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Ronald Reagan, MCA, and the Mob
By Dan Moldea
OPEN ROAD INTEGRATED MEDIACopyright © 1987 Dan E. Moldea
All rights reserved.
Near the end of World War I, the United States government built a naval base on the Mississippi River near the segregated Storyville neighborhood of New Orleans. The area, which covered thirty-eight blocks in the French Quarter, was a jazz musicians' paradise where townspeople jammed together on street corners every night, playing everything from boat whistles and washboards to open-bell trumpets and slide trombones into the early-morning hours. Known as "The District," Storyville stretched from Perdido and Gravier streets to Franklin and Locust streets and was the home of Ferdinand "Jelly Roll" Morton, the self-proclaimed "inventor" of jazz, as well as the home of a string of independent saloons, gambling joints, and brothels.
With the passage of the Volstead Act in 1919, the Prohibition Era began. The public drunkenness, crooked gambling, and open prostitution rampant in Storyville had earned it a reputation as Sin City, a reputation that had already reached Washington, D.C. The federal government needed little impetus to expropriate the land and permanently close down the area. Within days, thousands of people, packing everything they owned, left the city, looking for places to resettle.
"Closing the area meant the end of jobs for musicians, singers, and hundreds of other workers," said one observer. "But it was even more. It was the coda for a fantastic era, and the termination of New Orleans as the world's hotbed of jazz."
Most of the musicians — like trumpet players Joe "King" Oliver and Louis Armstrong — traveled north. Chicago became their new home and the new capital of jazz. King Oliver's Creole Jazz Band and Armstrong's Sunset Band worked at places like the Dreamland Café and the Royal Gardens on Chicago's South Side, as well as the Grand Theatre, the Colonial Theatre, and the North American Restaurant, all in and around the Loop, once again playing into the early-morning hours.
The Original Dixieland Jazz Band and the New Orleans Rhythm Kings were not among the first jazz bands, not even among the first all-white jazz bands, but their music — patterned after the rhythmic passion of Black rag and jazz — brought jazz to a larger, more cosmopolitan audience. These white bands quickly became known to audiences in places as distant as New York and London.
During the early 1920s, young South Side Chicago musicians — like Eddie Condon, Muggsy Spanier, and George Wettling — and West Side youths like Benny Goodman were influenced by the sound these groups produced. But Condon's and Goodman's music took on an identity of its own. It became known as "Chicago Style" or "White Chicago" because of its emphasis on Black off-the-beat rhythms and sharply defined notes, but with a new swing and aggressiveness. This variation of basic jazz, sometimes hard and harsh, seemed to epitomize the vitality of the Roaring Twenties and of Chicago, which had become a wide-open town.
The notorious Mafia leader Al Capone and his rival gangs had built their empires on illegal, bootlegged liquor, which brought them millions of dollars in unreported, untaxed income. When the Depression came, they were the only people with big money, so bankers, businessmen, and politicians often came to them for help. They usually received it — but always for a price. Massive violations of state and federal banking laws, the mob's infiltration of legitimate businesses, and political corruption became facts of life. Those who defied the system or double-crossed the people who paid them off were either personally destroyed or brutally murdered. Despite its more glorified Hollywood image, there was nothing glamorous about the real legacy of the Chicago Mafia.
Between machine-gun shootouts in the streets, the racketeers spent a lot of their dough in nightclubs and speakeasies, some of which they had built themselves. Juiced-up mobsters foot-tapped in time with jazz and Dixieland music played by one band or another in any number of clubs. Mafia members, who fantasized about playing a cool sax, befriended those musicians who could. Musicians — who dreamed about being rich and powerful, with plenty of dames around — allowed them to do so, usually making a few extra bucks, earning a little protection, and maybe even enjoying the favors of a mobster's moll.
Initially, music critics viewed jazz enthusiasts as "musical illiterates." But as a more commercial, toned-down form of jazz evolved, this relatively new innovation in music became more widely accepted. As a result, the band-booking business blossomed and the record industry boomed into a multi-million-dollar-a-year bonanza. In 1921 alone, twenty years after the pioneering Victor Talking Machine Company and the Columbia Graphophone Company were established, over $106 million in records were sold. Two years earlier, in 1919, New York's Radio Corporation of America (RCA) had been created.
On October 7, 1922, WJZ, a Westinghouse radio station in Newark, New Jersey, hooked up with General Electric's WGY in Schenectady, New York, and broadcast the opening game of the World Series. The following year, AT&T's station in New York performed a similar feat, cabling radio signals to WMAF in South Dartmouth, Massachusetts. By 1924, twenty-five other stations were added to AT&T. Two years later, the National Broadcasting Company, NBC — which was owned and operated by RCA — took over AT&T's operations and became the first licensed radio network, broadcasting as far west as Kansas City to twenty-one cities.
The demand for musical entertainment on the radio was tremendous. In spite of the fear among some people that jazz and its variations would corrupt the public's taste in music, dance bands were in vogue. The radio made Eddie Condon, Benny Goodman, Duke Ellington, and Guy Lombardo household words. Increasingly, both well-known and lesser-known but up-and-coming bands needed managers to represent them professionally. Band members were musicians but not always businessmen, and most of them needed an agent to protect their financial interests.
