HENRY CLAY DISTILLERY (RD #5)

Headley & Farra (1869 – 1872)

Jas. E. Pepper & Co. (1879 – 1907)

James E. Pepper Distilling Company (1907 – 1933)

Schenley Products (1933 – 1976)

The Henry Clay Distillery was built in 1869 by the partnership of Headley & Farra.  This partnership consisted of John A. Headley and James A. Farra.[i]  The firm purchased four acres for $2,000 from Judge George Robertson in January 1869.[ii]  The plant was located a mile outside of the city limits on Old Frankfort Pike.  This was the location of the Royle Spring and old Royle Mill.  The distillery operated for about three years until it was destroyed by fire in 1871.  The loss was set at $15,000.[iii]

After the fire, the property was sold by the Federal government in August 1872 for unpaid taxes.  Headley later founded the Woodland Distillery on Harrodsburg Pike.  Between 1875 and 1879, the property was used as the Blue Grass Pork House.  The property was sold first in 1879 to George C. Buchanan[1], a Louisville distiller and land speculator, and then sold on April 7, 1880 to George A. Starkweather, Jr., a wine importer from New York City.  The purchase price was $7,429.12 (cash of $4,096.12 and assumption of notes of $3,333.33).[iv]

Jas. E. Pepper & Company:

n 1879, George A. Starkweather, Jr. established a partnership with James. E. Pepper and reconverted the old distillery to whiskey production.[v]  Colonel Pepper came from a family of distinguished distillers.

Colonel Pepper designed the distillery and the layout of equipment.  He hired John McMurty, noted local architect, to translate these ideas into plans and specifications.  The grounds contained forty-eight and a half acres.  The distillery was constructed of brick, with floor space of forty thousand square feet.  The plant had twenty fermentation tubs of six thousand five hundred gallons each and seven hundred mash tubs of seventy-two gallons each.  The company had a still of twenty five hundred gallons and a doubler of twelve hundred gallons.  Both were made of copper.[vi]

Pepper installed four steam boilers to provide heat to the mash tubs and stills.  Many distilleries still used open flames for heat.  In addition, he installed two steam engines of one hundred twenty-five horsepower each to supply power.  The steam engines drove a series of shafts throughout the plant.  These shafts were attached to pulleys and belts to provide power to the machinery.  He purchased a six-roller mill, also powered by belts, to grind his grains into uniform consistency.  He designed rows of windows on two sides of his plant to allow ventilation and lighting.

These designs, while not revolutionary, allowed the distillery to operate with higher efficiency, improved yields and uniform quality.  Moreover, it allowed him to distill the consistent, higher-grade whiskey that was his hallmark.

The distillery plant was finished in April 1880, with the capacity of twenty-eight barrels (roughly three hundred bushels) per day.[vii]

In September 1880, the company let bids for the construction of two bonded warehouses.  Both warehouses were roughly nine thousand square feet, four stories high and projected to hold ten thousand barrels of whiskey in storage.  The foundations were of stone, walls of brick and roof of iron clad.  The first warehouse was finished in late 1880 and the second finished in early 1881.[viii]

Over the next twenty years, Colonel Pepper constructed four additional warehouses – giving the distillery bonded storage of fifty thousand barrels.  The average distillery in Kentucky had storage for five to ten thousand barrels.  These warehouses were:

                                Capacity                        Year Built

Warehouse A          10,000 barrels                  1880

Warehouse B            8,500 barrels                  1881

Warehouse C           6,000 barrels                  1890

Warehouse D           5,000 barrels                  1897

Warehouse E           8,500 barrels                  1897

Warehouse F         11,000 barrels                  1901

The Louisville, Cincinnati and Lexington Railroad (later Louisville & Nashville Railroad) had tracks on both sides of the distillery, with a siding into the distillery on the Frankfort Pike side.

 By 1882, the plant’s capacity had been increased to fifty barrels per day and ten thousand barrels per year.  The distillery was valued at $125,000.  The plant operated for ten months each year, with forty employees at an average of $1.75 per day.  The firm purchased oak barrels from the Bauer Cooperage Company for $2.50 each.  At the time, this plant was the largest distillery in the world.

