Foreword: In January 2012 when I posted a piece on a Kentucky liquor house entitled “Crigler & Crigler, a Family Affair,” it never occurred to me that lurking was another story, a tale of deceit, theft, desertion, and, if my reading of the evidence is correct, adultery. Everything swirls around the disgrace of Lexington, Kentucky, distiller William H. “Will” Headley.
Will was from a highly respected Kentucky family. It was founded by James Headley, a linen weaver from Cork, Ireland, who immigrated to the United States as a youth in the late 1700s. He married, sired eleven children, and about 1800 moved his family to Fayette County whose seat is Lexington, Kentucky. Among James’ descendants was John A. Headley, a distillery owner and a man with banking interests.
In 1869, John and a partner, James A. Farra, likely a relative, purchased four acres of land for $2,000 and built a whiskey plant they called The Henry Clay Distillery. The facility was located a mile outside the Lexington city limits on Old Frankfort Pike. The location was favorable because of nearby Royal Spring, shown here, and a grist mill. The distillery operated for about three years until destroyed by fire in 1871. The loss was set at $15,000, equivalent to $330,000 today.
The conflagration also cost Headley and Farra their ownership of the property. A wrinkle in the Federal law at the time decreed that even if their whiskey had gone up in flames, pending taxes still had to be paid. Authorities argued that distillers could siphon off their whiskey and then avoid discovery by firing their plants, thus avoiding payment. The government seized what was left of the Henry Clay Distillery, principally the land, and sold it.
Undeterred by this setback, John Headley, now in partnership with a brother-in-law, Charles Y. Peck, in 1872 at the cost of $30,000 built another distillery a mile south of the Lexington city limits. Enter the Crigler whiskey family. The site was 100 acres of farmland owned by Robert Crigler and leased. This second distillery had the mashing capacity of 300 bushels per day, operating for ten month of the year. It produced 30 barrels of whiskey per day and employed 25 workers. Through an agreement, the bourbon — called “Woodland Straight Kentucky Whiskey” — was almost exclusively bottled and wholesaled by Crigler & Crigler of Covington, Kentucky.
After some 15 years of operating this distillery, John Headley died. His son William H. “Will” Headley, at the age of about 34 succeed to his father’s share in the company. In 1891 under the name Headley & Peck Distilling Co., the organization was incorporated with officers having respected local reputations. The president was Logan Hocker, the son of a banking partner of John Headley. Major Garland R. Bullock, a Civil War hero, was secretary. Will Headley was named treasurer. His seemed like a particularly good choice. He was trained as a bookkeeper and had a reputation for integrity. After events later unfolded, his banker was quoted saying he “had done business with Will Headley for 25 years and that he was alway straight in his dealings.”
Headley was also known as a good family man. His wife was Nancy “Nannie” Willis, born in Boone County, who had moved to Lexington as a child. Nannie was 19 at their marriage, a year older than Will. Their first child, Madge, was born out of wedlock, an event apparently kept quiet. The birth took place in Earlham, Iowa, 690 miles from Lexington. More than a year later the couple was married and in rapid succession had another daughter, Laura Virginia, and a son, John Alexander, named for his grandfather. To outsiders the family seemed a close and loving one.
Another 15 years would elapse before the couple would have a fourth child, a boy born in January 1893 whom they named Willis Arnold. Then misfortune struck. The following November Nannie died, leaving Will with three children in their late teens and a baby not yet a year old. Sympathy for Headley and his children was widespread among friends and acquaintances.
The year 1893 likewise proved to be a difficult one for the Woodland distillery. A financial panic had depressed the sales of whiskey and severely affected company cash flow. Locker resigned his presidency for lack of a salary, his place taken by Major Bullock. Meanwhile, to no one’s knowledge, for several years Treasurer Will Headley diligently had been siphoning money from the distillery his father had founded.
