The Whiskey Making Was Hard, But the Government Was Easy

Our first president might be shocked at the regulatory machinery imposed on distillers.

George Washington's rebuilt distillery at Mount Vernon recently celebrated its 10th anniversary with a team of master distillers from around the country producing a commemorative rye whiskey using the old-fashioned methods of Washington's time.

When Mount Vernon farm manager James Anderson pitched the idea of opening a whiskey distillery to Washington in 1797, it was hardly a novel idea. Many early Americans distilled alcohol and whiskey surpassed rum as the young nation's spirit of choice after the Revolutionary War.

Despite a somewhat saturated market, Washington quickly distinguished himself in the whiskey business—his distillery would become one of the largest in the country, producing 11,000 gallons during its peak years.

Washington's success should not obscure the fact that making whiskey at the turn of the 18th century was hard. Everything about the whiskey-making process—from milling the grain, to stirring the mash, to firing the stills—was an order of magnitude more difficult than today's mechanized and streamlined process.

What stood out about this process was the intense amount of manual labor it took to run Washington's distillery. Nearly a dozen members of the Mount Vernon Historic Trades team were on hand on anniversary day to re-enact firing the pot stills, loading the mash pits with grain, and monitoring the temperature of the fermenter. One historical re-enactor spent all day chopping firewood with an ax. Another demonstrated how mash barrels were made by hand in that era.

After a long day of work, the distillers and re-enactors produced the equivalent of 40 liquid gallons of 50 percent alcohol rye whiskey. Even mid-sized whiskey distilleries today can produce more than 2,000 gallons a day or more than 1 million gallons a year. An expert cooper during Washington's time would have been able to produce a single barrel in a day. Brown-Forman cooperage in Louisville, Kentucky, currently pumps out 2,500 a day.

Entrepreneur that he was, Washington would be awed by the technological advancements in distilling capitalism has created—advances that, ultimately, have resulted in the wonderfully consistent and smooth whiskeys we enjoy today.

His awe would surely turn to disgust if someone tried to explain to Washington the modern-day nightmare that is the Virginia Alcoholic Beverage Commission. For all of the hard work to produce liquor in his time, dealing with the government was easy.

Washington was never forced to sell his alcohol exclusively through government-run liquor stores. Or send all the revenue from his sales at Mount Vernon to ABC headquarters, and receive a paltry 46 percent in return. Or pay the nation's third-highest liquor tax.

Washington's customers would have been just as frustrated. ABC allows visitors at distilleries to sample no more than three ounces of spirits (served in half-ounce pours), even though they can drink as many IPAs as they want at the local brewery. Virginians often pay significantly more for a bottle of booze than consumers in neighboring states, with the state's high mark-ups and liquor taxes.

Virginia's liquor laws are among the worst in the country, but almost every state in the Union has its share of outdated and backward booze laws. These laws survive largely from the post-Prohibition era, when states rushed to fill the federal void. States adopted something called the three-tier system, mandating the separation of producers, wholesalers and retailers of alcohol, something not required of the vast majority American industries.

Within this artificial structure, producers of alcohol are forced to sign away their sales rights to third-party distributors, rather than being able to freely sell their spirits directly to consumers. The three-tiered system also produces a patchwork of irrational and competition-inhibiting laws at the retail level, like Indiana prohibiting gas stations and convenience stores from selling cold beer.

To be fair, were he alive today, Washington might have supported some distilling regulations. After all, he signed the Whiskey Tax of 1791 that touched off the notorious Whiskey Rebellion. It bears noting, however, that the tax itself was largely the brainchild of Treasury Secretary Alexander Hamilton, who advocated for it rather than a direct tax to pay off the young country's federal debt.

Still, I think Washington would be stunned at just how intertwined the government has become—especially in his home state of Virginia—with the business of booze. Our nation's "original craft distiller" may even have started his own whiskey rebellion.

For more on distilling in Washington's day, please see this Reason video: