by Jeremy Banas
It would take another immigrant to San Antonio to quench this thirst. Fast-forward to 1883 San Antonio. Local resident (and Bohemian immigrant) Jaroslav B. Belohradsky was looking to open a brewery in San Antonio. Not just any brewery, though. Belohradsky wanted to open one that would produce lager beer. Belohradsky came to San Antonio in 1880 along with others of the St. Louis brewing industry, including brewing magnate Adolphus Busch, who would help open the Lone Star Brewing Association the following year. With the recent advent of refrigeration technology, it was now possible to get and maintain the lower temperatures needed for lager beer, and Belohradsky planned to take advantage of this.
When Belohradsky came to San Antonio, he left behind his wife, Marie A. Nemeck, whom he had married in St. Louis on February 20, 1868, and their children, who would remain in St. Louis most of the time. When he met Marie, Belohradsky was already a father and had a son, Joseph W. Belohradsky, who was born in 1860. It has been speculated that Marie Nemeck could have been the younger Joseph’s mother, as she arrived in the United States in 1859. Speculation is all we have, as records from this period are scant to say the least.
Feeling that he could fill the need for lager beer in San Antonio, Belohradsky made plans for his brewery, naming it City Brewery and pushing it to be the most modern site in Texas, with a focus on brewing a specific style of lager known as pilsner. The pilsner style was a relatively new type of lager that was gaining in popularity and hailed from the Pilsen region of Bohemia, now located in the Czech Republic. Belohradsky planned to sell his pilsner for about $3.50 per keg, about a dollar lower than the more popular national brands that had recently come to San Antonio with the railroad.
With a plan in place, he set out to get the financing needed for his brewing venture, one that was not going to be cheap if he was going to do this his way. Belohradsky came upon a bit of luck when he met fellow San Antonio resident Stephen Baker. Baker helped him get his fundraising started. It would take quite a lot more to complete his venture, so Belohradsky used the contacts he had in San Antonio and was introduced to Joseph S. Lockwood and John Hermann Kapmann. Lockwood was the president of Lockwood National Bank, and Kapmann was a venture capitalist from Westphalia. Together they composed the financial firm of Lockwood and Kapmann.
Lockwood and Kapmann seemed keen on the idea of another brewery in San Antonio and offered to loan Belohradsky the sum of $100,000. Although not all of what he was looking for, Belohradsky accepted the funds. Evidence points to Lockwood and Kapmann having more to invest, although it is unclear as to why it loaned only $100,000 to Belohradsky. Although underfinanced, Belohradsky pressed on, not realizing that one reason why he had not received as much financing from Kapmann might have been due to the fact that Kapmann was vested in the Lone Star Brewing Association and even held a seat on its board of directors, providing quite the conflict of interest.
In the late summer of 1883, construction started and was completed the following summer in 1884. One month later, the first barrel of Belohradsky’s new brew left the brewery doors. The beer was immensely popular and sold well almost immediately, but soon it became difficult to keep up with the debts he incurred in starting City Brewery.
After only two years in business, Belohradsky encountered trouble he may have thought he left behind from his time in Chicago many years before. In March 1886, a local newspaper, most likely the San Antonio Light, led with the headline “Prominent Brewer: Arrest of J.B. Belohradsky for Alleged Embezzlement in Chicago.” The accusation came from a former employer back in Chicago, a local Polish benevolent society. It accused him of taking approximately $1,750.
No real support existed for this accusation, and many at the time thought that Belohradsky was being framed. Regardless of the validity of the accusations, it was enough to spook his investors, who abandoned Belohradsky soon after the accusation came to light, resulting in the value of City Brewery dropping faster than hops in a brew kettle. Soon after, Lockwood Bank assigned a receiver by the name of Robert Tendick, who took control of City Brewery, signaling that the end was very likely near. It is possible that Belohradsky could have proven the accusations false, reassured his investors and gotten City Brewery moving again, but another roadblock lay in his path from an unlikely source: his own attorney, Oscar Bernard Bergstrom.
