J.B. Owens Pottery and Tile Plant

The Largest Illegal Still ever taken by the U.S. Government

by Michael Lussier

Zanesville gained some national exposure in the beginning of 1935. Federal agents from the FBI, Internal Revenue Service, and the Bureau of Tobacco and Alcohol converged on the old J.B. Owens Pottery and Tile Plant to shut down an illegal still being operated from the plant. The resulting discoveries would seem more like a dime store novel than something occurring within the small town of Zanesville. The still would turn out to be the largest capacity still ever shut down by the federal government. The operators would have direct links to organized crime including Myer Lansky, Elliot Ness would initially approve the federal operation to track the bootlegging gang, and the building would have hidden trap doors as well as an escape tunnel from the plant under a roadway to a nearby house. This is the story of a town's vulnerability during the depression, individual greed, and the efficiency of organized crime.

Social Climate of Zanesville

Zanesville has never been a puritanical city, but religion has played a prominent role in the city's development throughout its history. The numbers of churches that survive today are a testament to this. Zanesville has often been more mischievous than menacing in its pursuit of illegal or immoral activities. Zanesville during prohibition had its share of illegal liquor. Clyde Besser and his brother sold whiskey in the alley between Putnam and Woodlawn on Harrison Street. Big John's (now Don's Café), a restaurant on the corner of Putnam & Cleveland sold whiskey and near beer to customers who had the correct password. Alcohol was sold at the Palace Hotel at 5th and Market, Coleman's Restaurant, and The Arlington Hotel on Main Street.

Bootlegging was around Zanesville during Prohibition as well. Local historian Dick Baltzly tells the story of a local Zanesville cab driver named Floyd who was a mule for bootleggers in the early 1930's. Floyd's responsibilities would include going to a pre-arranged location on Friday morning each week. A Packard would be waiting from him to drive to New Straitsville. He was to arrive at exactly noon and stop in front of a diner. He was to go in and eat lunch until 1:00 p.m. Then he was to drive the Packard back to Zanesville and park it in a pre-determined location. His final act was to reach into the glove compartment and take out an envelope with twenty dollars in it as payment. He would wait to be contacted the next week and do it all over again.

This illegal activity meant Zanesville was by no means innocent, but they were not even close to the scale of Chicago, New York, or even Cleveland. The depression dominated local and national issues during this period so when the Volstead Act was repealed on December 5, 1933, legitimate alcohol producers became another industry for Zanesville to attempt to bring to Muskingum County.

Economic revitalization was a priority issue for the city in 1934. Solomon Berman was a newly elected city councilman who stressed new industry for Zanesville. He had made contact with a businessman named Sam Goldstein in December 1933. Mr. Goldstein had a son who worked at Lubeck Brewery in Toledo. During their conversation, he mentioned his son also knew a big wig at Lubeck named Abe Moore who had discussed expanding the brewery's operations. Mr. Goldstein also told Berman that Zanesville had been mentioned as a possible location. This was valuable information for someone trying to make a name for himself so Solomon Berman decided he needed to initiate talks with Lubeck and went to Toledo to meet with Abe Moore. Upon his arrival he found out Mr. Moore worked out of Cleveland. Mr. Berman returned to Zanesville with plans to go to Cleveland as soon as possible. The city was footing the bill for everything so he needed approval before making the trip.

Solomon Berman located Abe Moore in Cleveland and he turned out to be very encouraging. He said Zanesville was being considered and he would plan a trip to the city soon. Two weeks later Mr. Berman received a telegram for Mr. Moore stating, he would be coming to Zanesville to review potential plant sites. The city created an official reception committee for Mr. Moore that included members of nearly every civic group. The town presented all the available industrial sites and Mr. Moore showed a strong interest in the J.B. Owens Pottery and Tile Plant. Following a banquet at the Zane Hotel held in Lubeck's honor, Mr. Moore told the committee that he would be in touch soon and returned to Cleveland. The town never heard from Abe Moore directly again. The meeting with Abe Moore would be the beginning of an infamous chapter in Zanesville's history. The desire of Zanesville to bring new industry would leave them vulnerable to covert illegal activities.

Cleveland Connection

Several months after Abe Moore's meeting in August of 1934 a gentleman from Cleveland named Harry Bender registered at the Zane Hotel. He came to meet with Chalmer O. Milligan, the owner of the old J.B. Owens Plant, to negotiate the use of the building. He used the name Harry Smith during the negotiations. After much negotiation he agreed to buy the plant and took possession on August 17, 1934.

