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True grit.

Arthur G. Gaston Sr. has always wanted to be where the action is. For him, that means work. When he was younger, if he wasn't working one of his 16-hour days, you might find himin a crowd of kids at the A.G. Gaston Boys' Club, telling his story in hopes that it might inspire them to be successful in life. He has always credited his grandmother for instilling in him a healthy fear of God that has kept him from mistreating other people. "She told me when I was a boy that God was watching me all the time, so I better be good," he recalled during a March interview with BLACK ENTERPRISE. "It scared me then and I'm still scared. I knew I'd better do right."

Gaston did better tha right. He built a monument to African-American entrepreneurship in Birmingham, a city that once symbolized the dogged and hateful raical oppression tha made the words "black millionaire" a contradiction in terms in the minds of most Americans. He launched Booker T. Washington (BTW) Insurance Co. in 1932, at a time when white insurance companies ignored black consumers. Today, it has a secure position on the BE INSURANCE LIST, with assets approaching $40 million. Gaston and a group of investors started Citizens Federal Savings Bank, a savings and loan association, after raising about $350,000 in 1957. The bank deposits now exceed $72 million, placing it a t No. 17 on the BE FINANCIALS LIST. Besideds Citizens Federal and BTW Insurance, Gaston's empire includes BTW Business College, A.G. Gaston Construction Co., the A.G. Gaston Home for Senior Citizens, Citizens Drugstore, Smith & Gaston Funeral Directors Inc., New Grace Hill Cemeteries Inc., Zion Memorial Gardens and Mausoleum, Vucan Realty & Investment Co. Inc. and BTW Broadcasting Service Inc., which includes radio stations WENN-FM and WAGG-AM. Companies under the BTW umbrella had more than $24 million in revenue last year.

After of lifetime of working and building, Gaston, once believed to be the richest black man in America, still wants to be where the action is. Four weeks after suffering a stroke on Jan. 22 of this year, he was back at his desk on the top floor of Citizens Federal Savings Bank. This is a man who expects to celebrate his 100th birthday on the Fourth of July.

That's A.G. Gaston. That's the drive that carried this son of a domestic worker from rural Alabama to the top of a financial empire worth millions. That's the sheer determination, the "true grit," that makes A.G. Gaston BLACK ENTERPRISE's Entrepreneur Of The Century.

Rough Road To Riches

That Gaston chose the name of arguably the most important black man in the history of Alabama to label his companies might have been expected. Though Gaston says he actually named the insurance company after a friend who coincidentally was Washington's namesake, Gaston has always been a disciple of the founder of Tuskegee Intitute. Gaston even titled his 1968 autobiography Green Power, a term coined by Booker T. Washington more than 60 years earlier. Like Washington, Gaston believed that economic self-determination, rather than political agitation, was the road to equality for African-Americans.

The grandson of former slaves, Gaston was born in a log cabin his grandparents built in rural Marengo County, Ala., in 1892. His father died when he was a baby. It was as a child that he began exhibiting entrepreneurial skills. The other children paid him whatever they had--usually buttons and pins--to ride the swing in his grandparents' yard.

Gaston's mother moved to Birmingham in 1900 to be a cook for A.B. and Minnie Loveman. They were the founders of what became Alabama's premier department store chain, Lobeman's, which went out of business in 1980. Mrs. Gaston sent for her son and enrolled him in the Carrie Tuggle Institute. Granney Tuggle, the daughter of a Mohawk chief and a black woman, and herself a former slave, was totally committed to the education of black children. Gaston still attributes his learning how to treat to Granny Tuggle and his mother.

Gaston worked at a number of odd jobs as a young man. He also collected subscriptions for the old black newspaper, the Birmingham Reporter. He did so well that the paper's owner, Oscar Adams, sent him to Mobile, Ala., where a well-paying post office job was supposed to be held for him. But there was no job when Gaston got to Mobile, so instead he began working as a bellhop at the Battle House Hotel. Gaston made so much money as a bellhop and being involved in "side business after the saloons closed at midnight" that when the post office job did become available, he didn't want it. In a 1979 interview, Gaston said the Mobile experience was how he "got the disease....I wanted to be rich."

