The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1888-07-28
THE WHISKY U


Concerning the Trade in General.
WAsHINeToN, July 2L-At q meeting Of the
House committee on manufactures, to-day,
Chairman Bacon announced that the committee
would proceed to the investigation of the So
called whisky trust. and called j. M. Atherton,
of Louisville, KY, president of the j. NJ. Ather-
ton Company, as the first witness. The COM
pany's headquarters, the witness said, were To-
Gated in Lsrue county. kentucky. 1t wss not en-.
gagged in di%stilling whisky. but in handling the
whisky of a number Of firms who do a distilling
business in their own names. These firms were
Mayfeld g. Co., VIM. Miller & Co.. S. 0. OBrisn
Sc Co. and S. T. Carter, all of whose product is
controlled by the J.. NJ. Anterior Company, IN
der an agreement. The object of the agreement
was to preserve the trademarks of these firms.
which were regarded as valuable. The produc-
ton of these firms in 1882 was $4,000 barrels.
but the production had fallen of.
and since that time the yearly
production has been from 10000 to
$1,000 barrels. There were, Mr.. Atherton
said, two classes OF whisky producers in Ken
rucky-thosew who made line Bourbon whiskies.
and a number of firms located along the Ohio
river who made cheap w~hiskies. the difference
being that the value Of the Bourbon. or Ken
lucky whisky depended upon its flavor, and
that it had to be ''aRsd" before being sold,
while the other was Immediately placed on the
market There was no business connection be-
tween the producers Of the one kind Of whisky
and the producers of the other grades. nor was
there any connection between tho Kentucky
distiller and those who made substantially the
same kline of whisky 10 Pennsylvania or Mary
land. In reply to Mr.. Bacon, the witness said
that most OF the large distillers Of fine Ken.
lucky whisky entered into an agreement by
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whisky in the fiscal year 1888 Some few large
firms refused to sign the agreement,
and there were about loo very mall DIS
til,ers who we're not asked TO sign the
agreement. The combined production of these
non-signers was estimated at So, 500. 900. The
agreement grew out Of the fact that there had
been a very large overproductiono of whisky. In
1881 80. 900. 900 gallons we're produced, and in
1882 about the same quantity. As the annual
consumption is iestimated) from II, 600, 900 to
Ia, 600, 700 gallons. this whisky could not be con-
sumed and was exported to Europe to find a
market. but no buyers having been found
much of that whisky was coming back. In 1888
and 1854 there were about 1,000.O 600 gallons pro-
ducei each year; in 1855 about 10000. 900; in
1885, about 10. coo, 900. and in 1887 about the
same quantity. In order to protect the owners
of this whisky from the effects Of this overpro-
duction the agreement to suspend operations from
July 1, 1887. TO July ]. 1888, was entered into.
This agreement. tho witness desired to say. was
not in the nature of q trust; there was no con-
solidation of property or merging OF interests.
The witness stated that he did not believe that
there would ever be any serious competition OF
European distillers with American whisky man
ufacturers, for the reason that the United States
was the greatest grain country in tho world, and
also had the timber for barrels right at hand.
Though distillers of fine Whistles differed very
much politically, they oil, the witness said. as a
trade question. would be glad to have the tax
reduced to so cents per gallon.
The witness was then examined with regard
to the production of alcohol and spirits as dis
tineuished from beverage whisky. by Repre-
sentative Breckenridge. of Arkansas. and asked
if there was . trust in this trade. The witness
replied that he believed nearly all the distillers
north Of the Ohio river were members of a trust,
each distiller having q common interest in the
business of all the others. The headquarters
was at Peoria, Ill. and the president was H. B.
Greenhut. Of that place. The trust also in
cluded a few distillers Of alcohol and cheap whis-
Ky located in Kentucky. near Covington.
Representative MISUNDERSTANDING the In
ternal-revenue tax. what is the cost of q gallon
Of whisky laid down 10 a bonded warehouse3
The Witness-Thst depends on q variety Of fac
tors which vary considerable, but, assuming that
corn sells for 80 cents q bushel, rye for so cents,
and malt for so cents a bushel. q gallon Of stand
ard Bourbon whisky, with interest on plant.
would cost. say. 80 cents. and, excluding inter
est on plant, from 90 to 274 cents.
Representative Buchanan-What would be
the effect of requiring the tax to be paid when
LILO blshN ID 40, OOlle1A ~
bonded periodl
The Witness-It would substantially destroy
the manufacture OF fine WHISTLES, because OF the
increased cost of the whiskies when they were
fit for use, growing out Of the fact that one out
of each forty-eix gallons that evap0rated would
be a tax-paid gallon. and because of the heavy
expense of carrying the whisky for several
years. insurance. etc. The amount OF money
that would be required in the business would DO
so great that no distiller could do much unless
ha ua q pptninnafrA Srch n. law WOyld pa--
tainly lead to combinatIors; there would be no
other method of handling the business, and q
rich combination would soon aborb IL all.
Representative Buchanan-The makers Of
peach and apple brandy are not allowed to brand
their product
The Witness-Tbat may be because OF the
business. The witness said that as some refer
ence had been made to the National Protective
Association, of which he was president, he de-
sired TO say, before he lett the stand. that the
association had nothing to do with the manu-
facture or sale OF whisky. but was organized
solely and entirely for the purpose of opposing
the enactment Of prohibitory legislation. The
association sent out literature, but had never
sent a dollar into an election district, nor to q
State capital.
Mr.. II. w. Sherley. OF Louisville, said that be
was chairman OF the to secure sig
natures TO the agreement to limit the produc-
ton, in 1889, TO IL, 900, 900 gallons. Only about
% per cent, of those who signed the 1888 agree
ment had signed the new. By the 1889 agree
ment, 1000. 900 gallons of the production were
to be distributed among the signers ia proper
ton to their capacity, while 1000, 600 were left
TO be distributed in the discretion of the com
mittee among those who in previous years had
not overproduced. The dissillers held back
from signing the agreement until they could aud
out how much Of this 2, 600, coo gallons each was
to get
W.. 81. Thomas. or Louisville, testified that
one Of the reasons for the export of whisky to
Europe was that he and others believed Ken
lucky whisky was better than foreign compound
liquors. and thought they might find market for
il in Europe. Ninety per cent Of the whisky
exported was owned by wholesale dealers. and
he believed if thew all united they could build
up a big trade in Europe. He WAS not in favor
of the 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 be
believed there would be ten times the amount OF
1t drunk.
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