With Whiskey, Time Is Money

 

E. H. Taylor, Whiskey Mogul

In the early days of American distilling, and in most distilling cultures throughout history, the proposition was simple. You got some fruit or grain, fermented it, distilled it, and then either consumed it or sold it. The whole process took maybe a week. Looked at from a business perspective, that's how long your capital was tied-up. You spent some money and within a few days you recovered your investment plus profit.

Something happened in a few places to upset that happy paradigm. Aging happened. Instead of a return on investment in a few days, it was going to take years. Years! How is that supposed to work?

In the United States, deliberately aging whiskey in new, charred oak barrels began about 200 years ago. We don't know exactly when but that's a conclusion based on what was being advertised at various times. Even after aged spirits became common, 'common' spirits (the unaged stuff) remained popular. 

But as aged spirits became the norm, producers struggled to meet market demand. It wasn't easy to sell aged whiskey consistently for enough to finance its long maturation period. Aged whiskey had to compete with compound whiskey, a cheap knock-off that used artificial flavoring and coloring to imitate the flavor of wood-aged spirit. The market was chaotic and distillers easily became overextended. Unable to meet their obligations, many were forced to sell their businesses for whatever they could get. Often the new owner fared no better. Distilleries changing hands frequently.

Edmund Haynes Taylor (1830-1923) is a significant figure in American whiskey history for many reasons. He started or operated at least seven different distilleries, helped transform whiskey-making from an adjunct of farming into an industry, pioneered modern brand marketing, and was a leading advocate for federal government oversight of whiskey production and labeling. 

He was also the mayor of Frankfort and an award-winning cattle breeder. Busy guy.

But his most enduring contributions to the industry may be in the matter of financing. Taylor began his business career in a bank owned by his uncle and namesake. While opening a branch in Versailles, he got to know distillers Oscar Pepper and Dr. James C. Crow. After Crow's death in 1856, some whiskey distilled by Crow was still in barrels and his former assistant knew how to make more, so Pepper and Taylor hatched a plan to capitalize on the reputation of Crow's barrel-aged whiskey. The Old Crow brand was born. 

In 1860, Taylor and his bank organized Gaines, Berry and Co., Distillers, later reorganized as W. A. Gaines & Co., to make and sell Old Crow Whiskey.

Taylor's financing innovations, however, were not a perfect solution. Taylor himself became overextended to a customer named George Stagg and lost control of his largest distillery, today's Buffalo Trace.

After Prohibition was repealed in 1933, money was again a problem. Families like the Beams, successful whiskey-makers before the drought, had to look outside the family and beyond the Commonwealth for money. The Beams found it in Chicago, in investors Harry Blum, Harry Homel and Oliver Jacobson. Homel and Jacobson were investment bankers. They had an innovative idea of how to finance aging stock. Don't. Instead, sell it right away, like distillers did before aging, except sell it to your distributors. They'll buy the new make whiskey and pay you to age and eventually bottle it for them. Everyone expects the whiskey will become more valuable as it ages. This system spread out that risk. The distillery could put its capital into making more whiskey immediately.

The idea worked well for Beam. In a few years, Blum bought Homel and Jacobson out. They took their money, and their idea, down the road to Heaven Hill. It worked there too.

In the early days of craft distilling, many struggled with this same dilemma. Some still do. 

Today, companies such as IJW Whiskey, CaskX and others are offering innovations of their own. Just like those Beam and Heaven Hill distributors, now you can place a bet on whiskey appreciation, not the sensory kind, the financial kind. This particular model is new and still unproven. Most of the whiskey in these schemes is from relatively new producers with no track record. Still, we saw just a few years ago what can happen to bulk whiskey prices when the market gets tight. With tariff relief, a new export boom could be right around the corner.

Or not. But that's the adventure, right?

That Time I Saw an Old Man Play Guitar

 

Jimmy Raney, as I remember him. (Photo by Greg Turner)

I lived in Louisville from 1978 until 1987 and have spent a lot of time there since, except these last two years. Even after I moved, until about 1994 I was in Kentucky almost as much as I was in Chicago.