Old Pepper Brand Name:

In May 1880, Colonel Pepper began distilling Old Pepper Whiskey.  This was a century after his grandfather established the first Pepper distillery.  Old Pepper was distilled to his grandfather’s proprietary formula – developed in 1780, improved by Dr. James Crow and passed down three generations.  The whiskey was a sour mash, fermented for seventy-two hours.  This name Old Pepper Whiskey derived from his family name and reflected the heritage and tradition established by his family over the past one hundred years.  The distillery also produced a rye whiskey called Old Henry Clay, a brand inherited from the prior distillery.

Colonel Pepper reinforced this tradition by constantly stressing the quality of his whiskey, promoting its longevity (thus experience) and imitation by competitors.  He used the slogans “Established 1780” and “Purest and Best in the World.”  These slogans also tapped into the patriotism following the Civil War.  He placed the warning - BEWARE OF REFILLED BOTTLES – on his labels.  This created the impression that his whiskey was so good that others wanted to imitate it.

In addition, he sealed his bottles with a stamp bearing the script signature of “Jas. E. Pepper & Co.”  Signatures were protected under the forgery laws, which were faster to enforce than a trademark violation.[2]

He was also one of the first distillers to invest huge sums for advertising and promotion.  His success can be measured by the fact that he was able to charge significantly more that his contemporaries.

George A. Starkweather marketed the distillery’s products on the East Coast, while Colonel Pepper managed the production at the distillery.  During 1882, the company produced ten thousand barrels, valued at $300,000.  After Starkweather’s death in December 1883, his interest was conveyed to James E. Pepper for the sum of $70,000.[ix]

In 1884 Colonel Pepper sold half interest in his company to Colonel William S. Barnes of Lexington, Kentucky.[x]  Both Colonels Pepper and Barnes traveled around the United States promoting Old Pepper whiskey.  Colonel Pepper concentrated on the East Coast, especially New York, and Colonel Barnes promoted in the North and West, especially in the Chicago area.  They supplied the whiskey that made the “old west wild.”

Bottling Trade:

Initially, Colonel Pepper sold whiskey in barrels for the “bulk trade.”  Distributors from around the country purchased barrels for sale to saloons and bars.  The distributors resold the whiskey in barrels, half barrels and jugs.  The distiller also supplied “bulk decanters,” with their name in gold leaf, and the retailer filled and refilled the decanters from the barrels.

Old Pepper, circa 1890s

The Old Pepper Whiskey brand at this time had established strong name recognition across the United States.  In the late 1880s, Prince Henry of Prussia was served Old Pepper Whiskey while traveling on the Pennsylvania Railroad.[xi]  Many experts considered it as the best bourbon produced in Kentucky.  With its success, the Old Pepper trade name was constantly being “adopted” by others.

In 1890, the company advertised that Old Pepper Whiskey was a “grand medicine for Consumption, Malaria, etc.”  This was prior to federal regulations, such as the Pure Food and Drug Act of 1906.

In July 1891, Colonel Pepper bought out Colonel Barnes for $100,000 (cash of $60,000 and broodmares valued at $40,000).  Over the ten years, Colonel Barnes had taken out an estimate of $250,000 in profits; receiving $25,000 to $30,000 annually from his interest.[xii]

Employee Pin, circa 1890s

Old Pepper Private Car:

In February 1892, the company purchased a private railcar, named the Old Pepper, from the Arms Palace Car Company for $10,000.  The car was painted bright orange, with hand-painted scenes on its sides of Old Pepper barrels, cases and bottles, with thoroughbred horses and jockeys.  The end of the car was lettered “Private Car – Old Pepper – Property of James E. Pepper, Distiller of the Famous Old Pepper Whisky.”  Colonel Pepper was always the showman and promoter.[xiii]

Whiskey Depression:

In 1893, an economic depression began that lasted five years.  This economic downturn caused Colonel Pepper’s thoroughbred investments to drop significantly, while he still had the financial drain of the feed and board bills.  In addition, the over supply of whiskey caused the value of whiskey stocks to fall dramatically.

In the middle of the recession, Colonel Pepper purchased the Silver Springs Distillery in 1895.  He paid $20,000 - $15,000 in cash and $5,000 in notes.  He apparently did not take advantage of the slump and paid a fair price for the distillery (it was valued at the same price ten years later in a strong market).

Corkscrew, circa 1890s

Due to these financial problems, on April 15, 1896, Colonel Pepper assigned his assets to the Security Trust & Safety Vault Company of Lexington.[xiv]  This receivership also covered his company, Jas. E. Pepper & Co., which was a sole proprietorship.  Security Trust retained Colonel Pepper as manager of the distillery, at an “ample” salary.  Colonel Pepper projected that he would be able to pay back his creditors from whiskey sales over the next eighteen months.

