ASHLAND DISTILLERY (RD #1)

Turner, Clay & Company (1865 – 1871)

Wm. Tarr & Company (1871 – 1899)

Kentucky Distilleries & Warehouse Company (1899 – 1902, 1908 – 1923)

Stoll & Company (1902 – 1908)

In 1865, Turner, Clay & Company established the Ashland Distillery on Manchester Street (Old Frankfort Pike at Cox Street, at the city limits).  This distillery was the first to obtain a federal register distillery license in Lexington and was assigned RD #1.  The firm was composed of Horace H. Turner, Samuel M. Clay and Thomas D. Mitchell.  Turner, Clay and Mitchell were prominent merchants in Lexington.  The property was purchased on November 12, 1866, for $10,000.

The company advertised “Manufacturers of Pure Copper Distilled Whiskey, at Ashland Distillery, ns <north south corner> Manchester, west of Cox.”   Their product was known as Ashland whiskey.  The firm produced twenty four hundred barrels from October 1868 to January 1869.  The firm was averaging thirty barrels per day, slightly less than the thirty-seven barrel capacity.  They also completed their bonded warehouse in December 1868, which was said to be “fire proof.”

This firm operated the distillery for five years, before liquidating after the death of Turner in 1871.  Turner’s estate included $17,745 received from the distillery, less liabilities of $11,364, for a net of $6,381.

Wm. Tarr & Company:

In November 1871, William Tarr of Bourbon County and Thomas J. Megibben of Harrison County acquired the distillery and restarted whiskey production.  Tarr was a prominent land speculator and Megibben was a successful dry goods merchant.  Both were also distillers, entering the business before the Civil War.  They continued to produce Ashland and introduced Wm. Tarr (later known as Old Tarr) whiskey.  Both brands were distilled in a rye and bourbon versions.

In May 1879, a fire destroyed the distillery.  Distilleries were always prone to fires, given their wooden construction and the volatile nature of their products.  This fire (and the Phoenix Hotel fire later in the month) forced the local business community to establish a waterworks to lower insurance rates.  The waterworks provided a year-round supply of water to fight fires.

The distillery was reorganized in September 1879 as Wm. Tarr & Company – a partnership consisting of William T. Tarr (President), Thomas J. Megibben, Sam Clay, Jr. (which see) and Joseph M. Kimbrough (which see).  Clay was a broker who distributed the company’s whiskey.  Kimbrough was Megibben’s son-in-law and managed the plant.  They owned forty, forty, ten and ten percent, respectively.  The plant was rebuilt at the cost of $75,000.  The renovated facility was valued at $115,000.

The firm’s property included eleven acres.  The rebuilt distillery and warehouses were made of brick construction.  The company had two warehouses - Warehouse #1 (two adjoining buildings) and Warehouse #2.  The warehouses covered an area of one and one-half acres.  The firm had the annual capacity of six thousand barrels.

The distillery’s floor space covered twenty five thousand square feet.  The plant had fourteen fermentation tubs, with the capacity of nine thousand five hundred gallons each.  The primary mash tub held ten thousand gallons, with four hundred smaller fermentation tubs of one hundred and one gallons each.  Before refrigeration equipment, these smaller tubs allowed the product to cool faster than a larger tank.  The still’s daily capacity was five thousand gallons, while the doubler had the capacity of twenty five hundred gallons.

The distillery operated three steam engines, with a total of one hundred twenty five horsepower.  In 1882, the company had thirty-five employees and paid $1.75 per day.  The company’s production was approximately forty-five barrels per day.  The company mashed three hundred bushels of corn and one hundred twenty bushels of rye and barley malt daily.  The corn was purchased locally from Fayette County, and generated an estimated $30,000 in sales for the local farmers.  The rye and barley malt were purchased out west and shipped in on the railroad.  The firm had the capacity for eighteen thousand barrels in bonded storage.

The distillery had a siding running into the plant from the Louisville, Cincinnati & Lexington Railroad’s yard (later the Louisville & Nashville Railroad).