I remember once, during some kind of festival, being up by the Brown Hotel in an outdoor plaza, watching and listening to an elderly man play electric guitar. He wasn’t busking, it was part of the festival, but very low key, casual. Louisville is a big city that sometimes manages a small-town feel. It was afternoon, sunny and warm. A nice day.

There wasn’t a stage, or a band, just the man, on a bench, with his guitar and amp. I joined the small crowd gathered around him. He was just playing. No chatting up the audience. No vocals. I don’t recall recognizing any melodies. It was jazz, freeform, mesmerizing. I happened upon him but stayed until he finished. His music left a mark.

I remember that instance clearly, but I know I saw him other times in other places too. I may have seen him with saxophonist Jamey Aebersold, the renowned jazz educator who is a familiar presence around Louisville. Louisville had a nice, little jazz scene then. A guy I knew from work played acoustic bass in a combo at the Seelbach Hotel's bar. I enjoyed the music but didn't think a lot about it.  

At some point I learned that old guitarist’s name and looked him up.

It was Jimmy Raney.

His name probably doesn’t ring a bell unless you’re a big fan of 1950s American jazz. Raney was a ubiquitous sideman. He began his career in Chicago in 1944. Thereafter he played with Woody Herman, Artie Shaw, and many others. He is most remembered for his time in the 1950s with Red Norvo and Stan Getz. He won the DownBeat Magazine critics poll for guitar in 1954 and 1955. The New York Times called him "one of the most gifted and influential postwar jazz guitarists in the world".

They wrote that in his obituary. Jimmy Raney died in 1995. He was 67.

The obituary writer, Peter Watrous, also wrote this: “Mr. Raney's improvising, at its best, made clear that he had developed a lucid and distinct conception of both the swing and be-bop vocabularies. His lines often resolved on odd, pungent notes, and mid-solo his phrases rolled easily from his guitar as he constructed lengthy passages. His harmonic conception could be bleak and a touch bitter; he rarely relied on obvious or easy note choices. And he always varied his long lines with melodies and riffs.”

To the extent I understood any of that, it is how I remember the old man I saw playing in front of the Brown Hotel one sunny afternoon.

I learned that Raney was born and raised in Louisville. His father, a sportswriter for the Louisville Courier-Journal, died in 1944. Jimmy was 17. Traumatized by his father's death, he fled to Chicago where he had family and where there were more opportunities to play music for money than there were in Louisville. Once established, he relocated to New York, where he enjoyed his greatest success. 

Raney left New York, and music, to return to Louisville in the late sixties, reportedly due to issues with alcohol. He resumed his career in the 70s and worked steadily thereafter, often with his son, Doug, who also played guitar and had a similar style, but he never again achieved the fame he knew in the 1950s. 

Doug Raney is gone now too. He died in 2016 of heart failure. He was 59. 

Jimmy had another son, Jon, an amateur pianist who works in IT. He maintains a website called “The Raney Legacy” at jonraney.com. He has an active blog. His extensive biography of his dad is here. I also recommend his post on the 94th anniversary of his father’s birth in August of this year. 

One last thing. By the time I saw Raney, just a few years before his death, he was almost completely deaf from Ménière's disease. I can’t imagine how such a thing is possible, to play so beautifully even though you can’t hear what you’re playing. I didn’t know that when I heard him, only later. 

Is there a takeaway from this? Not much of one, just reminiscing. But you never know about another person’s life and isn’t the internet marvelous for the curious?

 

ADM Sells Storied Peoria Distillery to BioUrja

 

Hiram Walker Peoria in the 1940s.

The Peoria JournalStar reported it like this: "After almost 40 years, Archer Daniels Midland Co. no longer will be the primary firm that produces ethanol in Peoria. Instead, a Houston-based company will take over the dry-mill ethanol plant ADM has operated since 1982 at the foot of Edmund Street along the Illinois River."