His problems were attributed to “extreme dullness in whiskey market – scarcity of money – no demand for whiskey the past three months.”  Avery S. Winston, William S. Barnes and Louis Straus were appointed as appraisers of his assets.  Winston was President of the First National Bank and Straus was President of the Central Bank.

In August 1896, the distillery was scheduled to be sold at public auction on September 19, 1896.  At the auction, Mrs. James E. Pepper purchased the distillery for $43,142.69.  This price was payable in thirds – at one year, two years and three years, with seven percent interest.[xv]  However, Mrs. Pepper paid cash – from the prize purses of her thoroughbred stable.[xvi]

Reorganization:

In December 1896, the Jas. E. Pepper & Company was organized as a corporation, with $150,000 in capital.  The distillery had previously been a sole proprietorship.  Colonel Pepper owned two thousand nine hundred ninety four shares of the total three thousand shares.  John G. Offutt (his brother-in-law) and Charles O. Johnson (bookkeeper) owned three shares each.  These shares allowed them to qualify as directors under the laws of the time.[xvii]   The company was authorized to “engage in the manufacturing, handling, selling and dealing in distilled spirits at the old distillery, formerly run by James E. Pepper, and in buying, feeding and selling of cattle and hogs.”[xviii]

On February 9, 1897, Mrs. Pepper transferred the plant, equipment, stock and other assets purchased at auction to the new concern.[xix]  In February 1897, the Jas. E. Pepper & Company issued $150,000 in gold bonds to the Harrisburg Trust Company.  Charles J. Bronston and Charles H. Stoll represented the company at the closing.  These bonds were for five years, with interest at six percent, payable in gold coins and secured with a first mortgage on the company assets.  These assets included the Old Pepper Distillery and the trademarks of Genuine Old Pepper, Henry Clay and the script signature Jas. E. Pepper & Co.  The Little Pepper Distillery was not included.  This financing allowed the resumption of operations immediately.[xx]

The next day, the company resumed distilling bourbon.  Colonel Pepper had several months earlier placed drummers (sales representatives) on the road to book orders for the reopened distillery.  The officers at this time were James E. Pepper (President), A. G. Kinsley (Vice President) and James G. Hubbell[3] (General Manager and Secretary  & Treasurer).  Kinsley represented the Harrisburg Trust, and the bank placed Hubbell at the distillery to oversee the financial side of the operations.[xxi]

Case, circa 1890s

Invoice, 1897

Jas. E. Pepper & Company Distillers – 1898   UK 2002AV #071

Enlargement of Distillery

Enlargement of Bonded Warehouses

Enlargement of Front Gate

Serving Tray, circa 1900

In the late 1890s, the Whiskey Trust acquired control of the bourbon industry in Kentucky.  With their control, the inventory of bonded bourbon in warehouses was allowed to decline.  By the spring of 1899, the price of whiskey had recovered and Colonel Pepper finally operated at a profit.[xxii]

In 1901, Colonel Pepper rebuilt the “Little Pepper” Distillery and leased it to the Jas. E. Pepper & Co. to operate.  They produced the Old Henry Clay brand at this location.

Watch Fob, circa 1900

Metal Sign, circa 1900s

Colonel Pepper continued to operate the distillery until his death in December 1906.  The company had agencies in Cincinnati, Chicago, Cleveland, San Francisco, Pittsburgh, Buffalo, Boston and New York at the time of his death.  Colonel Pepper had been described as “one of the best-known distillers of fine whiskies in the world, whose brands have probably been more universally advertised that any other of the Kentucky distilleries.”[xxiii]

In January 1907, Christopher D. Chenault and Warner S. Kinkead were elected President and Secretary/Treasurer of both Jas. E. Pepper & Company and the Henry Clay Pure Rye Distilling Company (which owned the “Little Pepper” Distillery).  Chenault was Cashier of the Lexington Banking and Trust Company (executors of Colonel Pepper’s estate).  Mrs. Pepper, Chenault, Kinkead and Charles J. Bronston were elected directors of both firms.  It was noted that Mrs. Pepper was the largest stockholder and bondholder of both concerns.

