Foreword: When U.S. agents under the direction of Treasury Secretary Benjamin Bristow in May 1875 swooped down on the giant multi-city racket to defraud the federal government of millions in liquor revenues, called “The Whiskey Ring,…
Foreword: When U.S. agents under the direction of Treasury Secretary Benjamin Bristow in May 1875 swooped down on the giant multi-city racket to defraud the federal government of millions in liquor revenues, called “The Whiskey Ring,” they arrested 86 government officials and 152 distillers and whiskey dealers. Among them were three whiskey men whose outcomes following their arrests differed significantly.
Caught cheating the government of revenues on his whiskey, St. Louis distiller Louis Teuscher in 1875 pleaded guilty and began assisting the prosecution. Asked under oath how he ran his distillery, Teuscher, a German immigrant, replied “Vell sometimes straight but most times crooked.” His candid remark provided a brief moment of levity during the high-profile trials of the Whisky Ring.
Known for his “Good Times Bourbon,” Teuscher formally was accused of removing 10,000 gallons of whiskey from his distillery: “…On which said spirits the internal revenue tax of 70 cents…imposed by law upon each and every proof gallon…had not been first paid.” By so doing he had defrauded the government to the tune of $7,000, equivalent to about $154,000 today. His illegal whiskey was hidden in a building on the distillery premises, unknown to federal inspectors. There fraudulent tax stamps were applied.
Teuscher pleaded guilty and turned state’s evidence. The distiller testified for the prosecution in the trial of the kingpin of the Whiskey Ring, Orville P. Babcock, Civil War general and personal secretary and confidant of President Grant. According to the memoirs of former Ring prosecutor David Patterson Dyer, the government treated cooperative distillers like Teuscher as “victims of rapacious officials, or at worst, as having the lesser guilt….”
The German-born distiller did not go unpunished. Federal agents confiscated his distillery and whiskey stocks and took all or part of a $50,000 surety bond held by the Internal Revenue Service that allowed him to make whiskey. Originally indicted on felony charges, those were dropped for Teuscher when he agreed to cooperate. He pleaded guilty to two misdemeanors and was sentenced to one day in jail and a $1,000 fine. Although he spent the designated day in jail, Teuscher apparently balked at paying the $1,000 fine, likely on the grounds that he already had suffered sufficient financial losses for his folly in joining the Ring. In the end the presiding judge blamed mistakes in sentencing Teuscher and discharged him without requiring he pay the fine.
*****
William Bergenthal was well known for his ferocious temper. The Milwaukee, Wisconsin, distiller and liquor dealer, it is said, once physically threw a deputy sheriff out of his office who had come to collect a bill because the lawman made a remark impugning his honesty. Bergenthal would have been well advised to do the same when Federal revenue officers came looking for bribes. He did not and thereby became implicated in the Whiskey Ring.
Apparently by pointing the finger at his brother August and another employee Bergenthal himself was spared prosecution. The pair were held for four months in the Milwaukee County jail for ““misrepresenting the company’s alcohol tax records.” So popular were these “fall guys” in captivity, however, that the sheriff complained regular business was being affected by “the tramp, tramp, tramp of the friends of the prisoners.”
William Bergenthal was far from being off the hook. In 1876 a U.S. District Attorney brought a case in Federal Circuit Court that implicated Bergenthal and two friends with conspiring with Chicago gang members to steal incriminating Whiskey Ring-related documents held by Federal authorities. To carry out this heist the crooks allegedly had demanded $50,000 from the trio. If the government had been able to make the case, it was only a matter of time until Bergenthal and his colleagues would be on trial. A friendly judge, however, dismissed the indictment, ruling that the theft had never gotten beyond the discussion phase and that “some act must actually be done” to constitute a conspiracy.
Bergenthal subsequently was hauled into court by his jailed brother. Whether August was angry at having to take the rap for the tax cheating or other reasons, the brothers had parted ways with August working elsewhere in the whiskey trade. He still had a substantial financial interest in William Bergenthal Co., however, and sued for a right to examine the books. When a lower court agreed that August must have access, Bergenthal appealed the decision to the Wisconsin Supreme Court and lost a second time.