The new owner is BioUrja, an international supplier and trader of commodities such as biofuels, petroleum products, natural gas liquids, electric power, metal alloy tubing, grain, and animal feed products. 

ADM is reducing its ethanol capacity to redeploy that capital more profitably elsewhere while BioUrja is excited about diversifying its biofuels business into higher-value distilled ethanol products such as beverage and industrial alcohol, the Peoria plant's specialty. This comes on the heels of another major neutral spirits distiller, Kansas-based MGP, moving itself up the value chain by acquiring Luxco.

Peoria and the nearby town of Pekin were once whiskey producers on a scale that rivaled Kentucky. The infamous 19th century Whiskey Trust was based there. The distillery BioUrja is buying used to make whiskey, and a lot of it. ADM bought it and converted it to neutral spirit production in 1982. The seller then was Hiram Walker, a Canadian distiller best known for Canadian Club. 

Hiram Walker was a 19th century Detroit grocer who owned a distillery across the border in Canada. He always intended to sell his products primarily in the United States but located the distillery there because he anticipated Prohibition. In so doing, Walker introduced Americans to the lighter Canadian style of whiskey. Because of Detroit's proximity to the Canadian border, Walker's plant supplied a lot of whiskey to the U.S. market before, during and after Prohibition.

Canadian law officially did not permit the export of spirits into the U.S. market during Prohibition, but row boats would show up daily at the Walkerville docks, declare their destination as “Jamaica,” and be sent on their way loaded down with all the whiskey they could carry. 

The Walker family owned the distillery until 1926, when it was acquired by Harry Hatch, a Canadian entrepreneur who started out with a small liquor store in Whitby, Ontario. 

When Prohibition ended in 1933, Hatch's Hiram Walker and Sons, Inc. decided to reenter the newly-legal U.S. market in a big way. Their Peoria distillery was the largest in the world and made Walker’s DeLuxe and Ten High, both straight bourbons; Imperial Whiskey, a popular blend; and other Hiram Walker products.

That distillery's predecessor on the same riverfront site was Joseph Benedict Greenhut's Great Western Distillery, built in 1881. The production of whiskey and neutral spirits was booming in Peoria and each new distillery was bigger than the last and, therefore, the biggest distillery in the world.

Six years later, Great Western and 65 other distilleries merged to form the Distillers & Cattle Feeders' Trust, popularly known as the Whiskey Trust. Greenhut became its president.

The Trust used its resources to buy more distilleries, many of which it closed. The idea was to limit production industry-wide to reduce competition and protect profits. Although the Trust was technically legal (it would not be today), it engaged in many illegal practices such as intimidating any distillery owners who did not want to sell.

That was Peoria then. The Peoria Historical Society's "Roll out the Barrel" Tour focuses on Peoria’s years as “Whiskey Capital of the World.” Peoria's Bradley University has a collection of interviews and other records in its Cullom-Davis Library. That's appropriate since part of the Bradley family's wealth came from the alcohol business. 

As you come into Peoria from the north you see it, where once there were distilleries as far as the eye could see. There is still one, the big one. It's still converting corn and water into alcohol, as they have done on that site for more than 150 years. There's just a new name above the door.

A Piece of Bourbon History Is Leaving Chicago

This is the view Beam Suntory is giving up, of the Chicago River from the Merchandise Mart's rooftop deck.

Back in January, Beam Suntory announced it will move corporate headquarters from Chicago to New York sometime next year. At least 100 employees will relocate. The current office, in Chicago’s Merchandise Mart, will remain Beam Suntory’s largest global office and home to its North American business unit. Parent company Suntory Holdings already has offices in the same Madison Avenue building where Beam Suntory is going.

But this isn't about that. That is just an excuse to look back on the history of Jim Beam in Chicago, where I live.

