouses 24 7 all year long. Thankfully, they all happened to own coal fields.

Drew (00:34:24):
So

Laura (00:34:25):
It was helpful that they had this kind of vertical integration. But the whiskey trusts was, they were always worried about buying the companies that had the distribution networks. So they would buy everybody up or as many as they could so that they could have enough control of the market. But then they started going close down that one close down this one, because they would've been competition anyway, just shut 'em down. We'll still pay them to stay active, but they're not going to be, and the one,

Drew (00:34:55):
It was a Ponzi scheme basically in a lot of ways, but it's successful. It had to collapse. Yeah. Yeah. It had to collapse. And the government had to look into it at some point. And but

Laura (00:35:08):
The government was feeding off of it too. They were making handover fist because of their success. And anytime that the government needed information, because they didn't understand the whiskey, I mean the Internal Revenue Service did, this is something I feel like we're missing now. The government does not, after prohibition, the government was asking, you know, read the congressional reports, and you're hearing some of the questions that are coming out of the mouths of these officers who are now in Congress because of 13 years that have passed. Whoever was in Congress before maybe has moved on. And these are new people, and they're asking the most assine questions that you must be like, how do you not know this <laugh>? Like it's your job to know about whiskey production. And the whiskey trust was able to take advantage of that and say, don't worry, ask us what you need. We are here to help you. We're the stewards of the whiskey industry, and we wanna help you in all your endeavors. Yeah.

Drew (00:35:58):
So you brought up Taft and I have a love-hate relationship with him in terms of whiskey. Yes. Because he was the guy that yes, he said, all right, we gotta figure out and nailed these rules down. But he was the same guy that just a couple years later helped get the income tax put in so that we could have prohibition, because he knew, they knew the revenue had to keep coming in from somewhere. And since most of it was coming from either tariffs or from whiskey losing whiskey was going to be a hammer. And it was going to keep the politicians from siding with prohibition as a thing. But now as I start going in, it's again, researching and we hear about prohibition started with the Volted Act, and yet we can go back before that in these different states that went in early. Delaware went in two years before Pennsylvania went in a year before Tennessee went in 10 years before. So it was already kicking up in these other states. Some took longer to get to it than others. But with Pennsylvania going into prohibition, where did all of these major distilleries go to? As you said, there were a couple that continued to produce, but not for long.

Laura (00:37:30):
Well, this is tricky because there's a lot of reasons. I know I've talked to you about the f I have eight reasons of why I feel like Pennsylvania wasn't able to survive it. Pennsylvania, just to back up a little bit, because you're asking me about before prohibition. Pennsylvanians, yeah. They didn't believe that prohibition was going to happen because everybody's so insular, right? You're in Pennsylvania, you believe that the rest of the world's kind of like you <laugh>. And in Pennsylvania, they had had a vote in 1889 for prohibition, for the state, the local option, and it failed miserably. And so the distillers were like, see, there's no way our state's going to go over. And even when 1917 came and the war efforts shut down, the use of grain and all the distilleries had to shut down. Even then they were like, no, it's cool. We got this.

(00:38:24):
The war's not going to last forever. And yeah, we got all these prohibitionist and temperance warriors nipping at our heels, but we've always been able to tamp them down. In the past, the ones, ones that were big were sitting pretty still. Like I said, they weren't owned by the whiskey trust. They were all independent. They were all making money. They were all content in the fact that their representatives and their state was never going to go for prohibition. And they were right. Pennsylvania was not on board. They only ended up signing it when they realized that everything had collapsed and they were not going to win, and it was going to happen whether they liked it or not. So at that point, everybody was kind of going like, ah, let's all get rid of our whiskey. What are we going to do? How do we get outta this? And then, yeah, it was a mess. But I mean, do you want me to go into the reasons that I feel? Yeah, yeah, go ahead. So I actually, I have to write 'em down because like I said, my brain, so the first one was that it was expensive. We already talked about that rye whiskey is not only more expensive to grow but it's obviously more expensive to buy. It has a longer growing season. The heated warehouses we're expensive to maintain year round.

(00:39:35):
What else was there? The chamber stills, you know, required more staff constant supervision. It was just a far more expensive endeavor. So was not, that was not ideal. Everybody just wanted to, yeah, how do we cut corners and how do we make as much whiskey as possible as quickly as possible so that we can satisfy this nation that's thirsting for whiskey? So that was number one. It was expensive. Number two, Pennsylvania distilleries were not allowed to form corporations until 1901. There were corporations across the state in every other industry, but very specifically in the law, it's stated everybody can form corporations except distilleries, <laugh>. And it says that we don't want liquor becoming corporatized, not in our state. So it wasn't until 1901 and the McClean Act that they were able to say, all right, you guys win. You can do it. But even then there was Moss Distilling and who was the other one?

(00:40:36):
Fri, was it Fry massages? I forget there. But there were two distilleries that basically said, yeah, all right, we'll do it. But everybody else was kinda like, eh, I'm good. I've haven't done it. My distribution network is in New York California, Buffalo Georgia, Flo, I got it. I'm good. I don't need this. I'm already kind of a corporation of myself, and why would I even wanna involve the public? So they were all sitting pretty and unhappy. And the other corporations from OUTTA state at that point started moving in because we discussed Mej was doing well, and they all wanted to get jump on that bandwagon. So they were able to begin to buy up land in the Menga Hill Valley and build their distilleries. So there was a real big boom in the early 1905 to 1910 dozens of distilleries went up. They all lasted about two or three years and then went outta business, but still <laugh>.

