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Coal mines, medicine and mules: How the oldest distilleries survived Prohibition

These historic distilleries tell the story of Prohibition, by most accounts a dark time for liquor makers and the workers they supported.

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These historic distilleries tell the story of Prohibition, by most accounts a dark time for liquor makers and the workers they supported.

Published Updated

The stories of some of the oldest distilleries, including Buffalo Trace in Frankfort, Kentucky, are intertwined with United States history. They keep records of early American settlements and their commercial growth. They also tell the story of Prohibition, by most accounts a dark time for distilleries and the workers they supported.

When the first non-native settlers came to what's now Franklin County, Kentucky, they followed the trail of the buffalo. The roads that convene near the Buffalo Trace Distillery, on the banks of the Kentucky River, were laid over the animals' migratory paths that led to the water. 

That limestone-filtered water has long been key to Buffalo Trace's operations, which have run largely uninterrupted since the 1700s, though under a variety of owners and names. That includes during Prohibition when it was the George T. Stagg Distillery and bottled whiskey, government-stamped and bottled in bond at 100 proof, to be prescribed via doctors' orders. 

The historic Buffalo Trace Distillery as it looked during Prohibition.
The historic Buffalo Trace Distillery as it looked during Prohibition. Courtesy of Buffalo Trace

Whiskey history runs deep in this part of Kentucky, originally called Leestown. It was home to some of the earliest European-American settlers in the Bluegrass State, and the U.S. government gave them large parcels of wild land in exchange for growing grain.

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Surplus corn became whiskey, and Buffalo Trace's position on the Kentucky River made shipping that liquor to larger cities, and eventually to the global market, possible. The rise of Buffalo Trace, in its earliest years called Swigert Distillery, became synonymous with Franklin County's commercial growth.

When Colonel Edmund Haynes Taylor Jr. purchased the then-small distillery in 1869, he equipped it with state-of-the-art copper fermentation vats and stills and renamed it O.F.C., or Old Fashioned Copper, Distillery. Remnants of the stills survive on the property today, a reminder of how Taylor drove industrial change in this area.

Colonel Blanton, who helped shepherd Buffalo Trace through Prohibition.
Colonel Blanton, who helped shepherd Buffalo Trace through Prohibition. Courtesy of Buffalo Trace

"In these places where you have those industrial distilleries, you see lots of employment happening," said Nick Laracuente, archivist for the Sazerac Company Inc., which owns Buffalo Trace. "Farmers are able to get their corn in, they're able to turn it into whiskey, and everyone's benefiting, whether it's the farmers, barrel-makers or marketers."

Nelson County, an hour southwest, saw the same growth. Post-Prohibition, it became the de facto bourbon capital of the world. But after the 18th Amendment establishing Prohibition was ratified in 1919, Nelson County was left reeling. 

"There's an oral history of when Prohibition came in, literally everybody in the county is out of work overnight," Laracuente said. 

But Buffalo Trace had Albert B. Blanton, who grew up roaming the distillery grounds. First employed there as an office boy, he eventually helped steer it through two wars, the Great Depression and, notably, Prohibition.

O.F.C. became the George T. Stagg Distillery in 1904 and, when Prohibition began 16 years later, it became one of the few permitted by the U.S. government to bottle and eventually produce medicinal whiskey.

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For a few years, Stagg stored and bottled other distilleries' bourbon for sale in government packaging for medicinal use under the Liquor Concentration Act of 1922, which helped the government oversee legal whiskey stocks by concentrating them in a few hundred bonded warehouses. 

Laracuente said a combination of Blanton's ingenuity and the fact that the deep-pocketed Schenley Distillers Corporation purchased the distillery in 1929 helped Buffalo Trace earn a government-supplied license to produce new whiskey from 1930 to 1933.

Brown-Forman, Glenmore, Frankfort Distilleries, American Medicinal Spirits and A. Ph. Stitzel Distillery were the other permittees, according to bourbon historian Chuck Cowdery.

Freddie Johnson, a third-generation employee at Buffalo Trace Distillery and lead VIP tour guide, said other connections may have helped the distillery survive Prohibition. 

Tour guide Freddie Johnson leads a Buffalo Trace Distillery tour in the Stillhouse.
Tour guide Freddie Johnson leads a Buffalo Trace Distillery tour in the Stillhouse. Courtesy of Buffalo Trace

E.H. Taylor, a skilled politician who pushed for the Bottled-in-Bond Act of 1897, had famous relatives with clout, Johnson said. 

"One was Zachary Taylor, who was his uncle," Johnson said. "He became the 12th president of the United States."

E.H. Taylor, also related to founding father James Madison, was once the mayor of Frankfort and a member of the U.S. House and Senate. To say he was well-connected is an understatement. 

"So we've always been linked with interactions with the government," Johnson said.

From corn to quarries and back again

Other distillery owners, however, preferred to follow the letter of the law without assistance.

That was the case at the James B. Beam Distilling Co., founded by Jacob Beam. A son of East German immigrants, Beam moved from western Maryland to Hardins Creek, Kentucky, in 1792 to take advantage of a 100-acre land grant to grow corn.

He also took quickly to distilling and released his first batch of whiskey in 1795. Eight generations later, his descendants still carry on his legacy. 

Recently crowned master distiller Freddie Noe's great-great-great-great grandfather David M. Beam was responsible for moving distillery operations to Nelson County in 1854 to take advantage of nearby rail lines. That helped expand the distillery's shipping footprint, launching Jim Beam, then Old Tub, into a national brand. 