The Beam story begins, of course, with Jacob Beam's arrival in Kentucky more than 200 years ago. His descendant, James Beauregard Beam, brought the family's whiskey business into the 20th century only to see it snuffed out by Prohibition. After Repeal, Jim Beam, his brother, and their sons restarted the distillery but soon ran out of money, not because they were failing but because they were succeeding too well. It would take a lot of new capital to keep the company growing. The Beams didn't have it and neither did most of their neighbors in Kentucky's whiskey heartland. It was a common problem.

Perhaps in part because Chicago had been so wide-open during Prohibition, the midwestern metropolis seemed a natural place to concentrate legal whiskey distribution after Repeal. More importantly, investors could be found there. The Beams hooked up with three Chicago-based money men: Harry Homel, Oliver Jacobson, and Phillip Blum. The heirs of Tom Moore found Oscar Getz and Lester Abelson, who started Barton. In both instances, the distilleries were in Kentucky but the businesses were run out of Chicago.

Phillip Blum's son, Harry, eventually bought out Jacobson and Homel, who reinvested their funds in Heaven Hill. The Homel family hung on there until about 2005.

Harry Blum and his wife, Maribel, must have lived in my neighborhood because one of the buildings on the campus of Anshe Emet Synagogue, just down the block, is the Harry and Maribel Blum Community Hall. Two of the largest charitable foundations in Illinois are those of the Blums and of their daughter and son-in-law, the Kovlers, who also made their money from Jim Beam. 

The Jim Beam Distillery, of course, remained in Kentucky, in Bullitt County, about 30 miles south of Louisville. They eventually bought a second distillery a few miles away. Until the early 1990s, brothers Baker and David Beam minded the stills at the Bullitt County place, a 24-hour operation. Their cousin Booker Noe ran the plant in Nelson County. All of the manufacturing was done in Kentucky. All of the sales, marketing, finance, and corporate management was done in Chicago.

In 1967, Blum sold Beam to American Tobacco, which was using its cigarette profits to become a diversified conglomerate; soon renamed American Brands, then Fortune Brands. In addition to Jim Beam, the company would come to own Titlist, Moen, Master Lock and many other companies/brands. It was based in Connecticut, but Beam's headquarters remained in Chicago; downtown until 1988, then in a new office complex in Deerfield, a Chicago suburb. It had just merged with National Distillers and become a much larger company. 

Chicago is in Cook County. The next county north is Lake. The border between them is a major thoroughfare called, conveniently, Lake Cook Road. Beam's offices were on the north side of the street, hence in Lake County. I did a lot of business there between 1988 and 1994. One of their near neighbors was the Berto Center, where the Chicago Bulls had their offices and practice facility until 2014. 

Diversified conglomerates were all the rage in the 1960s but fell out of favor by the end of the century. Wall Street wanted 'pure plays.' Fortune eventually divested all of its other businesses and in 2011 became Beam Inc. That didn't last long. In 2014 it sold itself to Suntory. In 2016, Beam Suntory moved back downtown, to the historic Merchandise Mart building.

Although the top management echelon is decamping, what remains is significant. There is a lot of history there. Beam folks started to travel regularly between Kentucky and Chicago 80+ years ago. Chicago is slightly more convenient to Kentucky than New York, so that may help keep Chicago in the mix. It remains to be seen if there will be more Beam folks traveling from Muhammad Ali International to LaGuardia and Kennedy than O'Hare and Midway in the years to come. 

Whatever Floats Your Boat

 

Navy foresters at NSA Crane assess a white oak tree set aside for future use in repairing the USS Constitution. (U.S. Navy/Bill Couch)

Whiskey has only four ingredients and one of them is white oak, but there is a certain 50,000 acre stand of white oak trees that will never be used to make whiskey barrels. It is in southern Indiana, about 25 miles southwest of Bloomington, near the village of Crane.

Crane, Indiana is very much a company town and that company is the United States of America, specifically our Navy. Southern Indiana may seem like an odd place for a naval base, since it can't be reached by water, but Naval Support Activity (NSA) Crane is there nonetheless. 

