Interview with Bill Samuels, September 6, 1984

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Thomas Syvertsen: A period of blended whiskeys, and then a period of straight whiskeys ________ . It may be that one of the reasons that

Bill Samuels, Jr.: A lot of the rum side of the line came after repeal. In order to get whiskey you had to buy a case. You got a couple of bottles of bourbon, but you had to buy a lot of rum. There are some really neat stories about that.

TS: We would like to hear those.

BS: You have got to get them from the old guys.

TS: It may be not just those as a proposition, it may be that one reason that the distilled whiskey business has been in somewhat of a decline, has been that the industry has not done much with the understanding of American taste or

BS: That's not a backward look, that's a frontward look. See, and the provincial 1:00people that we have had are traditionally looking backwards, inward, day to day.

TS: How do you explain people going from blended whiskey to straight whiskey, or in the sixties going from straight whiskey to

BS: I wish I could show you. I have got, I'll tell you what I am going to do. You are not going to solve anything in a day. I was asked to talk about that very same thing and how I was asked to do it was, a friend of mine in Texas got drunk, and was very involved in the sales and marketing ordinance in Dallas and he bought a full page ad in the Dallas newspaper. And then he woke up and realized what he had done and didn't know what to do with it. So he offered it for us to use. He said here you use it, I don't have any need for it. And I could do anything I wanted to and that's what I talked about. And I am going to send you a copy of it. I am going to have it ready in about a, but it goes directly at that point, but it tries to go a little lighter at it than head on. But its, I mean that's, its the answer to the question that you asked me.

Sherrill Redmon: You said that whatever they learned from the past might not be applicable. You wouldn't pick it up and say, "This is what they did in 1940 that worked, I'll do that this year." But you could say, "The thing they did in 1940 was to look beyond what they were doing the last year, that's what we need to do now." Which I mean, in general, in just a conceptual way, it could be useful to people in the industry to be able to have some idea of the past of the industry and a lot of industries, maybe not so much in this one, but there is this musical chairs at the top where the people don't have any idea of product history or the company's history or any of the tradition that goes with it.

BS: If you were to ask me what part of what you are doing has any relevance to helping us, the Kentucky distillers, okay? Then anything prior to pro, anything prior to about the Civil War would help a great deal. Anything after that would help very little. Okay, not necessarily the Civil War, but after, certainly after about 1905, 1910. Because

SR: Because that was its boom year?

BS: No, I am talking about what role might history play that would be relevant in helping we, the Kentucky distillers, interest media in pursuing some facet of the great American spirits. Okay, well, the interesting part of bourbon whiskey is its early role in the social development of the West, how it got here in the first place, those wonderful little accidents that, and that's mainly the Elisha Craig, James Crowe, even certainly through the first bottling in 1870 with George Garvin Brown. Then it starts to descend in its, it gets a little dull, 4:00but up until about the. . . Well, hell how they got through the Civil War was absolutely incredible. If you, you take our little situation for instance, and think, and we sit here and ring our hands about how hard doing business is. Now how would you like to be running a distillery during the Civil War, trying to stay in business, with troops going back and forth. Now we know when there's insurrection, what's the first thing the population wants to do? And that is break in a whiskey store. Right? Well, it was the same thing during the war, they, all the troop movements through the state just happened to line up against distilleries. They would go this way to get to a distillery to spend the night. Well you have got to wear a gray hat one night and a blue hat the next night and all the time John Hunt Morgan's blowing up the trains, the L & N's trying to stay in business so they can bring barrels and, the barrels in and the grain in, 5:00and get whiskey out. And then in our particular case, of course, I am sure everyone of them had little old idiosyncrasies that even made it worse. My great, great grandfather who was, who operated the distillery was also sheriff, he was High Sheriff in Nelson County. And most of the thugs that were running around then, we were kin to them. Now you know I am talking about the, Frank and Jessie James, and the Pence's, Donnie and Bud Pence who were members of the Quantall's army and the original James gang. These were families so and they, when they came from Missouri in '65 they came to Bardstown. They, and we were hiding them out. So you think about having to keep a lot of balls up in the air just to keep the damned business running. And I have got some absolutely 6:00wonderful things where my great, great grandfather would provide money to one cause over here and then would be a patron over here on this side. It was just ridiculous and all the family members going this way and that into the war.

TS: Hasn't this policy of going to both sides really continued right up to the present, I mean in terms of, for instance politics. Going back to the forties and fifties hasn't the industry largely been approached in Kentucky by politicians from both sides and basically given to both sides.