Mr. Bender, alias Harry Smith, was actually Harry D. Bader, a member of a gang from Cleveland. Mr. Bader worked for "Big Al" Polizzi, one of Cleveland's noted crime bosses, running illegal stills. "Big Al" was a member of the Moe Davis Syndicate that controlled much of Cleveland. Before coming to Zanesville, Harry Bader had previously used a location for an illegal still on Sweeney Avenue in Cleveland. This location proved beneficial because of its proximity to the Molaska Products Company. Molaska provided dehydrated, powdered molasses to various businesses in Cleveland. Molasses, sugar cane, and water are the essential ingredients for distilling alcohol.

The FBI in Cleveland, led by Elliot Ness, had the Sweeney Avenue plant under surveillance. Bob Bridges was the lead agent working the case. The problem for Bridges and the FBI was the total lack of activity at the plant. No search warrant could be issued under these conditions. The Sweeney Avenue plant was under surveillance for many months before Bridges uncovered information showing abandoned sewers five feet in diameter running next to the plant. He had surmised that the materials probably were being passed through the sewers. Bridges finally got a court order to search the building, but by the time he arrived, the bootleggers were gone. The only thing left behind were three boilers that had been leased. The company who owned them sent men over right away to dismantle them. Although he could not prove anything, he suspected the owners of the boilers were involved on some level. He scratched his initials into each boiler in case they turned up later. They would.

Bob Bridges turned out to be right about the materials. Molasses and sugar were being pumped over from the Molaska Products Company in separate pipes installed in the sewers. Water had been tapped from a city water main and pumped into the plant through a 6" water line. The finished product was pumped down the street to an alleged gas station and them pumped into trucks disguised as tanker trucks.

The Molaska Products Company, which was owned by Moe Dalitz, Sam Tucker, Moses Citron, and Myer Lansky, closed down their Cleveland office a month before the raid on Sweeney Avenue. They would relocate to Elizabeth, New Jersey and change their name to The Molaska Corporation. Molaska product would be used in Zanesville. In fact, all the equipment from the Sweeney Avenue plant would eventually end up in Zanesville.

J.B. Owens Pottery and Tile Plant

The original J.B. Owens Pottery Plant was opened in 1897, and specialized in ceramic pottery. In 1901, business was so strong they doubled the plant capacity. A fire destroyed the factory in 1902 and it was rebuilt immediately in the same location. The plant became known as "The J.B. Owens Pottery and Tile Plant" in 1905. The company was reorganized that same year and called the Zanesville Tile Company. A tile syndicate then purchased this company in 1907. The tile syndicate ran the business until 1930, when another fire destroyed the building. The Empire Wall and Floor Tile Company rebuilt the building in 1930 and continued until bankruptcy forced their closure in 1932.

Harry Bader took control of the building on August 17, 1934 and he immediately began modifying it. The building was a three-story structure with a basement. Entrance into the first floor led into a large storage area with a new restroom to the right and a room to the rear. This storage area created a buffer between the workers and any unwanted visitors. The room in the back of the storage area was the old kiln room. The old kiln room had no visible doors or windows. It was suppose to be a dead end for those not working in the plant. The room was modified with a secret passageway that led to the bottling and canning room. The passageway was built into the brick wall and was covered by a tall cupboard. The bottling and canning room had a concealed stairway, which led to an underground passage and into the boiler & mash vat room.

A restroom was constructed off to the right on the first floor. It had three stalls and a sink basin. One of the stalls had a trap door behind the commode, which led to a secret room. The secret room contained nothing but a concealed trap door in the floor, which led to the boiler & mash vat room. The boiler and mash vat room was the center of the building's activity. A hidden trap door was installed in the boiler and mash vat room that led to a tunnel that exited at the storm cellar of a nearby house approximately 150 yards from the plant. The final construction modification was to build a main office in the boiler and mash vat room.

Besides the physical changes, a few electrical changes were implemented. An alarm system was installed in the building. The system involved the placement of four large nails outside the new restroom. At first glance, they resembled rustic coat hooks, but they actually were connected to a buzzer in the main office. When a fifth nail was placed on the heads of the middle two nails, a buzzer went off in the main office. This buzzer signaled danger. A series of red and green lights were assembled in each room. When the office was buzzed, the red light was activated notifying everyone to evacuate the building. A green light signaled everything was normal. The light system was used because of the noise created by the machinery.

Large trucks were used to bring in all the equipment for the plant. Deliveries were made day and night for a couple weeks. The equipment was always covered with canvass so neighbors or city officials could not see what was being shipped.

