Arthur George Gaston

1892–1996

Entrepreneur

Entrepreneur Arthur G. Gaston built a business empire worth an estimated $130 million. Starting with little formal education and a series of menial laborer jobs, Gaston made a plan to make money: a lot of it. His business empire would grow to include a variety of profitable companies. His first was a burial society for blacks in Birmingham, Alabama, which he started in 1923 as an insurance company that sold burial policies. With the success of that venture Gaston opened other enterprises including the Booker T. Washington Business College, the Vulcan Realty and Investment Company, and the Citizens Federal Savings and Loan Association. When asked about how he achieved such success in interviews over the years, Gaston would boil it down to one of his primary rules for business success: "Find a need and fill it."

Rejected Limits on Black People

Gaston was born on July 4, 1892, in the rural community of Demopolis, Alabama. His grandparents had been slaves before the Civil War. His father died soon after he was born, and his mother had to work as a domestic servant in the homes of whites to support herself and her son. According to Frank White III of Ebony, Gaston can remember the lynching of a young Demopolis black "because he did not get off the sidewalk for a White woman." Experiencing racial prejudice as a child, however, did not crush Gaston's determination to succeed. He recalled in Ebony that he developed his flair for business at an early age, while living with his grandmother: "We had an old swing in our yard and all the kids used to come to our house to swing. Right then and there, I started the first Gaston business…. I threw open our yard to all the kids in the neighborhood and I charged them an admission price. The admission was a button or a pin. Soon I had a cigar box full of buttons and pins. All the women in the community knew where to come when their buttons and pins disappeared."

When Gaston was about eight years old, his mother took a position as a cook, which forced the family to move from Demopolis to Birmingham. There Gaston attended the Tuggle Institute for black children. He was fortunate enough to hear Booker T. Washington, a black leader who favored economic achievement and education over social and political change as a means of alleviating the conditions of blacks in the segregated South. After leaving the Tuggle Institute, Gaston earned money by selling subscriptions to the black newspaper Birmingham Reporter and by serving as a bellhop at the Battle House Hotel in Mobile.

In 1910 Gaston decided to enter the U.S. Army. He stated in Ebony that "every young man needs a few years of disciplining in the Army." Since the Army was segregated at the time, Gaston served with an all-black unit during World War I. While stationed in France, according to Harold Jackson in Black Enterprise, Gaston found himself treated with a respect that proved hard to come by once he returned to Alabama after the war. Gaston told Jackson, "They had Dr. [Robert R.] Moton of Tuskegee [Institute] speak to the black soldiers, just before leaving Europe. We were looking for equal rights back then. We were all prepared for it. But it dampened our spirits when Dr. Moton advised us to stay in our place. But I was a follower of Booker T. Washington, and I took his advice. I stayed in my place."

Determined to Make His Fortune

As "a follower of Booker T. Washington," Gaston was determined to make his fortune when he returned home from war. He began working at the Tennessee Coal and Iron Company near Birmingham, earning $3.10 a day as a laborer. Gaston managed to save most of his paycheck, supplementing his income in many ways, such as selling box lunches and peanuts. One of his more lucrative sidelines, however, was loaning money to his fellow workers. He received interest of 25 cents on every dollar from them each payday.

Gaston constantly studied his friends and neighbors, trying to learn what they wanted and on what they would spend money. In the early 1920s, after he had married his first wife, Creola Smith, Gaston noticed that many blacks died without enough money to pay for their own funerals and that his co-workers were always willing to help defray the cost of the burial of one of their unfortunate friends. Gaston noted in Ebony that "the whole thing had degenerated into a vicious racket. Some people were out collecting money for 'dead people' who were very much alive." So Gaston decided to offer an alternative. He explained further: "It occurred to me that the whole thing could be handled in a more businesslike manner. I got the idea of starting a burial society and collecting so much money each week from people and guaranteeing them a decent burial. Thus began the Booker T. Washington Burial Society."

In order to begin his enterprise, Gaston related in Ebony, he "had the help and encouragement of [his] father-in-law, A. L. (Dad) Smith." By 1932 the burial society had grown large enough to be incorporated as the Booker T. Washington Burial Insurance Co.; two years prior to that, Gaston and Smith had helped their business expand by founding Smith and Gaston Funeral Directors to service many of the burial society's customers. Eventually, the Booker T. Washington Insurance Co. grew to handle other aspects of the insurance field, besides just funeral expenses.

By 1939 Gaston's first wife had died, and he married his second wife, Minnie, a schoolteacher who helped Gaston with his next business venture. Gaston had been having difficulties finding enough clerical employees to work for his various companies, so he decided to start the Booker T. Washington Business College. With Minnie Gaston serving as administrator, the college provided a place where black students could learn proficiency in working on various business machines. The school remained in operation after his death.

Gaston has stressed in many articles and interviews that his business ventures were not started to make money but rather to fill social needs. One exception was his founding of the Brown Belle Bottling Company. "We got a Joe Louis Punch franchise," he recounted in Ebony. "I bought machinery and sat down and waited for the money to roll in. I lost more than $60,000 in the venture." But Gaston's other enterprises were invariably successful. During the 1940s and 1950s, his business empire continued to expand; in 1947 he acquired the New Grace Hill Cemetery, and in 1954 he opened the A. G. Gaston Motel. The latter business filled a special need in then-segregated Birmingham, where visiting blacks were not welcome in white motels and had to depend upon local black families to take them in.