Water was supplied to the distillery from the Ater Spring , two hundred yards to the west of the plant.  The spring was under lease to the company.  The lease was for twenty-five years, with an annual payment of one hundred dollars.  The distillery constructed a stone wall and small house around the spring to protect the water.   Later Tarr purchased the spring property.  Pumps supplied two hundred thousand gallons of fresh limestone water daily through two three-inch pipelines.  The water was at a constant temperature of fifty-seven degrees.

The distillery maintained a cattle-feeding operation with the stillage on the ground for five hundred head.  During 1881, a cooper shop was built at the distillery that produced fifty barrels per week, with twenty employees.

In 1882, the distillery produced Ashland, a sweet mash, and Wm. Tarr, a sour mash brand of whiskey.  The sweet mash was held for ninety-two hours and the sour mash for ninety-six hours.

The company had 16,090 barrels in bonded storage in June 1882.  Its annual production was six thousand barrels, valued at $150,000.    In 1884, Sam Clay, Jr. left the partnership after a disagreement over the sale of the Kentucky Union Railroad (see Kentucky Union Affair).  Distributions of the distillery’s products were assumed by J. A. Lail & Company.  From 1886 to 1890, the company leased the rear portion of their bonded Warehouse #1 to the firm of Derby & Day, whiskey brokers of Louisville.

In November 1888, Wm. Tarr Company was incorporated, owned by William Tarr (40%), Thompson Tarr (10%), Thomas J. Megibben (40%) and Joseph M. Kimbrough (10%).   The firm’s capitalization was $100,000.  The officers were Tarr - President, Megibben - Vice President and Kimbrough - Secretary.  Thompson Tarr was William Tarr’s son.

After the deaths of both Megibben and Kimbrough in 1890, Tarr purchased their interests.  Tarr continued as President, while his son was elected Vice President and J. B. Huffman was selected Secretary.  Distribution was also shifted to R. S. Strader & Company.

In 1892, the distillery purchased the adjacent Lexington Distillery to acquire ten thousand barrels of bourbon in storage.  That distillery plant was demolished and the whiskey relocated to the company’s warehouses.

Ashland Distillery, circa 1893

On January 1, 1897, the company issued $50,000 in first mortgage gold bonds to the Security Trust Company.  These bonds were secured by the company assets.  At the time, directors were William Tarr and James S. Stoll.

In May 1897, the company and Tarr were forced to assign their assets to James S. Stoll and Richard P. Stoll as receivers.  This receivership resulted from Tarr’s endorsement of a number of notes for family and friends that defaulted.  The after-effects of the Panic of 1893 and depression in the whiskey industry compounded these problems.  He had judgments ranging from $200 to $8,000 arising from these endorsements.

 Ashland, circa 1900s

Old Tarr, circa 1900s

His personal assets included two thousand acres of farmland in Bourbon County (fifteen hundred of which was prime bluegrass land), commercial real estate in Paris, the Ater Spring in Lexington and a number of lots in Superior City, Michigan.

The distillery assets included ten thousand barrels in bond of Wm. Tarr bourbon.  Liabilities included ordinary payables and the first mortgage bonds.  The first mortgage bonds would later become the subject of litigation (see Settlement of Wm. Tarr & Company).  The newspaper noted that except for these endorsements, Tarr would not have become “financially involved.”   Tarr was 72 years old at the time.

On February 20, 1899, the distillery was auctioned at a Master Commissioner’s sale to Leonard G. Cox, of Graves, Cox & Co., for $60,001.  He was bidding against G. G. White, distiller of Paris, Lewis LeBus, of Cincinnati, and Squire Bassett, of the Fayette National Bank of Lexington.  These three were the larger creditors of the company.  Cox turned out to be a straw bidder for Charles H. Stoll (which see) and the Kentucky Distilleries and Warehouse Company (the Whiskey Trust).

Stoll & Company:

After the sale of the Stoll family’s Commonwealth Distillery (which see) in 1899, James S. Stoll operated his whiskey brokerage business as Stoll & Company (as successor to Stoll, Vannatta & Company).  Old Elk was the company’s proprietary brand of whiskey.  He also controlled the market in Old Tarr and Bond & Lillard whiskies, owning large numbers of warehouse receipts for these two brands.  This whiskey was stored in the bonded warehouses at Ashland Distillery, owned by the Whiskey Trust.

