Arthur George Gaston

Entrepreneur and activist

• Born: July 4, 1892
• Birthplace: Demopolis, Alabama
• Died: January 19, 1996
• Place of death: Birmingham, Alabama

Born into poverty, Gaston fought in World War I before beginning the first of many enterprises that he parlayed over the years into a large, profitable business empire in Birmingham, Alabama. During the 1960’s, he was an important financial backer of the Civil Rights movement.

Early Life

Arthur George Gaston was born to Thomas Gaston and Rosa McDonald Gaston on July 4, 1892. Gaston’s father died when Gaston was an infant, so his mother became a domestic servant to earn money while his grandparents—former slaves—cared for the young boy. At the turn of the twentieth century, Gaston’s mother landed a position in a white household as a cook, necessitating the family’s move to Birmingham. Her son contributed to the family income by selling newspapers and by serving as a hotel bellhop. Gaston attended Tuggle Institute, a segregated school, and was greatly inspired when educator Booker T. Washington visited to speak about the importance of learning and financial success to improving the social standing of African Americans.

After leaving Tuggle with a tenth-grade certificate in 1910, Gaston joined the U.S. Army, which, like the rest of American society at the time, was segregated. He served in France during World War I as a sergeant with an all-black regiment, the 317th Ammunition Train of the 92d Division, and was honorably discharged. Returning home after the war, he was hired for $3.10 per day as a laborer at TennesseeCoal and Iron Company, a subsidiary of U.S. Steel in Westfield, Alabama.

Gaston supplemented his meager income by finding ways to fill the needs of coworkers. He began selling to fellow employees such snack items as peanuts and popcorn and provided box lunches of fried chicken, baked sweet potatoes, and biscuits that his mother prepared. He loaned money to perennially cash-strapped laborers—who had to buy all necessities at a company store—at 25 percent interest. Gaston managed to save most of what he earned. After marrying Creola Smith in the early 1920’s, he began looking for new ways to earn money and make their future more secure.

Life’s Work

In 1923, Gaston initiated a new business designed to assist other poor African Americans while improving his own financial situation: He founded the Booker T. Washington Burial Society. The enterprise—which filled a void left by the unwillingness of white insurance companies and morticians to deal with African Americans—provided a form of prepaid insurance that, in exchange for monthly premiums, guaranteed funeral services and burial for black clients. The business was successful enough that by 1930, Gaston and his father-in-law, A. L. Smith, had established themselves as funeral directors. Two years later, using revenues gained from their funeral business, Gaston and Smith started up Booker T. Washington Insurance Company, which grew into the largest minority-owned insurance firm in Alabama.

The businesses spawned other businesses that also thrived. In 1939, after Gaston’s first wife died, he remarried to a schoolteacher named Minnie. That year, he founded Booker T. Washington Business College to train clerical workers. In 1947, Gaston purchased New Grace Hill Cemetery to provide burial plots for funeral home clients, and later founded a memorial garden and mausoleum company. By the 1950’s, Gaston had eight branch funeral homes that served African Americans throughout Alabama. During the mid-1950’s, he built the A. G. Gaston Motel to accommodate black businessmen barred from Birmingham’s whites-only establishments. During the same decade, he founded Vulcan Realty and Investment Company and Citizens Federal Savings and Loan Association, both of which catered to the black community. In the 1960’s, he opened a retirement home for aging African Americans; in the 1970’s, he bought two local radio stations—one gospel, one rhythm and blues—on which he frequently advertised his other businesses; and during the 1980’s, he founded a construction company. By the 1990’s, Gaston’s various enterprises were worth well over $100 million. He was a multimillionaire and one of the most successful African American businessmen in the United States.

During the late 1950’s and early 1960’s, Gaston was a key contributor to the Civil Rights movement. Although he disagreed with Martin Luther King, Jr., on the tactics used to fight discrimination—he was particularly opposed to pulling children out of school to march in demonstrations, and as a businessman he favored negotiations with whites rather than confrontation to achieve specific goals—he provided extensive financial support to the cause. Gaston provided lodging for King, Ralph Abernathy, and other activist leaders at his motel, provided meeting rooms for their conferences, and put up bail for those arrested at demonstrations. As a result of his involvement, racists targeted Gaston: His motel was bombed and his home was damaged by firebombs after he and his wife attended a state dinner hosted by President John F. Kennedy. During the 1970’s, he survived an attempted kidnapping for ransom.

Late in life, Gaston increased his philanthropic activities. He founded a Boys and Girls Club (an affiliate of the Boys’ Clubs of America) to help discourage youths from turning to crime. In 1987, Gaston created an employee stock ownership plan for Booker T. Washington Insurance, selling $34 million worth of company stock to the employees for a tenth of the price. Despite having a leg amputated during the 1980’s because of diabetes and suffering a stroke in 1992, Gaston remained active in his businesses through his hundredth birthday before finally succumbing to old age. He died on January 19, 1996.

Significance

Gaston wrote an autobiography, Green Power: The Successful Way (1968), which outlined his unique business philosophy. He received several honorary doctoral degrees. In 1992, just before his hundredth birthday, Black Enterprise magazine named Gaston Entrepreneur of the Century. The publication later instituted the A. G. Gaston Lifetime Achievement Award to recognize other outstanding African American business leaders. At the time of his death, Gaston’s net worth was estimated at more than $130 million, and most of the enterprises he founded were still in operation. The city of Birmingham bought the former Gaston Motel to convert it into an annex of the city’s Civil Rights Institute, which was built on the former site of Gaston’s Booker T. Washington Insurance Company.

Bibliography

Huntley, Horace, and John W. McKerley. Foot Soldiers for Democracy: The Men, Women, and Children of the Birmingham Civil Rights Movement. Champaign: University of Illinois Press, 2009. This vivid description of events that unfolded at a major Civil Rights battleground is based on accounts from more than twenty-five people who were involved in the movement.

Jenkins, Carol, and Elizabeth Gardner Hines. Black Titan: A. G. Gaston and the Making of a Black American Millionaire. New York: One World/Ballantine, 2003. Detailed, illustrated biography written by Gaston’s niece and grandniece.

Smith, Suzanne E. To Serve the Living: Funeral Directors and the African American Way of Death. Cambridge, Mass.: Belknap Press of Harvard University Press, 2010. An intriguing look at the history of the African American funeral industry, focusing on how black businessmen have accommodated traditions and customs in the past and present.