At a Glance …

Born Arthur George Gaston, July 4, 1892, in Demopolis, AL; died January 19, 1996, in Birmingham, AL; son of a domestic worker; married Creola Smith (died, 1938); married second wife, Minnie (an administrator), 1939; children: Arthur George, Jr. (deceased).

Career: Mobile and Birmingham, AL, worked various jobs, including bellhop and newspaper subscription salesman, early 1900s; Tennessee Coal and Iron Co., laborer, 1910s–20s; supplemented income with odd jobs, selling peanuts and box lunches, and loaning money 1918–20s; entrepreneur, 1920s–96: founded a burial society (with father-in-law, A. L. Smith), 1923, incorporated as Booker T. Washington Burial Insurance Co., 1932 (became Booker T. Washington Insurance Co.; Smith and Gaston Funeral Directors, 1930); Booker T. Washington Business College, 1939; Brown Belle Bottling Co., 1946; A. G. Gaston Motel, 1954; Vulcan Realty and Investment Co., 1955; Citizens Federal Savings and Loan Association, 1957; A. G. Gaston Home for Senior Citizens, 1963; A. G. Gaston Construction Company, 1986. Acquired New Grace Hill Cemetery, 1947, and WENN and WAGG radio stations, 1975. Founded A. G. Gaston Boys and Girls Club.

Awards: Achievement award, Black Enterprise, 1978; Entrepreneur of the Century award, Black Enterprise, 1992; received numerous honorary degrees.

Blacks also had a difficult time getting loans from white banks, and to remedy this, Gaston established the Citizens Federal Savings and Loan Association in 1957. In addition to providing a place for blacks to borrow money to build homes and churches, the Citizens Federal Savings and Loan helped change the racist policies of other local banks by pressuring them with competition. Gaston remarked in Ebony in 1963, "Some applicants we turn down today can go to white banks and get mortgages."

Civil Rights Movement Spurred Gaston's Empire Building

During the civil rights movement of the 1960s, Gaston was criticized by some for not taking part in nonviolent antidiscrimination protest marches. But Gaston explained to White that "that was the one thing [civil rights leader Martin Luther King, Jr.] and I differed on…. I always felt that if somebody hit me, I would have to hit them back." So Gaston made his contributions behind the scenes, providing free accommodations in his hotel for civil rights pioneers and allowing the Southern Christian Leadership Conference to make its headquarters there despite bomb threats from hostile whites. The entrepreneur also put up bail money for civil rights protesters who were jailed, including Dr. King himself. As Gaston told White, "Hell, somebody had to be able to get them out of jail." Some criticized his gestures as "Uncle Tomism," but to them Gaston said, as he wrote in his autobiography: "I was convinced it was now time to go to the conference table instead of the streets to try to settle differences. If wanting to spare children, save lives, bring peace is Uncle Tomism, then I wanted to be a Super Uncle Tom."

To do so he just focused on building community-serving businesses. During the 1960s Gaston established the A. G. Gaston Boys and Girls Club, affiliated with the Boys' Clubs of America. In addition to providing young urban children with wholesome activities as an alternative to involvement with crime, Gaston often visited the boys and girls personally, hoping to motivate them with the story of his own success.

Well past the age when most men retire, Gaston continued to build his empire. In 1975 Gaston acquired Birmingham-area radio stations WENN and WAGG, which play rhythm and blues and gospel music, respectively. He opened the A. G. Gaston Construction Company in 1986. The following year, however, he created a stock-option program for his various businesses and sold all of his stock to his employees. In the early 1990s the 100-year-old Gaston remained active in business affairs, working in his office on the top floor of Citizens Federal every day despite suffering a stroke in 1992. His age finally caught up with him and he retired in 1996, just six months before his death on January 19, 1996. At the time, he was considered the wealthiest African American in the country with his wealth estimated at $130 million, according to Black Enterprise. His inspiration lives on: those following in his successful footsteps have been honored with the A.G. Gaston Lifetime Achievement Award by Black Enterprise, and those aspiring to follow his example could attend the annual A.G. Gaston Economic Empowerment Conference held annually in Birmingham since 2005.

Selected writings

Books

Green Power: The Successful Way of A. G. Gaston (autobiography), Southern University Press, 1968.

Sources

Books

Gaston, Arthur G., Green Power: The Successful Way of A. G. Gaston, Southern University Press, 1968.

Jenkins, Carol, and Elizabeth Gardner Hines, Black Titan: A.G. Gaston and the Making of a Black American Millionaire, One World, Ballantine, 2003.

Periodicals

Black Enterprise, July 1976; January 1979; June 1992; August 1992; March 1996; July 2002, p. 91; February 24, 2004, p. 102.

Ebony, June 1955; June 1960; July 1960; January 1963; November 1975; June 1987.

Network Journal (New York), February 28, 1996, p. 13.

On-line

"A.G. Gaston: Rough Road to Riches," Black Enterprise, www.blackenterprise.com/ExclusivesEKOpen.asp?id=1283 (November 6, 2006).