In his pioneering 1963 book on American whiskey, Gerald Carson called Joseph Greenhut: “The organizer and promoter, the diplomat, the handler of men, the Svengali of the Whiskey Trust….” In a 2013 account Clay Risen has termed Greenhut, shown here, “immensely corrupt” and a “conniving stereotype of the Gilded Age tycoon.” Yet a 1902 biography extolled the same man as “…Honored by all who know him…for his generosity , his ability as a man of business and his sterling upright character.” What is going on here?
The answer lies somewhere in the story of Joseph Bendist Greenhut, born in February 1843 at a military post in Teinitz, Austria. After his father’s death and his mother’s remarriage, the family moved to Chicago when Joseph was about nine years old. His formal schooling ended at the age of 13 when he was apprenticed to learn tin and copper smithing. That trade took him to Mobile, Alabama, for two years, where he may have developed a strong antipathy to slavery.
When the Civil War broke out Joseph immediately returned to Chicago and in April 1861 became city’s second enlistee as a private in the 12th Illinois Volunteers. Soon promoted to sergeant, Greenhut was badly wounded in the right arm during Grant’s attack on Fort Donelson, and sent home to recover. By 1862, the Austrian immigrant was back in uniform and captain of Company K, 82nd Illinois Infantry.
Greenhut subsequently fought in the Virginia campaigns and was at Gettysburg where he displayed conspicuous bravery. He was transferred to General Hecker’s staff as the adjutant-general and in this command experienced more hot combat, particularly at Lookout Mountain in the battle for Chattanooga. Later he would be appointed one of three Illinois commissioners for monuments on the Gettysberg battlefield, including one for the 82nd Illinois, shown here.
When his health seriously deteriorated in 1864, Greenhut was forced resign his commission and given the rank of brevet-colonel. He returned to Chicago where initially he used his metal-crafting capabilities to fashion a number of useful agricultural and other mechanical devices. Joseph also found a wife in the Windy City. In October 1866, he married Clara Wolfner, a woman extolled as a “true helpmate” who is reputed to have taken a deep interest his undertakings and encouraged his ambitions. The couple would have four children, Fannie V., Benist J., Nelson W., and a son who died in infancy.
Perhaps it was the financial challenge of his growing family that caused Greenhut to make a sharp pivot away from mechanics to the whiskey trade. Over the next few years he worked for several Chicago liquor houses, in 1869 rising to secretary-treasurer of one. But Joseph’s ambition had a wider scope than anything Chicago could offer. Peoria, Illinois, to the south provided more expansive grounds for a go-getter’s whiskey interest.
In late 1879 when he arrived in Peoria, the thriving downtown shown here, Greenhut is said to have come with just $50 in his pocket, indicating that his Chicago experience had not proved particularly lucrative. Boasting some 73 distilleries operating between 1837 and 1919, Peoria often was called the “Whiskey Capital of the World.” The city was renown in the trade because of its plentiful supply of grain; clean and abundant spring water; convenient rail, water, and road transportation, and ample wood and coal for fuel.
Greenhut took a job with a grain dealer who also ran a distillery to use surplus grain and to sell spent whiskey mash for cow feed. Within two years, the German immigrant rose to the top of the distilling division and in 1881 broke away to start his own distillery. Shown above, Greenhut called it “The Great Western Distillery,” a facility that became among the nation’s largest. Even after a disastrous fire that destroyed the plant, right, he quickly rebuilt and resumed making whiskey.
By the early 1880s overproduction of whiskey had caused prices to decline to the great alarm of the distilling community. Initial attempts to curtail production proved unsuccessful. In 1887 Greenhut and other distillery owners, using as a model the Standard Oil Trust, created the Distillers and Cattle Feeders Association, better known as the “Whiskey Trust.” At its formation the Trust combined 65 distilleries, including 24 in Illinois. Twelve were in Peoria, that became its headquarters at 217 N. Jefferson Avenue. One of nine trustees and a moving force, Joseph Greenhut was elected its president. He had reached the pinnacle of the liquor industry.
In its early days, the Trust made a profit and paid dividends. Those payments were made to convince still other distilleries to join. Some did. Compensation also was given to wholesale dealers and “recifiers” (whiskey blenders) who promised to buy only from Trust distillers. For holdouts, the Trust would move into an area and undercut their prices—join the Trust or go out of business. Sometimes the Trust used violence. A Chicago hold-out, the H. H. Schufeldt company, was dynamited. [See my post on Schufeldt, June 4, 2012.]