Fans of the movie version of Anne Rice’s “Interview with the Vampire” will recognize at right the New Orleans above-ground tomb of her blood-sucking hero, Lestat. When visiting Lafayette Cemetery #1, tourists often seek out the cast-iron crypt and wonder who actually is interred there. It is Otto Henry Karstendieck, a liquor dealer whose life held its own vicissitudes.
After making large profits from his liquor trade during Union Army occupation of New Orleans during the Civil War, the customer base for Karstendiek & Company dwindled sharply in the post conflict period. President Grant had appointed his wife’s brother-in -law, Col. James B. Case, as collector of customs for the New Orleans port. Case was quick to see financial possibilities of skimming off illicit cash from liquor taxes. He recruited a handful of New Orleans distillers and dealers to assist him in the scheme. Otto Karstendiek joined the Whiskey Ring.
When the scheme came to abrupt halt, Karstendiek was arrested. Otto and his co-conspirators did not come to trial for almost a full year after the raid. In the interim the German whiskey man had suffered a heartbreaking loss. His wife died in September 1875, leaving him with six motherless children. At his trial Otto and five of his co-conspirators were found guilty. The prisoners were fined from $1,000 to $6,000 and sentenced to prison variably from six to sixteen months. Otto was assessed $1000 and given maximum prison time.
All six were sent to the State Penitentiary at Moundsville, West Virginia, shown here, more than 1,000 miles from Otto’s New Orleans home. He was anguished at serving time so far from his children, now being looked after by relatives. While at Moundsville he brought a case before the U.S. Supreme Court arguing that the decision to send him out of Louisiana was not authorized by law and should be voided. The Supremes did not agree. Otto spent a full sixteen months in prison a long way from his little ones.
The stories of these three culprits demonstrate the sweep of the conspiracy, from Milwaukee in the Upper Midwest to St. Louis in the Midlands and Deep South New Orleans. It also exposes the wide variety of penalties inflicted on those whose folly was joining the Whiskey Ring.
Note: More complete profiles of each of these men may be found elsewhere on this blog: Louis Teuscher, April 15, 2019; William Bergenthal, September 1, 2014, and Otto Karstendiek, August 25, 2021. An earlier post on three others caught in the Whiskey Ring may be found here at October 29, 2019.
Foreword: Making whiskey is not like peeling potatoes or baking bread. It requires a highly mechanized process involving a number of instruments to help the distilling process along the way. In the past a few invention-minded Americans have put their genius (or something) to work in improving elements of whiskey manufacture and testing. Here are the stories of three such inventors and the widely varying results of their efforts.
Mark Twain called it a “ten million dollar swindle.” The U.S. Commissioner of Revenue saw it as the answer to preventing the government from being deprived of “a vast amount of revenue” through frauds committed by distillers. They both were referring to the spirits meter invented by Isaac P. Tice, a New York mechanical engineer and inventor. For Tice the meter represented recognition of his inventive skills and a monetary bonanza.
In 1867 strong evidence emerged that the national government was being cheated out of tax money through frauds committed by distillers. For the Commissioner of Revenue the answer was to measure liquor output by means of meters attached to stills that would aid inspectors in detecting gross underestimates of spirits being manufactured. The Commissioner advertised for inventors to come forward with meters and asked the National Academy of Sciences to appoint a committee to review the submissions and select a winner.
Tice, an engineer working in New York City, already had patented an improved windmill, milk rack, and water meter, among other items. After the water meter proved to be commercially profitable, Tice had turned his attention to liquor. In March 1867 he had patented what he called a “Revenue Guard for Stills.” Using that as a model he submitted what was called the Tice Spirit Meter, shown below — and won the government contract.
Forced to buy the device, distillers, some of whom required multiple devices, were appalled at costs of up to $1,500. Tice, who had a wife and three children, had never seen so much money. Faced with anguished howls from distillers, officials in 1871 retested the Tice Meter, decided it was inaccurate, and discontinued its use. In the meantime, hundreds of distillers and rectifiers had been forced to buy it — and now Tice meters had been trashed. The inventor’s reputation and income plummeted. Four years later Tice was dead at age 41, leaving behind a widow and three minor children.
