That concern was deep. The plug was being pulled on an open microphone from America’s African-American heart to the world’s ear. Shirley Brown’s intimate plea was a whisper that, not too long before, could never have been heard. Isaac’s carnal image had been punishable by lynching only a couple decades earlier. Artist after artist, song after song, Stax gave voice to the hearts and minds of a people too long silenced. And with that voice, Stax brought power to its artists and also to its audience. Stax had become the song of a nation. And as Al sat in that huge office high above Manhattan, all of that newfound freedom won with blood and grit was at stake. Columbia cared not a whit about the message. It heard only the cash register. Columbia wanted the sales. Stax was fighting for its voice, its life, and the voices and lives of its people.
Al continues, “Arthur Taylor said, ‘Al, I’m not going to argue with you the merits of your antitrust suit. We just have more time than you and more money than you.’” However daunting the scene may have been, Al had the serenity that comes with faith in his position. “I said, ‘Arthur, there’s no question that you have more money than me but time I question, because I’m not giving up on this.’” If Al was thinking about the hundreds of people who worked for Stax, he must have determined that there was no hope in resolving the issue with Columbia, no hope in retaining their employment by making peace here, because Al didn’t stop; he kept right on going, delivering the goods to the big man on the top floor, saying, “Between me and you, you can call this World War III.” With that statement, Mr. Taylor’s hand stopped tapping that pencil. The room got quiet, and for a moment it seemed that all sound everywhere had stopped. The two executives were eye to eye, physically locked by an unseen tension. The hand holding that pencil clenched, the knuckles getting white, and the silence was torn—SNAP—by the angry breaking of that pencil. Arthur Taylor stood and exited the room.
The wrath of CBS, Inc. was discharged upon Stax. “After that,” says Al, “I grew to appreciate the power of a corporation like CBS. I didn’t realize that they could reach into offices that one would never have thought they could reach into. And they cut off the spigot. They said, ‘We don’t owe you any money because here’s the product that didn’t sell that we had in our warehouse.’ Several eighteen-wheelers came back to where we housed our goods, returning a substantial portion of all the inventory they had purchased on the same skids they were shipped out on. No more cash flow. We couldn’t pay many of our artists and other obligations. They were knocking us to our knees, breaking our back.”
In Memphis, elements of the white population, feeling their majority slipping away, began expressing paranoia and fear. Blacks were taking over the schools, taking over the city council, and, at the end of 1974, whites feared they would lose their voice in Washington, DC.
The congressional election in 1974 was an off year. Nixon had been reelected president two years earlier, and no Senate seats were up. There was the House election, and in contention was the Ninth Congressional District, which represented the heart of Memphis. The seat had been held for four terms by Dan Kuykendall, a staunch conservative. After the 1970 census, districts were redrawn and Kuykendall’s, which included Soulsville, represented a significantly larger black population. (It was also renumbered from the Eighth.) His opponent in the 1972 race had been African-American, and while the race was close, Kuykendall won 15 percent of the black vote and had the momentum of Richard Nixon’s landslide to help him retain office.
In the 1974 election, Kuykendall’s opponent was Harold Ford Sr., who’d served two terms in the state legislature. Ford was from a prominent African-American family that ran a funeral home and had a history in politics. He organized a vigorous campaign. He understood the racial fears that ran in Memphis and he sought a wide appeal with statements like “Inflation knows no color.” He campaigned on economic development, which would help everyone. With the redistricting in his favor, and the continued momentum from the Voting Rights Act, Ford organized a rudimentary political machine: phone banks, neighborhood caravans, and a proactive voter registration campaign that included rides to the polling places.
Kuykendall, meanwhile, appealed to the city’s conservative core, evident in his steadfast support of President Nixon even after transcripts indicting him were made public. And he had a problem new to the 1974 cycle, brought on by the recent implementation of busing: White flight from the city to the county and beyond had changed the district’s racial demographic to a larger percentage of African-Americans.