(00:41:31):
And the reason for that is largely because they were unwanted. Pennsylvania distilleries were kind of like, we don't want new neighbors. We're good. We've spent a hundred years nesting, and we don't need people taking our food supply. Yeah. And there was also, a lot of the courts were all, there was in 1887 was the Brooks Law was passed, which is basically gave Pennsylvania's courts the ability to determine who and who was allowed to get licenses, which was considered a win for the prohibitionist because they said, well, we can plant our own guys in the courts, and they'll start turning down all of these applications, and then we can start having dry counties and dry towns, which worked here and there, but not really overall. So anyway, not allowed to afford corporations. Number three Pennsylvania whiskeys doubted that prohibition would ever come become a reality. So I think we've already discussed that.

(00:42:27):
Number four, the control of concentration warehouses was key in determining who controlled whiskey stocks. So this is a difficult one because nobody really talks about this history, and it's incredibly important to where we ended up today. Concentration warehouses. The concentration act was Congress passed the concentration act in 1922. This was after prohibition had been underway. The government did not think things through <laugh>. What else is new? So they were like, oh, exactly, for prohibition, nobody's allowed to drink anymore. We've won. But what they didn't think about is what the actual industry is doing, that there was this collaboration between the government and the distillers, and the distillers in the government understood that they worked together to not only maintain the integrity of all these bonded warehouses they had cagers on site who helped with bookkeeping, which was swell for the distillers. They were like, great, this guy's taking care of all the books.

(00:43:29):
And the government at the same time was like, somebody's always watching the whiskey. We all have a shared interest in this. The minute that went away, everybody was just like what are we going to do with all these millions of gallons, this 80 million, 70 million gallons of whiskey that's in these warehouses in the country, not in the city, just spread around. There were about 800 warehouses that were in across the country everywhere. And of course, the Congress had to convene and go, okay, what do we do? And then they brought in the guys from the whiskey trust, and they were like, what do we do? And they said, well, we think that the best thing to do would be cons to consolidate all of this whiskey. And don't worry, we got this because all of our distilleries in Kentucky have these wonderful warehouses, and we'll be willing to pay all the costs of transportation.

(00:44:27):
And the government went, oh, that's great. You're going to pay for the transportation's on you. The storage costs are on you. You're going to pay for guards. That's wonderful. And they said, we will be the stewards of America's whiskey. So the government said, okay, sounds great. And so of course, they got to dictate with their lawyers where the major locations would be and started consolidating actually right away. So the government issued this option to everybody, and they said, Hey everybody do you want a concentration warehouse? Send us an application. We'd love to hear from you. So of course, about 75, 78 different applications were filed. 24 were approved. 12 of those were in Kentucky.

(00:45:15):
Let's see, I have the list of them. California had three. Illinois had three. Illinois was actually a really big location for whiskey storage, but it was mostly the grain spirit, whiskey trust. Right, exactly. Peoria, Illinois was big. Maryland had the Baltimore Distilling company. Massachusetts had one Missouri had two. New York had three. Pennsylvania had four, but large, as I said before, didn't really count because they were only storing the whiskey they made between 20 and 22. And Kentucky, as I said, head 12. So, okay. The funny thing is though, is that once these concentration warehouses were set up and whiskey started moving, obviously this is where once whiskeys on the road, <laugh> like gunshots, and lots of this whiskeys being stolen, not only stolen by the thieves, but I have a feeling stolen by the distillers as well that were working maybe with illegal channels or through illegal channels. And a lot of it was being moved to Europe. There were a lot of different, they, it's too much to talk about, but there was a lot of movement of spirits and where was it going and what happened to it all? I don't know. But in 1927, the time when they started talking about who was going to be able to distill again, Congress convened again, and they talked to the whiskey trust again, who said, don't worry. We got this.

(00:46:50):
The whiskey trust folks were able to convince Congress that it was okay for them to now seize control of the ones that they didn't own in Kentucky and bring it under their own umbrella. So they really had a very, very strong control over most of the whiskey in America. I would say about 50% of the whiskey in America. Number five was post-prohibition laws. So in Pennsylvania, Pennsylvanians had to deal with the fact that we had a very unfriendly government. We had our governor pin show. Love him. Yeah, actually an incredibly interesting man. I mean, he's kind of like was this guy, he was the governor at the time, right? At Prohibition. And he said, you know what? I don't want the saloon to come back. That's my big deal. I don't like bars. I don't loose women. This whole thing for him was just unheard.

(00:47:40):
He was a prohibitionist. He wanted prohibition to stick around, and he was going to do what he could to make sure that it did. And so he made laws like the floor. He had this great idea that he was going to tax all the whiskey that was still in Pennsylvania, because about what was it? A quarter of America's whiskey was in Pennsylvania's warehouses. Most of the rye whiskey was in Pennsylvania still. When he levied the floor tax, he had this idea basically he was going to tax it all, and he was going to put millions upon millions of dollars into the coffers at Pennsylvania. And all of the citizens were going to thank him for it, and it was going to be great. Well, the problem is that the people that owned the concentration warehouses and all this whiskey were the big four. These very powerful corporations who went. Yeah. And the minute that he went to go pass it, they moved most of their stuff out of state because they owned properties all over the place. And then he's sitting there going,

Drew (00:48:38):
Where

Laura (00:48:39):
Are you going with all that stuff? Not only did they move it, but they said, no, we're not paying it. You can't make us do it. Yeah, we will move our distilleries outside of the state. We do not need to listen to you. You are a silly little man. And at this point, he goes, well, what are we going to do? So he had to bargain with them. And he goes, look, instead of you guys paying the floor tax, you gotta let me get a win here. So why don't you sell me all your whiskey and then I'll make the floor tax off of the sales of that whiskey, and I'm going to do the sales. I'll take care of it. My state's going to benefit from this sale. You'll sell it to me for what I would've give, what you would've paid the floor tax on, and my new state source system. It's going to be great. So yeah, I know anybody in Penn, Pennsylvania can understand how ridiculous that is.