Prior to Colonel Pepper’s death, he had hidden a reserve of three hundred barrels of whiskey at the distillery for his personal usage.  This whiskey produced in the spring of 1899 was maintained at its original “barrel” strength.  Colonel Pepper considered this the best whiskey ever produced.  During his lifetime, Colonel Pepper had refused to sell these barrels – retaining them for his personal use.  In March 1907, after Colonel Pepper’s death, a half-barrel of this whiskey was sold by accident to the Reed Hotel.  It was soon recognized as Colonel Pepper’s reserve and orders poured into the distillery.[xxiv]

On May 15, 1907, a group of Chicago investors, headed by Joseph Wolf, acquired the distillery from Pepper’s estate for $400,000.  The local newspaper noted “Widow of Late Distiller Is Now Richest Woman In Central Kentucky.”  It also noted that she had inherited at least another $100,000 from insurance and other assets.[xxv]

The newspaper reported the distillery was a “mammoth concern, which had agencies and branches in every part of the civilized globe.”[xxvi]

Postcard, circa 1900s

James E. Pepper Distilling Company:

Joseph Wolf was President of the James E. Pepper Distributing Company of Chicago.  For the previous seven years, Wolf’s firm had managed the distribution of Old PepperWolf was a prominent member of the National Wholesale Liquor Dealers Association.[xxvii]

Wolf reincorporated the distillery as the James E. Pepper Distillery Company.  The company selected new officers, including Wolf (President), Kinkead (Vice President), Chenault (Treasurer), William E. Self (Secretary) and Bronston (General Counsel).  All were also elected to the company’s board of directors.  Self was Colonel Pepper’s bookkeeper.

The new company began making improvements to the distillery and bottling operations.  These improvements were budgeted at $200,000.  They immediately placed a fifty thousand dollar order for twenty thousand new oak charred barrels and stepped up production.  The company had sixty thousand barrels of Pepper whiskey stored in bond at its warehouses.[xxviii]

In June 1907, three hundred fifty five barrels of Old Pepper were seized by federal agents under the Pure Food and Drug Act of 1906 at the Louisville Public Warehouse.  The agents claimed that the whiskey was improperly colored, with burnt sugar added to give it a richer color.  This was a violation of the law because a rectifier’s tax was not paid.  The whiskey was traced to the Pepper Warehouse #5 and was manufactured in 1899.  The distillery claimed that it was not a violation of the law because the “sugar was put in at the distillery.”  John W. Yerkes, former Commissioner of Internal Revenue, represented the distillery.[xxix]   In August, the whiskey was released, after Wolf agreed to pay $2,500 in fines.  The whiskey was valued at $10,000.[xxx]

In July 1907, the company acquired six acres adjacent to the Tarr Distillery (across Old Frankfort Pike) for $4,500.  The company built an additional warehouse, bottling house and cooperage plant on the site.[xxxi]

"The Fight of the Century,” Reno, Nevada, 1910

On July 4, 1910, “The Fight of the Century” was held at the Golden Hotel in Reno, Nevada, between heavyweights Jack Johnson and Jim Jeffries.  This was the first prizefight with this designation.  Johnson was the first black man to hold the world heavyweight title, while Jeffries - "The Great White Hope" - came out of retirement for the event.  The fight was stopped in the 15th round, after an out-of-shape Jeffries was knocked down three times.  The fight was sponsored by James E. Pepper Whiskey.[xxxii]

In July 1910, the company started installation of new distilling equipment that doubled its capacity, increasing its daily mashing capacity to one hundred barrels of whiskey or approximately one thousand bushels of grain.  The improvements cost $25,000.  The company’s annual capacity was between twenty and thirty thousand barrels.[xxxiii]

During this period, the company introduced the Old Jas. E. Pepper brand name and continued to sell Old Pepper until the end of Prohibition.  Eventually James E. Pepper Bourbon replaced both trade names.  The slogan “Born With The Republic” was introduced around this time.

Prohibition:

It is interesting to note that during the First World War, the Army trained many of its recruits at the old Civil War battlefield at Chickamauga in Georgia.  Northern recruits were transported by the railroads south, and a number shipped through Lexington on the way.  The first thing they noticed upon entering Lexington was the Pepper Distillery and its boxcar-sized billboard for “Jas. E. Pepper & Co. – Whisky – Born with the Republic.”  This war was “to make the world safe for democracy.”  Less than two years later, these returning battlefield veterans passed the shuttered Pepper distillery on the way home, with whiskey now illegal.  Some suggested that the sign should be updated with “Born with the Republic, Died with Democracy.”[xxxiv]

Warehouses at Pepper Distillery, circa 1901   <M. Veach>

After the United States entered the First World War, the Federal government rationed barley grains to produce food for the troops.  The Pepper plant distilled for the last time on November 11, 1918, when the wartime restrictions on grains forced production to stop.