The race grew heated early and as it neared the vote, it was close with an expected Kuykendall win. By nine o’clock P.M. on election night, Kuykendall was ahead by five thousand votes and declared the winner by the major radio and TV stations. But the tally Ford saw on TV didn’t match what Ford’s poll watchers had been supplying him, and he went to the Shelby County Election Commission offices. “For an hour and a half he sat there,” said Election Commission director Jack Perry, “jabbering about ‘Something must be wrong,’ and ‘I know I’ve got the lead.’” As the tally closed, it turned out that six precincts had delivered their ballots but the ballots weren’t among those counted. Soon Ford “and about ten campaign workers found six unopened ballot boxes in the basement of the building.” (Ford was quoted as saying, “We found the reports in a garbage can and sent them up to be counted,” though he later retracted the statement.) Once those missing votes were tallied, Ford was declared the winner. The Shelby County Election Commission was all white; no African-Americans served on it. Harold Ford became Tennessee’s first African-American to serve the United States Congress.
November 5, 1974. Harold Ford becomes Tennessee’s first African-American to serve the United States Congress. (University of Memphis Libraries/Special Collections/Photograph by Jack Cantrell)
Memphis was a city divided. The population was still a majority white, but just barely. The wounds of Dr. King’s assassination had never healed, and the recent busing battles had reopened them. With Ford’s election, many Memphis whites were predicting doomsday scenarios, a revolution of the underclass. Black power frightened them, and they sought ways to take back the power.
Stax’s troubles had brought the company much unwanted attention, and Al was feeling the backlash against a black-owned company. “Stax was perceived as a white-owned business until they put it in the newspaper that the blacks were involved in the CBS litigation,” says Al, “and that’s when the white community in Memphis started reacting.” Columbia’s stranglehold was keeping any income from Stax, and Union Planters got in the fray by suing both Stax and Columbia. The bank’s suit, resulting from Columbia’s “virtual ownership” of Stax, asked for $10.5 million in damages from the corporate giant, cancellation of the bank’s subordination agreement (so that the bank could then collect its debts before Columbia), and the voiding of a $6 million loan agreement between Columbia and Stax. Union Planters had its own soul to save, and if it had to kill Stax to stay alive, that was basic business; like Columbia, it had millions of dollars invested in the company, though unlike Columbia, the talent of the artists was of no interest to the bank. Union Planters needed the company to thrive, or it needed its assets. Concerned about its reputation in the Memphis community, the bank came to Jim and proposed giving the company to him under some kind of probation. “Jim turned them down right away,” says Whitsett. “He said, ‘I’m with Al Bell on this, I believe in Al Bell.’ And the bank people came back just bewildered. They had to go for the jugular because they did have stockholders, and they had to recoup as much of their loss as they could.”
“It did not surprise me, the posture that that bank took,” says Logan Westbrooks, the Columbia division head. “It was owned and controlled by white men. I grew up in Memphis, I know the racist attitude of whites in the city of Memphis. The moment they became aware that Al Bell was the owner of Stax Records: ‘How dare you, black man, own this company in the city of Memphis!’ It was a vendetta from those white bankers against Al Bell an
d Stax Records.” Indeed, though Westbrooks would have reason to deflect blame from his company to the bank, his fundamental point remains true: Many white leaders (and followers) in Memphis were uncomfortable with African-Americans gaining ground in society; further, they’d find the idea of the city being represented by African-American culture embarrassing. Business was first, but reputation was not far behind.
