Schenley Distillers Corporation

Recently I reviewed Bourbon Justice by Brian Haara. I can’t say much about the book at this time because the Journal of American History has to publish the review first. Reading about bourbon has prompted me to post an excerpt from a paper I gave at a ADHS conference a few years ago.

The paper looked at how bourbon evolved into a distinctly American drink. One of the key players in this process was Lewis Rosenstiel, owner of Schenley Distillers Corporation.

Lewis Solon Rosenstiel was a Cincinnati native, born in 1891. His first job was working for an uncle, David L. Johnson, owner of the Susquemac Distillery, Milton, Kentucky. Prohibition ended that employment. In 1922, while on vacation on the French Riviera, Rosenstiel met Winston Churchill. The future prime minster was of the opinion that Prohibition would end. He advised Rosenstiel of this.[1]

When Rosenstiel returned to America he began to buy closed distilleries; one of these, the Schenley distillery, located north of Pittsburgh, on the Alleghany River,[2] had a license to produce medical liquor.[3]  Rosenstiel named his company, Schenley Products Company (later Schenley Distillers Corporation) after this distillery and the town it was located in. He also bought another distillery in the same area, Joseph H. Finch, Co.[4] By the time Repeal came Rosenstiel had amassed at least thirty distilleries.[5]

During Prohibition Rosenstiel also worked as a whiskey broker, dealing in and trading whiskey warehouse receipts. Between the distilleries he had purchased and his warehouse receipts, Rosentiel had a large stock of aged whiskey which would be immediately available for sale once alcohol became legal again[6]. In 1934, Schenley Distillers Corporation had sales of over $40 million; Rosenstiel earned 6.9 million that year.[7]

Rosenstiel and Schenley were not based in Kentucky but in the immediate Repeal period, his company was the leading distiller until 1937 and then, again from 1944-1947.[8] Although Schenley produced both blended and straight whiskey, Rosenstiel became the most prominent spokesperson for bourbon as a distinct product.

Rosenstiel had a colorful past. He was arrested during Prohibition for “counterfeiting whiskey bottles and labels for illegal sale to the public.” The case against Rosenstiel was dismissed but one of his associates was convicted. This man, Joe Linney later became a Schenley distributor in Boston. [9]

Schenley was one of three distillers that became major factors in the distilled spirits industry following repeal. The other two were Seagram’s, owned by Sam and Edgar Bronfman, Canadians and National Distilleries, a company formed out of the remains of several pre-Prohibition combinations.

[1] Leonard Sloane, “Lewis Rosenstiel, Founder of Schenley Empire Dies, New York Times, Jan. 22, 1976, p.37. https://www.nytimes.com/1976/01/22/archives/lewis-rosenstiel-founder-of-schenley-empire-dies.html

[2] American Whiskey: Messin’ ‘Round The Old Mawn-Nonga-HeelahButton up your Overholt, when the wind blows free… http://www.ellenjaye.com/hist_mono3overholt.htm accessed 5/30/13

[3] Sloane, “Lewis Rosenstiel”.

[4] American Whiskey

[5] Harvard Business School, Lehman Brothers, 1850-2008, “Deal Books: Schenley Distillers Corporation”, https://www.library.hbs.edu/hc/lehman/Data-Resources/Companies-Deals/Schenley-Distillers-Corporation

[6] Sloane, “Lewis Rosenstiel”.

[7] Harvard Business School, “Deal Books”.

[8] American Whiskey

[9] The Mail Archive, “Crime, Big Business and Watergate”. http://www.mail-archive.com/[email protected]/msg11476.html

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