Local Modifications - Individual Greed

Charles Barrow, Zanesville's city safety director, resigned one day before Harry Bader took control of the J.B. Owens Plant. He was an experienced politician in Zanesville and had many contacts in city hall. He also owned a furniture business at 335 Linden Avenue of which Harry Bader became a good customer during the next few months. Among his many purchases were a coal stove he would use to create the illusion of manufacturing at the plant, complete furnishings for the house where the escape tunnel exited, and office furniture for the plant. Barrow provided individuals whenever Bader needed laborers or property security guards. Charles Barrow would end up running all the political interference for the Baltic Feed Company. When the Zanesville Police Department suspected problems at the plant, Barrow offered to go over with the Chief of Detectives Milton Stotts to inspect the grounds. Barrow tipped Bader off about the proposed visit. Stotts and Barrow met with Bader in October 1934. They found no signs of gangsters or bootlegging. Charles Barrow was a valuable ally for the Baltic Feed Company.

Baltic Feed Company opens for business

Harry Bader made some final touches to prepare his plant for opening. He named the company "Baltic Feed Company". This would prove to be important because of the large shipments of sugar the plant would receive. Federal agents had tracked large shipments of sugar during Prohibition and were continuing to have companies explain the need for sugar after Prohibition as well. Sugar and molasses were used in the production of feed for poultry and livestock. The "Baltic Feed Company" could easily explain large shipments of molasses and sugar.

Mr. Bader had the coal stove purchased from Charles Barrow installed in the plant. He routed the fumes into the existing smokestack. This produced a black smoke common in production and helped dilute the fumes created during the distilling process. The illusion of manufacturing would protect the plant from unwanted attention.

The Baltic Feed Company opened for business in September 1934. The plant ran two twelve-hour shifts with twelve men on a shift. The plant ran six days a week and employed approximately 30 individuals.

Zanesville's Finest

With the plant in operation, Bader attempted to keep everything running smoothly by keeping an eye on Milton Stotts. Stotts had asked many questions around town about the plant. He even had all license plates of the cars parked at the Baltic Feed Company checked in December 1934. A few local men were identified and the rest had addresses from Cleveland. The group from Cleveland included some ex-bootleggers and gangsters. Stotts attempted to verify his information by contacting a detective in Cleveland. The detective reported these men belonged "to an alky ring". Detective Stotts became convinced of illegal activity when neighbors of the plant could detect the odor of cooking mash.

Bader contacted Stotts and offered him a bribe to keep quiet. He told Stotts others in the city were "on board". He also said the people he worked for were well connected and had people in state and federal positions looking out for them. They even had direct ties to Washington D.C. If someone were getting too close they would pack up and move the plant.

Baltic Feed Company closes for business

Milton Stotts reported bribes totaling $200 and six pints of whiskey to his superiors. They contacted a federal agent in Cleveland whom they trusted. The alcohol tax unit's acting investigator-in-charge, Eliot Ness gave his approval to send agents from Cleveland to Zanesville. Federal and state agents also came from Columbus and Cincinnati. They all converged on Zanesville January 19, 1935, and raided the Baltic Feed Company.

The arresting unit contained approximately forty-four officers from local, state, and federal branches. Basil Minnich of the IRS was the agent in charge. The agents involved were flabbergasted by what they found. Besides the modifications to the building, the agents were surprised by the amount of equipment confiscated. The equipment include the following items:

	Three columns
	1 beer column -	8 sections (3' high 14' circumference)
	2 alcohol columns -	8 sections (3' high 14' circumference)
	Four steel boilers	30' long 6' diameter
	Three vapor condensing tanks	30' tall (each)
	Two wooden funnels	5' x 5' each
	Four steel cookers	29,600-gallon total capacity
	Eight fermentors	161,994 gallon total capacity
	Four yeasting tanks	3,200 gallon total capacity
	Eight concrete mash vats	200,000-gallon total capacity
		90' long 36' wide 8' deep (each)

This equipment could produce 5,000 gallons of 190-proof alcohol and 36,506 gallons of beer every twenty-four hours. The agents found 250,000 lbs. of brown sugar and 15,200 lbs. of 'Molaska' in storage areas around the plant. Molaska Corporation was the sole supplier of sugar and molasses to the Baltic Feed Company.

The workers in the plant attempted to create a diversion by using the ventilation system to blow the fumes back into the plant. This action did allow three men to escape through the underground tunnel. One of those men was Harry Bader. Eleven men were arrested during the raid.

