preferred stock issue

The history of the whiskey that later brought fame to Schenley Distillers dates to approximately 1900, when chemist Frank Sinclair found an underground stream above the junction of the Kiskiminetas and Allegheny Rivers in Pennsylvania. With his charcoal expertise, Sinclair concluded that this stream water was ideal for making whiskey. Around 1900 he acquired the land from Mary Schenley and began what later became known as a Schenley distillery. The Schenley Products Company was organized in New Jersey in 1920. During the 1920s the owner of Schenley, Lewis Rosenstiel, acquired approximately thirty distillers of whiskies and other spirits, including Joseph S. Finch & Company, Napa Valley Wine & Brandy, Greenbrier Distilling Company, and Sam Thompson Distillery Company. During the 1920s and until repeal of Prohibition, liquor manufacturers were under strict government control that limited production for specific purposes. After repeal in 1933, Schenley Distillers Corporation was created in Delaware. In July 1933 Schenley Distillers acquired, in an exchange for 820,000 of its capital stock, the entire capital stock of Schenley Products. The shares of Schenley Distillers were then offered to the public in a deal arranged by Lehman Brothers and valued at approximately $3 million. At this time, Schenley was the second-largest whiskey distiller in the United States, second only to Joseph E. Seagrams, owned by Sam Bronfman. After Prohibition, demand soared for distilled alcohol products. Schenley earned $6.9 million on sales of $40.3 million in 1934. The following year, earnings rose to $8.0 million and sales rose 56 percent to $63 million.