Ambitious Brew: The Story of American Beer (27 page)

Jim Koch at the White House. Koch launched Samuel Adams in 1985. In 1987 the White House called and Koch paid a visit, beer in tow. Koch’s salesmanship won him both friends and new customers. Since 1987 Samuel Adams has been served at the president’s residence, at Camp David, and on Air Force One.
Photo courtesy of Jim Koch and The Boston Beer Company

CHAPTER FIVE

Happy Days?

S
UMMER OF
1932. For the first time in many years, August Busch had reason to believe that his family’s company might survive. Since the onset of Prohibition, the maverick, now sixty-six, and his two sons, Adolphus III and August Junior (known around the plant as Adolph and Junior, although Adolph also answered to “Third” and most people called August “Gus”), had struggled to hang on to Adolphus’s creation. Father and sons had pinned their hopes for profit on Bevo, the brewery’s “near beer.” With characteristic foresight, August had put the brewery’s chemists to work developing a “soft” grain-based beverage in 1906, and, after ten years of near-misses, messes, and mishaps, had finally concocted one that met his approval. In May 1916, the brewery released Bevo, a nonalcoholic drink made from malt and hops, which Busch hoped would revive his company’s bottom line.

Their hopes were misplaced. Since January 1920, Americans had turned a decisive thumbs-down on near beer, whether from Anheuser-Busch or one of the hundred-odd breweries still in business. In 1921 the nation consumed 300 million gallons of Bevo, Pivo, Famo, Lux-O, Quizz, Hoppy, and other fake beers, but in 1932 they choked down a mere 85.7 million gallons. In the intervening years, Americans had discovered the obvious: It was more fun to drink “alley brew,” the sludgy and sour but punchy concoction cranked out by racketeers in filthy brewhouses tucked into big-city alleys, and more pleasant still to Charleston the night away under the influence of hard liquor, its mostly foul and sometimes fatal wallop masked by juice and ginger ale. And when all else failed, they could indulge in what Gus Busch called the “great indoor sport” of the 1920s: making and drinking homebrew.

Still, August, Sr. and his sons were not about to concede defeat. Busch baking yeast, sold in grocery stores, had paid most of the bills, but they had also produced ginger ale and root beer. They’d built refrigerated trucks and ice-cream cabinets and manufactured ice cream, too, including a frozen eggnog and a chocolate-coated bar called “Smack.” None paid particularly well, especially after the bottom fell out of the economy in the crash of 1929. They’d sold off large chunks of their real-estate holdings and rented out sections of the brewery to other concerns. But they’d kept the doors open.

So had Fred Pabst, Jr. Back in 1905, he had resigned as company vice-president, leaving the brewhouse in brother Gustav’s hands and retreating to his farm at Lake Oconomowoc. But in the early days of dryness, he returned to Milwaukee and demonstrated a surprising fearlessness, a gambler’s willingness to discard the past and embrace the unknown. Pabst put some of the company’s equipment to work manufacturing malt syrup and scraped together enough cash to buy the Sheboygan Beverage Company, which enabled him to diversify into soft drinks and soft drink syrup. He converted his passion for Holsteins into making cheese products, though he struggled to compete against giant cheese manufacturer Kraft, whose network of distributors had already cornered the grocery-store shelf space needed to make the venture profitable.

Pabst understood that he didn’t have time to build a comparable distribution system of his own if he wanted to keep his company afloat. In 1932, he approached Premier Malt Products of Peoria Heights, Illinois, one of the nation’s largest manufacturers of malt syrup. Fred Pabst and Premier’s Harris Perlstein each had what the other wanted or needed: Perlstein wanted to invest in beer if it returned, but owned no brewing plants and had no brewing experience; Pabst owned a brewery but lacked the expertise to distribute cheese (and beer if the amendment was repealed) on a national scale. In late 1932, Pabst and Premier merged and adopted the name Pabst-Premier Corporation.

Across town at the Schlitz plant, the Uihleins fared better than most. They’d handed over management of the brewery—now devoted to making soft drinks and near beer, and renamed Joseph Schlitz Beverage Company—to outsiders more familiar with the grocery trade and instead devoted the 1920s to banking and to managing, in some cases selling off, their two thousand properties. The earnings funded the quixotic construction of a sprawling new factory with a marble-paved lobby and an elaborate garage modeled after an orangery on an English noble family’s estate, built to produce E-line chocolates and cocoa, the idea being that superior Wisconsin milk provided a superior base for superior confections. The rest of the world did not agree. After just ten years the family closed the plant, perhaps relieved to be free of their one rare failure.