NSA Crane was established in 1941 under the Bureau of Ordnance as the Naval Ammunition Depot. Weapons are produced, tested and stored there. It is remote; there aren't many people. That is by design, since Crane is where the Navy makes things that go boom. 

As naval weaponry became more sophisticated, so did Crane. Today, Crane provides a variety of advanced technical products to the Navy, but one of its products is ancient: hardwood timber, white oak.

It is hard to overstate the historical importance of white oak. Because it is so hard, humans didn't make much use of it until we developed iron tools that were strong enough to work it. After that, we used white oak for everything: buildings, weapons, containers, furniture, vehicles. Sure, there are other hardwoods, but plentiful and strong white oak is the unglamorous workhorse of wood.

White oak is used for whiskey barrels for several reasons. Strength is one of them. Barrels made from it are very sturdy and durable. Even more important is that they don't leak. Occlusions in the wood's large pores, called tyloses, protect the tree's sap when it is alive and provide leak resistance thereafter. The tyloses also contain a water-soluble compound that tastes a lot like vanilla, but that's a bonus.

White oak was, for centuries, used to make containers for all kinds of liquids. Even well into the 20th century, beer was kegged in white oak barrels. So was crude oil and many of the products made from it, such as kerosene. Today, most things are better off in metal or plastic; it's mostly wine- and whiskey-makers that still need white oak barrels.

White oak trees harvested for whiskey barrels are usually 60-75 years old, but that's not old enough for the Navy. For shipbuilding--or, in this case, repair--trees in the 200-year range are preferred. Those, too, once were plentiful but today not so much. Providing a stock of old growth white oak is part of NSA Crane's mission too.

The base at Crane covers about 62,000 acres and most of that is white oak forest. The stand's informal name is Constitution Grove and its mission is to provide enough white oak timber to keep afloat the USS Constitution, the oldest ship in the world that still is afloat. The Constitution was made from the same type of wood used to make whiskey barrels, white oak.

Although white oak is very durable, it doesn't last forever. Wooden warships usually don't last 227 years, but the Constitution is special. From time to time, parts of it need to be replaced. It is a real world ship of Theseus.

The USS Constitution is the only still-commissioned ship in the U.S. Navy that has sunk another vessel. (Shown here, doing it.)

Begun in 1794 and launched in 1797, the USS Constitution was one of six three-masted heavy frigates authorized by the Naval Act of 1794 and the third one constructed. It saw action against Mediterranean pirates and against Great Britain during the War of 1812. It was used for training during the Civil War, an era that saw the introduction of iron-clad ships. Soon the age of wooden warships was over. Today, the Constitution is a museum ship permanently docked in Boston's Charlestown Navy Yard. 

If after keeping the Constitution shipshape the Navy finds itself with excess white oak timber, Independent Stave has a stave mill in Salem, over toward Louisville, about 60 miles SSE of Crane. (A little closer if you take it out the back door.) It will be well-used. Maybe Spirits of French Lick can work something out.

The Indiana distillery formerly known as Seagram's, LDI, and MGP is now Ross & Squibb (sort of)

 

The huge letters atop several buildings in Lawrenceburg, Indiana, still say 'SEAGRAMS,' but the famed GNS and whiskey-maker is now Ross & Squibb Distillery.

Back in January it was announced that MGP Ingredients, based in Atchison, Kansas, had acquired St. Louis-based Luxco. Nothing much seemed to happen after that. In Kentucky, it was business-as-usual at Luxco's Limestone Branch in Lebanon and Lux Row in Bardstown, as well as at MGP's Indiana distillery. Until Wednesday, when it was announced that the oft-renamed Indiana joint will be known henceforth by two names plucked from its past, Ross & Squibb.

Sort of.

The press release says this:  "Luxco will rename the 174-year-old, Lawrenceburg, Indiana, distiller of its branded spirits Ross & Squibb Distillery™ as it joins the Luxco family of brands. Effective immediately, the distiller of George Remus Straight Bourbon Whiskey and Rossville Union Straight Rye Whiskey will go by its new name."