In December 1902, Stoll & Company Inc. was incorporated, with capitalization of $600,000 in common stock.  James S. Stoll was President; George J. Stoll III (his son) was Vice President and Samuel C. Stofer was Secretary/Treasurer.  Stofer was the firm’s office manager.   The same month, Stoll purchased both the Ashland Distillery and the Bond & Lillard Distillery  from the Whiskey Trust.   The company now controlled the Bond & Lillard, Old Tarr, Ashland and Old Elk brands.

In 1904, Stoll & Company’s Bond & Lillard won a gold medal at the Louisiana Purchase Exposition and World’s Fair in St. Louis.

In March 1905, the company purchased the Belle of Nelson  and E. L. Miles & Co.  Distilleries in Nelson County, Kentucky.  The purchase price was $486,655.32 for both.  They also obtained twenty five thousand barrels of bonded whiskey with the deal.  With these two additional distilleries, Stoll & Company became the largest distilling concern in Kentucky – with four operating distilleries.  They also picked up two additional brands – Belle of Nelson and E. L. Miles – for a total of six brands of whiskies.

On July 1, 1907, the Stoll family consolidated their wholesaling whiskey businesses – Stoll & Company and Stoll, Hamilton & Company (which see) into Stoll & Company Inc.  James S. Stoll was President, John G. Stoll and George J. Stoll were Vice Presidents and Samuel C. Stofer was Secretary and Treasurer of the new concern.  John G. Stoll was the son of Richard P. Stoll (who died in 1903).

Belle of Nelson, circa 1920s

Old Elk, circa 1900s

The new firm distilled and marketed seven brands; which were Ashland, Old Tarr, Old Elk , Bond & Lillard, Belle of Nelson, E. L. Miles & Co. and New Hope.  They engaged sales representatives to cover the entire United States.  Their main office and warehouse were retained in Lexington, while the firm had six other warehouses around the state.  They employed more than one hundred workers.

Letterhead, 1913

In 1908, after the death of James S. Stoll, the Stoll distilling interests were consolidated into the Kentucky Distilleries and Warehouse Company (the Whiskey Trust).  The Ashland distillery plant was dismantled.  After 1908, Stofer continued as a whiskey and wine merchant under the name Stoll & Company until Prohibition in 1919.  Stofer in 1910 reintroduced Old Buckhorn Whiskey (an old Commonwealth Distillery brand) and Sam Clay Bourbon.

“A Call in Arizona,” Belle of Nelson, circa 1908

“A Bluff in Chicago,” Belle of Nelson, circa 1908

“A Deal In Washington,” Belle of Nelson, circa 1908

In March 1909, Maurice Greenbaum, of the S. J. Greenbaum Company of Louisville, purchased the entire whiskey inventory in the Ashland warehouses.  Greenbaum was associated with the Whiskey Trust and owned a distillery in Midway (destroyed by fire the prior year).  The bonded warehouses held a total of eighteen thousand barrels of whiskey produced from 1902 to 1907.  Greenbaum paid the distillery $375,000 and assumed $600,000 in warehouse receipts.  He paid roughly $1.75 per gallon.

Greenbaum also purchased a plot of land, consisting of three-quarters of an acre, adjacent to Warehouse #1, and immediately began the construction of a bottling house.  Construction was completed in less than three weeks.  A bottling plant at the distillery was required to bottle in bond.  Over the next ten years, Greenbaum bottled whiskey from this stock.  The bottling plant had the capacity of forty barrels per day and employed thirty-five workers.

In 1913, the rear portion of the property (where the distillery was located) was sold to the L & N Railroad to expand its yard at the rear of the distillery.  The Ater Spring was included in this purchase.

Whiskey Bandits:

On the night of March 20, 1920, a band of masked whiskey bandits raided the warehouses at the distillery.  After overpowering the two guards, the thieves took ninety-six cases of bonded whiskey from the government storeroom.  This whiskey was valued at $20,000.