How to get rich was the question.

Gaston remembered a speech Booker T. Washington made at the Tuggle Institute. Washington said opportunity is like a bald-headed man with only a patch of hair right in front. Yo have to grab that hair, grasp the opportunity while it's confronting you, else you'll be grasping a slick bald head.

Gaston decided his bald head was the Army. By the time America was involved in World War I, Gaston was a seasoned soldier, a sergeant. He served with distinction in France as part of an all-black unit, the 317the Ammunition Train of the 92nd Division.

Like most other black soldiers who returned home after the war, Gaston was disappointed to find the fair treatment and respect given them in France was as elusive in the United States as it had been before they left. "The black soldiers stayed in their place during the war," Gaston says. "And they had Dr. [Robert R.] Moton of Tuskegee 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."

Gaston came back to Birmingham and took a job at the Tennessee Coal and Iron (TCI) Co. for $3.10 a day, which was considered a good wage back then. But it didn't take long for him to return to his entreprenurial ways.

He eventually began selling box lunches prepared by his mother, to his co-workers at the steel plant. Anyone needing money for a date could borrow it from Gaston, who was very frugal with his pay. Of course, borrowers had to pay him 25 cents on the dollar every two weeks. Gaston was also running a popcorn and peanut stand in his spare time when he had an idea that would change his life forever.

Having noticed that even the tightwards among his co-workers at TCI were willing to chip in whenever preachers came around asking for donations for the burial of a black person, Gaston thought they might be willing to start their burial society.

He got plenty of encouragement, but few contributions to the plan. As a result, when the first member of the society died there was only about $30 available to pay for the $100 funeral.

Gaston was able to get the woman buried on credit, but the future of the society looked bleak until a minister, the Rev. S.H. Ravizee of Hopewell Baptist Church, refused to take up any more collections for burials and told his flock to go to Gaston instead.

It was 1923. The burial society soon acquired the mortuary that became the home of Smith and Gaston Funeral Directors. In 1932, Gaston's burial society was incorporated as Booker T. Washington Burial Insurance Co., the source of capital for all his other ventures. It was the cornerstone Gaston used to build his empire.

Accidental Wealth

Gaston his getting rich was "accidental." He simply tried to fill the needs he observed in the community. In 1939, he started BTW Business College to train black clerical workers. In 1947, he acquired New Grace Hill Cemeteries Inc. 1954 he opened the Gaston Motel in downtown Birmingham for black travelers, who were barred from segregated lodging. Little did Gaston know it opened, the motel would become one of the landmarks of civil rights history, the headquarters for the Rev. Martin Luther King Jr. during the 1963 Birmingham demonstrations. In fact, the motel was bombed the day King left town after successfully integrating public accomodations in the city.

Though most of his work was done behind the scenes, Gaston was a key figure in Alabama's civil rights movement. He not only provided lodging to leaders such as King, he paid their bail when they were arrested for marching.

This was nothing new for Gaston. In 1957, when blacks in Tuskegee, Ala., staged an economic boycott to gain their voting rights, white banks put pressure on anyone who had outstanding mortgages or business loans. But Gaston promised to advance mortgage money to anyone being pressured.

Some called Gaston an "Uncle Tom" for not being at the forefront of the demonstrations in Birmingham in 1963, but he played a key role in furthering dialogue black activist and the wite businessmen whose respect he had gained long ago. "If I hadn't been an Uncle Tom, there wouldn't be what we have today," says Gaston.

Indeed, when other cities were being torn apart by race riots in the late '60s, Birmingham bubbled but did not boil over because some of the biracial ties Gaston helped foster. "Dr. Gaston was willing to give a part of what he made to the community," says W.C. Patton, a retired educator and former director of the NAACP National Voter Education Project. "He has been a contributor to numerous projects in the black community. He started Citizens Federal Savings Bank when black people couldn't borrow money without problems, if at all, from white institutions."

