Ambitious Brew: The Story of American Beer (15 page)

Besides, he argued in a letter written to Frederick Pabst in 1889, price wars were outmoded and the warriors “behind” the times. Instead of “fighting each other and running the profits down,” he and other giant brewers ought to be “working in harmony” as manufacturers in other industries were doing. Busch overstated the extent to which harmony reigned elsewhere, but he was correct that in the 1880s and 1890s, many industrial magnates were experimenting with various forms of organization that allowed them to regulate competition and, in theory at any rate, avoid ruinous price wars. Pools, the most common form of association, were informal agreements among manufacturers of, say, salt, by which the members agreed on a single industry-wide price or established production quotas that enabled them to control supply and so artificially manipulate price—to their benefit rather than to that of consumers. Each member paid a sum into the pool’s fund, monies they would forfeit if they violated the terms of this gentlemen’s agreement. The set-ups never lasted long: One member, sniffing opportunity, would lower his price or raid another’s markets, and a free-for-all would ensue.

“Now a perfect understanding between your good self, Schlitz, Lemp and myself ought to be reached [and] matters regulated,” Busch suggested to Pabst. By “a concerted action, and interchange of courtesies, . . . we could easily fix and hold” prices and “realize a profit of a half million or even a million more” than was possible while the wars raged. “[Y]ou had better come down here,” he urged, “so that we can talk matters quietly over . . . we are only hurting each other.”

That was wishful thinking on the part of Busch. He, the Uihleins, Pabst, and other beermakers tried this system of price management, but late-century brewers’ pools were no more successful than they’d been in other industries, lasting perhaps a few years at most. One or another member would violate the terms, launch an unprovoked attack on another member, or simply weary of the leash. Sometimes an effort to create a pool provoked the very warfare it was designed to constrain. That happened in Chicago. That city’s brewers and outsiders who sold beer there, including, most likely, Pabst and Schlitz, agreed to form a pool. But one holdout, Manhattan Brewing Company, a small and recently founded firm, refused to join. The pool threatened to drop barrel prices down to three dollars, which they knew Manhattan Brewing could not match. Still the newcomer refused.

One morning, two Manhattan employees set off on their rounds delivering kegs to the saloons that carried the brewery’s lager. An hour or so into the day, they realized that they were being followed by two men in a carriage. The Manhattan driver turned his buggy to block the street. He and the salesman jumped down from their wagon and confronted the other men—and learned that the pair had been hired by the pool to find out which saloons carried Manhattan’s lager, with orders to report back so that the pool could pressure those saloonkeepers to drop Manhattan’s beer. A “wordy altercation” ensued, which only ended when a passing policeman hauled all four off to jail. In that case, as in so many others, the pool collapsed soon after, and the ensuing price war provided Chicagoans with cheap beer for two years—until brewers called a truce and organized another pool. It, too, failed in short order.

Many small beermakers, bloodied by price wars and realizing that they could never fight the barons on equal terms, sought safety in numbers. Some relinquished their independence and banded together in “combinations,” by which they traded their own stock for shares of the new single brewery forged from many small ones. The maneuver reduced the industry’s numbers by hundreds, but in the end merely replaced shaky small independent outfits with only slightly less fragile medium-sized breweries.

Other brewers abandoned the fight altogether and sold out to syndicates of British capitalists, who arrived in the United States in the late 1880s seeking safe outlets for their money—safer, at any rate, than African mining operations, Mexican railways, and the boom-bubble-bust pyramid schemes of the sort lampooned in the novels of Anthony Trollope, more than one of which had parted plenty of Englishmen from their money. Some of the British investors bought flour or steel mills; others purchased cattle ranches. But the scent of lager proved the most intoxicating. Between 1888 and 1891, the outsiders snapped up dozens of breweries: seventeen in St. Louis alone, leaving Lemp and Anheuser-Busch as that city’s only independents; nearly every brewery in the San Francisco Bay area; and most of the major Chicago brewers. In Detroit and Buffalo, Phoenix and Baltimore, Denver and Cincinnati, owners cashed in on the craze. Many of Milwaukee’s smaller breweries closed their doors and reopened as cogs in the machinery of a syndicate. Valentin Blatz sold out for $3 million in stock (a staggering $60 million in today’s dollars).

