When Whiskey Flows

P: Not since Goldman, Sachs floated Blue Ridge Corp. has a new stock issue been gobbled up the way one was last week. Through Manhattan's Lehman Brothers, Schenley Distillers (Golden Wedding Rye) sold 230,000 shares of its stock at $15 a share. Advertisements ("a matter of record only") had not even appeared before the stock was whipped up to $46 a share on a when-issued basis. P: Within 24 hours after Illinois had formally ratified the 21st Amendment last week, Hiram Walker-Gooderham & Worts, Ltd., potent Canadian liquor company (Canadian Club Rye), announced that it would build a huge distillery at Peoria. Construction will begin in January with an initial investment of $1,000,000. The distillery will consume 20,000 bushels of grain per day, will have a daily output of 100,000 gallons of bourbon and rye whiskey. P: The price of medicinal whiskey, demand for which has increased enormously since relaxation of Federal regulations (TIME, May 22), was upped $5 a case. Such news as this last week sent speculators into a frenzy, sent "whiskey" stocks ballooning. Around & around boardrooms ran the story of how you could have made 2700% on your money if you had bought Hiram Walker last year at $2 a share and sold last week at $56; of how you could have bought National Distillers last spring for $17 and sold it last week for $117; of how Canadian Industrial Alcohol jumped from $2.50 to $24. These were facts. But thicker flew the rumors of how this company or that planned to enter the whiskey business, reap fat profits from the fact that Americans are proverbially a whiskey-drinking people. And the stockmarket soared to New Deal highs. Standard Brands lately announced that it might make gin as of old and its stock was given a whirl. Commercial Solvents and U. S. Industrial Alcohol are definitely entering the whiskey business.* So all the chemicals were given a whirl. Other chemical companies will probably enter the field not as whiskey makers but as distillers of spirits for blending purposes. For whiskey is not made in a day but in four to five years. Old whiskey will be cut with new or with grain alcohol. But because whiskey is cheap to make (as low as 60-c- a gallon in Canada where four-fifths of the retail price is tax), many a local promoter was drafting plans last week for a small distillery, when and if. There are only seven U. S. whiskey companies in business today. Under Federal license they produce medicinal whiskey. Five of them are privately owned--one in Philadelphia, five in bourbon-making Kentucky. Of the other two, most important is National Distillers. And until Schenley bounded onto the market last week National Distillers was the only U. S. whiskey stock available for trading. In National Distillers warehouses is 70% of all U. S. bonded whiskey. Some 80,000 of its 2,000,000 cases it declared as a dividend on its common stock last August--one case of 24 pints, preWar, for each five shares, payable the instant whiskey flows. Its trade position is assured by its old brands: Green River, Old Grandad, McBrayer, Old Taylor, Mount Vernon, Sunny Brook. Seton Porter, National Distillers' able, socialite president, further timbered his stronghold last month by acquiring the old Large and Overholt distilleries. And he has tied up with U. S. Industrial Alcohol by forming a jointly-owned distilling company, Penn- Mar-Kentucky, Inc. Seton Porter joined his brother Henry Hobart's famed firm of consulting engineers, Sanderson & Porter, a few years after he was graduated from Yale in 1905. A partner since 1913, he took on National Distillers after the 1924 reorganization. Tennis keeps him thin and looking younger than his 51 years. Mrs. Porter's bathroom in their Park Avenue apartment is widely known among decorators for its black & white marble floor, jade ceiling and mirror framed in black glass rising from the edge of the tub. President Porter's chief competitors will not be U. S. whiskey makers but Canadians and Britain's great whiskey trust, Distillers Co. Ltd., whence come the most famed brands of Scotch--Black & White, Haig & Haig, Johnnie Walker, Gold Label, White Horse. The six leading Canadian companies are flirting with the idea of a whiskey trust, but so far Hiram Walker has found the terms unattractive. U. S. whiskey production (rye and bourbon) was on the decline before the War. From 1910 to 1917 (last normal year) it dropped from 82,000,000 gallons to 57,000,000. But whiskey was still far & away the U. S. Drink. In 1917 rum production was 2,800,000 gallons, gin 5,700,000, brandy 8,200.000.

*Last week U. S. Industrial Alcohol wrote down its plant & equipment (carried at $29,000,000) to $1. Commercial Solvents did the same in 1930. Reason: to eliminate depreciation charges, boost profits.

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