Bob Bridges was asked to come down from Cleveland and identify the equipment. He was able to find the initials he had scratched in the boilers back on Sweeney Avenue. The majority of the equipment in Zanesville had been moved down from Cleveland. The total value of the equipment and materials confiscated was $200,000.

This raid would represent the largest capacity still ever captured by the federal government in United States history. The amount of equipment and details of the plant displayed a well-organized operation, but the impressive facts of this plant were the economic ones.

The Economic Facts

The total cost of production including raw materials, labor, fuel, and protection was fifty cents a gallon. The alcohol sold for two dollars a gallon wholesale. This provides a 300% net profit margin. The movement from wholesale to retail had the alcohol selling for $2.50 a quart or $10.00 a gallon and accounting for a 400% net profit margin. These figures are staggering when compared to modern day profit margins. The construction industry works off a 3-5% net profit margin and the retail industry works off a 28%-32% gross profit margin.

The conversion of 1935 dollars to 1992 dollars brings the economic impact into sharper focus. The cost in 1992 dollars is $8.00/gallon, wholesale is $32.00/gallon, and retail is $160.00/gallon. If the plant produced only alcohol and met its capacity, it could generate $800,000 a day in retail sales.

(5000 gallons/day x $160/gallon = $800,000/day)

The plant could have easily worked close to capacity. They had equipment in excellent condition, the labor to run the equipment 24 hours a day, and the distribution system. The plant was located next to railroad lines. Baltic Feed Company took full advantage of this and shipped their product out by the boxcar load, in addition to moving it by the truckload.

Conclusion

Thirteen men were ultimately arrested for their part in the Baltic Feed Company. Charges were dropped against two local men, Charles Smitley and Jesse Brummage because they agreed to help the prosecutor. Six men were deported to Europe. Four were sent to Italy, one to Spain, and one to Hungary. Harry Bader was captured in Kansas City and served two years for his part in the Baltic Feed Company. Howard Theiling, a former U.S. prohibition agent, had escaped through the tunnel during the raid but was captured in Cleveland in April 1935. He received a six-month sentence.

Zanesville needed industry desperately and was willing to welcome any business. They had unwittingly invited the Cleveland mob into the city. The city could not have known Lubeck's was a mob front and Abe Moore was doing their scouting. Solomon Berman attempted to help his city, while Charles Barrow took advantage of it. Milton Stotts performed his duty and may have saved Zanesville from further hardships. The Cleveland mob showed how organized and ingenious it was in setting up both still operations.

The economics of the entire situation were astronomical. The real war being fought involved money, not right or wrong. The uncollected taxes on the sale of liquor were the issue. The federal government had repealed the Volstead Act so alcohol distribution and consumption were not illegal. The federal government wanted its cut and would do everything to collect it. In all the wars organized crime and the federal government fought over the sale of illegal liquor, Zanesville still is the biggest victory for the United States government.

"Alky" Plant is Worth $70,000. (1935, January 22). The Zanesville Signal, p. A2

Allows Seizure of Alky Plant. (1935, March 12). The Zanesville Signal, p. A1

Baltzly, R. Oral Interview (5-22-99)

C.O. Milligan Also Denies Implication in Distillery Ring. (1935, January 26). The Zanesville Signal, p. A4

Defendants in "Alky" Ring Are Given Hearing. (1935, February 1). The Zanesville Signal, p. A1

Federal Officers Continue Investigation of Operation of $200,000 Alcohol Plant. (1935, January 21). The Zanesville Times Recorder, p. A1

J.B. Owens Pottery Display. (1999). National Road / Zane Grey Museum

'Joe Regan' of Brighton Still Under Arrest. (1935, April 26). The Zanesville Signal, p. A1

Kline, M. Hist 213 - Syllabus 1998, p. 5-6

Lacey, R. (1991). Little Man; Meyer Lansky and the Gangster Life. Boston: Little, Brown and Company.

Members of "Alky" Ring Face Federal Charges. (1935, January 21). The Zanesville Signal, p. A1

Men Enter Pleas of Not Guilty to Federal Charges. (1935, January 22). The Zanesville Times Recorder, p. A1

Messick, H. (1967). The Silent Syndicate. New York: The Macmillan Company.

More Arrests in Hooch Ring. (1935, January 24). The Zanesville Signal, p. A1

Nine Men Held to Federal Jury. (1935, February 3). The Zanesville Signal, p. A4

No More Arrests Made by Federal Officers in City. (1935, January 23). The Zanesville Times Recorder, p. A1

To Deport Few of "Alky" Ring. (1935, January 29). The Zanesville Signal, p. A1