7. The SCHOTT BROTHERS
& WORLD WAR II (1938 - 1945)
In the late 1930s, the Schott brothers divided their shares among their wives and children. The annual shareholders’ meeting was established annually in November, less than two months after the end of the fiscal year on September 30th of each year. At the first shareholder meeting on November, 20, 1938, a total of 15 Schott family relatives and shareholders were in attendance. Indeed, the ownership of the brewery was a rather large family affair, even though the management remained vested with the brothers and directors. During this first year, meetings were held at 512-537 Lehmer St., believed to possibly be in a room of the Brew House.
On March 15, 1939, Chris resigned, possibly due to one or more factors involving; his other business obligations, being of an age (71 ) and the oldest of his other brothers in this brewery venture where he was reluctant to be involved in a new business, or the substantial expenditures required to make the brewery efficient. Lou assumed the Secretary position that Chris had occupied and also continued to act as the Treasurer. The official address of the Special Board meetings in 1939 was 535 Lehmer St. and probably continued to be located inside the Brew House. However, at the annual stockholders meeting later that year, the address was permanently changed to 528 W. 12th St., which would remain the office address for the brewery until it closed. These offices were believed to be in or adjacent to what is now the Riedlin - Schott Room in the South Wing of the Kenton Co. Government Building. It appears that the stock held by the Chris Schott family was equally divided among the other three brothers, and the total number of owners attending the annual meeting beginning around 1940 was reduced to only these brothers and Directors, with proxies from their family members. The annual salary of each Director from 1938 until 1941 was $3,000.
PRE-WORLD WAR II (1938 - 1941)
Management & Building Improvements
The Articles of Incorporation and By-Laws for the Bavarian Brewing Co. were registered in Kentucky and approved in January, 24, 1938. The brewery was established with $152,000 in capital stock, and each Schott brother received 190 shares with a par value of $100 share. Each brother was also officially named a Director of the corporation. Collectively, the brothers owned 50% of the corporate stock and there were no other shareholders. The maximum liability or debt limit was set at $80,000. Initially, Will's brother George Schott was named the Board Chairman and Chris the Secretary, with no other officers elected. On January 26, 1938, the Directors established the corporate By-Laws. At that meeting, the brothers decided to forgo the position of Chairman and elected George as President, Will as Vice President, and Lou as Treasurer; Chris retained his position as Secretary. (Please see Corporate Material and the complete Articles and By-Laws).
ACQUIRING THE BREWERY OUT OF BANKRUPTCY
The Bavarian Brewing Co. went into bankruptcy and was ordered to be sold in December of 1937. To salvage the brewery, William C. Schott (Will), the husband of William Riedlin's daughter Lucia, acquired the brewery property along with three of his brothers, Chris, George and Lou. They paid $55,000 for the brewery property and all its assets, plus the assumption of $76,000 in liabilities. While this deal may have seemed like a bargain, the brewery had had difficulties breaking even when it was operating in receivership and had previously operated at a deficit. In particular, the brewery needed a great deal of improvements and working capital before it could become profitable. From February through September of 1938, the Schott Brothers spent $100,282 on plant and equipment, according to a note on page 22 of an audit report for Bavarian by Roden & Weiss in 1945. These expenditures were primarily for reconditioning the buildings, equipment and trucks to place these facilities in efficient operating condition. So, the total cost for the brewery a year after it was sold, including these additional expenditures and liabilities, was about $230,000. It must have been rewarding for Lucia to help her family retain ownership of the brewery. However, it required a substantial financial commitment, and they must have realized it would be challenging as well.
The Schott Brothers had been involved in successful businesses before acquiring and reestablishing the Bavarian Brewing Co. They included a business their father had started, the J.M. Schott & Sons Cooperage, and businesses the brothers began after the passing of their father; the Cincinnati Galvanizing Company, Schott Realty, and the WFBE (1200 AM) radio station, which became WCPO after the brothers sold it. The brothers had decades of experience working together in different types of businesses. (Please see The Schott Family.) Their experience with the cooperage had given them some experience in the brewing business, and collectively the brothers had sufficient capital to invest in the brewery and make it profitable again.
Note: There were also other unrelated Schott families in Cincinnati. One of these was the Walter Schott family and his son’s family, Charles and Marge Schott. However, these families were not related or connected with Schott family involved with the Bavarian Brewery.
The Main Brewery Complex
The Schott Brothers acquired the same Bavarian Brewery site in late 1937 as their predecessors did several years earlier. This site excluded some of the older buildings that were no longer needed, which fronted on W. Pike Street and were sold between 1925 and 1932. (See the Riedlin Co's. and the Reopening.) What remained were most of the newer buildings, which consisted of all of those located between Lehmar Avenue and W. 12th Street. Also included was the southwest corner of Main and W. 11th Streets, lying north of Lehmar Avenue, for employee parking and truck storage. The appearance of this site during the 1938 to 1947 period is outlined in the aerial photos below.
Shortly after the Schott Brothers acquired the brewery, they repainted the red brick buildings a cream or pale yellow color. Shown in the photos are different views of main brewery complex in the early 1940s. Left to right are; 1) The Stock House, Wash and Racking Rooms, and the Brew House, 2) the Brew House and Mill House, with the stone structure of a former ice house in front, and 3) the Mill House from 12th street, also showing a portion of the former ice house in front. Please compare these photos with those just a decade earlier contained in the Great Depression & Reopening. Note: The Stock House, beginning with the cars to the left in photo 1, no longer remains. But the Brew and Mill Houses are now part of the Kenton Co. Government Center.
These aerial photos were taken in the late 1940s, but have been annotated to reflect the property that comprised the brewery when it was incorporated by the Schott Brothers in 1938. The brewery site is shaded in yellow. The photo on the left has buildings identified according to letters and numbers identified in previous periods. Those buildings not shaded had been sold and owned by others. The aerial on the right has labels to identify the brewery buildings.
Shortly after the Schott Brothers made improvements to the brewery in 1939, bottled beer was offered in four sizes (12oz., Quart, Half Gallon and Gallon) and advertisements began to appear in newspapers. The main brands the Schott Brothers first used were simply Bavarian Beer for the unpasteurized beer, and Bavarian Master Brand Beer for their pasteurized bottled beer. During the spring they also offered Bavarian Bock Beer. Even though there was an effort to briefly market Riedlin Select Beer by the Voorhees management (1935-1937), it appears the success of this brand did not continue after Prohibition - and more than 15 years after it was last brewed. Consequently, this brand was eliminated by around 1939.
However, about the same time Bavarian discontinued Riedlin Select Beer, they began distributing another beer, Cincinnati's Pride Brand Beer. They hoped would be more attractive to the market across the river from Covington. The name and label of this beer commemorated the Union Terminal train station that was completed a few years earlier. It appears that Bavarian acquired this brand from Old Munich Brewing Co. in Cincinnati, a couple years after it went out of business in 1937. Evidently, this brand was also not well-received and production may have lasted for only a couple of years. However, around 1940, the new owners of the Bavarian Brewing Co. decided that besides producing a lager beer, they also needed to offer an ale. The named it Schott (Extra Pale) Ale, after their family. This brand continued until the mid-1950s. Labels used by the Bavarian Brewing Co. in the late 1930s and early 1940s are shown below. For additional labels during this period and a summary of most labels the brewery used, please visit Beer Labels.
A Centennial Celebration
In 1940, to celebrate the Centennial of Kenton County, KY (est. in 1840) and the Bavarian Brewing Co., a banquet was held. Some pictures of the event are shown below. Some months before this banquet, the son of William C. and Lucia Riedlin Schott, William Riedlin Schott (Bill) joined the brewery. Bill had graduated from University of Cincinnati with academic honors (Phi Beta Kappa). Also, in 1940, Bill's brother Louis, who was five years younger, had graduated from Western Hills High School in Cincinnati, which Bill had attended. Louis began attending Dartmouth College that fall. Several years earlier, Will provided financial assistance for some murals installed in this high school, including one by the Cincinnati artist Edward Volkert, which remains today and can be viewed here.
December, 1940. Bavarian Brewing Co. hosted a banquet during the Centennial of Kenton Co. On the top row far left, seated at the middle at right of the main table were George and Will Schott, Pres. & V.P., respectively, with their wives. On the upper right photo in the background, a band is providing music for the occasion.
Shown on the bottom row is an ice sculpture that spells Bavarian. On the far left is William C. Schott, Vice President, and on the far right is George Schott, President. The other men are unidentified. Source: Schott Family Collection.
Schott Brothers As Owners & Operators
Around the time of the above banquet in 1940, the Bavarian Brewing Co. commissioned multiple advertising items. One example is the neon "Spinner Clock" shown to the side, which carried the name "Schott Brothers Owners and Operators.” This reference to the brothers was only used from the late 1930s until the early 1940s, and seemed to be discontinued at the outset of the WWII years. Also please refer to Signs: Neon, to view other signs used in this same period. The brothers also frequently advertised. Please see Ads: 1935 -1945.
