and breweries— both those that were already in operation making dealcoholized beer, as well as some that had long sat idle— began to prepare in earnest. To help fund their rehabilitations, 10 more breweries issued $ 5.6 million worth of stock in November and December. Among these was a direct public offering( DPO, or an un-intermediated IPO) of 50,000 shares from Fort Pitt Brewing of Sharpsburg, Pennsylvania, with the funds raised earmarked for expansion.
Fort Pitt subscriptions opened at 10 am, and all shares were sold before noon. Nationwide newspaper coverage of the successful sale, reminiscent of the DPO of the Bank of the United States in July 1791, further excited the public’ s imagination about the financial possibilities associated with“ beer stocks.” While the unemployment rate was approaching 25 %, for those workers fortunate enough to keep their jobs, the era’ s deflation and government policies promoting high nominal wages proved something of a boon, leaving them with some savings but no clear place to invest it. After several waves of regional panics and failures, even banks were not considered a safe place to keep funds. Furthermore, many Americans were excited about the opportunity to get in on the ground floor of beer’ s return after the long years of Prohibition. Historically, most US breweries had been family-owned partnerships or closely held corporations.
The Erie Brewing Company also offered stock to the public early on. The company, which had operated in Erie, Pennsylvania, since 1848, gave up brewing completely during Prohibition, devoting its resources to the manufacture and sale of ice. To shift back to beer, the company needed capital quickly. The corporation’ s stock had long been closely held, but its shareholders agreed to directly offer 100,000 shares to the public— 10 % of the company— at a price of $ 2 a share to raise $ 200,000( around $ 5 million in today’ s dollars). A surviving stock certificate shows that Francis M. Keely purchased 100 of those shares on January 12, 1933. Other extant certificates and shareholder lists provide a flavor of who invested, which is a complex and interesting topic for another time.
On March 13, 1933, nine days after taking office, FDR asked Congress to immediately modify the Volstead Act to allow legal beer. The Cullen-Harrison Act, which raised the definition of intoxicating beverages to 3.2 % alcohol by weight( 4 %
Courtesy of Art Distelrath
Fort Pitt Brewing Company’ s new stock house under construction in 1934. The funds raised from Fort Pitt’ s DPO were earmarked for expansions like these.
by volume) quickly passed both the House and Senate. On March 22, Roosevelt’ s signature started a 15-day clock that made 3.2
beer legal at the federal level at 12:01 am on April 7. The legislatures of many states with their own prohibition laws likewise went into overdrive to clear the way for beer. Twenty states, including most of the large beer producing ones such as New York, Wisconsin, Pennsylvania and California, welcomed 3.2 beer on April 7.
Between Roosevelt’ s March 13 beer call and the“ New Beer’ s Eve” countdown to April 7, another distinct wave of beer stock issuances occurred. On March 16, the longstanding Berghoff Brewery of Fort Wayne, Indiana, conducted an IPO of 60,000 shares at $ 5.75 each. Six days later, the newly incorporated Croft Brewing Company held an IPO of 1.5 million shares at $ 1.30 each. Croft used the proceeds to purchase and rehabilitate the vacant Highland Spring Brewery, which traced its roots to 1869. Walter Croft, a major player in the corporate reboot, had served as Highland Spring’ s brewmaster prior to Prohibition. The company engaged architect Emil Hartman to design a new bottling plant adjacent to the brewery, and
This IPO advertisement from the Fred Krug Brewing Company appeared in the Omaha World-Herald on July 21, 1933.
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