As Johnny’s music inspired the servicemen to fight for their country, he continued to think about the musicians and performers he was surrounded by each day.
“I used to ask myself what talented people did between picture and radio jobs.”
In a conversation with Glenn Wallichs, the owner of the Music City record store, Johnny and Wallichs started talking about how to produce and distribute quality music records. Johnny expressed unhappiness with the way record companies handled talent, and Wallichs thought the existing distribution set up was flawed. Together the two men formulated a better way to operate a new label, while capitalizing on the fact that there weren’t any record labels on the west coast. The big recording labels, like RCA and Decca, were on the east coast, and smaller companies that had tried to compete with them in the past had not been successful. However, Johnny Mercer and Glenn Wallichs believed they could do better, with Johnny’s practiced ear and Wallich’s business savvy.
The new company, Capitol Records, was immediately beset by problems. The musicians’ union was preparing for a strike because radio stations were increasingly using records instead of live performers to broadcast music. Unlike today, the copyright laws of 1909 stipulated that records were for home use only, leaving only live performances for the radio. However, with the ease of use and lower cost of records, radio stations had begun to ignore this law.
In addition, World War II was still raging, and the U.S. government had seized 70 percent of the nation’s shellac reserves. Shellac was used as a primary ingredient in bombshells, but it was also used in the production of records. The government needed shellac to create munitions for the armed services, so the fledgling company didn’t have the raw materials necessary to create new records. Wallichs was able to find a temporary supply of shellac eventually, but the company also had to purchase and grind up half a million pounds of old records to create new ones.
While Wallichs navigated the business side of the company, Johnny supervised the talent and their recordings. The two men worked quickly in order to get as many recordings completed as possible before the impending musicians’ strike. When the strike went into effect three months after the company formed, Johnny and Wallichs had several hits and enough recordings to be able to keep producing and selling.
Johnny’s personal taste ran to swing music, which was very popular at the time. He was also able to keep up with the rest of America’s interests, bringing in country and western performers. Capitol Records was increasingly successful. Much of this success could be attributed to Johnny’s chemistry in the recording studio and his ability to motivate singers and musicians to produce stellar performances.
Johnny was a major force at Capitol until 1948. By then the company had grown very large; it was no longer the small, elite recording label Johnny had envisioned. He left because he was unhappy with the direction of its growth, which involved a heavy focus on profits and less on quality music and performances.