Drew (00:49:26):
I live there. I know how weird the Pennsylvania rules are. And I mean, when you to buy beer, you go into a restaurant, I mean, to buy a case or a six-pack of beer, or when I lived there, I used to have to go to the distributor's to go buy a 24 case of beer. I'm like, oh, not just beer.

Laura (00:49:48):
You have liquor is only available through the state store.

Drew (00:49:51):
Wow. But

Laura (00:49:52):
When you understand that, I mean, it was, was founded on the governor, misunderstanding the industry and misunderstanding who he was dealing with and having to get a win and saying, but this is great because now my new state stores are stocked with whiskey and this is wonderful. But he couldn't move it because the other thing that he believed very strongly in is not advertising liquor. So not only did he not understand anything about the liquor industry, and he's now trying to sell whiskey. Now, mind you, this is still the case today. Yeah, the state store system and their ability to advertise liquor is laughable at best. But it all comes from this idea that, okay, we're going to buy all this bulk whiskey from two or three guys and stock our shelves with this stuff, and then we're going to sell it and we're going to make our money back.

(00:50:39):
So that was absolutely ridiculous. But the floor tax was just such a failure. And then the other thing was that the United States government basically said, all right, guys, now that we know what's go, this is in 1933, so prohibition's coming to an end. Roosevelt's in office, he just gets in 32, and he's promising to end prohibition. But he says, okay, I'm getting all this pushback from all the prohibitionist. Everybody's pissed at me, so I gotta make some concessions. What I'm going to do is talk to my brain trust. Cause they're all his ridiculous people that made decisions for him, basically. And they said what we're going to do is we're going to say to the distillers that guys can go ahead and started getting your distilleries together because we're going to allow you to distill again. But I know you guys are in the middle of building and you're under construction, but if you guys aren't done by December 5th when prohibition ends, then yeah, I'm sorry.

(00:51:41):
You're not allowed to get a license. So all of these distilleries that were under construction, spending millions of dollars to put everything back into working order, because after 13 years of not running a business, not only are they missing half of their equipment, but they need to update and they need to do things that are going to improve or rebuild entirely if that's the case with some. And so they all kind of were left holding the bag. They lost millions of dollars because Roosevelt kind of arbitrarily said, oh, by the way, you've got two months. Good luck. And so no, nobody really talks about that either. But that's a huge fail for a lot of these distilleries that we're trying to get started again, and they were left <laugh> kind of blah. So

Drew (00:52:26):
That's a big one. And it's hard enough to, to start up a distillery knowing that you're going to have to wait years for the stuff to be ready to be sold, and then to have that happen on top of it,

Laura (00:52:37):
You have not like, it's insane the things that these distillers had to deal with. I mean, we talk, the history, like I said, all comes from Kentucky and what was happening with bourbon. But bourbon was sitting pretty because not only were a lot of them distilling not a lot of them, but a handful of them were distilling during prohibition. They had working equipment and they had the backing and the financial support of the whiskey trust or the newly formed whiskey trust and the newly formed national distillers. Sheley really didn't get his hands on Joseph Finch until way later in prohibition. And that kind of changed the course of Schenley. Without Joseph Finch he never would've been the Louis Rosen Steele, God that we think of when we talk about whiskey history. Without that particular distillery and it's access to that concentration warehouse and all of that whiskey he would never have been the Grand Puba of distilling mystery.

Drew (00:53:38):
But that was the gold golden wedding, right?

Laura (00:53:41):
Yes. Golden wedding. That was Joseph. But Joseph, by far, my favorite history in Pennsylvania is Joseph Finch. I have an old pin from the 1890s that I treasure, and I absolutely love the history of that place. But the fact that when Sheley bought it, because it was in Pittsburgh, by the way we think of Sheley is actually being in Sheley. But the whole reason that even happened is because, and I know I'm digressing here, I'm sorry, but Joseph Finch was in Pittsburgh. It was this huge mega, not mega distillery in production, but in clout. Everybody knew that distillery. Everybody knew what it was. Joseph Feer, that's what great brand, everybody loves Golden Wedding. You hear Golden Wedding and everybody's buying it. So that value was huge. But Sheley and or Lewis Rosens steel owned Sheley company which was down in, which was south of Pittsburgh, and he needed access to a concentration warehouse.

(00:54:47):
He was one of the guys that applied, well, he didn't get the license, and his board was pissed. And they were like, well, what's the point? If we don't have a concentration warehouse, then there's no point in us continuing. And they were all getting ready to pull their funds. So he got up the gumption and he ended up finding a way to purchase Joseph Finch and with Joseph Finch, it's concentration warehouse. And what did he do? He shut down Joseph Finch distillery in Pittsburgh and moved the entirety of the concentration warehouse contents to his location in Sheley. Nice. And began calling his distillery in Sheley, Joseph Finch, because he owned the name, he owned the license, and now he's transplanted that onto his new location. And most people don't realize that. They think Joseph Finch and they immediately think of Schenley. But that the history and all of the importance and the brands and everything that was formed over that a hundred years or whatever was actually from Pittsburgh.

(00:55:45):
But anyway, I should probably move on to the next one. I have a tendency to do this. I apologize. <laugh> the Yeah, that's fine. The loss of general expertise. Now, this is a big one because one of the things that you don't think about is knowledge. And we were talking about before this unspoken knowledge of distilling and mash bills and process distilling is obviously a whole lot more than going to school for four years. Actually, the Gibson Distillery, I had this interesting story of Gibson hired back in the 1860s, 1870s. He hired a distiller and he had worked for him for two years, and then he realized he wasn't skilled enough. So he sent him to the Gray Gray's Landing Distillery, which actually had a famous in his eighties distiller, who was a master distiller, literally one of the only people that I've seen on the tax records listed as master distiller, because he was a teacher, and so he sent him eight years.

(00:56:43):
He sent this distiller to train with this master distiller before bringing him back. That's how strongly people felt about the quality and of the distilling knowledge that existed. Yeah, eight years. He had to train with this master so that he could go back and make good rye whiskey at this place. Wow. This very wealthy, fancy pants in Philadelphia. He was just like, no, I need the best and nothing but the best. Yeah. Anyway the expertise was generational. You had men that had been distilling that were now fifth and sixth generation, and maybe the patriarch of that business got his start right around, say, the Civil War. So now he's in his eighties <laugh>. When prohibition is enacted, his sons maybe are a little wealthy, maybe they're kind of a little shady, businessmen or whatever. They're getting into the railroads. They're get, they're tycoons now. So they're not really interested in maintaining the family business they used to. So the minute the prohibition comes along, the patriarch who's just like, this is my business. This is my thing. Somebody needs to follow through with this. He dies. Cause now he's in his nineties prohibition last 14 years, and they all start dying off all of these old, I mean, we've had the same thing happen to us even during our lifetimes. The bourbon men all of the greats, Parker Beam and Elmer t Lee and Booker. No. And that all kind of happened at the same time. Imagine that happening in Pennsylvania

Drew (00:58:17):
Right before, right before

Laura (00:58:19):
Prohibition, and all of these men are kind of dying and all of their sons are moving on and finding new businesses to invest in. Some of them are still hanging on to the dream <laugh>, but most of them are selling off their properties and moving on. But that general loss of knowledge was like that

Drew (00:58:39):
Gone for. I almost sense that after Prohibition, it became less of a family tradition and became more of true corporation. That's

Laura (00:58:50):
Exactly right.

Drew (00:58:51):
You see that in Kentucky as well. I mean, there are some families that held on Heaven Hill is an example of that with the Shapiro family and the beams. Well, the

Laura (00:59:01):
Heaven Hill didn't start till after prohibition, so they didn't have roots before that. But I can get your point, but I get

Drew (00:59:06):
The still family. There were a couple of families that came out of Prohibition, but there was a feeling prior to that these were generational businesses. They were not corporations. Correct.

Laura (00:59:21):
Especially

Drew (00:59:22):
Even if they had corporations.

Laura (00:59:24):
I mean, we just talked about the fact that they didn't have corporations. Right, exactly. These were not only just family businesses, but they were also very successful. If prohibition had never happened, they would be thriving today. There's no question in my mind. But because they were independent and not under the umbrella of a corporation that was able to go, come with me. We're good. Now let's all start producing again, and we'll pay for it. And don't worry. But these are individuals who now no longer have their properties. They've sold off all of their equipment. That's actually my next number seven, is actually selling off the equipment, because the loss of those three chamber stills, those monsters, they're 10 feet wide and 30 feet tall and heavy, giant copper things. I don't know if you've ever seen the Leopold Brothers three chamber still, but that's just part of it. That's the initial three chamber, which was either copper or wood was a beast. And that then the distillate from the chamber still then went into a doubler, which was basically a copper pot. Still basically the same setup you have in Scotland. So you have, instead of the beer still the monster beer still, and then move into the spirit still. And then through the worm and finished spirit, the same thing, except instead of the initial beer still, that beer still is the three chamber

(01:00:43):
And the three chamber. Then this beer went into a pot still, and then the pot still then went through this 800 to a thousand foot worm that was in this giant flake stand outside of the building. <laugh> just kind of like coil. Okay. It's way. Yeah. And so you had this amazing, but expensive to make whiskey and all these men and all that equipment was gone. And if you wanted to start a new distillery, you needed all new equipment, you needed all that copper, all those pipes were pulled out. Everything was gone. And most of it was converted into any number of different businesses, making poison, making dyes, making chemicals, making all these other things. So even if they wanted to use the same building, it was already occupied. So they'd have to build fresh and new. And we already talked about why they couldn't do that because of Roosevelt.

Drew (01:01:36):
Well, it's interesting too that you bring up the worm too, because I've been to a couple of distilleries in Scotland that have that system. Yes. They have a pool outside of water, and then they have the worm that goes down inside. And their theory is that it makes a much heavier whiskey. And that's really, it's very oily and has a lot more body to it. And the whiskeys that I've tried that come from that Poltney is one Mor Mortlock is another, that the whiskey really does have a different feel to it. Different mass to it. Yeah. Yeah. Than other whiskey.

Laura (01:02:15):
There's descriptions of menah rye whiskey that was 20 years old or something that poured like molasses. They just said it was just this dense, obviously <laugh> being entirely honest about it, but the hyperbole there is a bit <laugh> sexy. Yeah, exactly. This very dense spirit and very heavy. And like I said, that's actually, I'm drinking the Leopold Dickel blends.

Drew (01:02:40):
Oh, nice. Okay.

Laura (01:02:41):
So yeah, the spirit is heavy and complex. He doesn't have the same setup, obviously, that the Pennsylvania's did with the doubler and the worm. But the three chamber is just a whole nother animal. It's a different, completely different spirit that we've lost. It's gone because copper was valuable and it all got smelted down and it was needed for the war effort. And you didn't keep giant copper pot stills sitting around if they weren't being used. So then I have the last thing which is actually, to me, the most important thing is the success of the rye whiskey distillers was actually their disadvantage that they were doing so well, and they were so confident that when prohibition did come, and even though Pennsylvania held out into the last minute, Kentucky, by the way, was the third state to sign on <laugh> for prohibition. <laugh>, like when you look at the list of who signed and who ratified. Yeah. And said, yeah, they jumped on that. They were just like, yeah, good

Drew (01:03:46):
Ion. Well, they actually went into prohibition in 1917, I

Laura (01:03:50):
Think. Yes. Right after, because 1917 was the year that what do you call, the joint resolution was signed by Congress approved the joint resolution for national prohibition. Yeah, in 1917. Yeah. It wasn't ratified yet. And actually initially it was passed in August. No, I'm sorry, when was it? February earlier in the year in 1917 is when it was ratified or not ratified, when it was approved by Congress. And then December they reconvened and said, you know what? We're going to have to put a deadline on this thing. So they said, okay, well ratification needs to take place. And this was kind of the wets saying you gotta put a deadline on this. It's can't be an open-ended thing here, so let's write it into the resolution that it needs to happen in seven years. And they honestly believed that it would take longer than seven years. There's no way they'd be able to get 38 states to sign onto this. No way. Right. And then it all happened in less than three, but Kentucky was just like, awesome. Let's sign. Yeah. That was 1917, right after the resolution. They signed, I think in January of 1917. Or not January. Yeah, I don't know. I've got it written down somewhere, but somewhere there, it would surprise me. I was like, how can they be so eager to sign onto Prohibition? Well,

Drew (01:05:15):
The thing about Kentucky that I learned, the more I started really digging into it, is there are wet counties and there are dry counties, and usually they're the Catholic counties and the Presbyterians and the, so Baptists or the Baptists that where they were distilling were very heavily Catholic areas. And so those areas are the ones that we think of for bourbon. But there's a whole other state that we don't count in that, that they have a vote too. And they wanted prohibition. Well, and Tennessee, like I say, Tennessee went in 19, 19 10, and it was one of those things where Tennessee was actually late to the game in their region, because Alabama was already dry. Mississippi was already dry in North Carolina was already dry by 1910. So yeah, somewhere I'm going to have an Excel spreadsheet that, yeah,

Laura (01:06:26):
No, I know. It's so hard to keep all this information. It has

Drew (01:06:28):
All these dates

Laura (01:06:29):
Isn't and stuff, but the dynamic, the political dynamic we're very staunch people in Pennsylvania as Kentucky. So this, in Pennsylvania, they call us Penn Uck for heaven sakes, the center of the state. So there's definitely so much relationship there politically and otherwise. But it just amazes me that we were the state that said no to prohibition, and we were like, you can't make us do it. We went kicking and screaming, but had, when ratification came, or not ratification, when repeal came along and we were just like, Ooh, we're going to sign on December 5th, 1933, the day of where, that's the day we're going to sign because the day that we sign is the day we're going to celebrate that it's over. So as you can see in the books that Pennsylvania and New Jersey signed on December 5th, it was actually Utah. That was the clincher that ended up making it that 5 33 in the east when repeal took place. So thank you, Utah. But it was this very dynamic, dramatic kind of love for liquor is something that's kind of inherent in our state. And it's such a funny thing to think now so much of Pennsylvania doesn't even know that whiskey was born here. So much of Pennsylvania is completely ignorant to it, but it's kind of in keeping with the type of people that we are. We're just like, move on.

(01:08:04):
We're farmers. We got stuff to do. Yeah. So you can't be bothered having to deal with this history stuff.

Drew (01:08:12):
So how long has it been, how did it evolve then to where you're at now? Where there were just maybe one or two distilleries that came back? I know Berg was there and then that changed to Tom's.

Laura (01:08:29):
I mean, this history is so intense after prohibition so much happened that it's kind of hard to talk about it all. But suffice to say, there were about, I think about 30 distilleries that came outta prohibition, ready to go. Here we go. Let's get back to distilling again. And they were all gungho and producing. And then they had to face all the things that we talked about, the floor tax. Many of the smaller distilleries just paid the floor tax, cuz they're like, I just wanna get on with it. I got whiskey

Drew (01:09:07):
To sell

Laura (01:09:08):
<laugh>. But the problem is because they sold it, and by the way, later on, the floor tax was repealed and found unconstitutional. But by then those distilleries had gone outta business because they were trying to compete against the big four who was just pounding their products and moving it out into the state stores. And the other distilleries just could not compete with that. And so they ended up find competition was gone at that point. There was a king of the castle that was national distillers and Port Seaton porter who basically let things happen because he saw them as being in his advantage. So, very interesting man that I don't think enough people kind of look at that, the kind of <laugh> evil genius almost of the way that he manipulated the system and the government. But it all worked. And look where we are today. The national distillers definitely won. And it's the winners that get to write the history. And it's been whitewashed. Pennsylvania's kind of religious and right wing well, I wouldn't say that we're necessarily a right-leaning state. We're very purple. But that's mostly because of the same things that we talked about beginning of the discussion, that there were two large cities. There was Philadelphia and there was Pittsburgh

Drew (01:10:33):
And Alabama in between.

Laura (01:10:36):
Right? But

(01:10:39):
Those are my people, but they're also very staunch and very set in their ways. And prohibition said liquor bad. All of our preachers tell us liquor bad. So that got written into it. And families that had generationally been distillers wrote it out of their family histories. It's not included my research. I have to contact families and I have to reach out to a lot of historical societies. And even the local historical societies are just like, there was a distillery here. And I'm like, oh my God, it was huge. I was like, and I send them Sandborn maps and I send them all the information so that they can put it into their databases. I'm like, please, for heaven's sakes, don't lose this information. Super important. And honestly, please look for more <laugh>. Just leave it at what I gave you. And if you find more, please send it to me. But yeah, most people just kind of went, well, this didn't exist. It's gone. And so when I talk to people about Pennsylvania whiskey and the history of Pennsylvania whiskey, it's super not helpful that my state has forgotten. There's one thing that you gotta give Kentucky, man, they love bourbon, even though those are promoters drink is actually milk, which I find laughable.

(01:11:53):
They, I'm sure they wanna change it to bourbon eventually, but yeah, I find it so silly. Why wouldn't Pennsylvania recognize its greatness? Even Philadelphia has a tendency to look at itself as second fiddled in New York. And yeah, Pittsburgh is just like, oh, we're just a steel town. When in fact, everything came out of Philadelphia and Pittsburgh. Not just whiskey, steel, iron copper.

Drew (01:12:24):
Liberty. Liberty. Yes. Coal

Laura (01:12:29):
Industry. Oil. Oil was discovered in Pennsylvania. Everything came out of Pennsylvania. And the fact that we still kind of see ourselves as, I fight it all the time. I mean the American Whiskey Convention is tough to sell tickets for sometimes to my people <laugh>. Cause I'm like, guys, yeah, this is a great event. We're celebrating farming and distilling. I have had in my nonprofit, I've had issues where I'm trying to sell a farmer's product. Say somebody contacts me and says, I've got about 18 tons of rye. This one woman, he's like, my husband has passed on and I need to find a place to sell it. Can you help me? Absolutely. I found a distiller and he goes, whoa, whoa, whoa. I am not selling my rye. He'd be made into whiskey. And so she turned down a sale just because of the connection to distilling. That's how embedded this is in my state.

Drew (01:13:23):
Still there? Yeah,

Laura (01:13:25):
Still very much there. But

Drew (01:13:26):
You have distilleries across the state. I found a website actually that said that there were 44 that they counted. But as I was going through it, I was doing

Laura (01:13:35):
The reading,

Drew (01:13:36):
There's 104 now. We have

Laura (01:13:38):
More distilleries in Pennsylvania than tech Kentucky has.

Drew (01:13:42):
Wow. Okay. Interesting. But you're also distilling. What's that? Small. Okay, well I was going to say, the thing is, well you got more than Tennessee too, cuz Tennessee was around 42 or 43. I think at last count you got more than Ireland. Ireland. I'm going to 45 distilleries. So yeah, Ireland

Laura (01:14:06):
Is on its way though. You know what I'm saying? Like Ireland. Yeah, it is. You gotta figure, America's huge. Yeah Pennsylvania is huge there. Are you ever drive across the state? Oh yeah. I do it all the time. So I'm kind of used to it. But it's about a six hour drive across the state and there's a lot going on. I mean we're no Texas, mind you <laugh>. But yeah, it's a big state. And Ireland as big as it is. I mean you could call it a state. And they have a very kind of similar parallel whiskey history to the United States in many ways. And so for them coming back almost exactly at the same time that America's starting to come back and rediscover it's distilling roots and try and refurbish these old distillery sites and pay all this homage to those that came before, which is some of the things that we're trying to do here.

(01:15:00):
I mean, yeah, God bless 'em, but <laugh> a long way to go in the same way that we do. The small craft distillers have a long way to go, but they have something that the big distillers will never have. And that is the ability to shift, pivot, change, and grow. Because you know, see the disnification of these distilleries down in Kentucky. And I almost, I don't know, I, I'm excited for it, but at the same time I'm like, I know this history. I've read it. Yeah, I know exactly what happens. And I don't want what happens to them to be Peoria because yeah, there's so, such a thing is too much of a good thing. I think there needs to be a check pull back. It's okay to have allocation, you know what I mean? It's okay to not have enough to feed the world because bourbon will not always be king. It's just rye wasn't always king. Bourbon's not always going to be king. There are distilleries in this country that are producing whiskey that is mind bogglingly good. You know what I'm saying?

Drew (01:16:07):
It's it's going to be fun to watch over the next few years because you do have there's actually a lot of innovation going on inside the big guys too. And I think the reason the whiskey industry is kind of following in the footsteps of the craft beer industry in initially, the big guys start seeing what the small guys are doing and they're like, wait a second. And in some cases they just buy up the small guys. Or in other cases they try to figure out what are the small guys doing and how can we play off of that and make something that works for us? And sometimes it works, sometimes it doesn't. And most of the time it doesn't. And actually when it doesn't, what keeps those small guys going? But

Laura (01:16:57):
It's also the idea that the big companies, when they think that they're seeing what the small companies are doing and what they do is the same thing that the whiskey trust did buy 'em up because you don't want the competition. So as long as I can control what's coming out of them, then I don't have to worry about them because I don't wanna imply that there's a threat here. Cuz there's not small distillery poses no threat to them. They are doing quite well. Yeah. But what it is, is this rebirth of American whiskey and all of these alternatives which don't exist yet. They're in infancy, they haven't walked, you know what I mean? They're just new. And so the American public needs to take this zeal for whiskey and grow up with it in the same way that the craft distilleries are growing up getting bigger.

(01:17:55):
The thing that I love, and this is selfish about the small distilleries, is that they have the capability of buying local grain. And the reason there's a lot of articles about local grain, there's a lot of articles about the movement of all of these heritage grains. And I'm a part of that. So obviously it concerns me. But the problem is that the big guys, in the same way that the whiskey trust understood, if you keep your bottom line low and you buy cheap and you keep it in, you're making corn products, so you're good America's biggest production thing, but you know, don't do any of that heritage grain stuff because you couldn't possibly have the yields. It's not a commodity grain. You can't control it. It's something that, it's too experimental, it's too expensive. Now there's something that Pennsylvania rye whiskey always understood that you have to spend lots of money to make a product that's better than everybody and you control it, it's yours.