BS: That's, yeah. We don't, we've never had, now I am not saying it would have been any different if DSI would have had more back bone. But clearly, if you were to look through and say what is the politics of our industry it is we have demonstrated the inability to, the inability over time to manage the courage of 7:00our convictions. Time and time again. Their gutless and that's not pointing any fingers, because we are there, we have been there longer than the rest of them, so we are you know. But if I were to look back and say what did DSI do wrong, may be wrong, it may have been worse if they had said, if they had been a little hard headed on a lot of these issues. It may have been a lot worse. You know, they would know, I wouldn't there. But I did get involved in the Kentucky Distillers even in '67 when you had Mr. Thompson and Jerry Bing and my daddy and Ed Dorch from Chandley that is somebody you ought to talk to. He lives up on Ridge Road, he's a neighbor of ours. He was the first man to see me when I was born. He ran Louisville Cooperage since repeal and he was Lou Rosensteel's right 8:00hand man. He, and he's a tough old son of a bitch. He was probably the, of all the people in those meetings, he's the only that was asking questions. Well why do we have to knuckle under? He is the only one. That is a must, that guy is an absolute must. Because what you will do you'll get, you know my, the way I like to go at things which is fairly straight forward, from a guy that was there. And very, very frustrated with the industry's inability to screw their, yeah he's about 80, but he's sharp as he can be.

SR: Good.

BS: Yeah, you have got to see him. If you are interested in why have we allowed ourselves to be pushed and shoved around so much. Now I am not saying that we ought to fight the consuming public. We ought to demand our right to be in business. No, no, they gave us the right to be in business. The American public repealed prohibition, we didn't do it. And there are certain rights that we are 9:00entitled with that. Well the industry was never sure of their legitimacy, they never had, they never felt comfortable with being legitimate.

SR: Why do you suppose that was?

BS: It was a lot of forces that these old timers would know. I could speculate and I could come down on them and that is not fair, 'cause I wasn't there.

TS: Part of that is public perception too. Perhaps the industry has not really taken proper leadership. For instance,

BS: Bull shit. Look at what Budweiser, just look right now, Budweiser's sponsorship of the Olympics. Alright? Media first reaction, bad taste, right? They handled it like a champ, 'cause they had some guts, right? That's all I am talking about. We have those very same things come up here for at least the 25 years that I have been kind of listening around and stuff, and we always go the safer route for today.

TS: Its okay, its okay in the public perception to advertise on TV, beer. Its 10:00okay to advertise wine, but it is not apparently been okay to advertise liquor. It would seem to me that the hard liquor, it would seem to me that the industry now after it has gone through this period of being the bad guys, and sins of the saloon keepers and so forth, it would seem that now is the opportune time for the industry to move ahead, yet one doesn't get that perception.

BS: That's right. Spirits advertising could be done in very good taste, and it would be done in good taste for the right reasons. Not that to do them in good taste keeps the dogs off of us. But to do them in good taste, is precisely the way to earn the right into the people's heads and hearts which you have to do in order to sell them something. And in order to keep the privilege of staying in business, we as an industry. I guess if I were starting over I wouldn't be in 11:00this industry for that reason. Okay? I would have taken one look at this thing and seeing that _________ don't fight, I would rather fight than switch. So you know, it's just, it's an incompatible situation, but of course here I can do what I want to do. And we never ever do the predictable other than not screw the whiskey up. And that is what makes it fun.

SR: Sounds like a successful formula.

BS: Yeah, and we don't offend anybody. We don't offend anybody, other than, we offend some of the people, some of the members of the industry who get nervous with all the editorial we get. Okay, but that's not any, that's not a plus or minus, we would all be helped if everybody generated a lot more interest in bourbon whiskey.

TS: Sure, you mentioned earlier the shift of the industry out of Kentucky, Jim 12:00Beam to Chicago and New York moves and so forth how do you explain that?

BS: In 1933, December, 1933 is when that happened and that is Roosevelt. Nobody had, he said, "Okay lets go to, lets make and sell whiskey tomorrow morning." And the distillers were saying, "Hey, we don't have any whiskey to sell and too we don't have any money to get back in business." These plants have been out of business 14 years. Nobody has got any money. And you can't age six year-old whiskey in 13 hours. So it was a natural, there's where the Hiram Walkers came from, that's where Seagrams came from, Chandley was a Cincinnati native, but one of those odd balls that nobody liked, because he was a non-conformist, Rosensteel. Rosensteel was a mover and shaker.