Fred and Freddie Noe at James B. Beam distillery.
Fred and Freddie Noe at James B. Beam distillery. Courtesy of Beam-Suntory

Later, James Beauregard Beam, aka Jim Beam, took over the family distillery in 1894, eventually buying property in Clermont, Kentucky, where the distillery is today.

Today, James B. Beam Distilling Co. is a far cry from the original creekside still. Instead, it's a 500-acre modern adult playground with a recently renovated restaurant and the state-of-the-art Fred B. Noe Craft Distillery, home to the brand's small-batch labels.

But Jim Beam did not have distilling on his mind when he bought the property during Prohibition. He had already sold his distillery, whiskey and all of its related equipment.  The Clermont property's onsite rock quarry simply offered a legal way to make money.

"Jim Beam was a very religious man, a very studious man, and very much about character and honor," Noe said. 

For the next 13 years, Beam eked out a living through that quarry, a citrus grove in Florida and a coal mine in eastern Kentucky. Running those operations was no small feat in a time when trains were the quickest mode of transportation, Noe said.

"He was trying to make ends meet, hoping Prohibition would end, given his family's craft was whiskey-making," he said. 

When Prohibition was repealed in 1933, Jim Beam was 70 years old. The dry days had left his children and nephews eager to delve into the family business. Beam was hardly thriving financially at that point, so several investors stepped in to help revive his distillery. 

With kin and friends, Jim Beam rebuilt the distillery in 120 days. He retired soon thereafter, his business in good hands. 

Nick Laracuente, archivist for the Sazerac Company Inc.
There's an oral history when Prohibition came in, literally everybody in the country is out of work overnight.

"My granddad always said God was the strongest link in our family's history, and as a young boy, I really didn't understand what he meant," Noe said. "Now that I've (worked) in the same company, I understand it exactly. There were a lot of things pulling against him, but he had that vision of our family being involved in that industry."

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A distillery in ruins

How Prohibition affected Jack Daniel Distillery
Lexie Phillips, the assistant distiller at Jack Daniel's Distillery talks about how Prohibition affected the company.
Nashville Tennessean

As much as Beam suffered during Prohibition, it's hard to argue he had it much worse than distillers in Tennessee, where in 1909 the General Assembly outlawed alcohol production in the state. The ban was not lifted until 1937 — four years after Prohibition was repealed nationally.

In 1864, Jack Daniel moved to the Dan Call Farm in Lynchburg, Tennessee, where he learned how to make whiskey from an enslaved man named Nathan “Nearest” Green. Daniel would later hire Green as the head distiller at Jack Daniel Distillery, officially established in 1866 as the first registered distillery in the U.S.

In 1880, he took ownership of a piece of nearby land with a 56-degree underground spring bubbling through layers of limestone and protected by a natural cave. The distillery is still there today and still uses that water in its whiskey.

"He bought the cave and 142 surrounding acres just to preserve the water source," said Lexie Phillips, assistant distiller at the Jack Daniel Distillery since 2020.

Lexie Phillips talks about the history and making of Whiskey at Jack Daniel Distillery in Lynchburg, Tenn., Monday, June 27, 2022.
Lexie Phillips talks about the history and making of Whiskey at Jack Daniel Distillery in Lynchburg, Tenn., Monday, June 27, 2022. Stephanie Amador / The Tennessean

Daniel died in 1911 as the result of a toe injury he sustained six years earlier after kicking a safe in a fit of frustration. With no other heirs, he left his distillery to nephew Lem Motlow. With liquor manufacturing already outlawed in the state, the inheritance was perhaps more burden than gift. 

Motlow tried to keep the distillery afloat by hook or by crook. He had moved Jack Daniel's distillation operations to St. Louis in 1910, but when the whole country went dry, so did Motlow's options. Even the whiskey he stored in St. Louis was siphoned off by thieves for bootleg resale

According to Phillips, Motlow dabbled in mule trading which was, she said, "very big in the day." He also opened a general store in downtown Lynchburg, such that it was. By and large, the distillery went fallow for about 30 years, save for some grain milling for local farmers here and there, Phillips said. 

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"By the end of that, there was almost nothing left here," she said. "It was pretty much in ruins. It was nothing like what you see here today."

Once Prohibition was finally repealed, distillery operations ramped up slowly, and on a much smaller scale than before. 

"We weren't able to make whiskey here, because he had to rebuild a lot of stuff, until 1938," Phillips said. 

By that time, demand for whiskey was at a fever pitch. In Kentucky, Albert B. Blanton was already scrambling to meet demand, he wrote in a memoir archivist Laracuente shared.

Despite the distillery's relative good luck in continuing production during what Blanton called "the dark days" of Prohibition, the first few weeks post-repeal were, he said, the most trying in his life.

But Schenley Industries founder Lewis "Lew" Solon Rosenstiel was suitably prepared.

Barrel No. 2 million is filled at Buffalo Trace Distillery.
Barrel No. 2 million is filled at Buffalo Trace Distillery. Courtesy of Buffalo Trace

"With his usual foresight, (he) must have smelled something in the wind a year before repeal, for he instructed me in 1933 to make certain changes and produce if possible a whiskey that would be palatable and pleasing at a reasonable age," Blanton wrote.

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By November 1938, when Jack Daniel Distillery was just bringing back production, Buffalo Trace was already making 260,631 cases of bourbon annually. 

Though E.H. Taylor was responsible for lifting Buffalo Trace into prominence, it was Blanton who made it survive and thrive, Laracuente said. 

"If it wasn't for those two, and especially Blanton, we wouldn't be here today."

Mackensy Lunsford is the food and culture storyteller for USA TODAY Network's South region and the editor of Southern Kitchen.

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Reach me:  mlunsford@southernkitchen.com

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