Staff photo by Fritz Busch August Schell Brewing Co. President Ted Marti talks about the brewery and how it survived the Prohibition era at the Brown County Museum Annex Thursday.

NEW ULM — August Schell Brewery Co. President Ted Marti shared details on how the brewery survived 13 years of Prohibition before a packed house at the Brown County Museum Annex Thursday.

When times were tough for breweries, Schell’s produced “near” beer (less than one-half of one percent alcohol) by boiling off most of the alcohol in beer. It sold its own root beer and candy made by other companies.

“New Ulm wasn’t too crazy about ‘near’ beer. It didn’t taste very good unless you spiked it,” Marti said. “Most breweries around here owned taverns and ice houses back then (1920-1933). Prior to that, we [lent] bar owners money to pay for beer licenses and bar fixtures in exchange for exclusivity. Most beer was sold on premises.”

Marti said federal brewery inspectors often visited the brewery to check the alcohol level of “near” beer.

He said former Schell’s manager and president Al Marti would turn off the heat in an upstairs office where the inspectors were when it was cold outside.

“He’d take inspectors pheasant hunting too, which is illegal now, I’m sure,” Marti said. “We always got along with the feds.”

Marti said the brewery was raided by feds in April 1923.

“They contended our beer had a trifle more than one half of one percent alcohol. We went to court to plead our case,” Marti said. “We said we had an equipment malfunction and they were fine with that.”

Marti said beer alcohol content was measured by boiling beer and water side by side. The time difference it took to boil the two liquids was used to measure alcohol content.

The brewery business got so tough in 1925, Schell’s sold properties in Searles and Springfield for $3,000 and $4,000 each.

“Money was tight. We sold taverns and other property to keep the doors open,” Marti said. “But there was plenty of alcohol around. It was made out in the country.”

In 1926, business got so difficult, and Schell’s tried to sell the brewery for $60,000. That amount is equal to about $870,000 now, according to a man in the audience.

Marti said nobody bought the brewery for $60,000. One firm offered $40,000 for the brewery but Schell’s refused the offer.

In 1930 and 1931, federal inspectors said Schell’s brewery was one of the cleanest breweries they ever saw, Marti said.

“The brewery kept limping along. In January 1932, employee wages were cut 10 percent so we could keep going. But we made it through Prohibition,” Marti said.

He said breweries had a number of ways to try to survive Prohibition. Survival tactics included making near beer and ice, selling candy, joining the dairy business or making malt syrup which was often sold to home (bootleg) brewers.

Marti said most breweries did not survive Prohibition.

A person asked if marijuana legalization affects the beer industry.

“The jury is still out on that,” Marti said. “Beverages with THC and CBD oil are being sold in some states and Canada. I’m not sure where that will go.”

The Brown County Museum will host an open house for Oktoberfest during the coming two weekends. The popcorn wagon will also be in use.

Fritz Busch can be emailed at fbusch@nujournal.com.