3/28/2007

Rosenstiel saw Scheneley through Prohibition and beyond
By Tom Range, Sr.

Amid the names of the giants of the distilling industry in the United States is that of Schenley Distillers.  And among the names of the individuals who formed the industry in the post-Prohibition era is Lewis S. Rosenstiel. Terms used to describe this controversial character are entrepreneur, hustler, rumrunner and bootlegger. In various stages of his career, all these descriptions were appropriate.

Rosenstiel operated out of his hometown, Cincinnati, OH, and had spent the Prohibition years (1920-1933) transshipping liquor purchased in England and in Canada into the United States.  Ocean going freighters transported the European liquor to the island of Saint Pierre in Canadian waters. The "hooch" was then loaded onto smaller, fast-moving vessels to the Canadian mainland, and then trucked to the Cincinnati operation. The liquor was warehoused in bulk for further blending, then to be sold to individual bottlers, or to be marketed with established name brands. To apply a veneer of respectability to his bootlegging operation, Rosenstiel purchased the Schenley Distillery of Pennsylvania in 1923 and consolidated his warehousing operation in that facility.  This company was established in 1892 by the Schenley family of Pittsburgh. Rosenstiel acquired other local distilleries upon repeal of prohibition and folded them into the operations that he had centralized in the Armstrong County, PA town named Schenley.

In its formative years during the Prohibition era, Schenley, that is Rosenstiel, began acquiring distilleries, and their warehoused liquor, which was now legally unsaleable within the United States, gambling that Prohibition would ultimately be repealed.  After the passage of the 21st Amendment to the Constitution in 1933, which repealed the 18th Amendment that established Prohibition in 1920, the liquor industry was relieved of many of the federal restrictions on its trade.  State restrictions remained or had been recently established. 

Pennsylvania, in which the bulk of Schenley's operations were concentrated, instituted a high tax rate on liquor bottled or sold within its borders. Schenley had warehoused 4,000,000 gallons of whiskey in Pennsylvania. As the date for the imposition of these taxes approached, a caravan of 100 trucks clattered through the still streets of Philadelphia in late November, shuttling 50,000 cases of gin across the Delaware River bridges to Camden, NJ.  Pennsylvania's Governor Pinchot was jamming through his legislature a $2 per gallon tax on every drop of liquor in the state. Only a relatively few drops of liquor escaped the state before the imposition of the tax.  Schenley along with other distillers in the state had to ante-up the taxes before the warehoused liquor could be released for "blending," that is, cut with water and flavoring, with one gallon of aged whiskey producing ten gallons of saleable blended whiskey.

An amusing incident in the Schenley saga is its involvement with The Society of Friends.  The firm's brand Old Quaker, described as a "friendly whiskey," had been made in the U.S. since at least the 1890s. By 1939 it was marketed by a subsidiary of Schenley Distillers.  Some members of the Friends had mildly objected to the use of the brand names Quaker Oil and Quaker Oats. But they objected vigorously to Old Quaker whiskey.  They objected to Old Quaker's implicit identification with the "purity and integrity" of the Quaker faith. They resented the implication that Quakers drink and they are not supposed to. The Friends were displeased that the Old Quaker trademark was a picture of William Penn, standard-bearer of Quakerism in America; that some Schenley advertisements had featured a photograph of a whiskey drinker in Quaker-style dress. In August 1939, as mad as members of a mild, tolerant sect can be, some Friends proposed to do something about the whisky.

Quakers had begun hectoring Schenley several years before.  Although it had no intention of yielding its 50-year-old name, a valuable property, the distiller agreed to gradually reduce the size of the Old Quaker's picture and to kill him off completely at the first opportunity.  To Friends, however, the Old Quaker still looked pretty big and bibulous.  A Manhattan based Friend suggested a boycott but by others.  An effective boycott of whiskey by teetotaling Quakers was a bit of a problem. The solution: to circularize other churches, civic groups, Rotarians, Kiwanis, Lions, fraternal organizations and sportsmen's clubs with an explanation of Quaker ideals, urging them to do the Quakers' boycotting for them.

Lewis Rosenstiel's Schenley survived and prospered. The firm became the leading U.S. distiller from 1933 to 1937 and lead again from 1944 to 1947.  Over the years, Schenley has marketed not only whiskey, concentrating on higher priced straight whiskey brands, but other liquors as well; Charles Heidsieck's champagne, Noilly Prat French wine, Dubonnet vermouth and Bacardi rum.  The town of Schenley, PA survives as little more than a post office and a station on the Kiski Junction scenic railroad. Rosensthiel had closed its distillery operations to relocate to other states more friendly to the liquor industry.  The town presently has a population of less than 80.

In 1952, at age 61, Rosenstiel stepped down as president of Schenley (but not as chairman), and elevated a whole crew of young executives. Into the presidency went Ralph Taft Heymsfeld, 44, a Columbia-trained lawyer, who had joined the company 18 years earlier and had specialized, as secretary and counsel, in fighting for fair trade and against high liquor taxes. Schenley's new top team insisted that Rosenstiel would still be the boss, and that no big changes would be made. But Schenley seemed to have a somewhat healthier respect for the lowly blend over its straight whiskey labels and pushed its blends harder. Said President Heymsfeld: "You can't sell a man a Cadillac when all he can afford is a Chevrolet."

In his later years, Lewis S. Rosenstiel, engaged in philanthropic activities, notably the establishment in 1968 of the Rosenstiel Basic Medical Sciences Research Center at Brandeis University in Waltham, MA.  

Send an Email Letter to Courier Editor - be sure to include your telephone number.