On December 8, 1919, the company shipped six hundred barrels to its bonded warehouses in Chicago.  This was transferred “in bond” from one warehouse to another.  The company’s headquarters were in Chicago.[xxxv]  For the last four months of 1919, the company paid $8,516 in state and local excise taxes, state and county road taxes and local school taxes.[xxxvi]

On January 4, 1920, the final shipment of Pepper whiskey was sent to New York for export to Hamburg, Germany.  The shipment included ten thousand five hundred cases (valued at $47 per case) and sixteen hundred barrels.  The L & N Railroad transported the load, with four armed guards on the train for protection.  The company still had twenty thousand cases and twenty six hundred barrels stored in the bonded warehouses.  Before legislation allowing medicinal sales, this whiskey in storage was considered worthless because the law did not authorize its removal.[xxxvii]

During Prohibition (1920 – 1934) the distilling plant was mothballed and the warehouses used as concentration warehouses for whiskey.  Due to the thefts and illegal removal of whiskey at a number of rural distilleries, the Federal government ordered the concentration of all whiskey stocks into warehouses in Lexington, Bardstown, Frankfort and Louisville.  The Pepper plant received shipments from a number of independent distillers.  The Whiskey Trust operated the warehouses in Louisville and Bardstown.

Whiskey Bandits:

On the winter night of December 2, 1920, whiskey bandits struck the bonded warehouses at the Pepper distillery.  That night William Anderson, revenue agent, and William Nix, distillery guard, were making their rounds as usual, checking on the warehouses.  At the time, eleven thousand barrels and eighteen thousand cases of bottled bourbon were still stored in the warehouses.

About one thirty in the morning the guards were rushed by a band of ten to twelve bandits hiding on the bank of the Town Branch near the last warehouse.  Agent Anderson ordered the thieves to stop and fired a shot from his revolver.  The band of thieves immediately returned fire and killed Agent Anderson.  Nix fled towards the office and raised the alarm.  The thieves left the area before the police arrived from Lexington.[xxxviii]

Witnesses stated that two touring cars and a truck, running without lights, raced out Old Frankfort Pike at about two o’clock.  The next morning the warehouse wall was “peppered” with holes from the battle.

The distillery increased the security to nine guards and the revenue service sent two more agents.  These guards patrolled the grounds for the next several months, with loaded shotguns and revolvers at the ready.

The Governor offered a reward of $300 for the capture of the thieves.  Rumors stated that organized crime from Chicago was behind this raid.  The bandits were never found.  This was the first attempt to steal whiskey from the facility.  However, several weeks before, one of the guards was stopped by a stranger and questioned about the whiskey stored in the warehouses.  This stranger asked “How would $6,000 look to you?”  The guard refused.

Medicinal Sales:

In 1920, the Federal government legalized “medicinal” sales of whiskey.  With a prescription, the local drug store would dispense whiskey.  The bottling plant was used to bottle medicinal whiskey.[xxxix]

Prohibition Pint, 1920

In April 1929 Joseph Wolf of Chicago died.  He was the leader of the syndicate that owned the distillery.[xl]  At the time, the firm had offices in Chicago (headquarters), New York (sales) and Lexington (production).

In October 1929, the company was awarded a share of the allocation to distill medicinal spirits for pharmacists.  This was the first time that the Federal government allowed production to re-stock whiskey for medical purposes.  The company estimated that it would cost $35,000 to put the plant back in commission, so they shifted distilling to the Stitzel & Weller Distillery in Louisville.[xli]

During Prohibition, the value of medicinal whiskey soared with its scarcity.  A case of pints of James E. Pepper Whiskey sold for $31.00 per case.  This compares to $12.50 ten years earlier.

Schenley Products:

With repeal in the wind, in 1933 Schenley Products Corporation[4] of New York purchased the company for $1,000,000.  They readopted the Jas. E. Pepper & Co. name and bottled James E. Pepper Whiskey.

After fourteen years, the distillery plant was in serious disrepair - with the boilers shot, machinery rusted, pumps frozen and piping corroded.  In January 1934, Schenley began rebuilding the distilling and boiler plants.  Capacity was expanded to three hundred barrels or approximately four thousand bushels per day.  The improvements were budgeted for $400,000.  Production was scheduled to restart in the first week of May 1934.