Earlie Biles, Al’s secretary, says, “I think the city saw all these black successful people with gold cars, fur coats, gold jewelry, and fancy this and fancy that, flying here and there—they didn’t understand what was going on.” Deanie Parker, the publicist, concurs: “Union Planters Bank was having very serious difficulties. Being a marketer, I think they were very shrewd. If they could find a scapegoat to position at the center of negative news, and blame their inefficiencies, their ineptness, their shenanigans, on somebody else, then it made a better story for the stockholders and for the customers. And in Memphis, Tennessee, what better target than a record company that’s predominantly African-American that’s making black people wealthy? Where Isaac Hayes is driving around in a custom-made Cadillac that cost more than many white folks’ houses did? And what better examples than Carla Thomas or Shirley Brown, or another artist purchasing a fur coat—cash. We were a victim of the times. Now, that said, Stax Records was not perfect. We were like any business, making the best practical decisions that we could, and we were risk takers as well. And the industry itself was changing.”
Earlie Biles, left, and Bettye Crutcher. (Stax Museum of American Soul Music)
While the label may have felt persecuted, the fact of its indebtedness to the bank remained, along with its lack of collateral, its impenetrable accounting, and the lawsuits against it. These were plenty enough reasons for the bank to pursue it vigorously. “I considered Bill Matthews in all respects an honorable, truthful person,” says attorney Wynn Smith. “As far as racism is concerned, my impression was that he didn’t recognize but one color, and that was green. I never saw any evidence of his being racist, and I was never aware of any impetus to go after Stax for any racial reason at all.”
Each side seems to see what it wants to see, but no matter what the disagreement was about, Al shares an insight that gets to the core of how the disagreement was handled, a reality about the times: “I know that if I had been a white man, Matthews would have dealt with me differently. Assets were sitting here. The language would have been different. The discussion would have been different.” Such a discussion with Al, for example, could never have taken place on the golf courses of several prominent Memphis country clubs that were still “exclusive”—forbidding membership to blacks and Jews among others. American society in general, and Memphis society in particular, was undergoing a transformation, trying to make a paradigm shift from a hundred or more years of institutional racism to new equality. It would be harder for those of the older generations. As progress dragged across stasis, the friction was burning Stax.
Tim Whitsett, who had become president of East/Memphis Publishing, remembers an embarrassing proposal made at a meeting between the bank and the publishing company’s writers. “Matthews pandered, especially to our black writers,” says Whitsett. “I was in the room, Eddie Floyd, Mack Rice, all of our writers.” Matthews proposed that, in lieu of payments to the writers, which would be temporal, that the publishing company fund a statue of Dr. King, which would be lasting. “The writers are going, ‘Hey, man, we’d rather get paid.’ It was so embarrassing. I felt a general uproar bubbling.”
In November 1974, Tim Whitsett was in his office when a Matthews henchman named Roger Shellebarger entered. “He announced that the Union Planters Bank was taking control of the publishing company, and the first thing they’re gonna do is move us downtown next to Union Planters. It was totally astounding.” Stax had defaulted on payments against which the publishing company was the collateral, and the bank was exercising its right to assume control. Jim Stewart had recently met with Whitsett and told him to go along with whatever the bank might say, but Whitsett was not expecting a new boss. Publishing is the music business’s constant cash flow, and diverting Stax’s stream would wither the company.
Even among the inner circle at Stax, this loss was a surprise. Few saw evidence that the situation was turning so calamitous. “All the news was hitting the trade magazines,” says Whitsett, “and I could not fathom the company going under. It was like the Bank of England or the Rock of Gibraltar.”
26. A Soul and a Hard Place
1975
The initial pay period in 1975 turned out to be the first gasp of a year-long, agonizing strangulation. Checks usually covered two weeks, and as employees collected their regular pay, they found only half there. “I tried to keep the faith,” says Deanie Parker. “I kept thinking, There’s got to be a break coming. But I’m afraid that [the missed payroll] was the confirmation that truly the ship had hit sand.”
Larry Nix, who mastered the records, had his own rude awakening when he went to cash his paycheck at the grocery store. “At the supermarket where I shopped, in the customer-service window, there was a sign that said, STAX RECORDS CHECKS NO LONGER ACCEPTED.” He went to Jim Stewart. “Jim said, ‘Don’t worry about it, we’re pulling our money out of Union Planters and the new bank hasn’t caught up yet.’ They’d make a check, miss a check. It just snowballed.”
