Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer (6 page)

The Busch-Church wedding took place in the home of Marie's widowed mother, but newspaper accounts played up the upper-crust aspects of the event—the diamond-encrusted platinum bracelet the groom gave the bride, the $10,000 check his grandmother Lilly presented to the couple, the plans for a European honeymoon while a small army of craftsmen redecorated the gray stone mansion his father had given him on Lindell Boulevard, the city's most fashionable thoroughfare.

The Busch family had not been embraced by St. Louis high society, which disapproved of their earthy exuberance and the fact that their fortune, massive though it was, flowed from such a plebeian enterprise as making beer. Denied membership in the WASPish St. Louis Country Club, Gussie's father, August A., built his own weekend social club in south St. Louis County, a few miles from Grant's Farm, starting with an elegant hotel, the Sunset Inn, then adding a golf course and swimming pool in 1918 to complete the Sunset Country Club. In a typically Buschy touch, the pool at Sunset was the first in the St. Louis area that allowed men to swim topless.

August A. also founded his own foxhunting club, the Bridle Spur Hunt, which rode in full regalia twice a week through the woods and pastures of Huntleigh Village, an estate-studded suburb that was becoming something of a Busch family enclave. Gussie's sister Clara and her husband Percy Orthwein maintained a mansion there, as did his brother Adolphus III and his cousin Adalbert von Gontard, the son of Gussie's great-aunt Clara and her German husband, Baron Paul Kurt von Gontard. Most of the Busch–Orthwein–von Gontard clan participated in the hunt, but Gussie stood out. In his mid-twenties, compact and muscled, clad in the hunt's traditional pink jacket, white breeches, and black velvet hat and knee-high English boots, always riding headlong in the lead as the club's Master of Fox Hounds, he was without question the alpha Busch.

The marriage to Marie produced two daughters—Lilly in 1923 and Carlota in 1927—but it didn't alter Gussie's womanizing ways. He had begun a dalliance with a married woman in their social circle, Elizabeth Overton Dozier, when Marie contracted pneumonia and died in January 1930. By all accounts, Gussie was devastated by the death of his beautiful young wife (she was thirty-three), but it didn't cause him to break off his relationship with Elizabeth. When he married Dozier three years later, the society pages practically clucked with disapproval. One article noted that the bride was “recently divorced” and the ceremony was “performed in a New York hotel with few present,” while recalling that Busch's previous wedding had been “an outstanding social event.”

The second marriage didn't yield much in the way of domestic bliss: Elizabeth moved into the mansion with the three children from her previous marriage, but Gussie's youngest daughter, Carlota (“Lotsie”), didn't get along with her, and the six-year-old promptly ran away from home to impress the point on her father. Elizabeth was asthmatic, a condition exacerbated by horse dander, which kept her from participating in one of the great passions of Gussie's life. Their relationship was stormy from the start, and got worse over the years as Elizabeth developed a dependence on alcohol and prescription drugs. Decades later, Lotsie would recall that her stepmother “was in bed much of the time.” Fortunately for Gussie, he had a company that required his attention, and he threw himself into the task with the same hard-charging energy he applied to chasing foxes and women.

During Prohibition, Gussie had been given the unenviable job of overseeing daily operations of the all but moribund brewery, while Adolphus III had focused on the company's default profit center, the Yeast, Malt and Corn Products Division. The minute the taps were turned back on, however, the relative importance of their respective roles was reversed. Gussie, ostensibly the No. 2 man, now held the power. Publicly, he deferred to his older brother as the president of the company, but privately, he was determined to run the brewery as he saw fit, and to hell with anyone who didn't like it.

