Wednesday, May 14, 2014

How The Hayners and Walter Kidder Profited from Prohibition

As noted in earlier posts,  when I find an article on a whiskey man or men that bears repeating I will use it on this blog.   Although in the past I had written about Ohio’s Hayner Distillery, at one time the largest mail order whiskey house in America,  an article By Michael W. Williams caught my attention while I was researching my own vignette.  It first appeared 15 years ago in the October-March 1999 issue of Timeline Magazine, the journal of the Ohio Historical Society.  Because of the comprehensiveness of Mr. Williams’ treatment of the subject, this post, with some editing and added illustrations, reproduces the article, as follows:

History of the Company
Lewis Hayner was one of 10 children, born to John and Sarah Meeker Hayner in Warren County. Lewis built the first distillery at Farrington Lock south of Piqua in 1856, which was owned by Farrington and Sluson of Piqua, and, like most distilleries of the time, was very profitable.  In 1866, Lewis built Troy’s first distillery — “Lewis Hayner, Distiller, Pure Copper Distilled Rye and Bourbon Whiskies” — at the northwest junction of the railroad and Water Street. The distillery had various name changes during its years of productivity.

Though there were other distilleries around Miami County at that point, there had never been any within the city limits of Troy. The distillery had hog pens next to it and the hogs were fed the distillery slopes, but according to Thomas Bemis Wheeler’s book “Troy: The Nineteenth Century,” town council made Lewis Hayner remove the hog pens two years later as it was considered a ‘constituting nuisance.’

Hayner Distillery Company began progressing in a small, moderately successful way. While whiskey was the main product, Lewis introduced a product known as “Hayner’s Pine Tar Cough King” — a medicine to combat colds, coughs, bronchitis, asthma and all diseases for the throat and lungs. According to “Troy: The Nineteenth Century,” people standing on the platform of the D&M depot on Main Street or passing by on trains could see a large sign that said “Hayner’s Pine Tar Cough King — Your Cough Cured Overnight.”

In 1885, Lewis’s nephew, William M. Hayner, opened the Hayner Distilling Company in Springfield, as importers, selling the products by express with charges pre-paid, and also at retail at 42 E. Main. St. in Springfield. Upon the death of Lewis in 1892, the distillery was taken over by Charles C. Hayner, the half brother of William Hayner, and became known as “C.C. Hayner Distiller, Pure Copper Distilled Rye and Bourbon Whiskies.”

By the mid-1890s, William appointed his brother-in-law Walter S. Kidder, who had been serving as treasurer of the Hayner Distilling Company in Springfield, as manager of the Dayton operation. These men were entrepreneurs who built the Hayner Distillery into a nationally recognized and massively profitable mail order whiskey business.  William and Charles Hayner and Kidder essentially doubled distillery capacity by the mid 1890s, and yet it became hard to keep up with demand. The brothers sold their whiskey locally to saloons, but the largest part of their business became selling their product directly to customers.

The Game-Changing Gambit
By the 1890s, the Temperance Movement — the country’s first serious anti-alcohol movement — was beginning to cause concern among American distillers. The movement didn’t just attack the reputation of the distillers’ business, it also had the potential to destroy it. Many states, townships and villages began forbidding the sale of intoxicating beverages. Whiskey, however, could be shipped by express and parcel post — and that’s something Hayner Distillery took full advantage of.   Kidder came up with an innovative idea to “wet the innumerable whistles in the waning years of legal liquor.” That idea was mail-order alcohol.

Kidder understood that when a county or town voted itself dry, that drinkers who resided in those places were not instantly reformed. So, according to Williams’ article, Kidder asked himself, ‘what if their local paper carried an advertisement for competitively priced Hayner’s whisky available by mail order?’ In essence, the Hayner Distilling Company gained customers and profits each time another county went dry.

But was mail-order booze legal? Kidder assured William Hayner it was, in fact, legal. In nearly all cases, the answer was yes. The leaders of America’s temperance movement believed some forms of drinking were slightly more evil than others, and most local option laws were targeting public drinking in saloons, bars and taverns, as those places were viewed as attracting gambling, violence, prostitution and murder. The local option laws generally banned the sale and consumption of alcohol in retail establishments. Sometimes possession, consumption, and even the production of liquor for one’s own private use were generally allowed. Only Congress had the power to regulate interstate commerce, and in 1886, the Senate defeated the prohibition amendment by a 3-1 margin. After that, the only effort to limit distillers was an 1890 federal law that outlawed transporting liquor for sale into a prohibition state. Thus, shipping alcohol directly to the consumer was permitted.

