In Liquor We Trust — The Rise, Fall, and Rebirth of America’s Original Whiskey Boomtown

The year is 1897. In a city next to the Illinois River, the streets are bustling with life. The newly built Flemish renaissance-style city hall draws the eyes of each passerby. A short walk north, a uniquely imposing mansion boasts a solarium and multiple balconies. The owner, Joseph Greenhut, is a local distillery owner and philanthropist. His home is one among many elegant residences that tell of local wealth. This is a city that is hard at work, and reaping the rewards. This is a city whose riches were built by whiskey. This is … Peoria.

Before Kentucky became America’s undisputed center of whiskey production, an unlikely city a little over 300 miles northwest of Louisville was enjoying its own golden era. If you were a whiskey drinker in America in the late 19th century, you would associate Peoria, Illinois, with liquor first and foremost. “Peoria was the whiskey capital of the world,” Andy Faris, president of Peoria-based JK Williams Distilling, tells me. “It was really a boomtown, and a little bit like the Wild West.” 

The Peoria area produced 18 million gallons of alcohol in 1880, which was more than the entire state of Kentucky. By 1887, Peoria was home to 12 distilleries in total, a peerless figure in its era. And by 1890, Peoria distilleries accounted for 40% of all alcohol produced in the United States. 

But this heyday wouldn’t last. While the rich businessmen of the day, such as Greenhut, were revered as local heroes for their contributions to the community, the outward display of wealth and success distracted from a dark underbelly of ruthlessness and coercion in the local whiskey industry. Plus, an even deadlier blow for the city’s ambitious distillers was waiting in the wings. 

HOW THE WHISKEY HUB WAS BORN

For distillers in the 19th century, Peoria was an ideal place to set up business. It was near to important agriculture centers, and as a result, had access to a steady supply of corn. “It made getting the resources that they needed for making whiskey relatively easy,” says Eric Zandona, author of “The Atlas of Bourbon and American Whiskey: A Journey Through the Spirit of America.” Plus, he points out, proximity to rail lines made the location convenient for large industry. “Just north of Peoria is Chicago, by rail or by barge, and then south of Peoria was St. Louis, which they could easily get to by going down the Illinois River to the Mississippi.”

It was also the ideal spot for another vitally important raw material. Like Kentucky, the Peoria area has a wealth of limestone-filtered water. “There is a huge limestone aquifer under central Illinois called the Sankoty aquifer,” says Bernie Drake, Peoria Historical Society member and tour guide. “The limestone purifies the calcium in the water, and it removes the iron salts from the water.” 

“Before there was income tax, [Peoria] was paid for by whiskey. As the money flowed in, the cultural institutions followed very quickly.”

In this era, it was especially important for distillers to set up their businesses in locations which had a favorable water supply. “In the 1800s there were few if any water-treatment plants like we have today,” explains Drake. Limestone-filtered water typically has a clean and slightly sweet taste, and so the Sankoty aquifer gave Peoria distillers an early advantage in making great-tasting whiskey.

Peoria’s first distillery was started by Almiron Cole in the early 1840s. Within just a few years, he turned the venture into a successful business, sold it on, and began constructing even larger premises. As well as enjoying the local whiskey, thirsty Peorians of the day could savor beer from Peoria’s first brewery, established by Andrew Eitle in 1837, in one of the many lively saloons in the city. 

In the years to come, more distilleries followed Cole’s. Among the most famous of the so-called “whiskey barons” of Peoria was the Austrian-born Joseph Greenhut, whose family moved to the state of Illinois when he was a child. In 1881, Greenhut and business partners established the Great Western Distillery (sometimes referred to as The Great Western Distilling Co.) and just three years later, he built his lavish mansion. 

As the industry grew, the town began to reap the benefits. The whiskey barons were powerful local figures, often funding beautiful buildings and local theaters. Greenhut, a Civil War veteran, contributed substantially towards the Grand Army of the Republic Building in the city. The Grand Opera House and the Palace Theater were also examples of buildings that received proceeds from local distilleries. “Before there was income tax, [Peoria] was paid for by whiskey,” says Faris. “As the money flowed in, the cultural institutions followed very quickly.” But as the industry boomed, some of those prospering from Peoria’s burgeoning wealth hatched a plan to monopolize the whiskey market, with a goal of preventing overproduction and taking control of as many local distilleries as possible.

THE WHISKEY TRUST

To properly explain how and why overproduction of whiskey became a problem in Peoria, we must look back to the Civil War. Congress needed money, and President Lincoln introduced income tax to raise revenue. This measure was short-lived, ultimately repealed in 1871. Following the war, taxation on some luxury items, including alcoholic beverages, increased. Between 1868 and 1913—the latter year being when income tax was reintroduced—Congress raised 90% of all revenue from taxes on liquor, beer, wine, and tobacco. In terms of liquor tax, the federal district containing Peoria paid a substantial share. 