Men With Bavarian Master Brand Beer
c. Early 1940s
Shown in this photo is Lou Schott, far right, and Will Schott, standing at the far back, gathering with friends and business associates. They are likely in a private room at one of the clubs in Northern Kentucky, or a hotel in Cincinnati. As shown by the bottles on the table, they are enjoying Bavarian Master Brand Beer. The labels on the bottles can be more easily distinguished by clicking on the picture. These labels were the same as the one shown above with the orange circle.
Bavarian Brewing Co. Delivery Trucks
This photo was taken directly in front of the Brew House. Since the building was not yet painted, the picture is likely from the late 1930's or early 1940s, before WWII. The italic lettering on the trucks was used from 1938 until 1946. Thereafter, the use of Old Style Beer in Gothic style letterings on their trucks and labels were used. The trucks are located in what has become the atrium area of the Kenton Co. Gov't. Center and next to its Information Desk today. (Source: Berhinger-Crawford Museum.)
The Brew & Mill Houses By Floor
The main brewery structure consisted of the Brew & Mill Houses, connected together, described and depicted in the previous section. These structures were five stories in height and situated just west or to the left of the Stock House. They were built in 1911 and renovated after Prohibition. Each of the floors, from the first to fifth, are shown in the photos below.
A unique aspect about the Cincinnati-area market in the early 1900s and before WWII was the residents’ proclivity for purchasing beer in large one-half and one gallon bottles, known as jugs. (A more common reference for these jugs today is tankards, or simply bottles.) These large bottles were generally filled with unpasteurized draft beer available directly from the brewery or from local cafes. An ad promoting Bavarian 'Jug" beer is shown on the right, along with a gallon jug. In the photo collage above, the lower right photo of the bottling department depicts one-half gallon bottles being processed, and can be better viewed by clicking and enlarging the photo. The shape of the labels on these bottles is oval, similar to the label above, which were only used around 1938 through the 1940s. The marketing of beer was oriented to the family (as shown in the ad on the side), a theme also used before Prohibition. An example of this type of earlier marketing can be viewed in a flyer reprinted in the Ads Before 1919. After WWII, the preference for beer in jugs gradually declined, and the marketing of beer to the entire family was no longer used. As the demand declined for unpasteurized beer in jugs, it was replaced by the demand for pasteurized beer in 12- and 32-ounce bottles and in cans.
WORLD WAR II (1942 - 1945)
The Second World War, or WWII, began in Europe on September 1, 1939 when Germany invaded Poland. The U.S. involvement in this war was precipitated by the Japanese attack on Pearl Harbor on December 7, 1941. The war ended in Germany on May 7, 1945, but the ending of the war was not finalized until the Japanese surrendered on September 2, 1945. During the WWII years, 16 million Americans enlisted, representing some 11% of the U.S. population at that time. Usually those who enlisted were younger men in their twenties and thirties. When WWII broke out, most men that worked at the brewery and fell into this age group enlisted in the Army. The youngest son of Wm. C. Schott, Louis L. Schott, was one of those men, leaving college to do so. He briefly served in the Army Air Corp in Dallas, TX, before being assigned to the Philippines. His older brother, Bill, who had been inflicted with polio as an infant, worked at the brewery through the war.
From 1942 through 1945, WWII had an enormous impact upon daily life in the U.S. The shortage of men required more women to seek employment in factories and assume occupations that were normally taken by men. Ration books with stamps were issued to restrict the consumption of certain foods, in order to provide sufficient food and materials for U.S. troops. Besides limiting food, such items as gasoline, tires and building materials were also rationed or restricted at home. The Revenue Act of 1942 also increased personal and corporate taxes to help fund the war, supplemented with Defense and War Bonds. However, WWII had the overall effect of strengthening the U.S. economy and helping it to emerge from the Great Depression.
The brewing industry was severely impacted by WWII. Rations restricted access to the grains, ingredients, and containers needed to produce beer. Beer deliveries and distribution were also limited to help conserve the consumption of gasoline and other materials used on the battlefield. A large segment of beer consumers - young men - were no longer purchasing beer; they were abroad fighting a war. During WWII, brewers also shifted their production patterns to participate in the war effort. They were involved in recycling efforts of cans and bottles and promoted War Bonds. A certain percentage of their beer was also required to be provided to Allied troops. For U.S. and Allied Troops abroad, beer was commonly used to help boost morale during periods of R&R (rest and recuperation). Since it was unnecessary for brewers to pay federal tax on beer sent to the troops; special labels were used to indicate this exemption, proclaiming "Withdrawn Free of Int. Rev. Tax for Exportation." One beverage that Bavarian Brewing Co. provided to the troops in WWII was Covington Ale. (See below.) It appears Bavarian distributed beer to troops only in bottles, in contrast to some other breweries who provided beer in cans; these were usually painted a dull olive green color for camouflage purposes.