Gaston takes pride in the number of young people who have found in his story their inspiration to become successful businessman and women. Some of those young people were products of the A.G. Gaston Boys' Club, and affiliate of the Boys' Clubs of America, which he started with a $50,000 donation in 1966. Since then, more than 20,000 boys and girls have gone through the program which offers athletics and moral guidance. Gaston has touched thousands of other young people just by talking to them. "Mr. Gaston has been a vital resource and an unusually positive influence in this city," saya Charles A. McCallum, president of the University of Alabama at Birmingham. "Perhaps most important among Gaston's contributions has been his work with young people."

Gaston knows that money can't buy everything, but he also believes Booker T. Washington's assertion that success in business can open many doors. "Money has no color. If you can build a better mousetrap it won't matter whether you're black or white, people will buy it," he says.

Yet Gaston has often wishd wealth wasn't so much a part of his own identity. He blames the "millionaire" tag for a 1976 plot to kidnap him and his wife, Minnie. A late-night intruder assaulted the couple in their home and drove a handcuffed Gaston around the city for hours before being aapprehended by police.

Spreading The Wealth

In 1987, Gaston cured himself of the "disease" to get richer by virtually giving away his empire to his employees. He created an employee stock option plan (ESOP) and sold the parent company, BTW Insurance Co., to his employees for only $3.5 million, a fraction of its value of $34 million in assets. Bettye, L. Clay, an executive assistant who has been with BTW Insurance Co. for 30 years, was overwhelmed by Gaston's decision to create the ESOP. "Those of us who have seen this company grow over the years feel our loyalty and dedication have paid off," Clay asserts.

BTW Insurance President Louis J. Willie, who has been with Gaston since 1952, credits his mentor with teaching him how to employ his education in the business world. "He told me that with my education--I was the only black peron in my M.B.A. class at the University of Michigan--and with his practical skills, we could really build something," Willie recalls. "Dr. Gaston put into practice all tha learned in school. He is a genius of psycology, someone who knows what makes people tick, and how get the best put of them."

Gaston has distilled his business philosophy into 10 rules of success:

* Save a part of all you earn. Money doesn't spoil; it keeps.

* Establish a reputation at a bank or savings and loan association. Save at an established institution and borrow there.

* Take no chances with your money. A man who has no money to lose has no business gambling.

* Never borrow anything that, it forced to, you can't pay back.

* Don't get big-headed with the little fellows. That's where the money is.

* Don't have too much pride. Wear the same suit for a year or two.

* Find a need and fill it. Successful businesses are founded on the needs of people.

* Stay in your own class. Never run around with people you can't compete with.

* Once you have money, or develop a reputation for having money, people will give you money.

* And once you achieve a certain financial standing it is very difficult not to make money.

Gaston's business acumen has been recognized the world over. Over the years, he has been honored by the U.S. Department of Commerce, the U.S. Small Business Administrator and the Chamber of Commerce of the United States. Although his formal education ended with a 10th-grade completion certificate from Tuggle Institutee, Gaston holds more than 10 honorary docorates, including degrees conferred by Tuskegee University and Monrovia College and Industrial Institute in Liberia.

Gaston says his fondest business venture has been the radio stations, R&B formatted WENN-FM and gospel formatted WAGG-AM, which consistently receive high ratings among Birmingham listeners, black and white. Gaston knows the importance of having black-owned media that can provide a public voice when the mainstream won't.

But he has also learned during his long life that sometimes a businessman has to mute his voice to accomplish his goals. Asked to state his philosophy in life, Gaston laughs and recalls and old saying: "Never spit in a lion's face when you've got your hand in his mouth."
COPYRIGHT 1992 Earl G. Graves Publishing Co., Inc.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:20 Years of Black Business Leadership; Arthur G. Gaston
Author:Jackson, Harold
Publication:Black Enterprise
Date:Jun 1, 1992
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