As taxes rose, distillers scrambled to protect their profits, often ramping up production in advance of a new tax rate taking effect, as any whiskey that had already been produced would not be subject to the tax hike. In some cases, this led to an oversupply, which made the whiskey hard to sell at a good profit. Pools sprang up in the 1870s, whereby distillers would make loose arrangements between one another to avoid overproduction, but such agreements were often broken, rendering this method unsuccessful in preventing a flooding of the market. 

The largest distillery in Peoria in 1887 was the Great Western Distillery, and Greenhut was intent on creating a trust comprised of distilleries across northern states, with a mission to tackle overproduction. Taking inspiration from the model that was used by Rockefeller’s Standard Oil Company, Greenhut created the Distillers’ and Cattle Feeders’ Trust, which was later known colloquially as the Whiskey Trust. The trust was so named due to the repurposing of spent grain as a nutritious feed for cattle. “The stillage that’s left over, they would feed to the animals,” says Zandona. “They had huge pens, for cattle and for hogs.” The animals, once reared, could be shipped to the meatpacking district in Chicago, which at the time was the country’s largest livestock center.

Greenhut’s intent was to take and maintain control of the whiskey market, and at least for a while, he was focused on making membership of the trust seem appealing. The Whiskey Trust promised to protect profits for its members. Those who joined essentially handed over control of their distilleries to the trust, and in return they received money or dividends. From the trust’s earliest days, the founding members were extremely confident in their mission. On Friday, July 22, 1887, the New York Times wrote of the Distillers’ Trust: “They say that the scheme is an assured success, and that the Trust will, without doubt, take in all the distilleries west of the Ohio River within a few weeks. In fact they expect to have 90 per cent. of the distillers in the pool inside of 30 days.”

“The Whiskey Trust is a part of this much larger story about monopoly power and antitrust, and all those sorts of things that we still are dealing with today, but on a different scale, with different companies.”

Trust members were reduced to employees of their own businesses, but were paid by the trust even while their distilleries remained closed. As the trust gained momentum, it was notoriously heavy-handed in its strategies for convincing new members to join. In some cases, the Whiskey Trust would deliberately attempt to undercut the pricing of those resisting, to put competitors out of business. And in one notable instance, it was accused of sponsoring the use of dynamite on a Chicago distillery that refused to join. 

For a while, at least, that bullish persistence to dominate the market paid off, and at the peak of its success, more than 80% of the nation’s spirits were produced by members of the Whiskey Trust. But trouble was afoot for Greenhut’s organization, and the trust’s days of dominating the market were numbered. 

LOSING GRIP

In 1890, in an attempt to prevent business monopolies such as the Whiskey Trust, Congress passed the Sherman Antitrust Act. This rendered the Whiskey Trust illegal, but ultimately the act was not effective in halting the operation. “The first reaction of the Whiskey Trust was to change from a trust company to a stock company and to change their name from the Distillers’ and Cattle Feeders’ Trust to the Distillers’ and Cattle Feeders’ Company,” says Drake. In fact, the company became one of the first to be listed on the Dow Jones Industrial Average. But with new competition springing up faster than the trust could crush it, the heyday for its members was over. 

The true demise of the Whiskey Trust, Drake explains, came shortly afterwards. “The company began to have financial troubles in 1893 and in 1895 it filed for bankruptcy,” he says. “The court eventually sold 17 of the trust’s distilleries to a new company called the American Spirits Manufacturing Company. The Distillers’ and Cattle Feeders’ Company was officially dissolved by the state of Illinois in 1920.”

In just eight years during the late 19th century, the Whiskey Trust had produced more than 300 million gallons of alcohol. And while history may not repeat itself, it often rhymes, as Zandona points out. “The Whiskey Trust is a part of this much larger story about monopoly power and antitrust, and all those sorts of things that we still are dealing with today, but on a different scale, with different companies,” he says. 

In recent times, we might look to retailers both in and out of the drinks industry who are able to rise to prominence at an alarming rate by undercutting their competitors. But once they control the market, they can naturally raise their prices, for consumers have little choice but to buy from them.

“Seeing what people have done in the past is usually reflective of how we kind of are today,” Zandona says. “Certain circumstances change in history, and certain attitudes change, but at the core people are kind of the same.”