Not surprisingly, syndicate representatives hounded the barons, offering millions for their firms. In early 1890, the saloons and hotel bars of Milwaukee ran full with rumors that Pabst planned to sell for $10 million. The Captain was “very much annoyed” by the gossip. “It is the most foolish thing I ever heard,” he told a reporter. His brewery was not for sale, nor, he insisted, would it be in the future. He added, “I am sick and tired to death of this whole syndicate business.”

So read Pabst’s public face. In private, he spoke otherwise. “There is no Piece [sic] from morning til night,” he told Charles Best a year later. At times, he mused, “I think its [sic] a little foolish to trouble myself as I do, still I enjoy it, and will try it a while longer,
anyway
until I get ready to settle down on a good large farm where I can have a lot of land and water,
that is where
I could contend [
sic
] myself & be happy. I may by that time get ready to let the Englishmen have the Brewery. They are still after us, and have offered as high as 16,000,000$ still I refused, as I’m satisfied as things go, and not wanting to work for the Englishmen.” The sum, he admitted, was “enough to make a man’s hair stand on end,” and tempting, too, if only because he was running out of steam. “I’m very glad of olden times,” he confided to Best, “and like to think about how many pleasant hours we spend [sic] even if we did work hard.” But, he added, “I should not like to go over it all again[.] [A]lthough I’m perfectly healthy & stoud [sic] I don’t think I could stand the Racket again.”

But the “Racket” was relentless, if only because, having made the decision to act on ambition and create one of the world’s largest breweries, men like Pabst, Busch, and the Uihleins were forced to maintain constant vigilance, promoting and protecting the good name they had worked so hard to make famous. Every brewer engaged in salesmanship: Their saloons sported the company logos, which also adorned serving trays, glassware, and color posters. Souvenir books contained lithographic images of the brewery and its affiliated hotels, saloons, and gardens. Brewers sponsored
sangerfests,
the great German singing festivals held around the country. When Milwaukee hosted the twenty-third annual Encampment, or reunion, of the Grand Army of the Republic in 1889, Frederick Pabst funded the construction of a 35,000-seat amphitheater so that none of the veterans or their family members would have to pay the entry fee otherwise necessary to recoup the cost. That act earned him the gratitude of the tens of thousands of men attending the event, who altered their parade route so that it passed by the Pabst home and brewery on Chestnut Street.

N
O ONE UNDERSTOOD
salesmanship better than Adolphus Busch. Anyone who met him walked away with a penknife or deck of cards, a corkscrew or bottle opener, each decorated with the company’s trademark eagle. The brewery furnished all of its saloons with a rotating collection of framed lithographs, the most famous of which was an engraved, and gruesome, depiction of
Custer’s Last Fight.
All of this helped sell more beer, easy enough to do when the beer was so fine, but as Budweiser’s popularity soared, Busch paid a price for his efforts.

Between March 1876 and December 1882, Carl Conrad had sold some twenty million bottles of Budweiser—a stunning achievement—but not enough to protect the liquor dealer from bad investments and his own inept management. In early 1883, Conrad filed for bankruptcy. While he weighed offers for what was left of his business and waded through a pile of overdue bills, he settled his debts with Anheuser-Busch by signing over to the brewery his remaining stock of Budweiser bottles and labels. Eventually Conrad decided to leave Budweiser in Busch’s hands and the rest of his business in limbo. Three years later, however, having restored his financial health, he tried to reclaim his property.

Too late. Having tasted Budweiser’s profit potential, Adolphus was reluctant to give it back. He and Conrad struggled over custody of the trademark for several years, and in January 1891, a year in which Busch sold fourteen million bottles of the beer, Conrad conceded defeat and granted Anheuser-Busch permanent rights to the Budweiser name. There was something of the inevitable in the acquisition. Since 1876, the beer had provided much of the profits earned by Anheuser-Busch and had made Busch and the brewery world famous: “I am very often greeted as ‘Mr. Budweiser’ instead of Mr. Busch,”Adolphus was fond of remarking. His fame, his immense fortune, and his sons’ futures all rested in large measure on the care he had taken with this one beer. To own it outright made that fortune and those futures that much more secure.