As 1974 had ended, banker Joe Harwell was indicted on charges he’d embezzled $284,000 from Union Planters between 1970 and 1973 through fictitious loans and checking accounts; seven other bank officers were indicted on similar charges, though only Harwell also had connections to Stax. Early in 1975, RCA Records sued Stax for failing to pay for nearly $160,000 worth of record blanks used in Stax’s recently purchased pressing plant; RCA brandished a $28,000 check that had bounced twice. “Ouch,” Larry Shaw said to the newspaper when told of the lawsuit. “This is a new one. I don’t know the details of it. There are so many coming at us.”
As the payroll fell further behind, employees began finding other jobs, and artists departed. In February, ABC Records announced it was signing both Isaac Hayes and the Dramatics; Isaac was being given a seven-figure contract, and he initiated a new lawsuit against Stax for continuing to collect his royalties without paying him, and for not fulfilling its promise to return his master tapes. A newspaper article quoted former Stax employees speaking of “salaries that were ‘way out of line.’ ”
Union Planters announced its year-end report in late January 1975; the bank had lost $15 million. On the first of March, Harwell pled guilty to “what was believed to be the largest embezzlement case in Memphis history.” He was sentenced to five years, as per the US Attorney’s Office recommendation. Other bank officers would soon plead guilty to fraud charges. As for the total bond claims (Stax and otherwise) of $16.5 million, the bank said it “has a reasonable prospect of recovering up to $10 million.”
A little good news came in March when Stax and CBS announced an out-of-court settlement. Each company found the other distasteful, but they were bound in a multimillion-dollar obligation. CBS wanted its money and, from its vantage point as exclusive distributor, was willing to take as partial payment both the money it was holding for Stax and the remaining record inventory it was warehousing, valued at—over $4 million. Stax would only owe half of its $6 million, plus interest and back interest if it paid off the debt by August 31, 1976.
The Stax employees who remained were far less concerned about the corporate settlement than they were about their own payments. “People began to say, ‘We getting paid this week?’” says promotions man James Douglass. “They changed the pay cycle to monthly, so people worked thirty days before finding out.” Al sought relief from a variety of sources. Mayor Richard Daley spoke of moving the company to Chicago. There was talk of relocating to Gary, Indiana. Al signed an heiress to the H.L. Hunt oil fortune as an artist. Looking for piles of money, Al and Stax attorney John Burton turned to the Middle East and made overtures to K
ing Faisal in Saudi Arabia. The king was interested, and talk ensued. They negotiated a multimillion-dollar deal, enough money to pay off all debts and return to the lavish spending that upped the odds for generating a hit. Deanie Parker recalls this as a “hare-brained scheme. But when you’re desperate, you have to do something.” Engineer Larry Nix stopped in his tracks when he saw three Muslim men in the former church offices, each wearing a flowing robe and kaffiyeh. Once the deal points were settled, Burton boarded a plane for the Middle East. Al told Rob Bowman, “I remember talking to him from Beirut while we could hear gunfire on the outside.” Bullets were rampant and the king, at his home in Saudi Arabia, was assassinated on March 25, before the papers were signed.
While Al chased the big fish, James Douglass and others searched for kelp. “We went to the mail room guy and got fifteen hundred or eighteen hundred albums up to Randy’s Record Store in Nashville, got a quarter on the dollar,” says Douglass. “The car, you couldn’t even see out the back it was so loaded up. Then Randy wanted them shrink-wrapped, which we could do. Out of the mail room, I was able to generate about ten thousand dollars. I’m spreading money around, people have bills, their kids are sick.” Though just a Band-Aid on a bullet wound, he was following Al’s old dictate about troubling situations: “Defuse it.”
Respect Yourself Page 42