But the Uihleins, Pabsts, and Busches shouldered their burdens without complaint. After all, their companies were alive. On life support, perhaps, but still breathing. There were so many who’d gone under during the 1920s. In 1918, a thousand brewers had been in business; by 1920, only half still had their doors open. Things worsened as the decade wore on. “Business is very, very poor,” warned the president of Golden Grain Company, the nonalcoholic wing of Minneapolis Brewing Company, in a letter to a stockholder in late 1926. “The people are all making ‘Home Brew’, and as long as this keeps on the non-alcoholic beverage consumption will grow less, and the outlooks are very discouraging.” Golden Grain limped along with a program of diversification that included using denatured alcohol as the base for Koonz Vigoton, a body rub (“Wonderful Body Stimulants For Use After Golf, A Swim, A Bath, Any Exercise”). The operation never turned a profit.

The story was the same around the country. Most brewers gambled their futures on one of three things, all of them in some way related to the original business of brewing: soft drinks, yeast, or near beer. But Americans already had plenty of soft drinks to choose from, and giant Fleischmann owned the yeast market. Nor, as the statistics showed, were Americans particularly interested in near beer. All of which meant that the surviving brewers were competing against each other or, in the case of soft drinks and yeast, with established companies with popular brand names.

Survival came down, in the end, to one thing: a cushion of cash provided by pre-Prohibition diversification. Take the Yuengling family in Pottsville, Pennsylvania. The brewery, founded in 1829, is today the nation’s oldest, a crown the Yuenglings treasure and that they wear only because Frank Yuengling kept the doors open during Prohibition. Like many brewers, he had invested in saloon real estate, and leases and sales from those properties paid some of the bills, as did income from shares in gold mines, railroads, and a local bank. But the family stayed alive in large part thanks to ice cream. There were hundreds of dairy farms in the surrounding area, and Yuengling gambled that he could make and sell a high-quality dairy product to the same people who’d remained loyal to the family’s beer. He was right; the Yuengling Creamery was so successful that it stayed in business until 1985.

But not every brewer enjoyed the comfort of diversification, and not every brewer had cultivated a loyal customer base. Nor was every brewer willing, as Fred Pabst had been, to admit his weaknesses and adjust his operations accordingly. And even the smartest, strongest, and shrewdest found it hard to cope with the stomach punch of 1929, when the stock market collapsed and the economy fell off a cliff. From 1929 to 1932, 100,000 businesses entered bankruptcy and more than four thousand banks shut their doors. By late 1932, eleven million adults had lost their jobs. The effects insinuated themselves into the very fiber of the nation: Workers first lost their jobs, then their homes. The destitute and desperate crowded into city parks and under railroad bridges, living in shacks cobbled from tarpaper and wood scraps. Hoovervilles, they called their new neighborhoods.

The economic havoc pummeled what little stability the brewers still clung to. For twelve years, Alvin Griesedieck and his father, Joe, had kept their family’s company, Griesedieck Brothers Brewing, afloat on a raft cobbled out of “sheer nerve” and dogged determination. They’d sold near beer and ginger ale, lemon soda and bacon. They’d begged money from banks and friends and family and niggled each dime to death. But by early 1932, they’d run out of ideas and the company hovered on the brink of collapse. The ledger book boasted nearly a half million dollars of debt, about $5,000 in cash, and another $50,000 or so in real estate and equipment that could be converted to cash. The only other valuable asset on hand was the trademark, “Falstaff,” purchased from William Lemp, Jr., in 1921. One more shove, and Alvin and his father and their fortunes would tumble into the same oblivion that had claimed tens of thousands of other American businesses in the three years since the market crash.

By the summer of 1932, they and 185 other brewers were gasping for air, staggering under the weight of debt and despair. If they could hang on just a few months more! Lately a drumbeat of glad tidings and small mercies had rumbled across the land. Lately it felt as if the dark days were nearing an end. Lately August Busch and the Griesediecks and Yuenglings and their fellow brewers had begun to believe that beer might return. Not tomorrow. Not even next month. But soon.