The task ahead of him was enormous. As part of the price of repeal, Congress and the president had imposed new regulations on the industry, outlawing some of the sales practices that had helped make his grandfather Adolphus so successful. Roosevelt created the Federal Alcohol Control Administration to establish codes for fair competition, and one of FACA's new rules prohibited breweries from owning any financial interest in retail establishments. Now they had to sell their product in arm's-length transactions with independently owned distributors who in turn sold to the taverns and restaurants. The so-called three-tier system meant that Gussie had to put together a network of hundreds of wholesalers around the country, teach them how to sell his beer, and cut them in for a commission.

Further adding to his cost of operation, Congress had raised the federal excise tax on beer from $2 a barrel to $5. Gussie didn't think he could offset the new costs by raising prices in an economy just starting to recover, and he refused to skimp on ingredients or cut corners with the forty-five-day Budweiser brewing process. The good news that orders were exceeding production meant he had to invest heavily to increase plant capacity or risk losing market share to his two national competitors, Pabst and Schlitz. As a result, even as Budweiser regained its No. 1 position, with more than a million barrels shipped in 1934 and 1935, the brewery division continued to run in the red, subsidized by his brother's yeast operations and the proceeds from the government-ordered divesture of the company's ownership interests in taverns and restaurants.

In February 1936 Gussie was elected president of the newly established Brewing Industry Inc., a self-described “organization of leading American brewers.” One of his first acts was to issue a state-of-the-industry report pointing out that since April 1933, America's brewers had paid $800 million in federal, state, and municipal taxes, another $200 million in wages to labor, and $150 million to farmers for grain and other agricultural products used in brewing.

“The records show that more than 50,000 union wage earners are employed directly in the brewing plants,” Gussie was quoted as saying. “The products of the industry are distributed by 15,000 wholesalers, each of whom employs from two to four men. The products are sold to consumers by 175,000 retailers, each of whom employs at least two men. The agriculture products needed require at least 65,000 100-acre farms to produce them, so the industry, directly in the manufacture and distribution of its products, has given employment, and better than average wages, to 650,000 persons.”

The report was practically a point-by-point affirmation of his father's 1930
Open Letter to the American People
pamphlet proposing the relegalization of beer as a cure for the Depression. As it turns out, economists now mark March 1933, the month Congress voted for the return of beer, as the official end of the Great Depression. Over the next three years the economy experienced a robust recovery, with unemployment falling from 25 to 14 percent as beer sales soared. In 1937, however, the economy went into a tailspin, and unemployment shot back up to 19 percent. Economists ascribe the “Great Recession of 1937” to a confluence of factors that sounds familiar today—an attempt by the Roosevelt administration to reduce the deficit by slashing government spending, coupled with a tax increase on the wealthy and a tightening of the money supply by the Federal Reserve. There was widespread fear that the country was going to slip back into a depression.

Viewed from an era of egregious corporate greed, Anheuser-Busch's reaction seems extraordinary. The company announced that it was going to devote its entire 1938 advertising effort to a series of newspaper and magazine ads aimed at calming the nation's economic fears and restoring confidence in the ability of the country's institutions to deal with the problems. The idea was “to sell America to Americans,” according to a statement A-B sent to its employees and the industry at large. “Our challenge is more important than selling beer, more important than making profits.”

The ads contained no pictures of the product, no statements about its merits. Instead they offered patriotic pep talks that might have made Ronald Reagan blush. “Each sunrise in America ushers in new opportunities to those who keep their chins up … who never lose that lusty courage and willingness that made ours the most envied nation on earth,” said one. “Confidence sailed our pioneer forefathers across the turbulent Atlantic,” said another. “Confidence helped our grandfathers extend the stubborn frontier, and made ours the strongest and most abundant land on earth today. Confidence is ready now to take America further still.”

The only mention of Budweiser came in the ads' tagline: “Live life, every golden minute of it … Drink Budweiser, every golden drop of it.”