(01:18:58):
But the mentality of making as much as you possibly can, not only does it drop the quality of your product, you know, lose your customer base. And that's something Peoria never understood. They always, they're like, we we're going to make all these customers, we're going to own it. The thing about the liquor industry is the consumer demand is always going to remain the same. It's what, the only thing that's going to fluctuate is what they drink. There's only going to be so many drinkers in America. That's just the way it goes. It's like 40% of the population is willing to drink and that's, it ain't going to be bigger than that. It ain't going to be smaller. This is the amount of people that drink. How do you market to them? How do you get those people to buy your product? Well right now everybody's sitting pretty drinking what they want to drink and they're advertising to them and they're doing a great job and it's working. But over time, as consumers begin to get more and the new generation look at them, they're very much kind of like, well, we like different things. Very savvy things, very different dynamic. I'm interested to see how they advertise to them because they're going to be the ones that wanna go to the micro distillery and the micro breweries. And you saw what happened with Generation X. We love the beers and yeah,

(01:20:10):
We drove that boom and the next generation is going to move in and really change the dynamic of the liquor industry.

Drew (01:20:19):
Well I think I was going to say that I think there's an opportunity also when you go to Germany, every small town has their own brewery. And that is something I could see happening here. Of

Laura (01:20:33):
Course it has what

Drew (01:20:35):
<laugh>, whenever a company, whenever a company or whenever a distillery starts up and you're just at the beginning of the movement you have these people who are small guys who think that they can become big and you'll get a lot of that going on. And everybody's got these grand visions of what they wanna do. And they're trying to market their product for the whole country rather than just for their backyard. Because there's not a lot of players beyond the big guys and they are kind of separating themselves. But then once you get to a point where so many of these towns have distilleries mm-hmm growing up, that there will be a point where we're going to have craft distillers that go, I want to create a local whiskey and I'm not really interested in making it. Right. A big Yeah. And that we'll see a lot more of that going on too.

Laura (01:21:29):
We will. And that is already happening and I'm so happy to see it. What I think always becomes the problem, and not so much a problem, but something that the big guys have always understood is that you don't have a company, if you don't have distribution any small distiller distillery will tell you the hardest thing is getting your product into another state. My state is notoriously ridiculous at this getting whiskey into Pennsylvania. But that's the hurdle because before prohibition, it was a national product. Your distribution network did not have limits as you could have just distribution centers all over the country and you could ship your whiskey to it and it could send it to, you know, had a customer in Washington, so be it your distribution network. Got it there. You had a friend at the train or you were a stock option owner of the train. Yeah. So you were able to ship it fine. There was this totally different dynamic with wholesale and retail that you controlled as your own company.

Drew (01:22:34):
You could do mail order, I was it, and it was just a product

Laura (01:22:39):
Then just prohibition changed all that. And the three tier system was born. And now you have distribution networks that without access to, you don't have a business. So you're beholden to a middleman on so many different levels as a distiller now you don't supply your own grain, you're not growing it yourself. Now talking to a supplier, you're not talking to a farmer, you're talking to a grain supplier. That's a middleman. If you need malt, the malt house is the middleman as well. If you need, you know, are talking to all of these different people on this grain supply chain and on this supply chain in general, bottles figuring this out. Now, when the supply chain went to hell, everybody was kind of like, I don't do anything myself. Which is not the case before prohibition. Everybody was doing it themselves. They had their own bottling plant, they had their own distribution center, they had their own retail locations, they had everything.

(01:23:34):
They were a very dynamic force to be reckoned with. And that is not the case anymore. So now you have these small distillers, they wanna get their product into another state and they just can't do it. You need, and so now you're seeing these companies going, I'm making a great decision because I'm partnering with this corporation who has my best interest at heart, wink, wink, and they've got the distribution network. So now my company is really going to expand and really become big. And as exciting as that is for a person like me who's trying to help farmers who in my opinion have no one to better benefit from than the distilling industry. The distilling industry buys grain in bulk and they do not need a middleman. A distiller can buy direct from a farmer that is gold. There's nothing better than that in as far as I'm concerned.

(01:24:24):
You don't have to deal with a ster cuz you're not a brewer. It doesn't need to be food grade cuz you're going to distill out anything that's going to be a problem anyway. And it's the perfect scenario. But what's happening is the small distillers that are interested in heritage grains or that are interested in something interesting, want to grow and want to be bigger. And they will allow themselves to be bought by a corporation that says, we ain't doing that. So then they win because they no longer have the competition and they no longer have to deal with any of that nonsense. And the distillery wins because now they're able to grow and expand and make more money and do well. It's hard to know where to stand on it. You know what I mean? Because I want the distillery to succeed, but I also want everybody else to succeed with them. I wanna see the whole grain supply chain, the whole supply chain benefit and grow. So yeah, that's my issue with corporate <laugh>.

Drew (01:25:24):
So here's the issue that I run into, and we'll kind of close on this. I'm thinking of the bottle I have behind me dad's hat that is made in Pennsylvania. I had to drive to California before I found it. I tasted it for the first time in Kentucky. I had it at Bardstown Bourbon Company while I was having lunch. And I said, Ooh, I really like that. I need to go find some of that. Nowhere around North Carolina. And then it got me thinking when I thought, well, I'll line some bottles back up over here. But the only things I could line up back here that I own that say Pennsylvania on them in some way are old Overholt, which isn't made in Pennsylvania. Came from Pennsylvania. Yeah, well, but isn't made, is it Rittenhouse?

Laura (01:26:15):
This is West Overton. Okay.

Drew (01:26:17):
West Overton is, there

Laura (01:26:17):
You go. The home of the over Holts, the Overholt family of, in Pennsylvania, that was their initial family homestead. So

Drew (01:26:26):
Location. So it got me thinking where are on my own store shelves? What are some brands, I know they're stolen wolf and we talked about wiggle, but I don't think they're distributed widely. What distilleries are shipping out of the state? What would be the big name that we would look for?

Laura (01:26:50):
Kenzie

Drew (01:26:52):
Kinzie. Okay.