At some point after the accusation came to light, Belohradsky retained the services of Oscar Bergstrom. How he found Bergstrom is not known, but Bergstrom appeared to be Belohradsky’s saving grace. Bergstrom quickly defended the brewer, eventually keeping Belohradsky out of jail. Of course, a little help from then Texas governor John Ireland didn’t hurt either. It seemed this young attorney from San Antonio had a few connections in high places. Eventually, Belohradsky squared his affairs in San Antonio, although he would never return.
It was during this defense of Belohradsky that Bergstrom appeared to show his true intentions. While Belohradsky struggled for freedom and his business, Bergstrom saw a great opportunity with very little startup cost involved. At some point in 1886, a sheriff’s sale took place in San Antonio, and one of the items up for grabs was City Brewery. Bergstrom wasted no time in purchasing the City Brewery stock from its spooked investors, thus saving the drowning brewery and effectively dooming his own client.
BELOHRADSKY DEPARTS CITY BREWERY
At age twenty-seven, Oscar Bernard Bergstrom was suddenly in control of a business that he really knew little about. He had neither brewed beer before nor worked at a brewery. For this, Bergstrom would call in an acquaintance—though possibly a friend, too—from his time in St. Louis: Otto Koehler. It is not clear who approached whom first, Koehler or Bergstrom; however, the pair wasted no time in reorganizing and modernizing City Brewery. Brought in as an initial partner was local businessman Frederick H. Hartz, although Hartz was primarily an investor and had no real role in the day-to-day operations of City Brewery.
In addition to the San Antonio Brewing Association, Bergstrom dabbled in other ventures as well. He had his hand in railroads, mining, a dye and clothing factory and politics. Much of his time with these ventures was spent in New York City, where Bergstrom seemingly fled to get away from what was becoming a volatile environment at City Brewery.
Bergstrom was an interesting character. He was charismatic, industrious and perhaps a little vain. He seems to have become very rich very fast. How much of this may have been due to questionable business practices is hard to say. After all, he had pulled City Brewery right from under Belohradsky. Perhaps it was also this aggressive and controlling nature that caused him to leave San Antonio and the City Brewery for the city of New York around 1896. What prompted the move? Very likely he saw New York as a more lucrative business environment than the Alamo City.
When Bergstrom arrived in New York, he was absent his wife, Phillipa. What became of her is not well known, although the 1920 Bexar County census listed a Philomena Bergstrom who was head of a household, so it is possible that they simply divorced. What is known is that in 1901 Bergstrom was remarried to one Eleanor Elliott, also a Texas native and also previously married. The 1910 census in Manhattan, New York, supports they had been married nine years and that each was in a second marriage. Although he had left the San Antonio Brewing Association behind him, Bergstrom was still a member of the board of directors, a point that he would later take legal action on.
While in New York, Bergstrom established a banking company in the Wall Street district, as well as mining and railroad investments, a citrus grove in Florida and a clothing and dye factory in New York. It seems that our man Bergstrom had quite the variety of job interests in which he wanted to invest his time and money. In his master’s thesis at Trinity University, “Business History of the San Antonio Brewing Association,” published in 1976, James Nelson states that according to Bergstrom’s family, “he was always ready to part with his money for the wildest schemes if they appealed to his fancy.”
Despite all his other undertakings, when Bergstrom left San Antonio
around 1896, he appears not to have abandoned the life of an attorney altogether. The same 1910 Manhattan census that discussed his marriage also listed him as “a lawyer in general practice.” Self-styled as O. Bergstrom and Company, he maintained several offices over his time in New York, all of which were in the Wall Street area. In fact, Bergstrom and his new wife appear to have lived in Kings County, New York, in the high society area of Brooklyn Heights, known to be an area where many a Wall Street financier took up residence.
Bergstrom and his family seem to have taken quite well to New York upper-crust society and were often mentioned in the society columns of local papers when they took vacations abroad as well as in Atlanta, Georgia.