SR: For political reasons it is easy to see why Roosevelt wouldn't have said let's repeal and you can start selling in four years, if the job

BS: Oh, I think he did the right thing, I think he had his priorities lined up right.

SR: It made a hard situation.

BS: It made it a very difficult situation for the Kentucky distillers to regroup in any thing resembling the form of an industry located, headquartered, here in Kentucky.

SR: Tell me about the KDA, now, who are the active people in it, and--

BS: Frank Daily is President and John Moreman is now the Chairman, he succeeded me and he is a good one.

SR: He is from Brown Foreman?

BS: Yeah, and the, you need to talk to Frank. We don't have much strength in KDA as far as policy, because it is basically an, as the heads have moved out and on into other things, we have been left with, you know. I don't look around and I don't see Jerry _____ anymore. I don't see that kind of person. I don't see the Thompson's anymore. You get the classic operating person with blinders on that 14:00takes information, runs home, maybe presents it, not good at presenting issues, never, so when we questioned, Frank and I would normally run around the border. Like we needed money for the New York promotion, we called the operating offices of all companies to get that done. So the KDA is mainly in place to deal with plant operations. With local legislative kinds of things.

SR: When you said plant operations, what are you, elaborate it.

BS: Distillery operations. I am talking about moving whiskey around and local tax problems. And we are not as active in the legislature as we used to, but Frank's fairly nimble when it comes to anticipating where the next blow may 15:00arise from

TS: How important do you believe the doubling of the production tax of 1955, '56 is in the decline of the industry within the state? And has there, have there been things that the state has not done to help the industry along, or is it largely that the federal problems supercede the state problems?

BS: Well, that is interesting. Lets take the state. Late 1934, think large corporations, some multinational at least between Canada and U.S., okay, and think about companies that are interested in the political environment. How well 16:00does, is this state really interested in my business and my sort of business? Okay. Well what Happy Chandler sent that loud signal was, is we want to get rid of the distillers. Okay, now that is very difficult for somebody that has got all their operations here like a Jim Beam to do. It would have been very difficult for us. But it wasn't difficult at all for the big companies. They are saying, "We don't need to be here. We've got plants in Indiana, we've got them out in California. We" You know, he wasn't looking at the large picture. And as a result, all of those that were multinational or at least much larger in shape then the state of Kentucky moved their expanding operations, okay? Now this is the time when a lot of imports were starting to come in in bulk. And what we would have benefited from not having that production tax which I don't see as a tax, I don't see it as a mechanical thing. I see it as an attitude which caused companies who had options to make their investments elsewhere, okay? What we 17:00were doing was bringing jobs into the country, because the distillery jobs are mainly bottling jobs, okay? And as a result of that tax we got very few of the bottling jobs from imported bulk spirits that have developed very, very rapidly in the last thirty years. We got almost none of those except where we got lucky, namely Brown Foreman and Glenmore buying out Old Mr. Boston, but for the most part, it has been in and out, its been going this way, or it has never come in. Now see when Happy made his big decision which was a result of the Kentucky Distillers finally screwing up their courage. They came down on the wrong side of the fence. Okay, the one time they did it. They, and by God, they guessed 18:00wrong. They have never done it again. One time they did it wrong and he said, "I'm going to get you, sons of bitches." And that's the way he got us. Its just that simple. And you can ask him and that is what he will say. He said I owed them one. And he, but what he did was, he really harmed the State of Kentucky. Because that was the time when imports, lots of the job expansion, most of the capital was already in place in Kentucky. We had a leg up to get those bottling jobs which were just starting to develop from bottling Canadian whiskey, Scotch whiskey, all sorts of blended whiskeys imported, and we didn't get anything. And then you have got the Brown Foreman's and the Glenmore's that were right next to the river, so they could very easily build aging facilities outside of Kentucky, and still get the benefit of saying "Kentucky whiskey." See, they would make it, age it a year here, and get it out of there. And then they were bringing it back for bottling. And then they said, "This is stupid, why don't I build a bottling plant over in Indiana?" Which they did. So you know, that would have been a difficult argument to convince anybody, 'cause you were looking, you would have had to look into the future. It is an argument that the industry tried to make, 19:00that the industry was changing, that this is not the way to get the industry. If you really want to get the industry put it on consumption, rather than production, because production equals economic well-being. So Chandley and National saw the signal. They said, "Oops, they don't want us." And boy that was the end of the capital investment.

