Tuesday, December 17, 2019

Julius Kessler Was Top Dog of Whiskey Trust II



Beginning as a newspaper reporter, Hungarian immigrant Julius Kessler parlayed his experience into an astounding career as a leading American figure in the liquor trade and ultimately head of a Whiskey Trust, controlling three quarters of Kentucky’s bourbon production.  Moreover, throughout his 85 years — sometimes twirling a fancy cane and wearing a monocle — Kessler, shown right, did it with verve.

When the first attempt at a “Whiskey Trust,” centered in Peoria, Illinois, fell apart in the mid-1890s, few shed tears.  That effort at monopoly had been marked by intimidation and even violence.  Nevertheless, the idea of cornering the market for whiskey and thereby raising prices continued to fascinate a number of New York City financiers.   As the earlier trust faltered, the money men organized the Kentucky Distilleries and Warehouse Company as a holding company for Kentucky distilleries, choosing Kessler as their leader.

Kessler’s road to top dog of this iteration of the Whiskey Trust was a circuitous one.  He was born in Budapest, Hungary, in 1855, the son of Ignatious Kessler and Nina Oestereicher.  Bright and restless, Julius emigrated to the United States in the early 1870s while still in his teens.  He must have had some training in English because his early employment was as a journalist.  

In a 1938 interview with a Montana newspaper, Kessler recounted being sent by his newspaper to a 1873 ceremony in Omaha, Nebraska, celebrating the “golden spike” that opened the first transcontinental railroad across the United States. There he got a taste of the West and a yen to get there:  “Anybody who wanted to be an editor was just a little misinformed about the better things in life.”


Recognizing that he would have to make a living and disdaining to dig for gold, Kessler hit on the idea of selling Westerners a product he knew they would buy.
He was able to purchase gallon jugs of whiskey in Denver for $1.30 each, loaded them on forty donkeys and hit the trail for Leadville, Colorado, one hundred miles to the southwest.  Leadville was the site of a large silver strike and was booming.  Drinking establishments proliferated.  Kessler went from saloon to saloon selling his whiskey for $6.00 a gallon, cash on the barrelhead.  He would sell thirsty individuals three shots for $2.00.  

This experience would shape the rest of Kessler’s life.  He subsequently devoted himself almost entirely to carving out a profitable career peddling whiskey.  Kessler never seems to have had an actual retail outlet.  Rather, he was acting more as a distillers’ agent, selling whiskey in large quantities to wholesalers and retailers around the United States.  Known for his winning personality, Julius was a tall man with a genial smile and an air of prosperity and sophistication.  He claimed to have shaken the hand of as many as 40,000 liquor dealers throughout the U.S.  About 1893, he opened a sales office in Chicago where he featured several brands of his own blending, “Andre Jackson Club” and “Rich Grain.”  From Chicago he also had a front row seat to view the imploding of the earlier attempt at a Whiskey Trust.

With a nationwide knowledge base and a reputation as a super-salesman, Kessler was a natural when the New York financiers came looking for a true “whiskey man” to lead this second run at creating a Trust.  It put managing the organization and a chunk of its stock in his hands.  By 1899, the cartel had merged with the remains of the failed trust and consolidated with two smaller syndicates that controlled a number of affiliated distillers and whiskey brokers in Kentucky.

Capital stock issued by of the Kentucky Distillers and Warehouse Co. included $10.5 million in preferred stock, paying seven percent, $18.55 million in common stock, and $1.5 million in working capital.  The New York Times in November 1899 reported the transfer by the Easterners of $3 million (equiv. $60 million today)  in stored whiskey and future contracts to Kessler.  The 85,000 barrels represented the bourbon, rye, and malt whiskey stocks from the Atherton, Mayfield, Clifton, Windsor, Brownfield, and Carter distilleries.  It also included contracts for the future output of the Atherton, Sam Clay, W.H.McBrayer and J.G. Roach & Co. distilleries.  Kessler later would advertise several on a deck of cards.


By 1899 the new Whiskey Trust boasted membership of 53 Kentucky distilleries manufacturing bourbon and rye.  The company also controlled four rye whiskey distilleries in the East, including the Kessler-owned Maryland Pure Rye Distillery, producer of “Monumental Maryland Rye.” A map of the distillery is shown here.  He also issued a whiskey under his own name with the motto “Smooth as Silk” from a distillery in Lawrenceburg, Indiana.