The biggest talent bureau at the time was the New York–based William Morris Agency. It was founded in 1898 by Austrian immigrant Wilhelm Moses, who had changed his name to William Morris when he came to the United States. Morris had retired in the early 1920s, turning the agency over to his son, William Morris, Jr., a scholarly man who had no taste for the business. Young Morris made Abe Lastfogel, a charming and popular man who had worked for the William Morris Agency since he was fourteen, the company's president. At that time, the agency numbered among its clients George Jessel, Jimmy Durante, Al Jolson, and Eddie Cantor.
Another prominent talent agency was the Associated Booking Corporation, run by Joseph G. Glaser. Glaser was Louis Armstrong's manager, as well as the exclusive agent for many of the top Black performers. A big Chicago White Sox fan who spent much of his time doing business at Comiskey Park, he had a reputation as a cold, crusty, hard-driving businessman. To ensure an edge in his business, he became a close associate of many of the top underworld figures in Chicago and New York, whom he had met through his band-booking agency.
In 1924, a small, soft-spoken, professorial-looking man named Julius Caesar Stein started the Music Corporation of America — MCA — in Chicago with a stake of only a thousand dollars — which included twenty-five dollars for the incorporation papers.
Born in South Bend, Indiana, on April 26, 1896, "Jules" Stein was the son of the proprietor of a small general store. His mother — who had bought him a mandolin as his first musical instrument — was an invalid whose care often drained the family's meager bank account. As a result, Stein, even as a child, was forced to make his own money. By the time he was twelve, Stein had saved enough money to see himself through prep school. He never returned home. Initially intrigued by the possibility of becoming a professional flyer, the black-haired, brown-eyed Stein, who had a sharply angular face with a pronounced chin and jaw, decided to move in a completely different direction and studied to be an ophthalmologist. (The year he founded MCA he published a respected, erudite treatise on "The Use of Telescopic Spectacles and Distil Lensen.")
But Stein had been smitten by show business. He began his entertainment career in Chicago shortly after leaving home. At the age of 14, he was leading an orchestra; his favorite song was "Alexander's Ragtime Band." As he worked his way through the University of West Virginia, graduating at eighteen, and medical school at the University of Chicago, he played in and booked dance bands, describing himself as a "schmaltzy" violinist and saxophone player. During World War I, he served in the Army Reserve as a medical officer. After the war, he headed for Vienna to pursue postgraduate work. Stein had also found time to take a three-year correspondence course in business.
Returning to Chicago, he served a residency at Cook County Hospital and went into private practice, working as the assistant to Dr. Harry Gradle, one of the Midwest's most eminent eye surgeons. Soon after, Stein met an old college chum, William R. "Billy" Goodheart. A quick-tempered but accomplished pianist, Goodheart was viewed as the kind of guy who would slap around the newspaper boy for throwing the morning edition in the bushes. "Goodheart was known as a 'character,'" wrote one reporter. "He was said to sit in a raised chair so he could look down on his callers. When someone asked for two minutes of his time, he got just that — by a stopwatch. He carried pills for every ailment. He was a driver who demanded results and accepted no excuses."
Goodheart shared Stein's interest in the music business. The two men became partners in Kenneworth Music. They soon discovered that they were shrewd businessmen and had a knack for organizing and promoting bands. Their principal business came from the mob-controlled nightclubs and speakeasies on Chicago's South Side, Capone's territory.
"I had a young assistant," Stein remembered, "and he'd ring up about bookings while I had a patient in the chair. I'd be saying, 'Can you read this, can you read this?' and all the while I'd be speaking [on] the phone. We had Hushaphones in those days, a box around the speaker so nobody could hear what you were saying, and I couldn't have done business without that."
Stein recognized that he could make more money as a booking agent than anything else he could do. So Stein gave up his career with Dr. Gradle to found MCA with Goodheart. Overnight, Dr. Stein became simply Jules Stein. Working from a tiny, two-room office in downtown Chicago, Stein and Goodheart quickly began finding jobs for dance bands and other musical performers throughout the Midwest, as well as advising clients on their careers. In return, they usually took a ten-percent commission.
Stein was responsible for inventing the concept of "rotating bands" for the one-night stands and the week-long engagements. He convinced club owners that their businesses would grow if they frequently brought in new entertainers. Before that time, bands would play in one location for months, even years.
Stein and Goodheart also insisted that MCA be the exclusive agent of those bands and bandleaders it represented and later demanded that dance halls with which they worked hire MCA bands exclusively — a practice which had been unheard of previously. Once signed, MCA's clients and customers would then be offered MCA deals on automobiles and insurance policies. To secure bookings, MCA, according to several sources, occasionally resorted to intimidation. Some clubs that refused exclusive arrangements with MCA became the targets of "stink bomb" attacks, which would be launched during the acts of other agencies' bands.