TS: As I understand it, it was not until 1963 that the industry pushed to have Spindletop Research, an independent research organization, study this tax. And of course, in several months, the Spindletop group came out and said that the tax must be repealed. And of course, going back earlier, Chandler's own Revenue Commissioner had said to repeal it. James Martin said to repeal it. Luckett has 20:00said to repeal it. Do you believe that the industry simply avoided attacking this issue of the tax for so long because of fear of state government?

BS: Sure, absolutely frightened. Frank Dailey was involved in it. Frank came to work at KDA right at the end of that. Who was Nana Lampton's first husband? Cox, Miller Cox was the lawyer for the KDA during this early period and he's the one that really, everybody blames him for getting us in that box. You know, which is the first time we ever came down on a political issue, since repeal. Frank knows the specifics of those kinds of things, certainly my father does.

SR: Where do we find Frank? Where is his--

BS: At the McClure Building. That's the Kentucky Distillers office in Frankfort, Kentucky.

SR: Okay, that's why we are not finding it. We keep looking in phone books and things and it is not here, it's in Frankfort.

BS: Yeah, he knows that end of it. Because he was there.

SR: Are there some more people's names that come to mind? I am grateful for the ones we have come up with.

BS: Of course, you have got a lot of them down at Brown Foreman shipment and

SR: Shipment dock?

TS: We have one interview that somebody else did.

SR: It has been within the last six months. The interview is good. The interview is almost all on prohibition, that was the focus of the project, but it is a good interview.

TS: George Grahams did it from the Louisville Times.

SR: Are there some more? I know the, well you might have suggestions at Brown 22:00Foreman that they won't make. We will be getting input from them and we have gotten a little bit already. Are there some people there who aren't obvious, that you think of as good candidates?

BS: Ben Morris, who is retired, has probably spent more of his life on the history of the company and to some extent the history of the industry than anybody down there.

SR: How about in the regulating process, are there some people who have been around it a long time?

BS: Some old timers, Frank would be a good one to ask that. There is a couple of old timers that were with ATF in the beginning, they would be good. Dad would know the, you know, would be much more aware of those kinds of things. What there is, there is almost nobody alive today that started in prohibition, you know right at the end of prohibition. In, with the job of building and running a distillery. That's, so that's where Dad would probably be interesting, because 23:00he may be the, he and the Colonel may be the only ones alive that did it. That were actually involved in rebuilding, starting up and then stayed after.

SR: We are going to try to schedule your father pretty soon,

BS: You better do that before November.

SR: Do you have a phone number for him that we can?

BS: Yeah, 3-4, we never use it. We have got a direct line down there, 583-9062. That is a Louisville, 583-39062, no wait a minute 9062, yeah.

SR: Alright, 583-39, no 90, 9062. Okay.

BS: Lucy Beam is up here. Jerry's widow and of course she is interesting for a whole lot of reasons. She is just an interesting human. She is,

SR: Will she be in the phone book, under

BS: Yeah, Jeremiah Beam, or Lucy Beam. She's Doctor, she's Doctor Kavanaugh's daughter from Lawrenceburg, remember the old lady that had the wonderful school, the military school in Lawrenceburg, famous old Kavanaugh Academy? Well she descends from those two. Oh, they have written a hundred million things about that literally. And she is a character. I mean she is something special.

SR: Good talker?

BS: The best.

SR: Good.

BS: She's the best that you will talk to probably.

TS: One thing that struck me going through the newspaper files on this is that the industry has not really focused on how important its contribution to taxes has been to state and local government. We talked about this is in the very beginning.

BS: Well we haven't, no that is not exactly right. It's who gives a damn. You see, you can feed the dog dog-food, but if the dog doesn't want to eat the dog-food, you just can't keep piling it up on it. And that is what we have had, nobody cares. Nobody that matters cares. Okay?

TS: Do you think that is still true today?

BS: Well, I think it is even more so. Because one of the arguments is it's not nearly as valid as it used to be.

SR: It gets less every year, smaller percentage.

BS: We make less of it and of course the tax hasn't increased as a function of inflation like, but no I think that's, I don't think that dog has many opportunities to be known. I don't think so.

SR: You said you would go into something else, what would you go into to start out today?

BS: It would have to be pretty interesting, pretty provocative, I would have to be in charge. You know, that's the reason, because I get to do what I want to do.

SR: How long has that been true, that you have been able to do what you want to do?

BS: Oh, it's probably a couple or three years. But you know it is an evolution too. You kind of learn, you learn to capture what is important in the marketing and then we go do it. And fortunately, the way we have decided to do it is reasonably non-traditional. So that is what keeps it interesting.