 The Trust’s concentration on Kentucky whiskey, however, held the key to the cartel’s success under Kessler’s leadership.  Although many other distilleries could be found throughout the U.S., the popularity of Kentucky bourbon and rye meant that about 90 percent of standard American whiskey brands were in its possession.  Many rectifiers, wholesalers, and brokers were now dependent on the Trust for their whiskey supplies and also were subject to Trust dictates.

By the early 1900s, the Kentucky Distilleries & Warehouse Company controlled virtually all of the state’s whiskey production, with a distilling capacity of sixteen million barrels annually.  The Trust now was capitalized at $32 million and had one million barrels in bonded storage.  It was shutting down smaller distilleries and concentrating production at larger, more efficient facilities. 


Kessler opened sales offices, ostensibly for his own distilling interests but in effect for the Trust, in a number of major cities in addition to Chicago:  Buffalo (1905-1906), Los Angeles (1912-1918), San Francisco (1913-1916), and Louisville (1902-?). Whiskey Trust II was never able completely to monopolize America's liquor industry, but as one observer put it:  "...By sheer size forced the outside whiskey houses to act in accord with its wishes." As the head of the cartel Kessler frequently found himself the target of scorn from the press and elements of the public.

Of Julius’s personal life during this period, little is recorded.  He was married for a time to a woman named Eva and later divorced.  No children.  A sports fan, Kessler’s saloon signs featured baseball, football and boxing events rather than the traditional lounging nude. 


Kessler did not drink alcohol.  He told the press that in a lifetime of selling liquor, he often was called upon to sample some but estimated that those tastes when added up amounted to no more than five gallons, his total consumption.  Cigars were Kessler’s weakness.  On business trips to Cuba he often bought 10,000 stogies at a time.

The Hungarian immigrant guided Whiskey Trust II to profitability for most of his tenure, increasingly finding that the onrush of Prohibition was depleting sales.  When National Prohibition was declared in 1920, the Trust like the rest of the U.S. liquor trade went out of business.  A year later Kessler, now 65 years old, retired to Vienna, Austria.  With him went a fortune valued in the millions and 38,000 cigars.

Enjoying the reputation of having sold more whiskey in his lifetime than any other living man, Kessler returned from Europe only after Repeal in 1935.  Now 80 years old and bearing  white mustaches, he settled in Manhattan, bringing his bull terrier, Roxie, and his bullfinch, Dickie.  One New York newspaper reported:  “Still sleek and jolly, he was observed stuffing down pigs’ knuckles and sauerkraut, running down a street after a taxi, dancing until 5 a.m. on New Year’s Eve.”

Kessler lived the next five years in New York, venturing out frequently to cities and towns in the West that he had known as a youth.  He also made use of his memberships in the Humanistic Club of New York and the Congressional Club and Army and Navy Clubs of Washington, D.C., the latter two emblematic of his lobbying efforts for the Trust.  He also served as a director of the Hungarian Relief Society in New York.

Julius died on December 10, 1940, at his home at 480 Park Avenue.  His funeral was held at the Universal Funeral Chapel on Lexington Avenue.  He was cremated and his ashes entombed at the Ferncliff Mausoleum, in Greenburgh, New York, 25 miles north of Manhattan.

Julius lived to see the Kessler Whiskey brand revived by the Seagram Company in 1935.  The labels and ads featured Julius.  Seagram’s later dissolution resulted in the Kessler brand later being owned by what is now Beam Suntory.  It has been claimed by Beam to be the #2 American blended whiskey in the world behind Seagram’s 7.  Thus the legacy of Julius Kessler lives on.

Note:  Although this post is gathered from a variety of sources about Kessler, none of them get to the heart of his success.  While clearly serving as the leader of the Whiskey Trust, Kessler seemingly also was operating on his own behalf with offices and brands.  This was a puzzle that Kentucky distillers outside the cartel were never able to solve.  Unfortunately, neither does this vignette.  
  













4 comments:

  1. His heirs were the two daughters of Armin Goldberger de Buda...

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  2. Peter: Thanks for this addition piece of information.

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  3. You have merited thanks and congratulation of mine, especially for enthusiastic and professional acces to the person of Julius Kessler.
    Family Keszler worked as land leaser in Paszto near Pest&Buda(since 1873 called Budapest). Among Ignatius childrens the older brother Joseph has studied in Paris, than became language-teacher and recognized theater-critic in Budapest.
    Sister Paula's daughter Elisabeth married to dr.Phil.Andres Armin Goldberger de Buda.

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  4. Somogyi Peter: Thank you for your kind comments and additional material on the Kessler/Keszler family.

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