The dance band business meant an itinerant existence. Booking agents handled the details of getting acts from place to place and finding them places to stay. Many bands had to play nearly every night, traveling from city to city, state to state in order to make enough money to survive. Bands might consist of as few as five and as many as twenty musicians. MCA made sure they were taken care of. For many trips band managers, arrangers, and soloists might also have to be included. MCA had to provide for them as well. "Name" bands traveled in their own buses; "semi-name" bands had to lease or rent. MCA was also responsible for arranging radio broadcasts, as well as supplying publicity — posters, press releases, and newspaper ads. For its ten-percent commission, MCA took care of everything as part of its package deal, leaving the clubs with little to do.
MCA remained in constant touch with dance hall operators in the various states while its bands were on the road, trying to extend their tours or fill in open dates. Whenever possible, MCA tried to gain exclusives with the clubs and hotels, providing them not only with bands but with liquor, glasses, linen, and even confetti.
Stein and MCA handled themselves so professionally that bigger-name bands began to take notice and sought to be represented by them. Among others, Stein had penned a contract with the Coon-Sanders Kansas City Nighthawks, which played a softer variation of jazz. But Stein still did not have a big-name band and a way to crack the lucrative New York big-band market.
In 1928, MCA pulled its first big national coup by signing Guy Lombardo and his orchestra to an exclusive contract. Goodheart — whose goal was to make a million dollars by the time he was forty — first approached Lombardo while he was playing at the Music Box, a nightclub in Cleveland, Ohio. Lombardo rejected MCA's offer at first, insisting that he neither needed nor wanted an agent. But after Stein pulled strings to get him a long-term contract at the Roosevelt Hotel in New York, Lombardo signed, bringing in tow his close friend, pianist Eddy Duchin. Other major bandleaders followed in Lombardo's wake. Goodheart left Chicago and opened the agency's New York office in the Paramount Theatre Building at 43rd and Broadway. MCA began to lock up bookings at New York's Waldorf-Astoria and many of the big, luxurious hotels and nightclubs in Chicago, New York, Miami, and Los Angeles.
By the mid-1930s — the Big-Band Era — MCA represented more than half of the major bands in the country, including those of Harry James, Tommy Dorsey, Kay Kyser, Xavier Cugat, Artie Shaw, and Gene Krupa. The agency booked them for one-night stands, as well as long-term engagements at dance halls, nightclubs, ice shows, county fairs, and big-city hotels. Stein, who had become a man-about-Chicago, was driving a Rolls-Royce and had purchased a beautiful French-style estate overlooking Lake Michigan.
With the growing popularity of musical programs on the radio — particularly on WGN in Chicago — Stein gained the support of his childhood friend, James Caesar Petrillo, the president of the Chicago local of the American Federation of Musicians (AFM).
Petrillo was the classical tough-guy labor boss. Born in 1892, the son of Italian immigrants, and a cornet-playing product of the Chicago slums, Petrillo had started as a union official for the Chicago local of the American Musicians Union in 1915. After losing his bid for president of his local in 1918, Petrillo abandoned the AMU and went to work for the AFM. In 1928, he became president of the AFM's Chicago local.
A small man, five feet six inches tall, with a fourth-grade education, a gruff style, rimless glasses, and monogrammed shirts, he spoke salty, ungrammatical English in a grating voice and rode around in a bulletproof limousine. He was an extreme egotist and a shrewd and treacherous political infighter who ruled his union like a dictator. He loathed record companies, calling them "musical monsters which were killing employment" for live musicians, and eventually succeeded in making the companies pay artists for each record sold. He also forced the radio networks to pay their musicians at union scale regardless of whether the musicians were needed or not.
"If I was a good trumpet player," Petrillo said, "I wouldn't be here. I got desperate. I had to look for a job. I went into the union business."
When he became national president of the AFM, union boss Petrillo became the most powerful figure in the music industry. He performed many favors for Stein. (Stein was given AFM's membership card number one and attended nearly all of its union meetings.) Petrillo used his clout to prevent other big-band talent agencies, in competition with Stein, from obtaining licenses to operate, thereby helping to give Stein and MCA a virtual monopoly over the major bands in the music business. Whenever a dispute arose between a band and MCA, the executive board of Petrillo's union always sided with MCA. One source said he could not recall a single case before the AFM board that was won by a union member against MCA. "The fix was always in," he said. "Big-band leaders were pretty consistently voted down by AFM whenever they had a dispute with MCA."
Petrillo also granted MCA an exclusive "blanket waiver," permitting Stein's firm to operate as both booking agent and radio production company — despite the fact that such an agreement was considered a conflict of interest and violated the AFM's by-laws. For instance, MCA, for as much as a thirty-percent profit, would package an entire radio program, complete with bands, singers, writers, directors, and producers, and sell it to the networks — even though all of the participants were represented by MCA. If a performer had a grievance, it would be difficult for him to complain to his agent, also his employer, who maintained a sweetheart relationship with his union.
Excerpted from Dark Victory by Dan Moldea. Copyright © 1987 Dan E. Moldea. Excerpted by permission of OPEN ROAD INTEGRATED MEDIA.
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Table of Contents
Frequently Mentioned Names,
I. The Rise,
II. The Fall,
III. The Resurrection,
About the Author,