SR: Is the company going great guns these days?

BS: Well, we are not great guns, 'cause we are so small, but we are moving forward as fast as we can go. As fast as we want to go.

SR: Beyond the candies, are you doing something else that is new or--

BS: No, no just the communications, that's kind of involved.

SR: But not new products?

BS: No, no. That is about all we can handle.

SR: Okay, how many people are employed by--

BS: We have got fifty.

SR: That's, you have got a terrific market image for a company with that small

BS: Yeah, that nobody has heard of, right. We are just a little bitty guy.

SR: Oh shoot. That is interesting.

BS: The jobs we provide are not direct jobs, they are service jobs. I am never down there that we don't have engineers on the grounds, that we don't have a, somebody bringing the grain in, painting. I would say without question that the contribution that the company makes is like 15 to 20 times a year, beyond payroll. It's just the nature of the beast, it's just not a labor intense industry.

SR: Has that always been true?

BS: No, Lord no. It was, that is what you are going to find out when you go back and look at those storekeeper gaugers, because for every storekeeper gauger, you need three babysitters. You have got locks, the little simple things, you had 28:00to, when you put whiskey in the barrel to put them away, you had to weigh the damned barrels empty, then you had to put the whiskey in, then you had to weigh the barrels full, but just think about that one. Wow. I mean, it's like thirty times faster now.

SR: So the regulation process itself was the generator of lots of jobs?

BS: Yes, absolutely.

SR: Not just the production?

BS: Most of them, and then of course the other area was in the bottling, where everything was done by hand.

TS: Other than for the late 1940's, as I understand it, this industry has not had much problem with labor. Is that a fair assessment?

BS: Now I am not good at that. We haven't.

SR: Of course, Kentucky has a bad national image for labor. You know, go to New York.

BS: Yeah, it does.

TS: They ________ us, business people always focus and ask many questions on that. But this industry seems to have gotten beyond that problem. Do you have 29:00any reflections?

BS: I don't know, but I bet you Brown Foreman would. Our situation is, we are non-union and we don't have any turnover. And we are in a part of Kentucky where we are dealing with very traditional, loyal people and if you have got the God given sense to understand that these wonderful people will do anything as long as you don't surprise them and cheat them. It is just a very simple formula. You don't spring a change on them, you get them ready for change. Very, very loyal, very dependable, unbelievably dependable. And really just a lot of fun, because they can put up with inept management. So, it's a--

SR: We're going to have to go down and take a tour of the--

BS: Yeah you ought to talk to the people, that is really where you get a much better feel of the business, kind of snooping around.

SR: Would yours be a good one for us to focus on, otherwise as an example? Is it very different from Brown Foreman in a lot of ways?

BS: Well in a sense it isn't different at all, because we all kind of started the same place. You know, we started about 100 years earlier, but and they were a lot better at what they did from management of assets standpoint.

SR: I am thinking though the labor situation would be fairly different, the size and the scope of the company would be somewhat different. I don't know.

BS: I don't know. There's not many options.

SR: Are there a lot of people at your place that have been there a long, long time?

BS: Oh, sure.

SR: On the production side?

BS: Oh, yeah. I'm one of the new comers and I have been there 17 years. Well, you've really only got a couple of alternatives that are meaningful in my sense is and that is Jim Beam, Heaven Hill and us.

** Tape 2 **

SR: Oh, too bad, 'cause that's all been good statements, certainly _____ in our heads, but we plan to cover some of that ground again later.

TS: But we would like to come back, you know as we get the idea, and get your perspective on it. And you know, we can hold in on that--

BS: Well mine is just little pieces growing up and not paying a whole lot of attention. Very specifically, I'd made my mind up, I wasn't, because we didn't have a business to come back to, so I was set on becoming an aero-space engineer. It was in the late fifties when that was a rather fashionable thing to do. So even as a youngster, I didn't pay a lot of attention to what was going on over there. I spent one summer working for the distillery and spent the rest of my summers working on the highways as a laborer, and then went on to law school; 32:00well in engineering school, in the aero-space industry and always working the summers there; and in law school, in the Patent Office. So, it was really not until '67 that I even started thinking about it.

SR: So, did you get started, did you get your practice in aero-space engineering for a while? Where did you do?

BS: At Aero Jet, General Corporation, Sacramento.

SR: Did you like that?

BS: Oh, not too much. Yeah, I liked the think and do part of it. I didn't like being in California, it is just a little impersonality. A little big, you know, it's a little hard coming out of Bardstown.

