Bavarian Brewing Co.
The SCHOTT BROTHERS & WORLD WAR II
(1938 - 1945)
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. Even though this may have seemed like a bargain, the brewery had difficulties breaking even when it was operating in receivership and had operated at a deficit previously. In particular, the brewery required a great deal of improvements and working capital in an attempt to make it profitable. It must have been very rewarding for Lucia to have her husband retain the brewery within her family, but they must have realized it would be challenging.
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, the Cincinnati Galvanizing Company, Schott Realty and a radio station, WFBE (1200 AM), 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 in the cooperage business had given them some experience in the brewing business, and collectively the brothers had sufficient capital to invest in the brewery, which was previously lacking upon its reopening.
Note: There were also other unrelated Schott families in Cincinnati, and one of these was the Walter, Charles and Marge Schott family, but they were not connected with Schott family involved with the Bavarian Brewery.
Additionally, the brothers divided their shares among their wives and children. The annual shareholders meeting was established annually in November, slightly more than a month after the end of the fiscal year, which ended on September 30th. At the first shareholder meeting on November, 20, 1938, a total of 15 Schott family relatives and shareholders attended. 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 other business obligations and being older than his other brothers. Lou assumed the Secretary position that Chris had occupied and also continued to be the Treasurer. The official address of the Special Board meetings in 1939 was 535 Lehmer St. and probably continued to be in the Brew House. However, at the annual stockholders meeting latter that year, the address was permanently changed to 528 W. 12th St., which would be at the office address for the brewery until it closed. These offices were believed to 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 rather equally divided among the other three brothers, and the total number of owners attending the annual meeting for the next few years was reduced to only these brothers and Directors, with proxies from their family members.
During the first couple of years the Schott Brothers acquired the brewery, a depreciation schedule was established for the plant and equipment, and there were significant capital costs required for the bottling department and to make the operations more productive and efficient. Larger expenditures were also needed to build a larger and more competent staff, begin effective advertising and establish better delivery capabilities, both with their own trucks and with distributors, etc. The Schott Brothers realized that the acquisition cost for the brewery, was just the beginning of costs needed to make it profitable. 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 brother received 190 shares with a par value of $100 share. Each brother also became 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 the Board Chairman and Chris was 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, Lou as Treasurer and Chris retained his position as Secretary.
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 thought to be no longer needed, which fronted on W. Pike Street and that 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. This site for the 1938 to 1947 period is outlined in the ariel photo 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 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.
It appears that important improvements were made in the first few months of the new ownership. Bottled beer was available in three sizes 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. Additionally, there was a effort to briefly market Riedlin Select Beer by the Voorhees management (1935-1937), which may have briefly continued by the Schott Brothers, possibly being eliminated in 1938. A successful name for a beer before Prohibition did not assure its success some 15 years later. Bavarian also attempted to distribute another beer around 1938; one that they hoped would possibly be more attractive to the market across the river from Covington, called Cincinnati's Pride Brand Beer. It commemorated the Union Terminal train station that was completed a few years earlier. It appears Bavarian acquired this brand from Old Munich Brewing Co. in Cincinnati, which went out of business a couple years earlier. Evidently, this brand was also not well received and production was limited. After eliminating certain lager beer brands in the late 1930s, as noted, the new owners of the Bavarian Brewing Co. decided to introduce an ale named after their family called Schott Ale around 1940, which continued until the mid 1950s. Labels used by the Bavarian Brewing Co. in the late 1930's and early 1940's 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, and 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 remain 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 Familyu
Schott Brothers As Owners & Operators
Around the time of the above banquet in 1940, the Bavarian Brewing Co. had some advertising items created for them. One example is the neon "Spinner Clock" shown to the side, which indicated "Schott Brothers Owners and Operators" - of the brewery. This reference to the brothers was only used from the late 1930's until the early 1940's, and seemed to be discontinued beginning with 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 the 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 in of the 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 for beer in the early 1900s and before WWII was the proclivity for its consumption 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 add promoting Bavarian 'Jug" beer is on the right 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 1938-1940s. The marketing of beer oriented to the family (as shown in the ad on the side) was a theme also used before Prohibition. An example of this type of earlier marketing can be viewed in a flyer in Ads Before 1919. After WWII, the preference for beer in jugs gradually declined and the marketing of beer focused 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 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, there were 16 million Americans that enlisted, representing some 11% of the U.S. population at that time. Usually the enlistments were younger men in the twenties and thirties. When WWII broke out, most men that worked at the brewery that were in this age group enlisted in the Army. The youngest son of Wm. C. Schott, Louis L. Schott, was one of those, 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 affect upon the U.S. A shortage of men required more women to be employed in factories and assume occupations that were normally taken by men. Ration books were issued containing stamps that were required to obtain certain foods, in order to provide sufficient food and materials for U.S. troops. Besides limiting foods, such items as gasoline, tires and other materials were also rationed or restricted. The Revenue Act of 1942 also increased personal and corporate taxes to help fund the war, supplemented with Defense and War Bonds. However, WWII strengthened the U.S. economy and helped it emerge from the Great Depression.
The brewing industry was severely impacted by WWII. Rations limited the grains, ingredients and containers needed to produce beer. Beer deliveries and distribution also became limited to help conserve the consumption of gasoline and other materials. A large segment of beer consumers, young men, were gone; they were abroad fighting a war. During WWII, brewers also participated in the war effort. They were involved in recycling efforts of cans / bottles and promoted the purchasing of saving of War Bonds. A certain percentage of their beer was required to be provided to Allied troops. Providing beer to U.S. and Allied Troops abroad was a way to help boost morale during periods when they were on R&R (rest and recuperation). In doing so, it was unnecessary for brewers to pay federal tax on such beer, and labels would indicate this by saying "Withdrawn Free of Int. Rev. Tax for Exportation." A beverage Bavarian Brewing Co. provided to the troops in WWII was Covington Ale. (See below.) Even though Bavarian distributed beer in WWII to troops only in bottles, when other brewers provided beer sent abroad to the military in cans, they were were usually painted in 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 in the to help fund WWII. These bonds were first called Defense Bonds before 1942, 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.
1944. A Covington Ale label is on the left. Some writing was added that appears to indicate this ale was consumed on the Island of Pavuvu on 9-30-1944, 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. Even though the island was free of malaria, the conditions were difficult and challenging. The one bright spot for those troops on the island was Bob Hope's USO performance in early August, 1944, about 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. and his son Bill Schott, is to his right on the other side of a woman in uniform. The small sign on the upper right of the photo says "Bring Back Returnable Deposit Bottles Promptly" and "Conserve Vital Materials" "It's Your Patriotic Duty." This group of soldiers may have been present in recycling efforts and the brewery was 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. Between 1942 and 1944, the bothers only had one or two Board meetings every year and limited decisions were made. Still, the brewer had been doing well the previous three years. 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 made improvements. To do so, the indebtedness was raised from $80,000 to $600,000 and Article 4 was amendment 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 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 hired Ray Hoffman as the General Manager and 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 did receive a few shares of stock for administrative purposes, and was the only non-family member to ever hold stock. The aforesaid changes positioned Bavarian Brewing Co. to be successful post WWII over the next several years.
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.
Trousdale, C.B., A History of the Bavarian Brewery, 1954
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.