Bergstrom did not have it easy in New York, with his business practices also being called into question. In 1906, Wall Street brokers were beginning to question one of his mining investments, the La Chiva Mining Company, wondering if anything was even being mined at all. It was not uncommon at the time for stock certificates to be forged, and many certificates were almost impossible to cash. It seems that Bergstrom disavowed all knowledge of, or investment in, the La Chiva Mining Company, despite the fact that many of the mining company’s investors had offices next to Bergstrom’s banking offices.
Outside an active social life in New York, which included his daughter, Eleanor, marrying a gubernatorial candidate and high-profile trips to Atlanta, Bergstrom himself felt the need to get back to San Antonio. By 1921, perhaps sooner, Bergstrom was back living in San Antonio and staying primarily at the Menger Hotel. His reasons for returning to San Antonio on a more permanent basis became clear when, in 1921, the San Antonio Brewing Association, now known as Alamo Industries but known by other names during Prohibition, barred Bergstrom from taking part in company decisions and even excluded him from the brewery grounds.
Blueprints of Pearl Brewhouse when it was known as Alamo Industries. Jeremy Banas.
With San Antonio Brewing Association’s profit margins close to bankruptcy and his own personal debts weighing on him, Bergstrom filed suit against San Antonio Brewing Association in the Thirty-Seventh Judicial Court in the spring of 1921. He demanded access to the brewery grounds and asked for the court to appoint different receivers. With Otto Koehler having passed seven years earlier, the suit focused primarily on Koehler’s widow, Emma, and Bergstrom’s partners. The San Antonio Brewing Association answered the suit stating that Bergstrom had been consulted prior to every business decision, even when he was living outside Texas, and that when he was in San Antonio, he spent the majority of his time at the San Antonio Brewing Association offices.
The judge eventually ruled against Bergstrom but did force San Antonio Brewing Association executives to allow Bergstrom to the brewery grounds and its records, although it would be another six years before the case was closed. When Bergstrom exited San Antonio in 1896, little did he know that he would create a vacuum that his co-president and co-founder, Otto Koehler, was more than happy to fill.
CITY BREWERY TRANSITIONS FOR THE FUTURE
When Otto Koehler took over San Antonio Brewing Association upon Bergstrom’s departure, he ushered in the second period in the brewery’s history. There was to be no more opposition to his and the board’s wishes. They were now firmly in control, or so they thought at the time.
To understand Otto Koehler and his approach to the business of the San Antonio Brewing Association, we must understand the man himself. Otto Koehler was born in the village of Aldfeld in the kingdom of Hanover, and although Hanover is in Germany now, when Koehler was born in 1855, Hanover was a separate kingdom under English rule. Koehler was born to August W. and Johanne Koehler and was one of ten children growing up, making their home a crowded one; however, his parents made sure that all were taken care of. Koehler’s twin brother, Karl, would precede him in a move to the United States.
Despite the many opportunities available to him in his hometown, the allure of the United States and the promise of greater success won him over. In 1873, Koehler left for the United States and the bustling city of St. Louis at the tender age of seventeen, using his sister Johanna’s wedding in St. Louis as the excuse he needed to leave Hanover and claim his opportunities in the United States.
Once in St. Louis, Koehler was determined to become a naturalized citizen and acclimate to his new country. He was granted U.S. citizenship the same year of arrival. His first job as an American citizen was that of a clerk in his brother’s general store, where he would begin to learn the ins and outs of the business world and hone his ability to relate and interact with his fellow man. This first job didn’t last long for Koehler, for soon he would run into St. Louis beer baron Adolphus Busch and was introduced to Anton Griesedieck, another German immigrant who owned a malting house, as well as what would later become the A. Griesedieck and Company Brewery, among others. It was one of Anton’s sons, Joseph—or “Papa Joe,” as he was affectionately called—who would later open the Griesedieck Brothers Brewing Company, one of the few breweries to later survive Prohibition and remain open until 1977.
The young Otto Koehler took a job as a bookkeeper and quickly proved himself, bringing him once again to the attention of Adolphus Busch, who himself had been busy with Anheuser-Busch’s first expansion outside of its St. Louis headquarters, to San Antonio, Texas—it would later become the first brewery to bear the name Lone Star. Koehler quickly jumped into the Anheuser-Busch Lone Star Brewing Association and was soon on his way to what would become his passion: brewing.
