While ostensibly German-style lagers dominate the bulk of the American beer landscape now, German brewers were a relatively late addition to the scene, arriving in large numbers only in the mid-19th century. But the successes of this often tight-knit community bred resentment and xenophobia from those whose forebears had arrived in the US in earlier waves of immigration—and that ill will helped to bring about Prohibition. But before we rush straight to 1920, a brief review is in order.
Many historians attribute the first lager beer brewed in America to John Wagner, a Bavarian immigrant who set up shop in Philadelphia in 1840, though some of that notice is probably due to the chain of events he helped kick off—Maureen Ogle points out in her excellent Ambitious Brew that two German immigrants were brewing lager on a small scale in 1838 in Virginia. But back to Wagner—he brought lager yeast with him on his voyage to America; it has been proposed that faster ships introduced around this time allowed the more fragile bottom-fermenting yeast to survive the trip, though it's also worth mentioning that there simply were not large numbers of immigrants from lager-drinking parts of the world until this era.
Wagner sold some of his yeast to George Manger, who was the first to produce lager on a commercial scale, albeit a small one. Magner's former employer, Charles Wolf, and a co-worker, Charles Engel (a fellow German), established the first large-scale American lager brewery in 1844; Wolf's earlier business, a sugar refinery, was destroyed by fire during anti-Catholic riots aimed at new Irish and German settlers earlier that year, and the new business was aimed almost solely at the growing German immigrant community that was growing up in the neighborhood.
But the beer's popularity quickly exploded—within a few years, the brewery was one of the largest in the country, even shipping beer as far afield as New Orleans. After the unrest of 1848, waves of German immigrants began arriving, and many experienced lager brewers gravitated toward the established business, which now branded itself, 'Die Erste Lagerbier Brauerei in Amerika'. Soon this 'first' lager brewery was joined by many others, creating Philadelphia's Brewerytown neighborhood.
By 1857, lager was outselling ale, and even established breweries took notice—when it rebuilt after a fire, Yuengling (founded in 1828, also by a German immigrant) ensured that its new brewery would be capable of producing lagers—it had been largely making ales and porters prior to that. An accidental survival of a pre-Prohibition German-American brewery can still be seen today: Bube's Brewery, in rural Pennsylvania, is now a microbrewery, but the original 19th century cellars and equipment are slowly being restored.
After 1848, new German immigrants began to look beyond the eastern seaboard, and began settling in large numbers in Cincinnati, St. Louis, Chicago and Milwaukee; while many German brewers continued to ply their trade locally in their new cities, some looked to expand their reach. Philip and Jacob Best, brothers from Mettenheim, founded the Best Brewery in and Milwaukee. With an emphasis on quality, they were hugely (and rapidly) successful, and began buying other local breweries and shipping their beer to other cities, including Chicago and St. Louis. Philip Best would later sell his stake in the operation to Frederick Pabst, though he still became the subject of a truly awful poem by Ella Wheeler Wilcox—one of 19th century America's most popular, although perhaps not terribly accomplished, poets—that hints at the fear many 'native' Americans (as they unironically styled themselves) were beginning to have as the influx of German immigrants continued.
As German-American communities grew, their 'foreign' ways became a further source of hysteria—and their lager-drinking tradition was directly targeted. One of the first major touchpoints came in 1855: the Know Nothing movement (also known as the Native American or simply American Party) was successful in getting their anti-immigration, anti-Catholic message across and won elections in cities such as Chicago and Cincinnati. Their platform included the restriction of political office to Protestants of English or Scottish ancestry, banning languages other than English, requiring Bible readings in public schools and, most important for our purposes here, restricting certain types of alcohol. When Know-Nothing mayor Levi Boone took the reins in Chicago, he aimed to curb the German beer-drinking culture by raising the cost of a liquor license by 600%, and revived a law banning beer sales on Sundays. German-American tavern and beer-garden owners opened as usual, and the police were sent in to arrest drinkers (many of whom were entire families enjoying their usual Sunday afternoon biergarten outing). As the trial date approached, neighborhoods protested, eventually leading to what became known as the Chicago Lager Beer Riot. Ethnic tensions simmered on and off for much of the century, but the association of German heritage with brewing became a key weapon in the temperance movement's arsenal in the early 20th century as war broke out in Europe.
By this point, most of America's largest breweries were owned by families of German descent—but most were 2nd and 3rd generation Americans. Nevertheless, their German names made them the perfect scapegoats that Wayne Wheeler of the Anti-Saloon League had been seeking. Once the US had joined the First World War, it was open season on these breweries: they were 'owned by enemy aliens'—the Anti-Saloon League even characterized Milwaukee's brewers as 'the worst of all our German enemies.' A lack of support for Prohibition suddenly became unpatriotic—and by 1920, it was the law of the land.
While some brewers were able to survive, many of the neighborhoods and German cultural centers that had grown up around them did not—Cincinnati's Over the Rhine neighborhood was just one of many across the country that lost its main economic and cultural engines as a result, and it could be argued that the beer brewed after Prohibition ended was also a pale imitation of what had come before.
While it is true that many German-American brewers used corn from the start in their lagers—something that would have been unheard of in their native land—the resulting beers were not the light, relatively flavorless drinks so abhorred by today's beer connoisseur. They tended to be darker (although still notably lighter than the contemporary ales and porters) and maltier than their modern counterparts; others were a bit more like Bohemian pilsners, as 'German' brewers often included immigrants from what is now the Czech Republic. Yes, corn was cheaper and easier to obtain than barley, but before Prohibition, a full-flavored, well-hopped drink was still the goal. And for those who assume that beer snobbery is a modern invention, think again—The American Magazine was already deciding which American-made lagers were 'real' and which were simply unworthy imitations as early as 1882.
German-American brewers may have ruffled feathers for some segments of society, but the rest knew that a good drink trumped politics.