The 'sort of' part comes later in the release where it says this:  "MGP will continue to produce bourbon, rye, whiskey, gin and grain-neutral spirits from this facility under its current name:  MGPI of Indiana, LLC."

It's a lot to unpack.

Luxco is a 63-year-old company. For most of that time it was a successful regional rectifier, a non-distiller producer with most of its business in St. Louis and vicinity. Along the way it picked up a few small national brands such as Ezra Brooks Bourbon, Everclear Grain Neutral Spirit, and Saint Brendan’s Irish Cream Liqueur. For many years, it bought almost all of its bourbon from Heaven Hill. Before that, its David Nicholson wheated bourbon came from Stitzel-Weller. 

The bourbon boom has been good for Luxco. In 2014, it acquired a one-half interest in craft distillery Limestone Branch, now the home of Yellowstone Bourbon. In 2018, Luxco opened Lux Row, a major distillery. For the year that ended October 31, 2020, Luxco generated approximate net revenues of $202 million and 9-liter case volume of 4.8 million.

At the time of the sale to MGP, Luxco was still owned by its founding Lux family and Donn Lux, formerly chairman and CEO of Luxco, is now a member of MGP's board. He and his fellow shareholders also are now $475 million richer.

MGP is public but tightly controlled by its founding Cray family. Cloud Cray started it in 1941, buying a small distillery which he enlarged to make ethanol for the war industries. It was known as Midwest Grain Processors. After the war, it continued to make ethanol for beverage and industrial use, as well specialty proteins and starches extracted from wheat. His son, Bud, who succeeded him, just passed away last year at age 96. Bud's daughter, Karen Seaberg, chairs MGP's board today. For calendar 2020, MGP reported net income of $40.3 million on sales of $395.5 million.

MGP has long been one of the country's largest distillers of grain neutral spirits (GNS, aka vodka) but has struggled with the low margins typical of commodity production. Its 2011 acquisition of the Lawrenceburg distillery, which makes GNS but also makes whiskey, was a bid to move into "higher value-added products," as they put it. So instead of commodity GNS, the company now also sold commodity whiskey, a minor improvement. It toyed with the next step up, selling branded products, but progress was glacial. Buying Luxco seemed to solve that problem at a stroke.

Maybe it will, but today's branding exercise needed work. That massive, red-brick distillery and maturation facility just downriver from Cincinnati will be called by its new name if you buy one of its branded products, such as Rossville Union Straight Rye Whiskey (which is pretty good, but perhaps not $60 good). If you want to buy contract whiskey, bulk whiskey, or GNS, it's still MGP. And if you're in town and need directions, ask a local how to get to Seagram's, because they all still call it that.  

Confusing, right? 

As for the new name itself, the 'Ross' part is a reference to George Ross, who is believed to have established a distillery there in 1847. He called it Rossville despite there being no town of that name in the vicinity. Then again, maybe it was 1857, as Seagram's claimed (see photo, above).

Regardless, Ross was out of the picture by 1875, when James Walsh & Company, a Cincinnati rectifier, bought the place. The Walsh operation was huge and it owned or controlled several distilleries in the region. The offices were in downtown Cincinnati but the main rectification plant was in Covington, Kentucky, at the other end of John Roebling's new bridge over the Ohio River.

Peter O'Shaughnessy was Walsh's partner and his three sons took the company over after Walsh and their father retired. They operated Rossville as a medicinal whiskey bottler during Prohibition. When Prohibition ended they sold it to Joseph E. Seagram and Sons Inc., aka, Seagram's. The Canadian distiller made it their principal U.S. distillery. They bought a grain silo in nearby Aurora to supply it. The O'Shaughnessy brothers then built a new distillery nearby and gave it the Walsh name, but it didn't last long. The enlarged and improved Seagram's plant produced Seagram's Seven Crown Blended Whiskey and Seagram's Gin, two major brands. 