SR: So you came back--

BS: Well, I went to law school then. Yeah, I went to law school after I went to Vanderbilt and then when I got through that, I began working in 1967.

SR: So when did you graduate from college?

BS: '62, '62 and went to graduate school a year and then.

SR: There wasn't a long, real long lapse between.

BS: Just like you Sherrill, overeducated.

SR: Oh, tell me about it. Well it is a good way to switch gears though to get another degree.

BS: I wouldn't have done it that way, if I had started over. Because there is absolutely no correlation between being successful in business and being overeducated.

SR: Oh, it's not. But it has probably done you some good to have a little bit of law background to deal with the lawyers you have to deal with.

BS: No, no.

SR: Not at all? Where did you go? Did you go to U oh, you went to __________.BS: That was just instincts, I don't have to know what I am doing. You know I come out swinging anyway, that doesn't make any difference. You know I do the same thing in advertising. I do our advertising. It was only last week, I read my first book on advertising. You know so knowledge doesn't have anything to do with it, it's just gut.

SR: Is that kind of the way your dad operates?

BS: No, Lord, no.

SR: Very differently?

BS: No, no. Very much a craftsman, very deliberate, very slow, very traditional, extremely bright, patient, understanding. Do one thing - do it better than anybody. I let more fall through the cracks then he did, you know normally does. But I do a lot more things wrong than he does.

SR: What do you, you must compensate with the

BS: Well, what I do, I have got an interesting perspective on all this. I pretend in all my decisions that he is looking over my shoulder, even though he's not. And it really reins in that aggressiveness and impatience. Because after all, if the responsibility we have to the market place is to do it better and to not disappoint them. And my instincts, first instincts are let's do 35:00something different, but that is not the business we are in. So I have to have a sort of a predictable mechanical way to get that reined in. So every time I want to go out in left field, I say, "Now what if he was just sitting around here?"

**Apparently technical recording problems developed for a brief period during this comment.**

SR: I don't think it's turned up.

TS: We're in a period now of major national discussion as to the necessities or non-necessities for regulation of various industries. The liquor industry in Kentucky since 1940 has come under the state Fair Trade Law. Would you discuss your ideas about the Fair Trade legislation and those of your father's as to the beneficial effect and the non-beneficial effect? What problems have you found with the Fair Trade legislation?

BS: Well the main problem I have is not looking at it from the perspective of 36:00necessarily what is in the best interest of the company, although I think it is. It is more of a personal bias. I have a very strong personal bias against legislation or regulation which appears and generates the illusion that it is in the interest of the consuming public and in fact is there to protect inefficiencies, laziness, and all, in and among industry members. And that is precisely what any kind of Fair Trade legislation does. That is precisely what "Buy American" does. If we can't compete, we shouldn't be around. The government does not owe me a living, it doesn't owe a retailer a living. So that is where I come from. We had a very interesting illustration of this very same thing. About a month ago, we called Senator Ford. We want to ship our candy, bourbon candy to 37:00______ markets because they want to buy it. Now that is great, that is just exactly how it ought to be. A Kentucky product that the _______ market people are just shaking their fists to get hold of and we found we can't ship it out of Kentucky. So there is a little gal in Senator Ford's office that went looking at the reason why, and there is an FAA regulation law that was enacted which was specifically targeted at this sort of thing. As long as it has alcohol, it can't be shipped in interstate commerce. Well the further they looked, they found out it didn't have anything to do with what it was reported, it was a law that was pushed through Congress by the Confectionary Association to protect itself against imports from Sweden, and Switzerland and others. So this doesn't have anything, they are not looking out for the American public. We're not in all honesty, looking after the American public when we say Fair Trade is in their best interest. Because I can promise you one thing. The industry makes more money in a Fair Trade environment and how that is in the best interest of the 38:00consuming public I don't know.

** Apparently further technical recording problems developed during this portion of the tape - perhaps a defective tape. **

________

BS: Well if you know Ford as well as I do, that when somebody says "can't do that," he usually ______. Yeah, it'll get done. It'll get done, because of him, 'cause it doesn't make any sense. And he was just mad as hell when he found out why.

SR: I remember that coming up back when ________________ somebody else wanted to do the same thing remember _________________________? That I don't remember, but _____________. I remember __________.