1942-5. The images below were likely trolley posters that were placed inside street cars shortly before and during WWII. They were paid for by businesses, like Bavarian Brewing Co., and encouraged the purchase of bonds to help fund WWII. Before 1942, these bonds were known as “Defense Bonds,” as shown in the illustration on the left below. However, the name was changed to “War Bonds” after the U.S. entered WWII, as shown by the poster on the right. Over 80 million Americans purchased these bonds out of a U.S. population at that time of about 135 million.
1944. A Covington Ale label is depicted on the left. Added writing appears to indicate that this ale was consumed on the Island of Pavuvu on September 30, 1944, by someone whose initials were J.W.C. This island is part of the Russell Islands and situated northwest of Guadalcanal. It was formerly a coconut plantation and was occupied by the 1st Marine Division for R&R during WWII. Even though the island was free of malaria - a common ailment in the war’s Pacific theater - the conditions were difficult and challenging. They ranged from a hot, muggy climate and a proliferation of rats to the stress of war. One bright spot for troops on the island was Bob Hope's USO performance in early August, 1944 - just a couple months before this label was dated.
c. 1944. The photo of soldiers accompanied by some of their spouses was taken in front of the Bavarian Tap Room. Standing on the far left is Wm. C. Schott, V.P.; his son Bill Schott is standing to his right, on the other side of a woman in uniform. The small sign shows the patriotic slogans then in use: "Bring Back Returnable Deposit Bottles Promptly" and "Conserve Vital Materials" "It's Your Patriotic Duty." This group of soldiers may have been active in recycling efforts, and the brewery was clearly showing their appreciation for the service of enlisted men and women.
WORLD WAR II (1942-1945)
Management & Improvements
During the WWII years, rations were in effect, the brewery was operating with limited supplies and no significant improvements were made. It is unknown specifically what the production of Bavarian was before the U.S. entered WWII in lat 1942, but it is believed production was expanded to at least 50% over the capacity of the brewery after it reopened to about 150,000 barrels annually. Between 1942 and 1944, the brothers only had one or two Board meetings every year and limited decisions were made. For the fiscal year ending September 30, production had declined to 90,107 barrels in 1944 to 85,447 barrel in 1945. The Directors had increased their salaries to $7,000 per year in 1942. But due to certain government restraints, their annual salaries were required to be reduced between $5,500 and $4,500 in 1945.
As WWII was ending in 1945, Bavarian realized the end of the war could be favorable for their business, if they were willing to increase production by improving their capital structure and making improvements. To do so, the indebtedness was raised from $80,000 to $600,000 and the company’s Article 4 was amended, allowing an increase in capital stock to $302,000. This was done by adding 1,500 shares of non-voting Preferred stock with a par value of $100 with a 5% dividend, while maintaining 1,520 shares of common stock at the same par value. The Preferred issue was partly due to the conversion of $70,000 in personal loans provided to the firm from Will and $35,000 from Lou. With changes in the corporate documents and the addition of more capital, a new bottling plant was approved at a cost of not more than $125,000.
Equally important, changes occurred with the Officers and Directors. In November of 1945, George resigned, Lou replaced George as President, and the son of Will, William R. Schott (Bill), replaced Lou as Secretary/Treasurer. In addition, the Board added a fourth Director, Joseph Vehr, who was the comptroller of the company. Vehr had no relations with the Schott family and received mostly bonuses in lieu of stock, but he did receive a few shares of stock for administrative purposes; he was the only non-family member to ever hold stock. Together, these changes positioned Bavarian Brewing Co. to be successful as WWII came to an end.
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 7: 1938 - 1945:
WWII begins as the Nazi’s invade Poland (1939)
Limited TV broadcasts begin (1940)
Franklin D. Roosevelt reelected as President (1941-1945)
Attack on Pearl Harbor; U.S. enters WWII (1941)
Revenue Act of 1942; Rations & recycling (1942-45)
WWII battles (1942-45); Germany & Japan surrender (1945)
Nuremberg trials begins & United Nations established (1945)
Harry S. Truman becomes President (1945-1949)
For a summary of all the periods in the history of the Bavarian Brewery, please see the entire Timeline.
Bavarian Brewing Co. Corporate Minutes: Book 1
Newspapers.com and Cincinnati Enquirer
Newsbank, Inc. and the Kentucky Post
Robert A. Musson, M.D., Bavarian Brewing and the rest of Northern Kentucky, Volume IX, pgs 24 & 25.
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.)
The background is a photo of the Schott Brothers aroud 1903. L. to r. from the top are Will, George, Lou, Chris and John, It was taken about three decades before all the brothers, except John, purchased the Bavarian Brewing Co. in 1937.