In June of 1812 the United States declared war on Great Britain. The war would be over by 1815, but the bills would not be paid for several more years to come. In order to pay for the war, the United States government decided to renew the tax on distilled spirits. The “whiskey tax” had been repealed by President Jefferson in 1802, but brought back in 1814 as the war debt increased. The war would end in 1815, but the tax on spirits would stay around until the end on 1817. The tax on distilled spirits was set at 20 cents a proof gallon (one gallon of 50% or 100 proof, alcohol).
With many of the men in Kentucky serving in the military, Kentucky’s women were often left to run the distillery and pay the taxes. Many would become permanent owners of the distillery when their husband did not return from the war. The Filson's Eli Huston Brown III collection has a license to distill issued to Milly Stone, dated 22 December 1817.
Milly Stone, of Nelson County, Ky., became a distiller when she inherited the distillery from her husband, John Stone. John had three stills with a combined capacity of 298 gallons, that he was licensed to use as a distillery during the first whiskey tax. There is no indication that Stone had served in the military, but his estate was settled in 1814 with his wife Milly receiving property in his will. The license issued to Milly lists her as the owner of the distillery and allows her to legally distill starting on 22 December 1817 till 22 March 1818. The license sets the tax at 54 cents per gallon of capacity of the distillery. Small distilleries that only operated part time were taxed on their capacity, not on their actual production. Accompanying the license is a copy of a bond issued on the same day showing that Milly Stone paid $160.92 in taxes for the license for the same period. The collection also includes two earlier bonds showing that Milly Stone paid her taxes on 14 January 1817 (two months distilling, $107.20) and 17 March 1817 (two weeks distilling, $26.82). With these figures, Stone was only expected to make about 80 gallons in the three month period between 22 December 1817 and 22 March 1818.
The amount of whiskey Milly was producing at any one time was a very small amount and it was not what we know as bourbon. Milly was probably putting her whiskey directly into jugs and selling the spirits either to neighbors or a wholesale grocer, or keeping it for personal use. Chances are it was not a product aged in oak barrels but it could have been flavored to make “cherry bounce” or “blackberry cordial”. The tax was repealed in 1818 and there are no other records in the collection to show what happened to Milly Stone’s distillery. Most likely the distillery stayed in the family until the federal government brought back the whiskey tax in 1861 to pay for yet another war. By that time the changes in the industry made it unlikely that the Stone family would want the expense of making whiskey on such a small scale. Aged bourbon was the product everyone wanted to drink and that market was becoming dominated by larger distilleries with warehouses filled with barrels of aging whiskey.