In 1872 Gordon Byron Bingham of Patoka, Indiana, patented an upright tank for holding liquor that he claimed was aimed at preventing “fraud on the revenue.” Just three years later, as a distiller, Bingham, shown left, was implicated and convicted as a participant in the “Whiskey Ring,” whose sole purpose was to defraud the revenue. As a result, Bingham ruined himself and the town of Patoka was said to be thrown “on the downgrade of the stream of time….”
Having a mind for invention, Bingham in February 1872 patented a metal tank for holding whiskey that, he claimed, would “prevent fraud.” Shown here, his “high wine cistern” was aimed at preventing the tax-avoiding removal of spirits that otherwise could go undetected by a U.S. revenue gauger. Bingham’s invention, he said, provided federal officers with “…an easy means of determining at all times, the exact proof and quantity of the spirits within the tank.” The invention went nowhere.
Ironically, it was not long after obtaining his patent that Bingham became entangled in the massive fraud against the U.S. government’s collection of taxes on spirits, a scam that became known as “The Whiskey Ring.” By massive payoffs to top revenue officials and the “watchdog” gaugers, distillers and “rectifiers” (whiskey blenders) in the Ring were able to get away with paying only a fraction of the liquor taxes they owed. Indicted in 1875, the Feds seized Bingham’s distillery, stocks of whiskey and other tangible property. Thoroughly cowed, the Indiana distiller pled guilty and became a principal witness for the government. Other Ring defendants detested him for “squealing”.
Disgraced, headed for jail, and beset on all sides, Bingham within a matter of days was dead, passing on January 10, 1876, at the age of 49. The effects of Bingham’s fall would continue to be felt. His widow, with five minor children, was sued by the government for $30,000, representing the amount believed to have been fraudulently withheld. Some Patoka residents implicated with Bingham were disgraced and bankrupted over the scandal. With its distillery gone, the town of Patoka — an Indian name meaning “log on the bottom” — went into serious decline from which it never recovered.
Recently Whiskey Magazine listed the 100 “Greatest Whiskey People,” highlighting individuals worldwide who have left a lasting legacy to the whiskey trade. Frederick Stitzel, left, was among that chosen few. His claim to fame was based on his patented invention for stacking barrels of whiskey for aging. Earlier the custom was to stack them directly on top of each other. This was a highly risky practice. Each barrels held about 53 gallons of whiskey and filled would weigh around 500 pounds. Putting one of those behemoths on top of another could cause leakage, outright ruptures and other problems.
As shown here in a drawing, Stitzel’s system consisted of what he called rails, shelves attached to heavy wooden frames to support the weight of individual barrels. The rails were spaced, so that when a barrel was placed on its side, each end would be supported by a rail. It also allowed for the barrels to be turned from time to time, assisting the aging process. Stitzel’s design called for each section to be made separately, allowing easier configuration of tiers in the warehouse. Stitzel rails currently are in use in most American distilleries.
With his father and brothers, all immigrants from Germany, Frederick also was a major Kentucky distiller. The Stitzel distillery, above, eventually covered an area of two and one half acres An 1895 publication entitled “Louisville of Today,” featured the facility: “Here are a large and splendidly equipped stillhouse, elevator, immense warehouses, cattle sheds, etc. The plant stands second to none as regards modern high-class machinery and appliances, power being supplied by a thirty horse power engine.”
Although his time and energy was directed toward making good whiskey, Stitzel is credited with a dozen or more inventions, including a railroad semaphore system used for years by the rail industry. Although he was no competition for the Ohio genius with his record 1,093 patents, Frederick Stitzel deserves to be called “The Thomas Edison” of whiskey men.
Note: Longer vignettes involving each of these inventors and their inventions may be found elsewhere on this website: Isaac Tice, January 29, 2018; Gordon Bingham, April 15, 2017; and Frederick Stitzel, September 22, 2021.
Foreword: Making whiskey is not like peeling potatoes or baking bread. It requires a highly mechanized process involving a number of instruments to help the distilling process along the way. In the past a few invention-minded Americans have put their genius (or something) to work in improving elements of whiskey manufacture and testing. Here are the stories of three such inventors and the widely varying results of their efforts.
Mark Twain called it a “ten million dollar swindle.” The U.S. Commissioner of Revenue saw it as the answer to preventing the government from being deprived of “a vast amount of revenue” through frauds committed by distillers. They both were referring to the spirits meter invented by Isaac P. Tice, a New York mechanical engineer and inventor. For Tice the meter represented recognition of his inventive skills and a monetary bonanza.
In 1867 strong evidence emerged that the national government was being cheated out of tax money through frauds committed by distillers. For the Commissioner of Revenue the answer was to measure liquor output by means of meters attached to stills that would aid inspectors in detecting gross underestimates of spirits being manufactured. The Commissioner advertised for inventors to come forward with meters and asked the National Academy of Sciences to appoint a committee to review the submissions and select a winner.
Tice, an engineer working in New York City, already had patented an improved windmill, milk rack, and water meter, among other items. After the water meter proved to be commercially profitable, Tice had turned his attention to liquor. In March 1867 he had patented what he called a “Revenue Guard for Stills.” Using that as a model he submitted what was called the Tice Spirit Meter, shown below — and won the government contract.
Forced to buy the device, distillers, some of whom required multiple devices, were appalled at costs of up to $1,500. Tice, who had a wife and three children, had never seen so much money. Faced with anguished howls from distillers, officials in 1871 retested the Tice Meter, decided it was inaccurate, and discontinued its use. In the meantime, hundreds of distillers and rectifiers had been forced to buy it — and now Tice meters had been trashed. The inventor’s reputation and income plummeted. Four years later Tice was dead at age 41, leaving behind a widow and three minor children.
In 1872 Gordon Byron Bingham of Patoka, Indiana, patented an upright tank for holding liquor that he claimed was aimed at preventing “fraud on the revenue.” Just three years later, as a distiller, Bingham, shown left, was implicated and convicted as a participant in the “Whiskey Ring,” whose sole purpose was to defraud the revenue. As a result, Bingham ruined himself and the town of Patoka was said to be thrown “on the downgrade of the stream of time….”
Having a mind for invention, Bingham in February 1872 patented a metal tank for holding whiskey that, he claimed, would "prevent fraud.” Shown here, his "high wine cistern" was aimed at preventing the tax-avoiding removal of spirits that otherwise could go undetected by a U.S. revenue gauger. Bingham's invention, he said, provided federal officers with "...an easy means of determining at all times, the exact proof and quantity of the spirits within the tank.” The invention went nowhere.
Ironically, it was not long after obtaining his patent that Bingham became entangled in the massive fraud against the U.S. government’s collection of taxes on spirits, a scam that became known as “The Whiskey Ring.” By massive payoffs to top revenue officials and the “watchdog” gaugers, distillers and “rectifiers” (whiskey blenders) in the Ring were able to get away with paying only a fraction of the liquor taxes they owed. Indicted in 1875, the Feds seized Bingham’s distillery, stocks of whiskey and other tangible property. Thoroughly cowed, the Indiana distiller pled guilty and became a principal witness for the government. Other Ring defendants detested him for “squealing”.
Disgraced, headed for jail, and beset on all sides, Bingham within a matter of days was dead, passing on January 10, 1876, at the age of 49. The effects of Bingham’s fall would continue to be felt. His widow, with five minor children, was sued by the government for $30,000, representing the amount believed to have been fraudulently withheld. Some Patoka residents implicated with Bingham were disgraced and bankrupted over the scandal. With its distillery gone, the town of Patoka — an Indian name meaning “log on the bottom” — went into serious decline from which it never recovered.
Recently Whiskey Magazine listed the 100 “Greatest Whiskey People,” highlighting individuals worldwide who have left a lasting legacy to the whiskey trade. Frederick Stitzel, left, was among that chosen few. His claim to fame was based on his patented invention for stacking barrels of whiskey for aging. Earlier the custom was to stack them directly on top of each other. This was a highly risky practice. Each barrels held about 53 gallons of whiskey and filled would weigh around 500 pounds. Putting one of those behemoths on top of another could cause leakage, outright ruptures and other problems.