When Koehler arrived in San Antonio to help head up Lone Star, he would meet two individuals who would later become key to his brewing career: John J. Stevens and A.B. Frank, both involved financially with Lone Star. Koehler quickly established long-lasting personal and business relationships with these men, quick enough that within a few years he would be involved in a different business venture that would last 115 years.
Koehler’s time at Lone Star was short-lived, however. Having whet his appetite with the first Lone Star, he had his sights on his own brewing operation and took steps toward this goal while still with Lone Star. In 1886, Koehler took a trip to Germany, where he acquired the rights to the recipe and the name Pearl beer. At the same time, he also took a loan of about $10,000 from his brother-in-law, John Bentsen, with the intention of investing in Lone Star’s primary rival in San Antonio. To plan and take steps to open your own rival brewery, while still working at one and using its resources, is ballsy, to say the least. This, however, was who Otto Koehler was, and it would later both work to his benefit and serve to be the end of him.
Returning now to City Brewery, we see J.B. Belohradsky and his ever-popular brewery struggling. Belohradsky was knee deep in his legal and financial scandal, leaving him exposed enough for Koehler and his partners to swoop in and take control. With an initial partnership consisting of Koehler, Oscar Bergstrom and local businessman Frederick Hartz, the three pooled their collective personal resources and took financial control of City Brewery from Belohradsky in early 1887. The new partners continued to operate as City Brewery until August 1887, when they re-chartered it as the San Antonio Brewing Association. With the help of John J. Stevens, they obtained a loan of $300,000 from Trader’s National Bank, which they used to upgrade City’s equipment and brewing processes and introduce a new recipe that would come to be known as XXX Pearl Beer.
Now somewhat established, City Brewery’s new managing directors included Koehler, Bergstrom, Hartz, Otto Wahrmund and Robert Tendick. Tendick had been running City Brewery as a receivership since 1886, when Belohradsky was forced out. With Koehler’s brewing experience, the new directors were poised to create what would become the San Antonio Brewing Association, a force to be reckoned with. Although not involved with breweries himself, Wahrmund’s father-in-law was Charles Nimitz of Fredericksburg, Texas, who not only operated a small brewery out of his saloon but grew his own hops as well—no small feat in Texas, where the soil is not suited to large-scale hop growing. This being the cas
e, Nimitz likely was able to grow enough for his own purposes. Not too many years later, another famous Nimitz would come out of Fredericksburg: Charles’s grandson, Admiral Chester Nimitz.
PERIOD II
THE RISE OF THE SAN ANTONIO BREWING ASSOCIATION, 1887–1918
BUBBLES, BUBBLES, BOILERS AND STABLES
Although the San Antonio Brewing Association’s beginning is set in 1886, Koehler did not actually leave the Lone Star Brewing Association until 1887. It was during that year that Koehler is reputed to have made his now well-known trip from San Antonio to Bremen, Germany, and to the Kaiser-Beck Brewery to acquire what would become the recipe and trademark for San Antonio Brewing Association’s XXX Pearl Beer.
Another thought as to how Otto Koehler came upon the name Pearl, and possibly the recipe, lies with a recently discovered match safe bearing the name “Compliments of A. Griesedieck Brewing Co., Pearl Lager Beer, St. Louis, Mo.,” with dates stamped on it ranging from 1879 to 1886, the very year the San Antonio Brewing Association debuted its XXX Pearl beer. Coincidence? Perhaps, but consider again that Otto Koehler worked for Anton Griesedieck. “Kaiser-Beck did not have a Pearl beer and Anton, as well as his future sons, did not continue to call their beer Pearl,” noted Charlie Staats, a local historian and collector of Texas brewing memorabilia and who also discovered the match safe. “It is possible that Otto struck a deal with Anton to purchase the recipe and the Pearl name from him, making one wonder what Otto Koehler was actually doing in Germany if he was not at Kaiser-Beck.”