Three weeks into Prohibition, the Wathens were in federal court. By Repeal their whisky belonged to the company that held half of America's supply.

National Prohibition began on January 17, 1920. On January 2, two weeks before it, 8,159 cases of whisky were moved out of the R. E. Wathen distillery in Louisville. The tax on them had been paid at the rate for medicinal whisky. Then, the government said, they were sold to saloons.

On January 27, R. E. Wathen, the company's president, and his manager W. F. Knebelkamp were held for the federal grand jury in Louisville. Witnesses described the whisky "loaded on trucks at night by the aid of a flashlight carried by a mysterious man at the Wathen warehouse," payments to truckmen "made in the dark," and orders to follow a truck with an Ohio license plate to Covington. Former saloonkeepers testified they had bought it and sold it by the drink. By October the case was over, settled with federal fines.

Seven years later R. E. Wathen & Co. was folded into a new company called American Medicinal Spirits, and that company became the Kentucky half of National Distillers. There is a Chicago whisky ring in this story, Judge Kenesaw Mountain Landis, and a second Wathen, who comes at the end.

October 1920: 1,000 cases from Old Grand Dad

That fall a broker named Sadler broke down and confessed to the U.S. Attorney in Chicago. He phoned in terrified: "My life won't be worth a nickel if they don't get here in a hurry." His confession, the papers said, implicated a former Illinois legislator named John J. McLaughlin, who was said to have taken a $30,000 bribe on $125,000 worth of whisky, and O. H. Wathen, described as owner of the Grand Dad distillery at Louisville and of the Louisville baseball club. The U.S. Attorney promised "a scandal that will shake Chicago."

On November 24, 1920, a federal grand jury indicted 31 men for moving 1,000 cases of whisky from the Old Grand Dad distillery to Chicago. The list included O. H. Wathen, Jim O'Leary, "the widely known Chicago saloon keeper and gambler," Michael "Mike de Pike" Heitler, and four Chicago detective sergeants.

The defendants hired so much legal talent the case was called the "million dollar defense." Their first motions were denied by Judge Kenesaw Mountain Landis, who had just been named baseball's first commissioner. The case moved to another judge, and in May 1921 Heitler got 18 months in Leavenworth and a $10,000 fine. What happened to the Wathens in the case is not in any record found.

1924 to 1927: a yeast company and a merger

National Distillers Products Corporation was founded in 1924, out of the wreck of the old Whisky Trust. For a while it was partly a yeast business. In 1925 its Liberty Yeast subsidiary was said to account for about a fifth of National Distillers' sales.

The whisky still in bonded warehouses was the real asset. In December 1926 a committee of six whisky owners, "headed by R. E. Wathen, Louisville," approved, in general, the administration's bill to create a monopoly to make and distribute medicinal liquor. It went nowhere. In August 1927 the Treasury said no new whisky would be distilled for several years. That same month five Kentucky warehouse companies holding more than 150,000 barrels of bourbon merged. In November the American Medicinal Spirits Co. of Maryland announced it would take over Kentucky Distilleries and Warehouse, R. E. Wathen, F. S. Ashbrook, Hill & Hill, E. H. Taylor Sons, and the Baltimore Distilling Co.

1929: the first new barrels

By 1929 the medicinal supply was running out, partly, the Treasury said, because of "robbery of bonded warehouses." In October the government picked three bourbon makers to distill again. American Medicinal Spirits was one. In late November an NEA photographer caught a federal gauger checking its first barrel in Louisville, the first bourbon barreled there in 12 years. The brand was Old McBrayer.

Representative Emanuel Celler of New York wrote to the Prohibition commissioner, James M. Doran, that AMS had been given "40 per cent of the entire gallonage of both rye and Bourbon whisky to be distilled," that in an epidemic "this company could charge any price it saw fit," and that some of its important people had "been haled before the Federal courts for violation of the prohibition law." On December 24 National Distillers' stockholders voted to take over AMS, in which it "already has a large stock interest."

1932: a dividend paid in whisky

In August 1932, with Prohibition still the law, National Distillers announced a "whisky dividend": on October 1, 1934, each stockholder would get 12 quarts for every five shares. Seton Porter, the president, explained: "We have, by observing the laws and selling only where we were permitted to sell, piled up a reserve of stocks. Our stockholders, who have stood by us, deserve to have this dividend." A Connecticut paper called it "the strangest dividend ever declared by an American corporation."

1933: half the whisky in America

By the fall of 1933 a newspaper profile said National Distillers held "about 50 per cent of all the aged and green whiskies now available in America," against about 25 percent for Schenley. Porter, it said, "hopes to make his corporation into the General Motors of the whisky industry." The brands were Old Grand Dad, Old Crow, Sunny Brook, Old Taylor, Mount Vernon, Large, and the Pennsylvania rye it bought that June, Old Overholt. When Repeal came that December, the only distillery running in Baltimore was American Medicinal Spirits.

The company's rival for most of this was Schenley. National went on into chemicals, and in 1987 its whisky business, Old Grand-Dad, Old Crow and Old Taylor among it, was sold to American Brands, the owner of Jim Beam.

1934: O. H. Wathen again

In June 1934 a syndicated news photo ran with a warning from National Distillers: pre-Prohibition Old Grand Dad, Mount Vernon and Sunny Brook were "rapidly disappearing." The man giving the warning was "O. H. Wathen, president of the straight whiskey subsidiary of National Distillers." Fourteen years earlier, a man with the same name, then president of the Old Grand Dad distillery, had been indicted for shipping 1,000 cases of Old Grand Dad to Chicago. The papers never said in so many words that they were the same man.

If you have one of their bottles

Medicinal pints bottled by American Medicinal Spirits still turn up, often whisky distilled in 1916 or 1917 and bottled in 1933, under names like Old Taylor and Hill and Hill. Before 1927 the same whisky would carry the name of the old distillery or of R. E. Wathen & Co. After Repeal, look for National Distillers on the label. To date the bottling, use the strip and the size in How old is this bottle?

National Distillers, year by year

Where the sources disagree

When National Distillers got American Medicinal Spirits. You will read 1927. In 1927 AMS was its own Maryland company. In December 1929 National already had "a large stock interest" and voted to take over the rest.

Which Wathen, and who owned the ball club. The 1920 and 1921 papers print O. H., O. E. and other initials for the Grand Dad Wathen. One paper says Wathen owned the Louisville baseball club. Another says Knebelkamp did.

Who started American Medicinal Spirits. You will read that R. E. Wathen founded it. His company was part of it from the start, but no record found names a founder.

The six licenses. You will read that AMS was one of six companies licensed to sell medicinal whisky. No primary list of six turned up.

The first legal whisky. You will read that AMS was the first to distill legally again in 1929. Two other bourbon makers were picked the same day. The Old McBrayer barrel is the earliest photograph found.

Jim O'Leary. The gambler indicted in 1920 is often taken to be Big Jim O'Leary, son of the Mrs. O'Leary blamed for the Chicago Fire. The 1920 paper does not say so.