American Whiskey During Prohibition: What Survived and Why

By July 1929, about 300,000 barrels of whiskey remained in bonded storage, yet medicinal supplies were running short. The Treasury was preparing permits to make more bourbon and rye. Even under Prohibition, American whiskey had a legal route from barrel to bottle, and eventually back to the still. [4]

What survived was not always a working distillery. Medicinal sales, stored barrels and transfers between companies kept whiskey in circulation. A warehouse, bottling operation or trademark could outlast the business that had originally made the spirit. [2][3][5]

In short

• US medicinal prescriptions were subject to statutory limits. [1]
• Accounts differ on whether the familiar six licences were national or confined to Kentucky. [2][3][6]
• In July 1929, the Treasury was preparing permits to replenish medicinal stocks. [4]

What survival meant for American whiskey

Selling whiskey and making it were two different things during Prohibition. Michael R. Veach records that distilleries continued bottling and selling spirits until Prohibition began on 16 January 1920. Afterwards, existing stocks supplied the permitted medicinal trade. A bottle sold during Prohibition could contain whiskey distilled well before it began. [2]

The George T. Stagg Distillery makes that distinction clear. Kentucky Historical Marker 2428 records its federal permit to bottle medicinal whiskey during Prohibition: evidence of a continuing bottling business, rather than uninterrupted distillation. The marker also records Albert Blanton becoming president in 1921 and Schenley Distillers Corp. buying the distillery in 1929. [5]

Brands had another way through. Stocks and names could pass to a new owner while the original production business disappeared from the story. Old Fitzgerald and Old Charter illustrate the difference: counting brands that survived gives a different picture from counting distilleries that survived. Both matter, but they tell different stories. [2]

The medicinal exception had strict limits

Medicinal whiskey remained legal in the United States, but access was tightly controlled. Section 7 of the National Prohibition Act, dated 28 October 1919, required a physician to hold a permit before prescribing liquor. It allowed no more than about 473 ml (one US pint) of spirituous liquor for internal use per person in any ten day period. Each prescription could be filled only once. [1]

The rules tightened in 1921. The Supplemental Act barred medicinal prescriptions for malt liquor, including beer, and limited other prescriptions to a combined maximum of about 237 ml (half a US pint) of alcohol per person in ten days. Each physician was also limited to 100 prescription blanks in 90 days. Crucially, the earlier limit measured liquor; the later one measured alcohol. The two quantities cannot be compared as though they controlled the same thing. [1]

Those restrictions were challenged. In Lambert v. Yellowley, Justice Brandeis's majority opinion upheld them as measures for enforcing the Eighteenth Amendment. Justices Sutherland, McReynolds, Butler and Stone dissented. The medicinal trade endured, but physicians did not have unlimited discretion over it. [1]

Licences belonged to companies, not simply to buildings

The familiar list of six concerns companies, not six individual distilleries. Veach identifies six companies licensed to sell medicinal spirits. Trade writer Chuck Cowdery names Brown-Forman, Glenmore, Frankfort Distilleries, Schenley, American Medicinal Spirits and A. Ph. Stitzel. He emphasises that companies held the licences, placing the Stagg distillery under Schenley's licence. [2][3]

Verdict: Disputed. The geographical scope of the “six licences” claim remains unsettled. Veach and Cowdery describe six holders nationally. Brown-Forman's own history instead describes its permit as “No. 3 of only six federal licenses in the state of Kentucky”. Cowdery also says ten licences were authorised, without citing a primary source for that number. [2][3][6]

The practical distinction is straightforward: a licensed company, a production site and a brand were not interchangeable. A permit held by one company could support sales of whiskey bearing several names. Keeping those categories separate reveals more of the industry's survival than a simple tally of distillery buildings. [2][3]

Warehouses kept stocks and brands together

Barrels gathered in consolidation warehouses helped whiskey weather the shutdown of ordinary sales. Veach describes distilleries moving stocks into government-licensed warehouses to wait out Prohibition. Cowdery explains the consolidation as a response to the difficulty of securing whiskey scattered across rural warehouses. [2][3]

A. Ph. Stitzel's warehouse preserved names as well as liquid. According to Veach, it sold Old Charter, Waterfill and Frazier, Henry McKenna and Geo. A. Dickel's Cascade on commission. It also acquired the stocks and trademarks of Old Fitzgerald and Old Elk. Commission sales kept whiskey moving on behalf of others; outright purchases brought stocks and names into new ownership. Both arrangements allowed established brands to remain in trade. [2]

Here lies much of the survival story. Barrels could move, and trademarks could travel with them or separately. A familiar name appearing after Prohibition might owe its survival to another company's warehouse rather than to continued work at its original distillery. To follow that history, the warehouse record is often more revealing than the label. [2]

Dwindling stocks brought distilling back

The medicinal trade eventually needed fresh whiskey. In July 1929, Time reported about 300,000 barrels in bonded storage and said the Treasury was preparing permits for bourbon and rye production “to replenish fast-dwindling medicinal stocks”. Prohibition Commissioner James M. Doran said the Bureau would proceed with applications. Existing barrels alone would not sustain the trade indefinitely. [4]

The barrels were running down, and the question had changed: how could the trade replenish them rather than simply preserve them? By mid-1929, the Treasury was preparing to replenish medicinal whiskey stocks. Documented. The July 1929 report explicitly connects those preparations with dwindling supplies. [4]

Time reported proposed production comprising 70% bourbon and 30% rye, with a start expected in late autumn 1929 or near January 1930. These were production plans, rather than a record of completed distillation. The report does not establish when the first newly authorised whiskey was actually distilled. [4]

The earliest known source, Time, “National Affairs: Medicine”, 29 July 1929, supports the shortage, permit preparations, proposed proportions and expected timing: https://time.com/archive/6776935/national-affairs-medicine/. This record was last checked on 7 November 2026.