Greenhut was responsible for bringing to the United States a Japanese scientist, Dr. Jokici Takamine, with an idea for cutting distilling costs. The scientist is shown above left with Greenhut in a cartoon. Central to distilling is an enzyme obtained from malt made by germinating barley. As Takamine knew, the enzyme in Japan is derived from a fungus grown on rice and is far more active and less expensive to prepare than malt. The scientist saw commercial opportunities for the process in the American liquor business. Greenhut envisioned a way of cutting costs for Trust distilleries and set Takamine up with a laboratory. In the end nothing came of the experiment. [See my post on Takamine, August 5, 2018.]
The Whiskey Trust initially flourished. Although more than 80 distilleries joined the monopoly, only a handful were allowed to continue production. From 1888 to 1895, its heyday, the Trust produced 300.4 million gallons of alcohol. That was 75 percent of all alcohol made in the United States. With that seeming stranglehold on American whiskey production in 1888 Greenhut and the Trust responded by raising prices, in part to help pay off extravagant bonuses they earlier had promised to distillers who joined.
When that strategy simply brought into the marketplace new distilleries with lower whiskey prices, Greenhut tried a series of ploys, including reneging on bonuses and rebates to get funds to buy additional distilleries. The Trust slowly was sliding into insolvency. Increasingly the Trust president was being blamed. Whiskey men and others holding a vast majority of the stock demanded a meeting with him and his fellow directors. Greenhut tried one more gambit. He asked a federal court to “appoint a receiver to control the assets and ensure their responsible use” and then sought appointment as a receiver. Dissident stockholders protested and the judge agreed with them. After eight years, Greenhut was out. With him went his son, Benedict, who had been hired as his father’s personal secretary.
Nevertheless, Joseph Greenhut exited a very rich man. His 35-room mansion on Peoria’s Sheridan Street, shown here, featured a tall tower, a turret and a glass conservatory. It was of red brick construction and had an adjacent carriage house, replete with white cast iron horse heads. As testimony to his influence, in 1889 Greenhut entertained President William McKinley there. He had met McKinley during the war. He also boasted a beachfront house on the New Jersey shore that in 1916 he loaned to President Woodrow Wilson as a Summer White House.
Having exited distilling, Greenhut remained as president of the National Cooperage and Woodware Company of Peoria, accounted one of the country’s largest, and was a major investor in the Central Railway Company, later the New York Central. He also was heavily into banking, including Peoria’s German-American Bank, the Merchants National Bank, and the National Bank of the Republic located in Chicago. He is credited with founding the Glucose Company of America.
Greenhut eventually sold his Peoria home to a brother-in-law and moved to New York City. There he bought a major Gotham dry good store known as Siegel-Cooper. Son Benedict joined him there as secretary-treasurer of the corporation. After more than a decade of living in New York, Joseph died in November 1918, age 75. He is buried adjacent to Clara in Salem Fields Cemetery of Brooklyn, right, in a family mausoleum. His estate has been estimated at $10 million, 20 times that in today’s dollar.
Greenhut made sure that Peoria would remember him fondly for a long, long time. He made a two-thirds contribution toward the erection of Peoria’s the Grand Army of the Republic Building, designated as the “Greenhut Memorial Hall.” Even today portraits of Joseph and Clara are displayed there and a plaque outside commemorates his contribution. 
Greenhut also underwrote the construction of the Civil War Soldiers and Sailors monument in Peoria’s Courthouse Square. Additionally, in 1902 a biographer opined: “Mr. and Mrs. Greenhut are noted for their helpfulness to the poor and all in want or trouble.”
Others might argue that Greenhut’s philanthropy might have emerged from ill-gotten gains. Carson asserts that: “Greenhut found his metier in manipulating stocks for the benefit of insiders….” Risen similarly points out that the whiskey man was repeatedly accused of financial impropriety: “…Rumors floated around Wall Street that its stock was inflated by 10 times what the company [Trust] was worth, and that Greenhut was skimming off the difference.”
For all that, despite vigorous attention from federal and state authorities, Greenhut was never accused of a crime or brought before the bar of justice. Moreover, Charles C. Clarke, a Peoria distiller who early broke from the Trust, testified before a Congressional committee that poor management practices, not fraud, ultimately doomed the monopoly. Those flaws certainly can be laid at the feet of Greenhut as Trust president. But bad judgment is not a crime. Analysts in our own day have concluded that given the nature of the U.S. distilling industry it was impossible from the outset for the Trust entirely to corner the market on whiskey. Thus, the true character of Joseph Greenhut remains an enigma.
Note: This vignette has been created from a wide number of sources. Principal among them are Gerald Carson, “The Social History of Bourbon,” 1963; Clay Risen in an article in the Virginia Quarterly Review, October 28, 2013; and the “Encyclopedia of Illinois & History of Peoria County,” ed. David McCulloch, 1902. This McCulloch is not the famed American historian.
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