The Cereal Beverage and “High-Powered Beer” Scandal

By Kelli Huggins, Education Coordinator

When 18^th Amendment and national Prohibition went into effect in 1920 (local prohibition went into effect in Elmira in 1918), brewers scrambled to find new ways to stay in business.  Some continued to produce beer illegally, but others found ways to work with the Volstead Act.  Under the new law, only “near beer” containing less than 0.5% alcohol could be produced and sold.  In fact, the law was so strict that this drink couldn’t even be labeled “near beer,” and instead had to be sold as “cereal beverage.”

Trade card for the Chemung Beverage Co.'s cereal beverage.

In May 1927, the Chemung Beverage Company of Elmira received a permit from the federal prohibition enforcement agency to produce cereal beverage for 4 months.  At that time, they were only one of only two breweries in New York State permitted to do so.  As part of the permit agreement, federal prohibition agents were to inspect the brewery regularly to make sure all of the near beer met the Volstead standards. The Chemung Beverage Company moved into the old Briggs Brewery building, which had been abandoned for over a year. Employees cleaned up rust and dust for almost two months to make the space operational. 

Plans for a Chemung Beverage Company building from several months before they were issued a permit. 

The Chemung Beverage Company didn’t stick with the “non-intoxicating beverage” business for long.  At 10pm on August 5, 1927, Federal prohibition investigator F.J. Raymond led a raid on the Chemung Beverage Company and discovered employees loading train cars with “high-powered brew.”  Employees Ed Kennedy, J. Heisler, Frank Schmalesberg, and Benjamin L. Heyman were arrested along with the owner and permit holder, Frank Teitlebaum .  There was an estimated $20,000 worth of beer at plant. 

The former Briggs Brewery building as it looked at the time of the Chemung Beverage raid.

In September, the Chemung Beverage Company officially got its cereal beverage permit revoked.  In November, prohibition agents disposed of the 63,756 gallons (2,024 barrels of high-test beer and 400 barrels of near beer) seized by dumping it into the sewers. The building was padlocked and guarded.

In the fallout, Teitlebaum and the other men involved received hefty fines.  In May of 1928, Roscoe C. Harper, the Prohibition chief for Western New York, and Donald V. Murphy, the Prohibition agent in Elmira, were arrested for conspiracy to violate the National Prohibition Act.  Harper was the person who granted the permit to Chemung Beverage Company a year before.  The corruption and flouting of the Volstead Act continued in the city (as evidenced by the many subsequent raids of other brewers) until Prohibition was repealed in 1933.