Will’s scheme was one fairly common in the liquor industry. Crooked distillery owners were known to sell forged warehouse receipts on whiskey said to be aging in their warehouses, whiskey that actually did not exist. Or to sell securities on the same whiskey to several buyers. When legitimate, selling warehouse receipts fulfilled a useful purpose, allowing distillers to have an income while their product was aging. For their part, buyers could anticipate a substantial return on investment when the aged whiskey was released from the warehouse and sold. Headley as treasurer was the only officer at the Woodland Distillery authorized to issue warehouse receipts and he was cheating.
In February 14, 1894, a wind storm damaged roofs of the company’s bonded warehouses, leaving many barrels inside uncovered. Apparently fearing discovery of his misdeeds, the following week Headley told his family he was leaving on a business trip. Before departing he visited his local bank and withdrew $900 in company funds. Several days later, Madge, who was looking after the other children, received a letter from her father indicating he had absconded to Mexico and admitted having issued $50,000 in fraudulent warehouse receipts over the past several years, equivalent to $1,100,000 today.
When Major Bullock learned of Headley’s message, he immediately summoned Robert Crlgler, who not only owned the distillery property but was a major holder of warehouse receipts. According to an account: “Mr. Crigler assumed control and ordered that no whiskey be removed from the warehouses until an inventory was taken and more information was discovered. A locksmith had to drill the lock to open the safe and gain access to the company records. The Warehouse Receipt Book, with the stubs indicating whom the receipts were issued to, was located inside.”
The ensuing investigation discovered that Headley had issued receipts for 1,800 barrels of bourbon, allegedly produced in 1892 and stored in the warehouses. Woodland Distillery, however, had produced only 600 barrels that year. The losses from just one year of fraudulent receipts totaled more than $30,000, equivalent today to some $660,000. Robert Crigler discovered that half the loss was to himself and his family.
What could have caused Will Headley to have executed such a massive theft? He was not known as a gambler or heavy drinker, character flaws that might have made his behavior more understandable. My judgment that it was love, likely an adulterous affair, that had led to Headley's downfall. The fraud had begun more than a year before his wife’s death, to my mind an indication of Will’s earlier need for funds to bankroll a “back street” love affair. This speculation is backed up by the document shown here. It is a visa certificate Headley received from the U.S. Consul General in Mexico City, dated October 1, 1910.
It indicates Headley was living in Penjamo, city in Guanajuto State, about 370 kilometers from the capital. Shown below, almost a mile high, Penjamo was a resort town, one that attracted the wealthy, including rich Americans who enjoyed the moderate climate and luxury accommodations. It also was noted for the tequila manufactured in a local factory.
Will had married again, his wife’s name given as Aanna Nelson, originally from Peoria, Illinois. They were accompanied by a son named Nelson W. Headley who had been born to the couple in Penjamo the previous February. Since Will could not have returned to the U.S. without going to jail, the assumption must be that Aanna joined him “South of the Border.” He had abandoned one family in Lexington to start another in Mexico. Somewhat ironically, Headley gave his purpose for staying in Mexico as “extending American trade.” He died there three years later at the age of 59, once again leaving a small child without a father. No evidence exists that Headley ever returned to the U.S. or made any restitution.
Meanwhile, back in Lexington, the distillery and the Woodland brand was sold to Robert Crigler. Two years later he sold the distillery and land to a buyer who demolished the plant and returned the land to growing tobacco. Distillery warehouses were converted to tobacco barns. The Criglers retained the use of the Woodland name and continued to bottle bourbon under that name until National Prohibition. While the wealthy Criglers were able to survive the losses, a number of local investors, including proprietors of saloons, were left bereft.
What of the children Will Headley had left behind? Indications are that the three older ones were advanced enough in age to fend for themselves. The baby, Willis, was another story. Census records indicate that the child was taken into the home of an aunt and uncle, Virginia and Charles Johnson, a Lexington wool importer, and raised by them into maturity. Whether any of the Headley children ever saw their father again is unclear.
Note: This post is based significantly on research by William M. Ambrose of Lexington, Kentucky and published initially in his book, “Bottled In Bond under U. S. Government Supervision,” by the Limestone Press, Lexington, 2008. Information in ancestry.com, including the image of the Mexican visa, helped to round out the story.
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