BS: Well, it was Boone probably. John Boone, he was very helpful. He said, "I have thrown up my hands, I can't deal with it." ______________________. But it needs to be everybody. It needs everybody that has got a Kentucky product who 39:00would, a legitimate Kentucky product. And too the thing about it is they started off saying, "Well, it will make you drunk." Well Christ, you die of sugar diabetes long before you would ever, you know, you never notice any alcohol. And they started going further and further, and they found out it was a big sham. Fair Trade is a big sham on the public. Now I make more money under Fair Trade, but that is not the government's responsibility to help me make more money.

TS: As I understand it even with the Kentucky Fair Trade legislation, there was _____________ in Kentucky for a variety of more products under Fair Trade legislation until the late 50's or early 60's which is a fairly long period of time. _____________________________________.

BS: Well one of the first meetings that I went to on that issue immediately 40:00after I got out of school in 1967 for, one of the legislators said, "No." This bill, as I understand it, the four part increase should be handled in __________, okay we went to a hearing and heaven - hell, I think was the issue of the thing and everybody was scared to go. Well I was certain they didn't want to cook the goose that laid the golden egg. And believe it or not even free market principles were beginning to filtrate our industry. A little bit, not much. Just a little bit.

_____________________________________________________

SR: I don't really think it is the tape, either. ___________________________.

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** Tape 2, Side 2 **

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BS: Do one thing and you being an outsider,

TS: I am a New Yorker, I'm a total outsider.

BS: We got that during John Brown's administration. 'Cause he is a very objective guy. And he brought in a lot of large picture, objective kind of humans around him, and he is the one that repealed the state half of the adverlorn tax. First governor since Isaac Shelby to sign a liquor bill. Isn't that incredible?

SR: It is.

BS: Blame it on the Baptists, blame it on this, I don't know, you know, I don't know where the, my sense is that it is one of those evolutionary things that you can't ever get to the tail of the dog. It is just hard to, I'll tell you something else you'll never come to. You'll never demonstrate when Kentucky whiskey became bourbon whiskey. Because it didn't, it just wasn't something that happened one day.

SR: It is slippery.

BS: It is extremely slippery.

SR: Believe me many, many things in history are. I mean you celebrate centennials and things and bi-centennials and you can pick a date, you can pick the state, when they formed the first organization to pick, to explore the issue, you can pick the one when the hospital opened and had the first patient, you can pick any number of dates and basically you pick it by what year you want to celebrate within bounds. You have to have something to pin it, but most history is not nearly as easy to say now it wasn't, now it was. It just doesn't work that way. But you know for you to have that kind of perspective that will go, that moves you way beyond the distilled spirits industry. For you to have that perspective that things are not black and white that things evolve and that is a big,_________.

BS: It's a lot more fun when they do evolve and what I have enjoyed more than any single thing was I wonder why this happened, what are these people doing here, not that they are here, but what the hell did they come here for? Then you start rooting around, and oh, well that makes sense. And it always makes sense when you get to the right answer. But getting there is sometimes not direct, 43:00because nobody ever really was worried about that sort of thing, you know the old corn rites and all. The thing well, we started back in 1793 or '94 when George Washington and Colonel Nelson drove everybody out of Carlisle with the whiskey rebellion. Christ we had about 1,800 distillers here before then and you know, back fourteen years before that.

SR: Things get started, and they have,

BS: They just cannot

SR: People keep repeating them and saying it's true.

BS: They keep repeating them and then they gain authority. Isn't that something?

SR: That's crazy. Well that makes it fun to go back into something though that you got a pattern ______.

BS: I will tell you one of the things I would really love to know is the role the industry played in bringing the thoroughbred industry here into Kentucky. 44:00It's fairly significant.

SR: I don't know about that at all. What do you think it was?