Laura (01:26:52):
New Liberty, which is Rob Castle's company. Rob Castle is such an interesting dude. Not only did he launch distilling in Pennsylvania because he actually with his uncle started Philadelphia Distilling Company in Philadelphia. You're familiar with it? Blue Coat Chin. Yeah. Yeah, that's his baby. So he started that company in 2006, I believe, and basically had to go to the government and write his own application because they didn't know what to do with him. They're like, well, we don't have new distilleries in Pennsylvania. And he was just like, well, let's get it started. And so he was able to befriend a lot of people in Pennsylvania's in Harrisburg, really Pennsylvania's government, and was able to do some lobbying, not only for Pennsylvania, but for distilling in general. I mean, he's good friends with Bill Owens, the American Distillers Guild. No, <laugh> out

Drew (01:27:47):
In California. I can't think of, I'm not sure. I can't help you on that one.

Laura (01:27:51):
But anyway he's that wonderful lobbying group that's always looking out for craft spirits American Craft Spirits Association or something, and aca. And he's got Rob Castle on his side, Rob Castle's helping on drive all the laws that are being passed to help distilleries have tasting rooms. So that distiller and Pennsylvania was one of the first in the country to be able to sell direct consumers just from your tasting room, which was not legal before that actually the first distillery in the country that was ever able to sell direct to the public from their distillery victors in Pennsylvania. They, because they had a license as an historic landmark, they had park status and they were a same way that Mount Vernon can sell direct.

Drew (01:28:42):
Okay.

Laura (01:28:43):
So Mount Vernon can sell direct to the public out of their

Drew (01:28:47):
What? Their, and Yellowstone, I think once did that too. With their Yellowstone. With the Yellowstone brand

Laura (01:28:51):
Possibly. I don't know exactly. I don't know who else can do it, but I know that it was, Victor's was first. They were the ones that said, oh, we can sell direct to the public. And that was a big deal. But yeah, Rob Castle started Pennsylvania distilling, and then he branched off from that and started New Liberty distilling. New Liberty Distilling is in Kensington in Philadelphia, and he produces Kinzie. He brought the brand, bought the brand name and kind of recreated it using sourced whiskey from Kentucky basically. And mm-hmm. Making blends. So he was making rye blends and making he made it a seven year old corn whiskey. Aged corn whiskey, which is probably one of the only ones in the country at the time. So I, he's the man, he's also the president of the Distillers Guild, but his company also sells whiskey that's called Pennsylvania Whiskey <laugh>. That isn't from Pennsylvania.

Drew (01:29:47):
That is in from Pennsylvania. It's a, yeah, yeah,

Laura (01:29:51):
Yeah. But he's definitely one of the guys to get whiskey from if you want stuff outta state. Yeah.

Drew (01:29:57):
So that's good. We have some names to go and I haven't been up to Pennsylvania in a while, so I need to just get back up there and do some travels. If there's 144 distilleries, then I guess I got some distillery travel to do. Oh,

Laura (01:30:13):
You'll trip over. They're everywhere.

Drew (01:30:15):
Fun.

Laura (01:30:16):
We have one actually, I live in Newtown, Pennsylvania and Triple Sun Spirits, which is actually in a maus. Their base camp is in a Emmaus, they have a distillery right down the street now. It's right on State Street. I think it's State Street in Newtown is their satellite location, because that's another law that we have here in Pennsylvania where if you have one base location, you are entitled to two, or maybe it's three satellite locations, I believe it's two. And this is one of them. Interesting. And the other local, what is it? Spirits is also close to me. And then they have a location in Peddler's Village, which is a satellite location, like a tasting room, an offsite tasting room. Yeah. So okay. Planning to see you. Nice. Take you out drinking.

Drew (01:31:03):
Yeah, <laugh>. All right. Sounds good. Well Laura, thank you so much for taking us through the history and there's a lot to it. And one of those things that how long do you think it'll be? This is asking an author how long they think a book it's going to take. I asked that question and then I go, oh, I hope nobody asked me that question about my own books. But I mean know you're deep in research, but are getting close to well,

Laura (01:31:32):
It's one of the things that's very difficult about whiskey history, right? We just got finished talking about how I'm delving into all these rabbit holes. I think what I need to do is kind of check myself and kind of pull back because I have information for multitudes of books and so I'm looking at the possibility of just putting out the research about these individual distilleries, cuz I feel that that is very important. They're all written individual stories, so it would be more of like a compilation thing. And that's pretty much done. It just needs to be edited. And then, okay the history of Pennsylvania whiskey, I mean, that's a big book and I'm

Drew (01:32:11):
A big book.

Laura (01:32:11):
Yeah. I'm still working on that because every other one that I've read is just, it falls so short because like I said, it's all through the lens of bourbon and you know, cannot tell the story of rye whiskey without talking about Pennsylvania. You just can't. Yeah.

Drew (01:32:26):
Well I wish you much luck in putting it together and I know the struggles of trying to write a history book. Yes. That keeps evolving. So I wish you all the luck in the world. And again, thank you. Thanks for being on the show today.

Laura (01:32:40):
Oh, my pleasure. Thanks again.

Drew (01:32:43):
If you wanna learn more about Laura's American Whiskey Convention, just head to american whiskey convention.com. If your show notes, transcripts, links to whiskey lore, social media and more, head to whiskey-lore.com. Next week we're going to start our dive into Irish whiskey as I stop by and talk with a man who brought distilling back to the liberties area of Dublin 40 years after Powers headed outta town in more than a century after the last distillery it's built there. Join me as I chat with Jack Teling of Tillings Distillery right here on whiskey lore. I'm your host, drew Hamish. And until next time, cheers. And SL Ofk whiskey lords of production of Travel fuel's Life. L L C.