It was Seagram's for 70 years, the longest name tenure in its claimed 174-year history.

The 'Squibb' part of the new name refers to brothers W. P. and G. W. Squibb, who bought a Lawrenceburg distillery called Dunn and Ludlow in 1866. In 1885, their Squibb Distillery installed a column still and made other improvements to increase its capacity to 330 bushels per day. It was a major distillery until Prohibition closed it. Near the end of Prohibition, Schenley bought it and another shuttered distillery nearby, combining them under the name Old Quaker, a popular pre-Pro brand Schenley had acquired.

For MGP, the significance of the Squibb name is its association with George Remus, the notorious Cincinnati-based bootlegger who briefly owned Squibb as part of his phony medicinal whiskey scheme during Prohibition. MGP has been selling a George Remus Bourbon (also good, about $40) as part of its fledgling effort to add profitable branded products to its portfolio.

Schenley and Seagram's were two of the post-Prohibition 'Big Four' distilled spirits producers and Lawrenceburg was the only place they had big distilleries side-by-side. That made Lawrenceburg "Whiskey City," a legacy the local community has recently embraced. In that context, Ross & Squibb is a great name because it salutes those two local whiskey giants, Seagram's and Schenley, without trespassing on anyone's intellectual property.

Schenley stopped distilling at Old Quaker in the late 1980s when it became part of what is now Diageo. They continued bottling until the warehouses ran dry. The bottling plant was sold and for a short time continued to operate as a separate company. Everything else was either demolished or converted to other uses. 

Seagram's Lawrenceburg kept going even after Seagram's itself was dissolved and sold for parts in 2000. The facility first went to Pernod Ricard, which sold it to CL Financial, which sold it to MGP, after first selling the bottling plant to Proximo. Through all that and more, it never closed.

MGP now has six distilleries, in Atchison (KS), Lawrenceburg (IN), Lebanon, Bardstown (KY), Mexico, and Washington, D. C., where it last year bought a quirky little gin maker called Green Hat. 

We just got our first glimpse of how this new MGP/Luxco mash-up will work. It has a few bugs. Maybe better luck next time. 

UPDATE (10/14/21): Hey, look! The new sign is up.

A Tale of Two Jacobs

 

The furnace at Bourbon Iron Works, established by Jacob Myers in 1791 in Bath County. It was the first iron mill in Kentucky. 

Jacob Boehm was born in 1760 in Pennsylvania. You may know him better by the Americanized version of his name, Jacob Beam, ancestor of all the whiskey-making Beams. 

Jacob Myers was born in Maryland, reportedly in 1738 or 39. His birthdate is not well documented and, based on other life events, was likely a few years later. You probably don’t know him at all, but he was Jacob Beam’s uncle and the person who taught Jacob, and through him all Beams to come, how to make whiskey.

Skills such as whiskey-making typically passed from father to son, but not in Jacob Beam's case. His father died suddenly when Jacob was six. His mother, Margaretha, with five young children and no way to support them in Pennsylvania, returned to her family’s home and farm in Maryland. She was Jacob Myers' sister. Perhaps she named her son Jacob after her brother.

Since the Myers observed the rule of primogeniture, Margaretha and Jacob Myers' oldest brother, Jost, owned the homestead. Fatherless and landless, both Jacobs knew from an early age they would have to make their own way in the world.

The Myers farm was remote and relatively self-sufficient. It included livestock and crops, cereals as well as fruit and tobacco. Most of the farm’s income came from the sale of intoxicants, tobacco as well as beverage alcohol, fermented and distilled. Both Jacobs took a particular interest in the farm’s beverage alcohol enterprise. Jacob Beam, very much the junior partner, learned all he could from his Uncle Jacob.

It is a remarkable fact of American colonial history that after nearly 200 years of settlement, most colonists still lived very close to the Atlantic coast. That began to change in the last quarter of the 18th century. The first European settlement in Kentucky, at Harrodsburg, was established in 1774. Jacob Myers decided to seek his fortune there too.