Distillery Reconstruction, 1934   UK 96PA101 #908b

During Prohibition, the company had acquired the following additional brands - Mayflower, Buckeye, Old Fireside, Old Hillside, Old Chelsea, VanArsdell, D. L. Moore, Geo. A. Dickel’s Cascade, Golden Premium and Genuine Kentucky whiskies.  In addition, they distilled V O Brandy and Lord Elston Gin.[5]

On March 18, 1934, Governor Ruby Laffoon signed an act finally repealing the state’s prohibition laws to allow the production and sale of liquor in Kentucky.

During the night of April 28, 1934, a massive fire destroyed the gauging house, office, bottling plant and six warehouses.  This night was exceptionally cold, and Stanley Travis, night watchman, started the fire in the guardhouse for warmth.  However, he mistook gasoline for kerosene and the stove exploded.  Travis was overcome before he could raise the alarm and died later in the morning.

By the time the fire department arrived, the fire had spread to the first warehouse.  Fueled by the burning bourbon, the fire quickly consumed the other five warehouses.  The blue flames of burning alcohol overflowed into the Town Branch Creek.  The fire was observed as far as Frankfort and Richmond.

The police had trouble controlling the crowd of onlookers.  A number of “volunteers” ran into the burning warehouses and “saved” cases of bourbon.

Damages were estimated at over five million dollars.  Until the 1980s, this was the largest monetary loss due to a fire in Lexington’s history.  In equivalent dollars, it is still the largest fire loss ever experienced in Lexington.  These losses included fifteen thousand barrels, valued at $300 per barrel wholesale, for a total of $4,500,000; eleven thousand cases, valued at $60 per case wholesale, for a total of $600,000 and warehouses valued at $100,000.  The new distilling plant escaped damage.  The bourbon destroyed included Republic, Old Pepper and Golden Bantam.  The loss was covered by insurance.[xlii]

In May, the company began rebuilding the warehouses and production was finally restarted in September 1934.  At the time, Fred Pauly was the General Manager and G. C. Cooper was the Master Distiller.  Cooper remained the distiller for two years, before moving to other Schenley plants.

Schenley filed a claim for $4,500,000 with the company’s insurance companies.  In June 1934, Schenley settled for $2,655,476 because of missing paperwork.[xliii]

On December 1, 1934, one of the new twelve thousand barrel warehouses collapsed, dumping five thousand barrels of new whiskey into the Town Branch.  Lubrecht Construction of Covington built the new warehouse for $200,000.  This warehouse was finished on October 1, 1934, and partially filled with new whiskey.  The warehouse was four stories, with twelve tiers of racks.

Collapsed Warehouse   UK 96PA101 #3367b

Barrels in the Collapsed Warehouse

The Lexington Fire Department rushed to the site, as a precaution against the concern that the whiskey might catch fire, and the Lexington Utility Company shut off power to a section of the city, to prevent sparks from hanging wires.  The distillery placed guards around the “whiskey soaked mass” to prevent “samples” from being borrowed from the crushed, partially filled barrels.[xliv]

“The Marching Three,” 1940

Serving Tray, 1940s

1953

During the Second World War, production of bourbon stopped, and the plant converted to industrial alcohol production for the war effort.  The Federal government limited the supplies of grains for distilling whiskey until after the war. From available records, the plant began distilling of its flagship bourbon again in April 1946.[xlv]

The plant also produced Henry Clay Bourbon, Blue Ribbon Bourbon, Peppleford Bourbon, Old Pointdexter Bourbon, Echo Springs Bourbon, Cream of Kentucky Corn Whiskey, Indian Hill Whiskey, Old Culpepper Whiskey, Stagg Bourbon and Ancient Age Bourbon.

At the start of the Korean War, the plant was operated a full capacity, anticipating the Federal government would again limit grain supplies.  This restriction did not happen and the company was stuck with an oversupply of bourbon inventory.  Production was limited during the later 1950s to draw down the existing inventory in the warehouses.

