6. The GREAT DEPRESSION
& The REOPENING OF BAVARIAN BREWING CO.
(1932 - 1937)
THE GREAT DEPRESSION & THE REPEAL OF PROHIBITION
The ending of Roaring Twenties, and the beginning of the Great Depression, is often considered to be when the great stock market crash occurred on October 29, 1929, known as Black Tuesday. However, it took a year or two for the economic impact to have more serious consequences. By 1932, the country was truly in one of the darkest times of the Great Depression. It was a horrendous period for most people in this country, and for many people in other countries as well. With the worsening of the economy, the continuation of Prohibition - which was widely considered to be a failure - and the expansion of organized crime, the country was ready for a change. In 1932, Franklin D. Roosevelt campaigned to help stimulate the economy, in part by repealing Prohibition. Shortly after he was elected, the Cullen-Harrison Bill was enacted, legalizing beer with an alcohol content of no more than 3.2 percent; it came into effect on April 7, 1933, thus allowing breweries to reopen. Over 100 permits were granted in Cincinnati for beer sales on the first day, and bars were overloaded with patrons. To commemorate this occasion, April 7 was declared National Beer Day. Congress then proposed the 21st Amendment to repeal Prohibition, effective December 5, 1933. Within about a year, 785 breweries throughout the U.S. opened.
The Reopening of Cincinnati Breweries
Since the Bruckmann Brewing Co. owned the only brewery that continued to operate during Prohibition in the Cincinnati area, making "near beer" and sodas, it was the first to reopen with its Brucks Beer. However, many breweries did not reopen, including the three largest in Cincinnati before Prohibition, Morelein Brewing Co. (the largest in Cincinnati and the fifth largest in the country), and the next two largest, Hauck and Windisch-Mullhauser breweries. After 14 years of Prohibition, there were various reasons why numerous brewers did not reopen. Some breweries were sold and used for other purposes, previous brewery owners had passed away or became involved in other businesses, and the heirs of brewer owners either were no longer willing or able to get back into the beer industry.
From some 30 breweries operating in the Cincinnati area before Prohibition, there were only five breweries in Cincinnati that operated under the same names afterwards - Bruckmann, Foss-Schneider, Jackson's, Schaller and Hudepohl, and two in Northern Kentucky - Bavarian and Wiedemann. The other breweries that reopened in the Cincinnati area after Prohibition were mostly former breweries that operated under different names and ownerships with new brands. For example, Burger occupied the former Windisch-Mullhauser brewery producing Lion Beer. In addition, the former Ohio Union Brewery was acquired by Bruckmann Brewing Co., as their Plant No. 2. Further, some new breweries were built, as discussed in section 8A. Heidelberg Brewery, which was opened in 1934 and located in Covington near the Bavarian Brewery. Other breweries that opened in Cincinnati within a few years after Prohibition were; Clyffside (becoming Red Top), Delatron, Old Munich, Schoenling and Vienna. In total, about a dozen breweries were operating in Cincinnati by the mid 1930s, less than one-half the number that existed shortly before Prohibition. Whereas a small brewery in an older building could be profitable before Prohibition, afterwards, it became necessary for a brewery to be larger and to have less plant obsolescence in order to be successful.
ARRANGEMENTS TO REOPEN THE BAVARIAN BREWERY
Interestingly, initial efforts to reopen the Bavarian Brewery were not made by William Riedlin's son-in-law, William C. Schott (Will), who married Lucia Riedlin. Will had been a Director of the Riedlin Beverage Co. and the President of the Riedlin Company (holding the rights to Bavarian Brewing Company) before Prohibition. Instead, the initial attempt to open the brewery began with Leslie Deglow who incorporated The Bavarian Brewing Co. in the state of Delaware in 1932, becoming its president. Leslie was an architect and relative of Julius Deglow, who first established the brewery in 1866. Murray L. Voorhees, the husband of William Riedlin's granddaughter Rosemary, also acquired some shares in the brewery in 1932. By May 1933, Voorhees had become President and Deglow was Secretary/Treasurer. This change in positions seems to have occurred in connection with the Voorhees acquisition of the main brewery property from Riedlin heirs. It may have also been aided by a loan Rosemary had made to the newly organized brewery, using part of her inheritance from William Riedlin. Regardless, announcements were made by Voorhees in 1933 that he and others would reopen the Bavarian Brewing Co. Stock solicitations and efforts to raise capital to acquire new brewery equipment and refurbish the brewery took over a year and longer than expected. (Please see Corporate Material for a copies of the solicitation, the notices and a stock certificate owned by Murray Voorhees.)