As more and more settlers came through the Cumberland Gap into Kentucky and Tennessee, their land claims had to be professionally surveyed and registered. Since surveyors typically were paid by retaining a percentage of the land they mapped, many got rich. 

Soon after he arrived in Kentucky, Jacob Myers went to work as a chain carrier on a surveying crew, a low-level position. One day he asked the head of the crew, a man named Fox, to survey some land for him. When Fox refused, Myers announced he would deprive the crew of all the land they had surveyed that day; he would jump their claim. They laughed because they knew he was illiterate and couldn’t transcribe the complicated measurements they had taken, which he would need to establish the claim. 

Myers immediately set off on foot for the land grant office in Harrodsburg. The others slept, starting the same trip on horseback the next morning. Myers beat them by about 90 minutes and was able to register the claim in his own name. How? He may have been illiterate, but he had a very good memory.

Thereafter, Myers mapped and filed land grant claims for more than 145 tracts, encompassing some 30,000 acres, and launched many other enterprises. One of the first was a grist mill and distillery on the Hanging Fork of the Dix River, near modern Danville. Although we don’t know exactly when he started to distill, we know it was before 1781 because in that year he ran for political office and campaigned by giving out free whiskey, a common practice at the time. He still lost, to an “old Indian fighter” named Benjamin Logan. The Myers Mill is mentioned in official documents from 1783 and shows up on a map in 1784. 

By the mid-1780s, settlers were pouring through the Cumberland Gap on foot and floating into Kentucky via the Ohio River. Among them were more members of the Myers and Beam families, including Jacob Beam. Jost Myers had died and the Maryland farm was just about played out. By this time, Jacob Beam was married to one of his Myers cousins, Ann Marie.

The move to Kentucky was facilitated by two family members who were already there, Jacob Myers and an older brother of Jacob Beam, Conrad. Although the Beams were not initially Catholics they migrated with and settled among the Maryland Catholics who populated what are today’s Nelson, Marion, and Washington Counties in Kentucky. Jacob Beam converted. 

In 1791, Jacob Myers started the first iron works in Kentucky, near Owingsville in Bath County. It made everything from farm and household implements to military ordnance. Cannon balls from this foundry (what remains of it is pictured above) were used by the U.S. Navy at the Battle of New Orleans, but Jacob was long out of it by then. Shortly after he started the business, he realized he didn’t have enough capital to run it properly, so he sold it. The Bourbon Iron Works, as it was called, continued in operation until 1838.

Considering his many other enterprises, it is not surprising that Jacob Myers was involved in shipping. In 1793 he began regular service from Pittsburgh to Limestone (today's Maysville), Kentucky’s first official Ohio River port. Myers’ boats hauled passengers as well as freight. The service, strictly one-way in those days before steam power, was later extended to Cincinnati and Louisville.

At Louisville, the Ohio is blocked by a series of cascades, known as the Falls of the Ohio. Trips typically either ended there or resumed on the other side in a different boat. Today Kentucky’s largest city, Louisville became important because anyone who wanted to continue south on the river had to stop at Louisville and travel overland to Portland, on the other side of the Falls. Although foolhardy captains occasionally tried to shoot the rapids, they rarely succeeded, and generally everything had to be unloaded and transported overland. 

That became a business in its own right. It was thirsty work, a fact exploited by early distillers like Evan Williams. Other local distillers pursued that business too but Williams had the inside track. Louisville was Kentucky's second official port and Williams was its first wharf master. 

As a land speculator, miller, distiller, shipper and iron maker, Jacob Myers was like another better-known early Kentucky entrepreneur, Elijah Craig, who did many of the same things in Scott County. Like Myers when he jumped claim on his surveying crew, frontier entrepreneurs took their opportunities where they found them. They weren’t trying to establish historic “firsts,” they were just trying to make a living for themselves and their families. It took equal parts daring, effort and luck, but many, like Jacob Myers, succeeded spectacularly.

His Beam relations didn’t do too badly either.