But as it had in the Lademan case back in 1878, Budweiser inspired dozens of imitators in the form of sometimes insipid lagers whose labels sported the same name. During the 1880s, Schlitz sold a version of Budweiser, as did the Budweiser Brewery in Brooklyn, Fred Miller Brewing of Milwaukee, Texas Brewing of Fort Worth, Prospect Brewing of Philadelphia, and the Westside Brewery in Chicago, to name just a few of the dozens of beermakers who “borrowed” the name. Adolphus Busch disliked courtroom face-offs, but he despised those—whether it be the Uihleins or a two-bit brewer from Brooklyn—who tried to hitch a free ride on Budweiser’s reputation. After Busch gained permanent rights to the trademark, he directed attorney Nagel to issue cease-and-desist letters to the usurpers. All but one of the brewers backed down. On May 20, 1893, Adolphus Busch filed suit against the last holdout: Fred Miller Brewing of Milwaukee.

Miller had earned a comfortable living selling beer to customers in surrounding states and operating a small distribution center in the Dakota Territory, but he never posed a serious threat to the barons. He did not introduce mechanical refrigeration until 1887, nearly a decade after Busch and Pabst had done so, and at the time of his death in June 1888, the brewery produced a mere 82,000 barrels a year, about what Fred Pabst brewed in a month.

Miller’s sons, Ernest and Fred, Jr., wasted no time converting the cash inherited from their father’s estate into new brewery equipment and buildings. The company had been selling bottled beer since 1883, but in 1889, Ernest Miller decided to add to his roster a beer brewed in the “Budweis” manner. Neither he nor his brewmaster had any idea how to make such a lager, so Miller wrote to Anton Schwarz, the New York brewing maven, requesting a recipe and detailed brewing instructions. When the materials arrived, he handed them over to his brewmaster and told him to get busy. Miller Budweiser was the result.

In 1893, Anheuser-Busch attorneys attacked on two flanks. They argued, first, that the St. Louis giant owned the name “Budweiser.” In the 1890s, that was a risky maneuver: Trademark laws were a swamp of conflicting statutes and murky legal rulings, so proving ownership would be difficult, which was why Busch hired Rowland Cox, the nation’s foremost trademark and patent lawyer. Cox also argued that Anheuser-Busch had invested millions of dollars to advertise Budweiser as an “exceptionally expensive, pure and superior product.”The Miller brothers, in contrast, slapped Budweiser labels on an “ordinary” beer brewed with “very cheap and inferior” materials, and then sold the beer “for the express purpose of creating a false and fraudulent competition and unfair trade.”

One fact emerged from the heaps of testimony presented in the case: Ernest Miller, a small-time, small-town brewer, was in over his head. His hometown newspaper described him as one of Milwaukee’s “deepest, shrewdest, and ablest” and “most ambitious” businessmen. Perhaps that describes his acumen as a real-estate magnate—he and his brothers owned hundreds of saloons—but his testimony in the Budweiser lawsuit reveals a man who was either a first-class liar or a stunningly indifferent businessman, or both; a man, in fact, who knew next to nothing about beer and brewing. Rowland Cox had only to ask a few questions and then stand back and watch Miller dig his own legal grave.

What ingredients, asked Cox, differentiated Budweiser from the brewery’s other lagers? Miller hemmed and hawed, and finally admitted that he couldn’t answer the question. Cox reminded Miller that, according to the beer’s label, Miller Budweiser contained “the best Bohemian barley.” No, Miller responded; he never used imported barley. Perhaps in response to a look on Cox’s face, Miller blamed the lithographer for the text. “I don’t know whether [those words] are on the label at Budweis or not; probably that is the reason the lithographers put it on, I don’t know.”

“Do you mean to say,” Cox responded, “it is possible your label was taken from a label used at Budweis, Bohemia?” “I say,” Miller replied, “I don’t know where that was gotten from . . . I don’t know much about it.” What about the label’s color: red, the same as the Anheuser-Busch label. Was that a coincidence? Yes, replied the brewer. He and his brother “didn’t care very much about the color” or, for that matter, anything else about the label. They had turned the entire matter of design—font, color, wording, everything—over to the lithographer.

Cox asked Miller to describe the technique used to brew Budweiser. Miller considered the request and finally replied that it was the same as any other brewing process. “You don’t understand, do you,” Cox retorted, “that the Budweiser process is materially different from the Pilsener process?” Well, replied Miller, perhaps there was some slight difference in fermentation, or perhaps in the mash or the temperature of the water. Perhaps.