The Hayner company shipped whiskey without any mark on the package to show its contents, and stealthy drinkers became loyal customers. As the need for Hayner products grew nationally, shipping offices were established in St. Louis, Kansas City, Washington, D.C., Boston, New Orleans, Jacksonville, Toledo, Springfield, Indianapolis and St. Paul. Hayner Distilling Company’s main office was in Dayton, and that was managed by Kidder, while William Hayner managed operations in Troy.

William Hayner married Mary Jane Harter in 1891 — which shocked the city of Troy, considering she was a member of the temperance movement locally. Mary’s father, Samuel K. Harter, was an investor in real estate, railroads and banks, along with being a chief stock holder in the St. Louis patent-medicine company that was began by his brother, Dr. Milton G. Harter. Eventually, management of the Dr. Harter Medicine Company was turned over to William, who was president of Hayner Distillery at that point.  While most of America struggled in the depression that followed the Panic of 1893, the Hayner Distilling Company expanded due to both the growing success of mail orders and the fact that William Hayner was now supplying the alcohol for Dr. Harter medicines. Hayner eventually moved the medicine company’s operations to Dayton.

The company spent nearly $80,000 on advertisements in magazines and newspapers in dry territories where saloons were prohibited by law in 1900, according to “Troy: The Nineteenth Century.” The book also pointed out that the company spent $200,000 on pre-paid express charges, and that the company also shipped some brands of whiskey in a special bottle with a combination lock at the top, so that no one except the paying customer could “imbibe” the contents.

In the early 20th century, Troy’s facility was run for 24 hours a day and it was capable of producing 12,500 gallons a day. The distillery covered almost three city blocks. It was the largest grain consumer in the county — requiring an average of 2,000 bushels a day,  A long line of horse-drawn farm wagons filled Water Street to the plant each day. William Hayner eventually felt the need to build a new warehouse, one with a capacity of 5 million gallons.

Push Towards Prohibition
In 1908, the general assembly gave approval to local option at the county level. There were 63 out of 88 counties in Ohio that voted themselves dry. Dayton remained wet, while Miami County voted to go dry.

By 1910, there were 13 states that had some form of statewide prohibition, along with local option laws to limit restriction on liquor sales to more than 95 percent of the country.  Mail-order alcohol plus myriad illegal dodges meant that state and local prohibition laws leaked like a dribble glass. In Ohio, “alcohol producers combined long overdue initiatives at self-regulation with a vigorous political campaign to reverse local option laws.” In 1912, there were a number of counties that went back to being wet, although Miami County wasn’t one of them.

William Hayner, however, passed away at age 54 before the good news broke. The net worth of his estate was near $3 million. Kidder stepped in as president of the Hayner Distillery, which was dealt a “body blow” with the passage of the Webb-Kenyon Act in 1913. The law regulated the interstate transport of alcoholic beverages. It banned shipments of liquor intended for violation of state prohibition laws — making Kidder’s mail-order alcohol business virtually illegal.

More states entered the dry column in 1914, but still, Ohio voters rejected statewide prohibition and repealed the countywide local option. In the upcoming years, though, a total of 14 states became dry.  As Congress continued to push the entire United States closer and closer to full prohibition, there was little Kidder could do to keep business afloat. He added cigars to the company’s mail-order products … but sales continued to go down.

On Aug. 1, 1917, the U.S. Senate voted to approve the Prohibition Amendment. On Dec. 21, 1917, Kidder announced that the Hayner building in Dayton would be closing. On Nov. 18 of 1918, Ohioans voted to prohibit the sale and manufacture of alcoholic beverages. The Eighteenth Amendment was ratified by the Ohio General Assembly in January 1919, and prohibition began in the United States on Jan. 17, 1920.

Kidder, then in his middle 50s, didn’t retire just yet. He and his wife, Georgeanna spent time at Resthaven, their farm north of Troy. They also helped establish the Miami County Golf Club. A scandal broke at the Hayner Distillery in 1925, with a federal investigation revealing a large liquor consignment had been withdrawn from the facility with fraudulent permits. Three years later, in 1928, the Hayner facility — Troy’s landmark business for more than 62 years — was finally shutdown.   Kidder died in 1953.

Postscript:  Memorabilia from the Hayner Distilling Company can be found at  the Hayner Cultural Center, located at 301 West Main Street in Troy.  Shown here, the Center is housed  in a beautiful Tudor-style mansion.  The house was built by Jane Harter Hayner, the widow of William, who filled it with objects collected during her international travels.  At her death she left it to the City of Troy.  The 100th anniversary of the mansion was celebrated 2014, as well as the 200th anniversary of the founding of the City of Troy.

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