In April 1920, the remaining seventy-six barrels of Old Tarr bourbon were removed to the concentration warehouses in Louisville (controlled by the Whiskey Trust).  The newspaper indicated that the value of this bourbon was $266,000 or $3,500 per barrel (or $4.50 per pint “Prohibition” prices).  This move eliminated the cost of the guards at the warehouse.

Kentucky Union Affair:

The Kentucky Union Railroad Company was chartered in 1872 to build a railroad into the rich timber and coalfields of Eastern Kentucky.  The investors included Thomas J. Megibben, William Tarr and Sam Clay, Jr.

In 1884, Sam Clay, Jr. arranged a deal with outside investors to acquire the railroad.  Meanwhile Tarr and Megibben (his partners in the distillery) arranged a counter offer by a group of local investors.  When Clay’s investors arrived in Lexington with the tender amount in gold, the railroad had already been sold.

The local investors turned out to be Henry Clay McDowell (grandson of the statesman), Richard P. Stoll and Charles H. Stoll.  Clay was outraged and filed suit against Tarr and Megibben for interfering with the closing.  Clay also terminated the distillery partnership.

In June 1891, Clay won a judgment for $10,000 against his former partners.  This judgment was one factor in Tarr’s bankruptcy.

Tin Sign, circa 1902-08

Bond & Lillard, circa 1920s

Settlement of Wm. Tarr & Company:

In 1897, Richard P. and James S. Stoll were appointed joint receivers of the company.  After both of their deaths, J. Will Stoll (which see), President of the Lexington City National Bank, was appointed interim receiver.  The Stolls had collected $130,402.35 and paid out $127,192.02 for a balance of $3,110.35.  Tarr’s creditors were paid in full, with interest.

The Stoll brothers liquidated the distillery in 1899.  At the same time, they were involved with the formation of the Whiskey Trust.  The distillery sold at auction for a fire sale price of $60,001 to the trust.  Within the next few years, the distillery was easily worth three or four times that amount.  The company’s bonded whiskey was sold for as little as $5 to $10 per barrel.   Within a year, it was worth four times that amount and within the next few years at least eight times that amount.

The receivership was kept open for an unusually long twelve years.  Finally, in 1910, Lewis E. Pearce was appointed replacement receiver for the Stolls.  He was ordered to settle the affairs of the Wm. Tarr & Company.  He immediately began to question the Stolls’ actions.

In August 1911, Receiver Pearce filed suit against the estates of the Stoll brothers to recover $60,399.55 paid from the company.  He claimed that the gold mortgage bonds were issued for the benefits of the Stolls and not for business purposes.  He also claimed that these bonds were delivered without consideration and in anticipation of insolvency.  He additionally claimed that the receivers had charged excessive fees and paid excessive interest on the repaid loans to their related entities.

Richard P. Stoll was the closing attorney for the bonds while he was President of the Lexington City National Bank (the largest creditor and primary beneficiary of the bond issue).  His brothers – Charles H. and James S. Stoll – were involved with the Whiskey Trust.  James S. Stoll was also a director of the Tarr distillery.

At closing, the bonds were divided: Lexington City National Bank received thirty-three bonds; James S. Stoll received five bonds; First National Bank received five bonds; William Tarr received five bonds; Lexington City National Bank received one additional bond as a fee; and Fayette National Bank received one bond to secure a loan of Tarr.  Each bond had the face value of $1,000.  Tarr’s bonds were payment for the sale of the Ater Spring property to the distillery.  After the receivership, he was forced to surrender these bonds back to the receivers.

The Stolls charged a receiver fee of $10,000 for their services.  The company also had additional loans with the Lexington City National Bank for $32,000, Fayette National Bank for $4,300 and Stoll, Vannatta & Company for $3,200.    These loans were paid in full with interest.

After Tarr’s death in 1911, the suit was settled out of court.  Many observers thought that Tarr had turned to his friends the Stolls for help and the Stolls helped themselves.  It is interesting to note that the Lexington Herald, a paper friendly with the Stolls, ran a short obituary stating, “he used to be very wealthy.”  Other papers from around the state ran lengthy obituaries, fitting his position and many accomplishments.

References: 
William M. Ambrose, Bottled In Bond under U. S. Government Supervision, Limestone Press, Lexingotn, 2008.
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