Frederick Pabst: Brewer, Banker, Empire Builder

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Photo: Pabst Mansion - pabstmansion.com

Frederick Pabst

Frederick Pabst

His brewery sprawled across 35 acres. His real estate holdings included hotels, theaters, saloons, restaurants, and a home that cost 100 times the average working man's salary to construct. Penniless at the age of 12, Captain Frederick Pabst lived a rags-to-riches life as he rose from waiter to steamboat captain to control of the largest brewery in the world. 

On New Year’s Day 1904, one of Milwaukee's most celebrated citizens was dead of complications from diabetes. Known internationally as the chief executive officer of the world of the Pabst Brewing Company, Captain Frederick Pabst was a banker, real estate magnate, civic leader, and philanthropist. At the time of his death, his brewery employed 5,000 workers and produced a million barrels of beer a year.

Pabst was born on March 28, 1836, in Saxony, Germany.  His father, Gottlieb, heard stories of unlimited opportunities in America and moved his family to Milwaukee in 1848. His job search exhausted their savings and the family moved to Chicago where Frederick got a job waiting tables in a hotel for five dollars a month.  

When a cholera outbreak forces the hotel to close, Frederick loses his job. To make matters worse, his mother dies from the disease. Faced with poverty, Frederick and his father separate to find work. The 12-year-old return to Milwaukee and is hired by the Goodrich Steamship Company as a cabin boy on one of the Lake Michigan liners. At night he studies navigation and mathematics and by age twenty, he is in command of his own ship…

Meeting Mr. Best

It was as a boat captain that Pabst met Phillip Best, a second-generation brewer with a plant at 10th and Juneau. In 20 years, Best had successfully expanded his operation to include a large beer garden on Randolph Street in Chicago. When Frederick met Best’s 15-year-old daughter, Maria, he was a handsome sea captain with a mane of dark hair and buccaneer's goatee. They fell in love and married after a 24-month courtship. Phillip Best, now in failing health, encouraged his son-in-law to leave the sea and buy the brewery for a down payment of $20,000. Suddenly Pabst, not yet 30, was at the helm of a brewery instead of a boat.

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Photo: Pabst Mansion - pabstmansion.com

The Pabst Mansion

The Pabst Mansion

Even as he ingests his father-in-law's vast knowledge, Pabst envisions an expansion for Best Brewing. In 1870, the company has 138 employees and produces 100,000 barrels of beer.  Pabst acquires the Melms Brewery on Milwaukee's South Side because the company has direct access to the Milwaukee Road’s railroad tracks. Pabst then forms partnerships with innkeepers, restaurant owners and saloon operators, erecting a new building for them or refurbishing an old one. In this manner he builds a chain of outlets that carried only his beer.  Pabst then invests in hotels, theaters and restaurants in New York City, San Francisco, Minneapolis, and Chicago. His success in these business ventures drives the company’s profits into the stratosphere. But Pabst’s private thoughts often turn to his children. He has two sons and three daughters, whom he loves dearly. Only his closest friends and family know he mourns six children who died in infancy…  

By 1889 Best Brewing's output topped 850,000 barrels a year with sales in 32 states and 20 foreign countries. The brewery’s board of directors voted to change the organization’s name from Best to the Pabst Brewing Company. Pabst, in memory of his father-in-law, insisted the newly named brewery forever retain a capital “B” inside a circle as part of the logo.  

Double the Value

The Pabst Brewing Company’s emerging worldwide presence made it attractive to venture capitalists looking for a good investment. The most lucrative of several buyout proposals came from a British syndicate early in 1890.  Pabst made national headlines when he refused their offer of $16 million, nearly double the value of the company. “The money is awfully tempting, but this brewery was founded in Milwaukee, and that's where it needs to stay,” he said.

Along with his decision to stay a locally owned concern came another round of real estate purchases. In March 1890 Pabst bought the St. Charles Hotel for $150,000.  The pre-Civil War hotel occupied a prime location on Water Street across from City Hall. Pabst razed the 35-year-old structure and built a modern hotel with 110 rooms, a grand dining hall, and two large retail spaces at street level.  

At age 56, Pabst has become a wealthy and powerful businessman. His wife Maria is still in love with him after 30 years together. But he's struggling with the knowledge that he doesn’t have much longer to live. The diabetes that's plagued Pabst most of his adult life has damaged his heart. He tires easily now, and 18 workdays are no longer possible. He takes his mind off the inevitable by throwing himself into the planning and construction of a new home at 20th and Wisconsin Avenue. The Flemish Renaissance-styled mansion has 37 rooms, 12 baths and 14 fireplaces…   

After Pabst's death in 1904, control of the vast brewing empire fell to his sons, Gustav and Frederick Jr. Stock options in Pabst Brewing, once held by a chosen few, were slowly but surely falling into the hands of nieces, nephews, grandchildren, spouses, and, increasingly, outsiders. The brewery itself, without a single, dominant hand on the tiller, began to lose market share. Longtime rival brewers Joseph Schlitz and Anheuser-Busch eclipsed the once mighty Pabst, as did the Miller Brewing Company. By the 1990's, the last vestiges of Pabst Brewing had been gutted from the inside by a ruthless corporate raider from California. 

Despite his company’s long, slow slide from grace, Frederick Pabst’s legacy is still apparent in an 1895-era theater and his fabulous mansion, now a historic landmark.  Noises from the residence’s third floor have been known to occur without warning, and employees are comfortable knowing the ghost of Captain Pabst still walks alongside them.