Omaha daily bee., 1888-07-28
MAKERS OF BOURBON AND RYE
They Appear Before the House
Committee ON Manufactures.
THE TRUST AND ITS METHODS.
Representatives of Several Large Dis
tilleries Explain the Manner In
Which the Combination Trans
acts Its Business.
The Whisky Trust.

| luc NHIshy lTuS+
WASHINGTON, July 27.-At the meeting Of
the house committee on manufacture today,
the chairman announced that the committee
would proceed to the investigation of the So
| called whisky trust, and called j. M. Ather-
ton, of Louisville, KY, president of the j. M.
Anterior company, as the first witness. Tho
company's headquarters, the witness said,
were located in Larague county, Kentucky.
1t was not engaged in distilling whisky, but
in handling the whisky of a number Of firms
who do a distilling business in their own
names. The product of these firms is con-
trolled by the j. M. Anterior company under
agreement. The object of the agreement was
to preserve the trademark of these firms,
which were regarded as valuable ones.
There were, Atherton SAID, two classes of
whisky producers in Kentucky; those who
made fine bourbon WHISTLES, and a number
of firms, located along the Ohio river, who
made cheap whisky, the difference being
connection between these two classes
of producers, nor was there any connection
between Kentucky distillers and those who
made substantially the same kind of whisky
in Pennsylvania and Maryland. In reply to
a question the witness said that most of the
large distillers OF fine Kentucky whisky en-
tered into an agreement by which they
bound themselves to produce no whisky in
the fiscal year of 1888, Some few large firms
refused to sign the agreement, and there
were about one hundred and fifty very small
distillers who were not asked to sign. The
combined production of these non-signers
was estimated at 50, 800, 900.
TIL agreement grew out Of the fact that
| from 1881 to 1887 there had been n very large
oyerproduction of whisky. In order TO pro-
tect the owners of this whisky from the eff
fects of this overproduction an agreement to
suspend operations from July |, 1887, to July
4 - - yrpnn TOW trtN Nh,
the witness desired to say, was not in the
nature of a ~trust-there was no consolidation
OF property nor merging of interests.
The witness was then examined with re-
gard to the production of alcohol and spirits
by Representative Breckenridge of Arkan-
sas, and asked if there was "a trust in this
| trade.
The witness replied that he believed that
nearly all the distillers north OF the Ohio
river were members of the trust. The head
| quarters were at Peoria, and w. II. Greenhut
was president. The trust also included u few
distillers of alcohol and cheap whisky located
in Kentucky, near Covington.
Representative MISUNDERSTANDING the
internal revenue tax, what is the cost of a
gallon of whisky laid down in the bonded
warehouse2n
Witness-"Tha depends upon a great many
factors which vary considerably, but assum-
ing that corn sells for so cents, rye for SO
cents, and malt for 80 cents per bushel, a gal
lon of standard bourbon whisky, with inter-
est on the plant, would cost say 30 cents, and
excluding interest on the plant, about 90 cents
to ~ cents.n
Mr.. Buchanan-"What would be the effect
of requiring a tax to be paid when the whisky
IS produced; that is, abolishing the bonded
periodg"
Witness-"It would substantially destroy
the manufacture of fine whiskles, because
of the Increased cost of WHISTLES when they
were fit for use, growing out of the fact that
every gallon that evaporated would be a tax
paid gallon, and because of the heavy ex-
pense of carrying whisky for several years,
insurance., etc. The amount of money re-
quired in the business would be so great that
no uistiller could do much unless he was q
millionaire. Such a law would lead to COM
binations, and rich combinations would soon
absorb it ALL"
w. Z. Shelley, Of Louisville, said that he
was chairman of the committee to secure
signatures to an agreement to limit the pro-
duction to 1000, 600 gallons. Only about rs
per cent of those who signed the 1883 agree
ment had signed the new one. BY the 1889
agreement 100000 gallons of the
| production were to be distributed
among the signers in proportion to
their capacity, while 1000, 900 gallons were
left to be distributed, in the discretion Of
years had not ovcr-prcduced. The distillers
held back from signing the agreement until
they could find out now much of this 2,000,-
600 gallons each was to get.
w. H. Thomas of Louisville testified that
one of the reasons of the export of whiskey to
Europe was that he and others believed that
Kentucky whisky was better than the for
eign compound liquors and thought that they
might make a market for it in Europe.
Ninety per cent Of the whisky reported was
owned by wholesale dealers and he believed
that If they all united they could build up u
big trade in Europe. He was not in favor of
q repeal of the tax ON liquor for the reason
that every farmer with a stream near his
farm would go INTO the business and ruin the
distillers by over-production. With no tax
on whisky he believed that there would be
ten times the amount consumed.