A possible reasoning why Will Schott did not attempt to reopen the brewery initially after Prohibition is that he had been successful and fully occupied as the General Manager of the Cincinnati Galvanizing Co. for over 20 years. He and his brothers owned that enterprise, as well as J.M. Schott & Sons Cooperage and other businesses. Will probably realized it would be a very capital-intensive and time-consuming to reopen the brewery and make it successful, especially since he was already committed to the other family firms. Even though Will and his wife Lucia had established a family across the river in Cincinnati for 20 years, Lucia stayed in touch with her sister, cousins, nieces and nephews. To celebrate with her relatives, she would hold a Cousins Party every summer. So, she was very approachable and apparently supportive when one of her relatives approached her about reopening the Bavarian Brewery. In addition, her husband Will, likely didn't want to strain any relationships with his wife's family. Initially, both Lucia and Will may have thought it was more financially prudent to allow the property to be operated by another family relative.
THE BREWERY IN 1932
Between 1925 and 1932 several of the older brewery buildings between W. Pike St. and Lehmar Avenue were sold by the Riedlin Company, which included the assets of the Bavarian Brewing Co. to Lucia Riedlin Schott and her husband, William, and resold. (See period 5. Prohibition and the Riedlin Co's.) Most of the newer buildings and all of those located between Lehmar Avenue and W. 12th Street were retained and would form the basis for the brewery after Prohibition. In addition, the southwest corner of Main and W. 11th Streets, lying north of Lehmar Avenue, was also retained, and would be used for employee parking and truck storage. The site outline of the brewery in 1932 is represented below. The letters and numbers on the buildings primarily correspond to their use before Prohibition and are discussed in more detail in periods 3. Late 1800s and 4. Early 1900s.
The Ice Plants (F and 11) were no longer needed for brewery operations.
The old Brew House (C) and Mechanical Building (D) were no longer needed, even before Prohibition, because they had been replaced by newer buildings.
Those buildings that were no longer used for brewing were sold by the Riedlin heirs before Prohibition was repealed, primarily to George Rehkamp, who then leased the buildings to other users.
As mentioned, nearly all brewery equipment had previously been removed from the brewery and sold when the Riedlin Company began to be liquidated in January, 1925. Therefore, a great deal of capital was necessary to invest in new machinery and to update the buildings after a decade of neglect. Photos taken in 1932 show the extent of disrepair of the buildings and are reprinted below. The process of raising capital from stock solicitations took about two years, and approximately another year was needed to make the brewery operational. During this 1932 to 1934 period, before the reopening of the brewery, the Bavarian Brewing Co. did not have offices on the brewery grounds. Instead, they operated from two other locations. One was located in First National Bank in downtown Covington, and the other was a small office used in the efforts to obtain capital located at 150 Broadway, Suite 1113, in New York City. (Please see Letterheads for 1934.)
1932. The photo on the upper left was taken from a stock offering prospectus in 1932.(See Corporate Material.) Interestingly, the buildings shown in the foreground were not actually part of the brewery property when it reopened in 1935. The other photos were of the brewery property and were taken on November 28, 1932. (Source: Kenton Co. Library.)
The BREWERY REOPENING IN 1935.
The Bavarian Brewing Co., under Voorhees and DeGlow, evidently had some difficulties in obtaining the financing to reopen the brewery, and it also took some time to acquire and install the new brewery equipment. They also needed to obtain a new brewmaster, and were able to obtain Fred Faller, originally from Bavaria. The previous Bavarian brewmaster, Joseph (Sep) Ruh, had become the brewmaster and officer with the Heidelberg Brewing Co., which opened in Covington, KY, in 1934. The grand reopening for the Bavarian Brewery occurred on Saturday, June 1, 1935, attracting some 8,000 people. Attendees were treated to music from the Al Shield's German Band, along with food and, of course, free beer.
Despite the reopening of the Bavarian Brewery, the economy was still in the midst of the Great Depression and making it challenging to raise additional capital required to operate the brewery. Because of these financial difficulties, the brewery was not immediately restored to its previous production capabilities. It was reopened with an annual capacity of 125,000 barrels, far less than its annual production of 216,000 barrels before Prohibition. It appears the two brands of beer offered upon its reopening were Riedlin's Select Beer and Bavarian. A label and a beer tap marker for these brands are shown below.