Without question, there was self-interest behind the ads—Gussie and Adolphus III figured that confident wage-earning men were likely to drink more beer than fearful unemployed men. But the campaign was hardly a cynical ploy. Gussie believed in his gut that serving the public good also served the company, and that goodwill was always the best salesman. It all went back to the beginning, when his grandfather Adolphus first explained to his new partner and father-in-law, Eberhard Anheuser, that their business was not just making beer. “Making
friends
is our business,” he said. Gussie had made that his motto; rarely did he go a day without uttering it. Over the years, he came to the conclusion that the company could never go wrong by doubling down on patriotism and the public good. “If we do something in the public interest which at the same time is profitable to the company, then this is, indeed,
very
good business,” he said.

As it turned out, Anheuser-Busch did very good business in 1938, selling more than two million barrels, surpassing its pre-Prohibition high by 400,000. At a time when the industry as a whole grew by 26 percent, A-B sales increased 173 percent. For the first time in nearly twenty years, the brewery division turned a profit.

All of which helped boost Gussie's public image in St. Louis. No longer was he seen as merely a beer baron's playboy son. Now he was considered a bona fide captain of industry, cut from the same cloth as his grandfather Adolphus. Cocksure and playfully extravagant, he was great copy for the local newspapers, which gleefully reported on his extracurricular activities, whether it was his arrest for driving 70 miles per hour on a city street in his Pierce-Arrow sedan or his purchase of an eleven-ton, thirty-three-foot private bus equipped with a kitchen, bathroom, and sleeping berths for eight. He got the idea for the bus, which he called “my land yacht,” from his pal silent film cowboy Tom Mix, who had customized his traveling horse trailer to include sleeping quarters for humans. On a trip to New York City, Gussie entertained himself by taking a shower as the bus cruised down Fifth Avenue, lathering up and laughing uproariously at the thought that he was probably the first person ever to do that. A reporter for the
St. Louis Globe-Democrat
was on hand when Gussie returned home from an Arizona vacation accompanied by “12 cow ponies, two cowboys and a cowgirl” that he planned to employ in a calf-roping exhibition at the St. Louis Spring Horse Show. To practice for the event, in which he intended to perform, Gussie built an elaborate corral, “patterned after those on Western ranches,” at Belleau Farm. As he watched his hired cowpokes put on a roping demonstration for the newspaper, he boasted that the pony named Indian Summer had cost him $1,000 and was “one of the best roping horses in the nation today.” He was, said the newspaper, “like a kid with a new toy.”

In the years immediately following Prohibition, it was good to be Gussie. He had a valet, a personal barber, and a driver to attend to his daily needs. Tailors came to his office to fit him for his business, formal, and sporting attire. His household staff included a butler, two cooks, several maids and nannies, a laundress, and a yardman. If he was not yet a king, he was definitely a crowned prince. The only thing lacking in his life, as far as he was concerned, was a male heir. Over the course of nineteen years and two marriages, he had fathered three daughters—the youngest, Elizabeth, was born in 1935—and each birth had been more disappointing for him than the last. He loved his girls, and doted on them, particularly Lotsie, whom was spunky and free-spirited and reminded him of himself at her age. But he needed a son to carry on the family name and run the family company; it was an ancestral imperative. His grandfather and father were never far from his mind. He adored August A., whom he invariably referred to as “my good Daddy,” and was awestruck by Adolphus. “Grandaddy would take us hunting, let us smoke and have a drink of whiskey,” he recalled. “I was a big man when I was with him. And everything he touched turned to gold.”

Gussie wanted to be a big man to his own boy—teach him to ride and hunt and run a brewery, encourage him to drink deeply of the golden American dream that his forebears had realized.

He finally got what he wanted on June 16, 1937, when Elizabeth gave birth to August Anheuser Busch III. As if to make it clear to the world that the future leader of the company had been born, Gussie arranged for the baby to be fed a few drops of Budweiser even before he tasted breast milk.

The arrival of August the Third would prove a classic case of “Be careful what you wish for.” Gussie's firstborn son would lead the company to heights his father never dreamed of, but in the process he would commit an act of betrayal that Gussie would never fully forgive.