HOW PROHIBITION CHANGED PEORIA

The 18th Amendment would deal a substantial blow to Peoria’s thriving whiskey industry, but the stage was set for Prohibition some years before the Volstead Act. By the time the United States was getting ready to enter the First World War, the temperance movement had gained plenty of traction. Advocates for temperance had already succeeded in passing some prohibition laws on state levels, and in 1917, the introduction of the Food and Fuel Control Act made it illegal to use grain to produce distilled spirits. It was intended as a short-term measure, though it ushered in a harsh reality for Americans, and provided temperance advocates with another step towards their goal of limiting alcohol production. 

In January 1920, the 18th Amendment went into effect. It prevented the manufacture, sale, and transportation of intoxicating liquors. The Volstead Act, enacted to enforce the amendment, followed shortly thereafter. With legal distilling banned, moonshine—a high-proof, unaged corn spirit—became popular. Some distillers became bootleggers, and this practice fueled the creation of criminal gangs who sought to control local bootlegging operations. 

JK Williams was one distiller who got into the bootlegging business—most likely to stay afloat throughout Prohibition—but later decided to leave the city behind. And he wasn’t the only Peoria resident to fight back against Prohibition. “Peoria’s Pere Marquette Hotel, which opened during Prohibition, has a hidden liquor cabinet built into the wall in the top-floor Presidential Suite,” says Marilyn Leyland, Peoria Historical Society member and tour guide. This hidden bar was discovered during a period of renovation. “As older buildings have undergone remodeling, it’s not unusual to find a hidden stash.”

Since at least 1964, when Congress passed a resolution designating bourbon as a distinctive product of the U.S., Americans have associated this spirit with the state of Kentucky first and foremost. But if not for Prohibition, would America’s whiskey landscape have looked different today? Perhaps, if not for this fatal blow to the industry, Peoria’s time in the sun as a whiskey boomtown might have lasted a little longer. 

“Peoria’s Pere Marquette Hotel, which opened during Prohibition, has a hidden liquor cabinet built into the wall in the top-floor Presidential Suite. As older buildings have undergone remodeling, it’s not unusual to find a hidden stash.”

Zandona agrees. “My guess is that it probably would have been harder for the other whiskey companies to really compete and dominate in the same way without Prohibition,” he says. “If Prohibition hadn’t come along and shut them down, [Peoria distilleries] would have had this massive advantage in terms of scale.” However, he also points out that the Second World War caused disruption to the entire industry, when many distilleries transitioned from making whiskey to producing industrial-strength alcohol for medical supplies, plastics, antifreeze, and other purposes.

Today, remnants of Peoria’s post-Prohibition return to distilling remain in the city; much like in wartime, some facilities have recently been repurposed for industrial distilling. For example, the Hiram Walker Distillery—constructed on the site of the Great Western Distillery—was once the largest in the world, and was more recently owned and operated by Archer-Daniels-Midland Company, which produced ethanol for both industrial use and for the beverage industry. Archer-Daniels-Midland sold the site to BioUrja Group in 2021.

REVIVING THE TRADITION

Until the 21st century, Peoria’s history as a whiskey center was fading from memory. Then, nearly 100 years after JK Williams fled Peoria to escape run-ins with the criminal underworld, his great-great-grandsons, Jesse Williams and Jon Williams, started a distillery bearing his name in the city once again. Today, Faris is at the helm. Although he hadn’t intended on making Peoria home, he became enthralled with its rich history, and he and his wife decided that the time was right for the move. And while the city’s whiskey-making heyday might be long over, Faris hopes to be part of keeping the tradition alive.

“I’ve been kind of an amateur historian since we moved to Peoria to take on this endeavor,” says Faris. While he concedes that taking over an existing operation was not quite the shortcut into the industry that he first imagined, he did benefit from the inventory. JK Williams whiskey is aged for four years; any bourbon that is sold as “straight” bourbon must be aged in new, charred oak barrels for a minimum of two years, and Faris believes that the extra time makes a difference to quality. “Years zero to two, you’re not really imparting the true flavor from the barrels,” he says. Today, Faris makes bourbon using the original recipe first created by JK Williams himself. 

As Faris describes his home and its history, it’s easy to see that this city was once steeped in the influence of the whiskey industry. In the way that Peoria was focused on liquor production—and all the businesses that support it, such as cooperages—I’m reminded of Burton-On-Trent: the original company town for the U.K. beer industry. It was the industry that funded many aspects of public life and gave the city its wealth, character, culture, and personality. 

Now, distilleries are opening in Peoria again: Besides JK Williams, Black Band Distillery is another recent addition to the city. Faris is happy to be working towards reestablishing Peoria as a known center for quality whiskey, and as younger generations turn their attention to spirits, his is proving to be a good business decision, as well as one that satisfies his desire to preserve a little slice of American distilling history. “This town was built on whiskey,” he says. “I feel like I’m in the right place.”

Words by Hollie StephensIllustrations by Colette Holston