Saturday, April 30, 2016

The Trials and Ascent of George T. Stagg

       
The name George T. Stagg on a bottle of whiskey for many years has been a familiar sight in virtually every liquor store in America.  Beyond the name and the brand was a Kentucky-born man, shown below, whose life might be characterized as having achieved his fame amidst a series of trials that he not only surmounted but that actually contributed to his rise to wealth and fame.  Five events in Stagg’s story are particularly significant.

1. The Civil War — 1861-1865:  George Stagg was born in 1935 in Garrard County, Kentucky, a town in the central part of the state.  He came from Dutch Reformed stock.  His family had originated in Bergen County, Pennsylvania, where his great-grandfather had been commanded a regiment of the New Jersey Militia during the Revolutionary War.  His father moved to Kentucky and bought a farm where George grew up.  In 1858 he married a local girl, Elizabeth “Bettie” Doolin, and settled down to raising a family in Richmond, Kentucky, where he worked in a shoe store.

Stagg’s life plans were interrupted when the outbreak of Civil War intruded.   Perhaps remembering the fighting spirit of his ancestor, In November 1861 he enlisted in the Union Army.  Although Kentucky was split in its allegiances between North and South, Stagg’s religious views on slavery likely motivated his choice.  His unit, the 21st Kentucky Infantry Regiment, saw significant combat.  It took part in the Battles of Stone River, Resaca, Kennesaw Mountain, Nashville and the siege of Atlanta.  During the conflict, the 21st Kentucky lost 57 enlisted men and three officers killed, with another 158 dying of disease.

Through the flash and fire, Stagg remained steady and rose through the ranks as his courage and ability were recognized.  He received a field commission to first lieutenant in January 1862 and a promotion to captain a year later.  By the summer of 1863 he was chosen as an aide to General Ambrose Burnside.  The Civil War had been a testing grounds for Stagg and he had showed his mettle.

2. The Whiskey Ring Exposed — 1875:  After the conflict ended, Stagg moved with his growing family to St. Louis,  Missouri, where the pre-war shoe salesman met a wealthy local businessman named James Gregory.  Gregory likely was impressed with the 30-something’s highly-developed sense of organization, meticulousness in keeping records, and leadership qualities.  Together they established a firm they called “Gregory & Stagg, Commercial Merchants and Distillers Agents.”  It meant that Stagg was busy selling Kentucky whiskey in markets throughout the United States.

His work brought him in contact with distillers and whiskey rectifiers of St. Louis and other Midwest cities, some of whom were part of a national scheme to defraud the Federal government of its liquor tax revenues.  At the heart were corrupt federal tax agents taking kickbacks for themselves and operatives of the Grant Administration.  Stagg blew the whistle on the scam and a series of raids occurred across the Nation, many in St. Louis, resulting in rolling up the “Whiskey Ring” and sending many of its participants to jail.

Like many “whistle-blowers”  Stagg himself came under scrutiny from individuals skeptical about his motives.  A suspicious House of Representatives Committee in May 1876 held extensive hearings on the scandal.  An Federal Internal Revenue officer was questioned extensively about Stagg’s role in the affair, with the implication that the whiskey salesman might have been in cahoots with the culprits.

The officer, Elverton R. Chapman, vehemently fended off those innuendoes, testifying that Stagg had tipped him off about illegal whiskey being dumped in a local warehouse and then shipped to New Orleans, and, moreover, had told him whom to call as witnesses.  Chapman asserted:  “The most valuable assistance that we got in St. Louis was from Mr. George T. Stagg, of the firm of Gregory & Stagg,, commission-merchants in St. Louis.  Mr. Stagg is entitled to more credit for the exposure of the St. Louis whiskey ring than any other man that lives.”  With this ringing endorsement not only had he fended off Congressional criticism, Stagg had reached another rung in the his climb toward whiskey fame.

3. Financial Panic — 1877 - 1879:   In 1873 a severe financial downturn in Europe and America threw many previously successful distillers into serious financial trouble.  Among them were Col. Edmund Taylor, considered the king of Kentucky bourbon [See my post on Taylor, January 2015].  The Louisville Courier-Journal reported in June 1877 that Taylor owed Gregory & Stagg’s firm $150,000 (equivalent to $3.75 million today).  An “…examination of the books shows that receipts have been given for 7,014 barrels of whiskey, whereas his actual stock does not exceed 4,722 barrels.” the newspaper reported.  With more than a hint of fraud involved, Taylor’s total debt approached  $11 million in current dollars.

Stagg saw Taylor’s financial plight as an opportunity.  Up to this time he had been considered a gifted salesman, a pitchman for Kentucky whiskey but not a real player in the industry.  Stagg set out to change all that.  The partners paid off Taylor’s loans and as a result gained control of the colonel’s two distilleries, located adjacent to each other on the Kentucky River at Leestown on the Frankfort and Lewis Turnpike.  One was known as the OFC (Old Fire Copper) Distillery and the other the Carlisle Distillery, named for John G. Carlisle, then a congressman from Kentucky, later Secretary of the Treasury.  Shown above is the OFC distillery when owned by Taylor;  below as it grew under Stagg.
Stagg recognized that keeping Taylor and especially his name associated with the enterprises was important.   He established the E. H. Taylor Jr. Company in 1879, with himself as president and Taylor as vice president.   Stagg had 3,448 of 5,000 shares in the company;  he gave Taylor, who was overseeing the operation, just one.  Out of the financial panic that had brought down the icon of Kentucky bourbon,  Stagg had vaulted himself into the forefront of the state’s whiskey industry.

4.  Grilled by Congress — 1882.  With Stagg’s emergence into the forefront of Kentucky distilling, came new responsibilities and challenges.  As a member of the Kentucky Distillers Association, he helped push a Carlisle bill that lengthened the federal bonding period for whiskey and reduced the tax burden on distillers.  Stagg’s efforts subsequently earned him a trip to Washington to testify before a Select Committee of the U.S. Senate investigating whether illegal funds had been raised to pass the legislation, including whether any money had been channeled to members of Congress.

Stagg faced stern questioning by the Senators when he appeared before the committee on May 29, 1882.  He was asked again and again whether he had paid his own way to Washington and for his expenses while in D.C.  The senators wondered whether he had contributed to anyone else’s expenses:  “A. I have not. — Q. In no way? — A. “In no way.”   So the grilling went on to what he had spent to advance the Carlisle bill.  “All the money I have expended, or known to be expended, was $35 for printing a brief which I presented to the Finance Committee of the Senate and $50 to the Public Printer to publish speeches to be circulated in the trade…,”  Stagg testified.

Cool under the senators probing and sometimes hostile questions, Stagg acknowledged he had heard he and other proponents of the Carlisle bill “were charged with fraud.”  He staunchly responded:  “I will say that I have never presented a case in court with cleaner hands than this one has been presented to the Senate and House of Representatives.”   With that, the Select Committee sent him on his way.  Stagg seemingly had vindicated not only himself but his industry.  His reputation continued to rise.

5.  The Wrath of the Colonel — 1886-1890:  During the six years Taylor was working for Stagg, relations between them deteriorated sharply.  By late 1886 the Colonel was straining to exit the company.  Clearly tired of dealing with the distiller’s strong personality,  Stagg cut a deal.  In return for Taylor’s single share of stock, he gave back a small third distillery he had acquired from Taylor’s son and loaned the Taylors the money to start up again as independent distillers.  George also agreed to remove Taylor’s name from the parent company of the OFC and Carlisle Distilleries.
Stagg soon had second thoughts about removing Taylor’s name.  The Colonel’s reputation for quality whiskey had spread beyond Kentucky to the entire Nation and having his name on the corporate letterhead was significant. Taylor was outraged by Stagg’s change of mind and, litigious by nature, began a series of contentious and costly lawsuits against him and his partners.  When the last of these court actions were settled in 1890, the company adopted the name George C. Stagg and Co.  Now the liquor salesman turned distiller had his name in the forefront of the Kentucky whiskey industry.  Once again adversity had turned to Stagg’s ultimate advantage.

The Cost of Responsibility:  Although in 1890 Stagg was only 55 years old, his many responsibilities were taking a toll on him.  In his Senate testimony, he had talked about his lifestyle.  Although he still was a partner in the St. Louis commission house and additionally running the Frankfort distilleries, he said, “I am scarcely in Saint Louis.  I have not been there, perhaps, for more than a few days at a time for a year and a half, or two years…I do the selling for these houses in the Eastern markets.”   

With Taylor’s departure, Stagg’s work load had increased sharply.  In addition to his other burdens, he was running two distilleries plagued with over-production, lagging sales, falling whiskey prices, and continuous wrangles with government authorities. Moreover, his health was failing.  In 1890 Stagg turned to Walter P. Duffy, an aggressive and somewhat notorious New York purveyor of “medicinal whiskey” [See my post on Duffy, May 2011].  By the early 1890s Duffy quietly had purchased all of Stagg’s stock and gained control of the company.  George retired.  Not long after, he died in 1893 at the relatively young age of 58.

Through the years that other owners guided the distillery complex, it continued to bear the name of George T. Stagg, until it was rebranded as Buffalo Trace in the summer of 1999.  The Frankfort site is still named for Stagg on its listing in the National Register of Historic Places.  Moreover, his name lives on in the award-winning bourbon that bears his name.  Scattered throughout this post are illustrations of artifacts that bear Stagg's imprint, some of them issued after his death.  They are reminders that George T. Stagg had faced major challenges during his foreshortened lifetime and not only had surmounted them, he had thrived on them.  

























2 comments:

  1. Great article! George was my great x3 grandfather, and there was some new stuff in here that I had not known about despite my family's extensive record keeping.

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  2. Dear Lindsay: Glad to be able to shed some light on your distinguished ancestor!

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