T
HE BEGINNING
of the end had come in January 1931, when President Herbert Hoover released the results of his campaign promise to analyze the impact of Prohibition. The National Commission on Law Observance and Enforcement, more commonly known as the Wickersham Commission, declared the Great Experiment a failure and portrayed a nation adrift in an ocean of crime, drunkenness, and flagrant disregard for the law. The eleven members of the study panel refused to recommend outright repeal, but the report’s exhaustive detailing of organized law-breaking confirmed what many had argued back in 1919: Prohibition had not and never would prohibit.

It was not hard to see why. As soon as the enforcement legislation, known popularly as the Volstead Act, had gone into effect, an underground economy bloomed, devoted to the manufacture, transportation, and sale of alcohol. Liquor came into the country along the borders, in rickety boats that bounced from the Bahamas or Cuba to Key West or the coast of the Florida panhandle, and hidden under car seats or stashed in trucks filled with crates marked “bananas.” The busiest spot was the Detroit River, which separated Detroit from Windsor, Ontario. Even the harsh winters could not stop the flow: Drivers loaded their cars and drove across the ice.

The business of making and moving illegal alcohol was as organized and efficient as that of any major corporation in the country, thanks to the mostly Italian gangs who, by the mid-1920s, had grabbed the lion’s share of the black market’s profits. Most of their contraband was spirits, which, ounce for ounce, were cheaper to make and far cheaper to transport than beer. A case of spirits sold for as much as $100, while a case of beer, which weighed as much and took up as much space in a truck, fetched perhaps $25. Still, there was beer for those who wanted it: The only way to make “near” beer was by first making beer itself. Many brewers, both large and small, began the dry years intending to obey the law, but once they realized that they were not likely to get caught, they began bottling and selling the real thing. But as with rumrunning, gangs controlled the brewing industry, too: They snapped up defunct breweries, of which there were plenty to be had, and filled the vats with mash.

Almost everyone who wanted to found a way to make crime pay. Swanky speakeasies that featured uniformed doormen, linen tablecloths, orchestras, and entertainers could be found in all the major cities, comfortable hideaways where the well-to-do could sip the finest spirits, wines, and beers. For every posh nightclub, there were hundreds of holes-in-the-wall where drinkers crowded into a single room—often inside a private home—to drink whatever swill happened to be on hand. Ingredients for making gin, wine, and beer could be found in any drug or grocery store, and millions of families turned a basement corner or their bathtub into a small alcohol factory. In the backwoods and hills of the Appalachians, Americans continued to do what they’d been doing for two centuries: making small batches of whiskey in homemade stills.

Most bootleggers broke the law because the immense profits made it worthwhile, but everyone else embraced a life of crime because they resented the law and the chances of being caught breaking it were slim to none. The Volstead Act established the Prohibition Bureau (originally called the Prohibition Unit) as an agency of the Treasury Department. But the Bureau’s agents never numbered more than three thousand, not enough to patrol the 18,000-mile border, let alone thousands of cities and counties. Nor were they particularly qualified for or enthusiastic about their mission. Thanks to Wayne Wheeler, who wrote most of Volstead, the Unit’s thousands of jobs were patronage positions, rather than merit posts dispensed by the Civil Service. Wheeler’s reasoning was simple: Control the patronage jobs and you also control the patrons, in this case the senators and representatives who used the posts to reward loyal constituents. As a result, while some Unit agents were honest, most supplemented their meager salaries with bribes or by selling confiscated booze. In theory, local police departments and the Coast Guard assisted the effort; in reality, in most cases they, too, turned a blind eye, paid off by deep-pocketed booze mobs.

But to focus on the colorful, albeit often tragic, excesses—machine guns jutting out of Model Ts rattling through Chicago’s streets; flappers swilling cheap gin in smoky nightclubs; hobos blinded or paralyzed by “Jamaican Ginger” or moonshine—is to miss the reality: The majority of Americans honored the Eighteenth Amendment and obeyed the law, and alcohol consumption plummeted during Prohibition. That is not surprising: By 1920, millions of Americans had grown up under some form of prohibition, or embraced with fervor the notion of an alcohol-free society. Gallup polls taken in the 1930s showed that 40 percent of adults had never consumed any alcohol. Government statistics confirmed it: In 1915, Americans consumed about 2.5 gallons of spirits and thirty gallons of beer per capita; in 1934, the first full calendar year after repeal, they drank 0.64 gallons of spirits and about fourteen of beer. Per capita consumption of beer did not reach its pre-Prohibition highs again until 1970, while the population grew at record rates. Prohibition did not prohibit, but it certainly curtailed Americans’ fondness for drink.