After the Korean War, the James E. Pepper logo was again redesigned around the “Born with the Republic” slogan, using the profile of a minuteman.  The James E. Pepper Bourbon was available in Bond (green label 100 proof), Straight (blue label 86 proof) and Blend (red label 65% neutral spirits) versions.  During the 1950s, Schenley offered James E. Pepper Mint Stirring Sticks as a marketing gimmick.  These sticks dissolved when stirred in bourbon, making a Mint Julep.[xlvi]

The Pepper plant produced its last bourbon on November 1, 1961.  During the month, the plant distilled 5,805 barrels of whiskey, using 57,950 bushels for its mash.  Maximum daily mash capacity was 2,850 barrels.   In 1962, the distillery closed and Schenley switched production to other plants.  The company continued to bottle James E. Pepper whiskey from the warehouses until the 1970s.  They continued to use the warehouses for bonded bourbon until 1976.[xlvii]

Pepper Warehouse, circa 1950s

 In 1976, the property was sold to Land Development Company for warehouse space.  In December 1981 a warehouse collapsed, after a gust of wind, while it was being demolished.  Debris forced the closing of Frankfort Pike for a day.  Less than two weeks later, another warehouse was destroyed by fire.  Both warehouses were five stories, each twenty thousand square feet.[xlviii]

The distillery (and some of the equipment) and one bonded warehouse remain today.  In 1994 United Distillers, successor to Schenley, re-established the James E. Pepper brand for export outside the United States.  They operated as the Jas. E. Pepper Distillery, with production at the Bernheim Distillery, Louisville, Kentucky.

 

[1] George C. Buchanan operated Newcomb, Buchanan & Company, whiskey brokers of Louisville, Kentucky.  In 1872, he was the largest distiller in Kentucky, with the Anderson, Nelson, Buchanan and Greystone (later Elk Run) Distilleries.  He was connected with Parris, Allen & Company, an English investment bank.  He sold out to the Whiskey Trust in 1905.

[2] Trademark protection was primarily based upon common law, which was open to various interpretations.  Over the years, Colonel Pepper filed scores of lawsuits against competitors for using the “Pepper” trademark.  He spearhead the efforts to have the Trademark Act of 1905 passed.  This act established the Trademark section in the U. S. Patents Office, where brand names and marks were registered.  Once registered, the owner could use the Federal courts to enforce his claims.

[3] James G. Hubbell was born in Cincinnati and relocated to Lexington in the 1880s, after marrying the sister of J. Hull Davidson.  He was city bookkeeper in the late 1880s and manager of the Phoenix Hotel in the early 1890s.  He was also a National Bank Examiner.

[4] Schenley Products Corporation was controlled by Lewis S. Rosenstiel.  Rosenstiel was born in 1891 and worked before Prohibition at the Susquemac Distillery Company (which controlled the Susquemac Rye Whiskey).  During Prohibition, Rosenstiel smuggled whiskey from Bermuda into Cincinnati and then began acquiring distilleries for their inventory of whiskey.  In 1923, he purchased the Schenley Products Company of Schenley, Pennsylvania.  In 1929, he purchased the Leestown Distilling Company (the original OFC and Carlisle plants of Edward H. Taylor).  Its brands included OFC, Carlisle, Ancient Age and Old Stagg whiskies.

In 1933, just before repeal, he established Schenley as a holding company for his whiskey interests.  The same year he acquired the Pepper Distillery in Lexington.  Over the next few years, he also acquired the Jos. S. Finch & Co. (Golden Wedding and Old Log Cabin); the Stilzel – Weller Distillery (Old Fitzgerald and Rebel Yell); the Glenmore Distillery (Yellowstone); Bernheim Brothers (I W Harper and Old Charter) and Geo. Dickel Company (George Dickel).

Between 1933 and 1937, Schenley was the largest distillery in the United States.  By the 1940s, the company had expanded into Canadian whiskies and by the 1950s into Scottish distilleries.  The company became overextended during the Korean War, when he increased distilling anticipating wartime restrictions.  This inventory lasted for the next ten years.  Eventually it became United Distillers, a subsidiary of the Irish beer giant Guinness of London.

[5] Seal of Kentucky and Kentucky Seal were sold by Pepper & Adams of Frankfort, Kentucky.  Both were probably distilled by the Leestown Distillery, owned by Schenley Products Corporation.

 

 

[i] Deed Book 49, page 583, Fayette County Clerk Office.

[ii] Lexington Observer & Report, January 9, 1869, page 2, column 2 and January 13, 1869, page 2, column 2 and Deed Book 32, page 24 and Deed Book 46, page 106, Fayette County Clerk Office.

[iii] Lexington Morning Transcript, February 23, 1872, page 1, column 5.

[iv]  Deed Book 52, page 629 – 30, Fayette County Clerk Office.

[v] Deed Book 69, page 143, Fayette County Clerk Office.

[vi] Perrin, page 206 – 7 and Cecil, page 70.

[vii] Lexington Morning Transcript, May 19, 1880, page 1, column 3 and September 22, 1880, page 1, column 3.

[viii] Lexington Transcript, September 22, 1880, page 1, column 3.

[ix] Deed Book 52, pp. 629-630; Deed Book 60, pp. 189-190; Deed Book 60, pp. 195-197; Deed Book 61, pp. 22-21; Deed Book 69, pp. 143-146, Fayette County Clerk Office.

[x] Deed Book 69, page 149, Fayette County Clerk Office.

[xi] Gerald Carson, The Social History of Bourbon, Dodd, Mead & Company, New York, 1963, page 33.

[xii] Lexington Leader, July 5, 1891, page 2, column 5 and Deed Book 92, page 374, Fayette County Clerk Office.

[xiii] Lexington Leader, February 24, 1892, page 4, column 4.

[xiv] Deed Book 108, page 126, Fayette County Clerk Office.

[xv] Lexington Leader, September 19, 1896, page 8, column 4.

[xvi] New York Times, January 16, 1897 and December 25, 1906.

[xvii] Incorporation Book 2, page 267, Fayette County Clerk Office.

[xviii] Lexington Leader, December 19, 1896, page 1, column 3.

[xix] Lexington Leader, February 9, 1897, page 5, column 4; Lexington Herald, February 10, 1897, page 5, column 2, Deed Book 110, page 63, and Deed Book 113, page 142, Fayette County Clerk Office.

[xx] Lexington Herald, February 10, 1897, page 5, column 2.

[xxi] Lexington Leader, February 10, 1897, page 2, column 3.

[xxii] Lexington Herald, February 4, 1899, page 1, column 3.

[xxiii] Biographical Cyclopedia of the Commonwealth of Kentucky, Southern Historical Society, page 200.

[xxiv] Lexington Herald, March 10, 1907, page 5, column 4.

[xxv] Lexington Herald, May 22, 1907, page 1, column 5.

[xxvi] Lexington Leader, December 27, 1906, page 2, column 3.

[xxvii] Lexington Leader, May 17, 1907, page 1, column 4 – 5 and May 20, 1907, page 1, column 4.

[xxviii] Lexington Herald, May 22, 1907, page 1, column 5.

[xxix] Lexington Herald, June 15, 1907, page 1, column 6 and June 16, 1907, page 2, column 4.

[xxx] Lexington Herald, August 24, 1907, page 2, column 4.

[xxxi] Lexington Leader, July 14, 1907, page 11, column 4.

[xxxii] Carson, page 208.

[xxxiii] Lexington Herald, July 3, 1910, page 6, column 2.

[xxxiv] Carson, page 33 – 4.

[xxxv] Lexington Herald, December 8, 1919, page 12, column 4.

[xxxvi]  Lexington Herald, Lexington, Kentucky, January 18, 190, page 1, column 4.

[xxxvii] Lexington Leader, January 4, 1920, page 9, column 4.

[xxxviii] New York Times, December 3, 1920.

[xxxix] Lexington Leader, December 2, 1920, page 1, column 8; December 3, 1920, page 1, column 8 and December 4, 1920, page 1, column 2 and the Lexington Herald, December 2, 1920, page 1, column 8.

[xl] Lexington Herald, April 7, 1929, page 12, column 5.

[xli]  Lexington Herald, October 20, 1929, page 1, column 8.

[xlii] Lexington Herald, April 28, 1934, page 1, column 8; Lexington Leader, April 28, 1934, page 1, column 8 and Lexington Herald – Leader, May 19, 1963, page A-62 and New York Times, April 29, 1934.

[xliii] Lexington Herald, June 22, 1934, page 1, column 3 –4.

[xliv] Sketches, page 82, Lexington Herald, December 2, 1934, page 1, column 8, and the Lexington Leader, December 2, 1934, page 1, column 8 and December 3, 1934, page 1, column 3 –4..

[xlv]  Production Records of the Jas. E. Pepper & Company, copy in possession of author.

[xlvi]  Michael Veach, Filson Historical Society, Louisville, Kentucky.

[xlvii]  Production Records of the Jas. E. Pepper & Company, copy in possession of author.

[xlviii] Lexington Herald, December 24, 1981, page A-3, Column 1 –4 and Lexington Herald – Leader, January 1, 1882, page A3, columns 1 –4.

 

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