Let’s party like it’s 1933

Sean-o Says:
April 8th, 2008 at 8:52 pm

If you have time, check out this extended story:

Sean

http://www.stltoday.com/stltoday/business/stories.nsf/0/724190C52EB6DC5E86257422001B951F?OpenDocument

‘A good time for a beer’ — 75 years after the end of Prohibition
By Jeremiah McWilliams
ST. LOUIS POST-DISPATCH
04/06/2008

April 6, 1933. Midnight was approaching. A crowd of perhaps 25,000 milled around the Anheuser-Busch brewery on Pestalozzi Street.

Inside the lobby of the Bevo packaging plant, August A. “Gussie” Busch Jr., grandson of the brewery’s patriarch, stepped up to a KMOX microphone.

“April the seventh is here, and it is a real occasion for thankfulness,” Busch said in his Midwestern growl. “Happy, grateful men are back at work after what seemed an endless idleness.”

At 12:01 a.m., sirens and steam whistles blasted. Dozens of Anheuser-Busch trucks rolled into the streets, carrying their first beer shipments in more than 13 years.
Beer was back. The nation had tired of Prohibition, a grand and failed social experiment, and was on its way to repealing the law.

PROHIBITION’S ROOTS

National prohibition on alcohol manufacturing, consumption and shipments started in 1920, a product of the 18th Amendment and federal legislation.

But its roots went back decades, emerging from a stew of religious activism, optimistic reform and the thrust to regulate big business — including banks, railroads and meat companies. By 1917, more than a dozen states had already drafted tough anti-alcohol laws in response to the perceived perils of alcohol: addiction, violence and the breakup of families.

Still, the federal government relied on revenue from alcohol taxes. But the 16th Amendment, ratified in 1913, ushered in a national income tax; its ability to raise big sums surprised “even its most enthusiastic supporters,” said Donald Boudreaux, chair of George Mason University’s economics department.

Suddenly, the federal budget didn’t have to lean on alcohol. “The political cost of pandering to the temperance groups” fell, said Boudreaux.

Congress passed the 18th Amendment in December 1917. In January 1919, Nebraska became the thirty-sixth, and decisive, state to ratify it. One year later, Prohibition went into effect, outlawing the manufacture, sale or transportation of “intoxicating liquors” in the U.S. for beverage purposes.

Anheuser-Busch executives sensed gathering storm clouds. The company did much of its business in rural states such as Oklahoma, where the push for Prohibition was stronger than in big cities on the East Coast.

In response, the brewer pushed the “Budweiser Means Moderation” message in the 1910s.

“Law abiding German-American citizens … know there is no evil in the light wines and beers of their fathers,” one ad thundered. “EVIL ONLY IS THE MAN WHO MISUSES THEM.”

But by the middle part of the 1910s, brewers had reason to worry.

Even before Prohibition, World War I rationing, anti-German sentiment and the burgeoning temperance movement lowered the thirst for beer, causing Anheuser-Busch to slash production.

In September 1918, President Woodrow Wilson issued a wartime ban on beer production that would take effect Dec. 1. Though the war ended in November, the ban remained in place.

Anheuser-Busch had sufficient beer in lagering tanks to last until June 1919. But it produced just 218,000 barrels in 1919 after making more than 1 million barrels every year from 1901 to 1915.

BEER TOWN BEAT DOWN

St. Louis’ growth as a beer town in the 1800s and early 1900s was propelled by the influx of German immigrants and storied breweries with names such as Griesedieck, Stifel and Lemp. Immediately before Prohibition, St. Louis boasted 20 breweries and supported related industries such as barrel-making, glass-making and metal-working.

With the onset of Prohibition, brewers were forced to adapt. Anheuser-Busch churned out yeast, ice cream, refrigerated trucks, a non-alcoholic malt drink called Bevo and a de-alcoholized version of Budweiser.

The company sold off trucks, automobiles and about half of its real estate holdings. From 1919 to 1922, A-B incurred four straight years of losses, totaling $5.6 million — its first losses for which records exist — before breaking even in 1923.

In Milwaukee, the Miller family invested in real estate and overseas holdings. In Pennsylvania, the owners of the Yuengling brewery opened a creamery.

Brewers who made it through the dry years “understood how to live in a completely changed world,” said Maureen Ogle, author of “Ambitious Brew,” a history of the U.S. brewing industry.

But many didn’t survive.

The brewery belonging to Anheuser-Busch rival William J. Lemp Brewing Co. was sold to International Shoe Co. in 1922 for $588,000 — a fraction of its pre-Prohibition value.