C. 1937. The label on the near right was believed to be used for kegs sold in Ohio. It appears Riedlin's Select Beer was discontinued shortly after the brewery was sold in bankruptcy. The beer ball knob on the far right is possibly the first beer ball knob tap marker style used by Bavarian after Prohibition.
C. 1937. Above is one of the few signs that were made under the Voorhees Management. Please Signs: Neon for more information.
Even though the neon sign on the left, produced in 1937, indicates that Bavarian Beer was available in bottles, this may have only occurred for a short time - if at all. Apparently, nearly all the production was in kegs instead. Most advertisements for this period indicated that Bavarian Beer was served "On Tap" from kegs, and were intended for saloons. Only a couple ads for Bavarian or Rieldin's Select Beer made directly by the brewer were found between 1935 and 1937. (See Bavarian Ads: 1935 to 1945.) In fact, very little advertising memorabilia has been found for this 1935 - 1937 period; it appears the brewery at this time had a restricted operating budget that didn't allow for extensive advertising.
DIFFICULTIES FOR THE BREWER & BANKRUPTCY
From the above, it was apparent that after its reopening in 1935, the Bavarian Brewing Co. was operating under significant financial constraints and had insufficient working capital. Furthermore, a lawsuit was filed against Bavarian Brewing Co. in 1936, involving a claim of $25,000, alleging that the management of the brewery had been transferred to Frederick Drybough with the Beverage Bureau in Louisville, KY. Even though this was refuted by the Voorhees management team, it was a harbinger of difficulties to come for the brewer. What was probably the final downfall for Bavarian Brewing Co. was the Great Flood of 1937, which occurred in late January of that year. Even though the brewery was about a mile south of the Ohio River, the flood reached portions of the brewery and some buildings sustained water damage. This damage, along with limited reserves and a poor cash flow, caused the brewery to have difficulties in meeting other financial obligations. As a result, the brewery was forced into receivership as a going concern in April, 1937. Former congressman Orie S. Ware was appointed as the receiver and he requested that John S. Bruckmann be installed interim managing supervisor of the brewery. Bruckmann, formerly with a brewery in Newark, OH, was part of the Bruckmann family of Cincinnati that produced Brucks beer. He also had a relative that married into the Schott family.
Brewery assets were initially appraised at $457,02 and liabilities were claimed to be $260,432. However, as the case unfolded, claims rose to $395,806 by September, 1937. The largest default was on a loan from Rosemary Voorhees for $161,000. However, by the time this case was being heard in court in the fall, Rosemary had obtained a divorce from her husband and had legally changed her name back to Rosemary Riedlin. She claimed her loan was supposed to be converted into stock and purchased by others so that she would receive her loan back in cash. However, that didn't occur. To resolve debts with their creditors, the Bavarian Brewing Co. was forced into Bankruptcy Court and sold in December, 1937. Not unlike other many local brewers, the operation of the Bavarian Brewing Co. was unsuccessful for the originally investors in this brewer after Prohibition.
Even though Bavarian suffered a bankruptcy, the Great Depression did not spell the end of the brewery. Learning of its fate, the husband of William Riedlin's daughter, Lucia, William C. (Will) Schott, and three of his brothers decided to step in. The uncertain future of the brewery motivated Lucia and Will to acquire the brewery in bankruptcy, keep its ownership within their families and uphold their family's reputation. Evidently, Will also viewed it as an opportunity for his two sons, and the grandsons of William Riedlin, to continue the legacy of the brewery as well. (Please see the The Schott Family.)
T I M E L I N E
To place the events described above in perspective, following are some major events that occurred in the Bavarian Brewery Time Period 6: 1932 - 1937:
Franklin D. Roosevelt is President (1933-41)
21st Amendment - Prohibition is repealed (1933)
Heidelberg Brewery in Covington, KY opens (1934)
The first flat top and cone top beer cans are used (1935)
WPA, FBI & Social Security Act begin (1935)
For a summary of all the periods in the history of the Bavarian Brewery, please see the entire Timeline.
Newspapers.com and Cincinnati Enquirer (1919 - 1937)
Newsbank, Inc. and the Kentucky Post (1933 - 1937)
Bavarian Brewing Co. Stock Solicitation, 1933.
Riedlin and Schott family items and information, including notations on photos by Lucia Riedlin.
C.B. Truesdell, (The History of) The Bavarian Brewery, 1954. (Unpublished manuscript.)
Shown in the background is the Bavarian Brewery Stock House, with the Wash House in the lower right,
taken in August of 1932.