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THE SEAGRAM YEARS I was hired as a fire protection engineer by Seagram Distillers during 1954.

Seagram and the distilling industry in general had major problems with the insurance industry. The whiskey warehouses stored high proof (flammable liquid) whiskey in wood barrels stacked on wood racks that were open (no floors, only catwalks every 3 barrels in height) to heights from slab to roof up to 50 feet and more. The buildings also were of wood construction. The whiskey had to be aged. Assume whiskey already aged 3 years was destroyed. The true loss would be the loss of sales of that brand until a new batch was created and aged 3 years. These warehouses contained so much fuel that they could burn for three days and expose other nearby rack houses. Thus the values at risk were incredibly high and nearly all of these rack houses were devoid of sprinkler protection. As a result, the insurers set rates high and the sums of monies going to the insurers were enormous. Some years after I arrived at Seagram we had all of the distillers calculate the total monies paid to the insurers since prohibition and the insurers payout in losses. We discovered the industry had a 20 percent loss ratio; meaning for every 100 dollars in premiums the distillers received back 20 dollars in losses. The insurers had been lying to the distillers about their profits for years. The reason why the warehouses contained no protection is because the insurance engineers believed the fire problem was so severe, the barrels within the racks were so closely spaced, the fuel loading was so extreme and the height from floor to roof so great that it was probably near impossible to design a system equal to the task. But they did create a set of special sprinkler design regulations that were so extreme and potentially so costly that it was financially impractical to protect them. I studied the rack house problem and concluded that the insurers were probably deliberately making it impossible to protect these buildings because; first they were so well monitored and so free of fire hazardous conditions that they almost never burned. Secondly, the insurers were collecting such huge sums of money from the industry that they liked things just the way they were: Non-protected with sky high rates. I went to a meeting held by the chief engineer of the Kentucky Inspection Bureau, Mac Horn, who was the chairman of the committee of the National Board of Fire Underwriters (now defunct). The KIB engineer wrote the special sprinkler code for installing sprinklers in the distilling industry with four other NBFU insurance men (who had never set foot inside a distillery). The KIB engineer had some new rules that were written to apply to distilleries and which would have cost more money (which is how the game is played). At the meeting I began to question some of the sprinkler rules and to make suggestions as to how things could be better designed. Although I was trying to protect our industry, the reps from the other distillers sided with the insurance man. (Who was I to question the expert?). That night Mr. Horn called my room at the hotel and advised me that the 9:00 AM meeting the next morning was postponed to 1:00 PM in the afternoon. That was fine with me; I could sleep late and have a leisurely breakfast. The next day when I went to the meeting room at 1:00 PM it was deserted. They had held the meeting in the morning without me and they were all on their flights back home.

When I returned to New York City I related events to my Boss, Al Bracker and he was furious. Seagram was the largest distiller in the world and the Seagram rep was disrespected by an insurance man, so called engineer, who operated as a committee writer, not as a researcher, and was producing regulations that were little more than conservative guesses on protection criteria. My boss went over to the Chrysler Building, sat down with the founder of the billion dollar corporation, Sam Bronfman, and when he came back he told me that he was authorized to create a distilling industry fire research group and that I was going to head it. For an industry to research its own fire protection needs was unheard of. (Only the insurers were the fire experts.) Over the prior ten or so years the insurers had pushed Seagram into building massive fireproof whisky warehouses. Every 6 barrels in height there had to be a massive reinforced concrete floor that presumably would contain a fire to the floor of origin (lots of luck!). These whiskey storage houses cost about 36 dollars a barrel stored. Due to our research we built whiskey houses 12 barrels high that had a complete layout of sprinklers at the roof. The cost was about 6 dollars a barrel and Seagram engineers designed a barrel lift that place d the barrels in the racks from the ground slab at an great reduction in manpower costs.