The broader restart chronology remains Disputed. Veach dates renewed production to 1928; Cowdery gives 1929. The contemporary Time report still described permits being prepared in July 1929. The editorial chronology used here is 1929 to 1930, after permits were granted, while retaining that disagreement. [2][3][4]

Annual quantities also differ between the accounts, which use different measures, including proof gallons and gallons of spirit. Those figures cannot be combined into one production allowance. Together, the accounts support a clear but limited conclusion: limited new distilling was permitted late in Prohibition to replenish medicinal supplies. [2][3][4]

Old Forester's continuity claim is narrower than it sounds

Old Forester's distinctive claim is about who sold it. Brown-Forman says it received its medicinal licence in 1920 and continued selling the bourbon. The producer describes Old Forester as the only bourbon sold by the same company before, during and after Prohibition. That is a claim of company continuity, not exclusive survival among bourbon brands. [6]

Other names took different routes. Veach traces Old Charter, Henry McKenna and Old Fitzgerald through Stitzel's warehouse and acquisitions. Four Roses' own history describes another corporate path: at the end of Prohibition, the Paul Jones Company acquired the Frankfort Distilling Company and adopted the name Frankfort Distilleries, Incorporated. [2][7]

Old Forester's claim concerns continuity of company and brand. The warehouse histories show how other brands endured through changes of ownership and sales arrangements. [2][6][7]

Old stock was not necessarily better stock

Some medicinal whiskey had spent 17, 18 and even 20 years in wood by the time it was bottled late in Prohibition. Veach describes it as “very tannic”. Age had not necessarily improved what remained: prolonged time in the barrel could leave whiskey with an assertive oak character. The supply problem involved the character of the stocks as well as their dwindling quantity. [2]

Repeal brought fresh competition as well as renewed opportunity. Veach describes Scotch and Canadian whiskies entering the market after repeal, while Brown-Forman records increased production in 1933. American producers were not simply reopening the old trade with the old stocks. They had whiskey to replenish and imported supplies to compete against. [2][6]

Common mistakes when reading the history

“Every distillery shut completely.” Stagg retained a medicinal bottling permit, while consolidation warehouses preserved stocks. Distilling was only one part of the business. [2][5]

“Doctors could prescribe whatever they wanted.” Statutory limits governed prescriptions, tightened in 1921 and upheld by the Supreme Court. [1]

“A surviving brand proves an uninterrupted distillery.” Stitzel's dealings show how stocks and trademarks could survive in another company's hands. [2]

Where to go next

• The History of Bourbon and Kentucky Whiskey: follow the wider development of the industry.
• When Whisky Was Prescribed: Medicine, Prohibition and Historical Claims: examine medicinal claims as history, not medical advice.
• Moonshine Running and NASCAR: The Documented History and the Legends: explore the separate history of illicit whiskey transport.

Sources

1. Cornell Law School, Legal Information Institute. Lambert v. Yellowley, 272 U.S. 581. Supreme Court decision, 1926. https://www.law.cornell.edu/supremecourt/text/272/581
2. Michael R. Veach. Prohibition and American Whiskey. Bourbonveach.com, 6 September 2021. https://bourbonveach.com/2021/09/06/prohibition-and-american-whiskey/
3. Chuck Cowdery. Who Had Medicinal Whiskey Licenses? Trade blog, March 2014, updated 2023. https://chuckcowdery.blogspot.com/2014/03/who-had-medicinal-whiskey-licenses_7.html
4. Time. National Affairs: Medicine. 29 July 1929. https://time.com/archive/6776935/national-affairs-medicine/
5. Kentucky Historical Society, ExploreKYHistory. O.F.C. and Stagg Distillery. Historical Marker 2428, dedicated 1 May 2014. https://explorekyhistory.ky.gov/items/show/512
6. Old Forester, Brown-Forman. Old Forester Bourbon History and a Legacy of "Firsts". Producer fact sheet, edition undated. https://www.oldforester.com/wp-content/uploads/2022/06/FactSheet_OFD_History.docx-2.pdf
7. Four Roses. Four Roses Through the Decades: 1920 to 1930. Producer's account, publication date not supplied. https://www.fourrosesbourbon.com/blog/four-roses-through-the-decades-1920-1930

This desk-researched article uses the supplied verified fact sheet, distinguishing contemporary reporting, retrospective historical accounts and producers' claims.

Last checked: November 2026