Prohibition lost support over the years, beset by charges of corruption among regulators and the growth of organized crime.

But it took the onset of the Great Depression — and nose-diving income tax revenues — to convince America that it had seen enough, argues Boudreaux, the George Mason economist. Income tax revenues dropped 60 percent between 1930 and 1933, he calculated.

In 1932, Franklin D. Roosevelt, the Democratic Party’s presidential candidate, campaigned in part on the pledge to end Prohibition. On March 23, 1933, Roosevelt signed legislation relaxing the legal definition of intoxicating beverages, eight months before Prohibition would be officially voided by a constitutional amendment. As of April 7, beer with up to 3.2 percent alcohol by volume could flow in the 20 states that did not outlaw its sale.

Said Roosevelt, “I think this would be a good time for a beer.”

BEER RUN BEGINS

The beer run was on. Over 1.5 million gallons of beer were consumed on April 7. Brewers sent beer to Roosevelt, with Anheuser-Busch employing a hitch of Clydesdale horses to deliver the gift in Washington.

Former New York Gov. Alfred E. Smith, a reliable foe of Prohibition, got his case of Budweiser from a Clydesdale wagon parked in front of the Empire State Building. “My only regret is that the wagonload is not all mine,” he said.

National prohibition of distilled spirits would end soon after, when the 18th Amendment was repealed in December.

But jubilation couldn’t hide that the beer industry had changed. At the height of pre-Prohibition production in 1910, nearly 1,570 breweries operated in the U.S. One year after repeal, only 714 were back. In St. Louis, the ranks of 20 breweries immediately before Prohibition dwindled to eight by the end of 1933, according to Anheuser-Busch’s corporate archives.

Even though Prohibition had not stopped Americans from drinking, it slashed their consumption of alcohol.

Many drinkers shifted from beer to hard liquor, which was more easily concealed. Drinkers came to prefer sweet flavors that could mask the nasty taste of illicit hooch.

Many “Americans just flat-out lost their taste for beer,” said Ogle, the historian. “The whole beer culture of … taking your family, sitting in a beer garden — all of that was destroyed.”

Small St. Louis breweries such as Hyde Park, Carondelet and Schorr-Kolkschneider tried to make a go of it, and failed.

Now, with 75 years of legal beer under America’s belt since Prohibition’s demise, the industry finds itself evolving. Overall sales are growing after several years of stagnation. But most of the recent growth has come from imports, as well as small-batch beers from 1,400 craft breweries scattered across the country. The little guys face daunting cost pressures, squeezed between malt, hops and demand for their beers.

Meanwhile, the top three U.S. brewers — accounting for four of every five beers sold in the country — have been stung by the faster growth of wine and spirits.

Anheuser-Busch Cos., Miller Brewing Co. and Coors Brewing Co. are trying to juice their domestic brews with line extensions and new products, chasing fickle consumers who reshuffle their flavor preferences like decks of cards.

Today, visitors take daily tours through the Anheuser-Busch brewery in St. Louis. They stop outside the brewhouse, not far from where Gussie Busch celebrated the return of legal beer.

Below the sculptures of elephants — animals used to market Anheuser-Busch’s yeast during Prohibition — the tour guides grab a microphone. The script calls for a history lesson to remember what one guide called the “long, sad, sober years.”

“Can we get a boo for Prohibition?” a guide asked his group last year. The crowd didn’t hesitate.

“Boooo!”

jmcwilliams@post-dispatch.com | 314-340-8372

TimelineDec. 18, 1917: The 18th Amendment was passed by Congress to become effective one year after it is ratified by the states.Jan. 16, 1919: Nebraska was the 36th, and decisive, state to ratify the 18th Amendment.Jan. 16, 1920: Prohibition went into effect at midnight.Feb. 3, 1920: Dealcoholized Budweiser (less than .5 percent alcohol) is put on the market.April 7, 1933: Beer becomes legal. Anheuser-Busch introduces Clydesdales. Dec. 5, 1933: Utah is the 36th state to ratify the 21st Amendment, repealing Prohibition.Sources: Post-Dispatch and Anheuser-Busch Cos.

Grocery Gift Card Says:
May 15th, 2009 at 7:42 pm

Great post! Gift cards are awesome gifts. ConsumerIncentivePromotions is giving away $250 grocery gift cards at:
http://bit.ly/grocery-gift-card

Check it out! (zip code required)

Dave Says:
July 9th, 2009 at 5:09 pm

I kind of agree. I wonder what will have to change though for that to happen.