As shown here in a drawing, Stitzel’s system consisted of what he called rails, shelves attached to heavy wooden frames to support the weight of individual barrels. The rails were spaced, so that when a barrel was placed on its side, each end would be supported by a rail. It also allowed for the barrels to be turned from time to time, assisting the aging process. Stitzel’s design called for each section to be made separately, allowing easier configuration of tiers in the warehouse. Stitzel rails currently are in use in most American distilleries.
With his father and brothers, all immigrants from Germany, Frederick also was a major Kentucky distiller. The Stitzel distillery, above, eventually covered an area of two and one half acres An 1895 publication entitled “Louisville of Today,” featured the facility: “Here are a large and splendidly equipped stillhouse, elevator, immense warehouses, cattle sheds, etc. The plant stands second to none as regards modern high-class machinery and appliances, power being supplied by a thirty horse power engine.”
Although his time and energy was directed toward making good whiskey, Stitzel is credited with a dozen or more inventions, including a railroad semaphore system used for years by the rail industry. Although he was no competition for the Ohio genius with his record 1,093 patents, Frederick Stitzel deserves to be called “The Thomas Edison” of whiskey men.
Note: Longer vignettes involving each of these inventors and their inventions may be found elsewhere on this website: Isaac Tice, January 29, 2018; Gordon Bingham, April 15, 2017; and Frederick Stitzel, September 22, 2021.
Caught cheating the government of revenues on his whiskey, St. Louis distiller Louis Teuscher in 1875 pleaded guilty and began assisting the prosecution. Asked under oath how he ran his distillery, Teuscher, a German immigrant, replied “Vell sometimes straight but most times crooked.” His candid remark provided a brief moment of levity during the high-profile trials of the Whisky Ring.
The German-born distiller did not go unpunished. Federal agents confiscated his distillery and whiskey stocks and took all or part of a $50,000 surety bond held by the Internal Revenue Service that allowed him to make whiskey. Originally indicted on felony charges, those were dropped for Teuscher when he agreed to cooperate. He pleaded guilty to two misdemeanors and was sentenced to one day in jail and a $1,000 fine. Although he spent the designated day in jail, Teuscher apparently balked at paying the $1,000 fine, likely on the grounds that he already had suffered sufficient financial losses for his folly in joining the Ring. In the end the presiding judge blamed mistakes in sentencing Teuscher and discharged him without requiring he pay the fine.
William Bergenthal was well known for his ferocious temper. The Milwaukee, Wisconsin, distiller and liquor dealer, it is said, once physically threw a deputy sheriff out of his office who had come to collect a bill because the lawman made a remark impugning his honesty. Bergenthal would have been well advised to do the same when Federal revenue officers came looking for bribes. He did not and thereby became implicated in the Whiskey Ring.
Bergenthal subsequently was hauled into court by his jailed brother. Whether August was angry at having to take the rap for the tax cheating or other reasons, the brothers had parted ways with August working elsewhere in the whiskey trade. He still had a substantial financial interest in William Bergenthal Co., however, and sued for a right to examine the books. When a lower court agreed that August must have access, Bergenthal appealed the decision to the Wisconsin Supreme Court and lost a second time.
Fans of the movie version of Anne Rice’s “Interview with the Vampire” will recognize at right the New Orleans above-ground tomb of her blood-sucking hero, Lestat. When visiting Lafayette Cemetery #1, tourists often seek out the cast-iron crypt and wonder who actually is interred there. It is Otto Henry Karstendieck, a liquor dealer whose life held its own vicissitudes.
All six were sent to the State Penitentiary at Moundsville, West Virginia, shown here, more than 1,000 miles from Otto’s New Orleans home. He was anguished at serving time so far from his children, now being looked after by relatives. While at Moundsville he brought a case before the U.S. Supreme Court arguing that the decision to send him out of Louisiana was not authorized by law and should be voided. The Supremes did not agree. Otto spent a full sixteen months in prison a long way from his little ones.