BS: Well, again I am just going back to what we did. It's that series of things. Patrick Henry as governor of Virginia, wanted to keep the Indians off his ass, okay? And early in 1780 we were renamed the Kentucky County of Virginia which was just a frontier before that, okay? So and the first form of western settlement to encourage permanent settlement in the history of the country was the corn rites, 1780. Permanent settlement was needed, why, to get humans down here to deal with the Indians. No strategic plans, how the people were going to defend themselves, or how they were going to deal with the Indians, just kind of put them together and see what happens. And so the land grant thing, that first grant was set up to get them down here, and then to see how innovative they could be. And what they decided to use was Indian maize. And they used maize, not that that was magical, but that took all summer to grow. And they had to 45:00plant it and harvest it and stay there. And that was the deal. They had to raise the native grain for three successive seasons and then they got their sixty acres free. Well he didn't give a damn about, you know, what are they going to do with the corn? Well that is the next question. Of course our people knew what to do with the corn. Alright so we have got whiskey. Now what do we do with the whiskey? There is no market. You know this business about how much easier it is to haul a gallon of whiskey back over the mountains then it is five bushels? They didn't haul anything back over the mountains that was insane. The first markets were in New Orleans, put this stuff in on flat beds right at the bottom of the falls of the Ohio and down she went. Now the next question, okay we got to New Orleans, how do we get home? See that is the way I kind of followed the thing through. Well they were bringing these Spanish show horses back and guess 46:00what? That is where the Natchez Trace got its name from. The Natchez Trace was founded, was formed, was developed, solely to bring people hauling whiskey from Kentucky from New Orleans back into Central Kentucky. You know, so we were directly responsible for the Natchez Trace and I guess indirectly responsible for the thoroughbred industry, because. And then you get a bunch of horses back here and then what have you got? Then you find out if the horses do well in Kentucky with this limestone soil or not. Well they did. Now let's bring more horses. So that is the way those kinds of things happen. That's not a bang, bang, but that's, so there is a very close kinship between our industry, but it wasn't an industry. It was a bunch of guys trying to survive, used whiskey for money. The first money of the West was Kentucky whiskey. But it sure wasn't bourbon. It just happened to be made from corn. And the other thing why is rye used today with bourbon? Very logical. Very logical. Where did these people come 47:00from that reacted to the corn rites? They came from Pennsylvania. What kind of guys were they? They were Scots and Scotch Irish. What did they do? They made whiskey. What did they make it from? They made it from the native grain of Pennsylvania, that was rye. What about their personality? It was very predictable, very conservative people, the Scots, always have been. So they say, if I have got to go down here and raise this grain, I know what I'm going to do with it. I don't know how it's going to do. I'm going to take some of what I know about with me. And in between the corn rows, they planted rye. So and that is why bourbon formulation is traditionally corn and rye. So those kinds of things, somebody needs to deal with that a hell of a lot more thoughtfully and thoroughly than I have. But I, you know, I have done all I could really suffer through, because I don't deal well sitting still and that kind of stuff. But I mean, I did. I put in about a year and a half and all I did was just bring my people down and ask all those questions. Why did they do this, where did they come from, why did they do this that way, wonder why this worked out this way?

SR: What did you do read a lot of books, go to the library?

BS: Well, no I hired a guy and it almost put me in bankruptcy and got him to do an incredibly thorough job on Carlisle, Cumberland County, Pennsylvania, because that is where they all came from. And I am talking about the Rowens and Federal Hill and all those old guys. It just, those early tax lists read like the early tax lists around Bardstown. And Mad Anthony Wayne was one of them. It's just amazing the people that evolved out of the war that before the war there they were they were neighbors of ours up in Carlisle.

SR: That's interesting.

BS: And of course, that is where the whiskey rebellion took place.

SR: What became of that document, do you have that document that he produced?

BS: It isn't a document, it's just file drawers full of stuff. But I wasn't looking for any, I got kind of curious about it, because I knew the history of 49:00the industry wasn't right. I knew everybody was trying to make it black and white and then they were trying to move black over to where it could help them sell whiskey. So, you take those two objectives and you are not ever going to get anywhere near the right answer.

SR: True.

BS: And I just did it for me. We have never used it. It is just kind of fun. It's a fun thing to understand.

SR: It would be nice to make it available to somebody else sometime when you're finished with it.

BS: Its really disorganized. I, its, you know, I have got, its valued in the, isn't any magic to it, there is just lots of it. I

SR: It sounds like a good research project on that subject.

BS: Yeah, it is probably the only one that is.

SR: Origins of the whiskey industry in early Kentucky.

BS: Yeah, but as long as we all understand it wasn't an industry then. It was an adjunct to an agricultural existence.

SR: That's true.

BS: And that's all.

SR: I might be on your trail to see if you want to share that.

BS: You can have anything you want. But it is going to drive you crazy.

SR: No, see I won't have to read it. I will just have to make it ready for those people fifty years from now who want to read it.

BS: Oh,

SR: That won't. I don't want to take too much more of your time.

TS: Can I ask one more question? John Ed Pierce in the book that he did in 1969, 1970 on the 100th anniversary of Brown Foreman says that the corn that is used at least by Brown Foreman is non-Kentucky corn. He says that it comes from Indiana, Illinois, Western Ohio. The rye is Canadian rye. And the water is purified water

BS: Its not either, oh it may be here, yeah, that's

** End of Tape 2, Side 2 **