Mercer founded Capitol Records with the financial help of movie producer Buddy DeSylva and the business acumen of Glenn Wallichs, owner of Music City, at the time the biggest record store in Los Angeles, California. Capitol was the first West Coast label, competing with RCA-Victor, Columbia and Decca in New York. In addition to its Los Angeles recording studio Capitol had a second studio in New York City, and on occasion sent mobile recording equipment to New Orleans, Louisiana and other cities.
The earliest recording artists included Paul Whiteman, Martha Tilton, and Ella Mae Morse. Capitol's first gold single was Moorse's "Cow Cow Boogie" in 1942. By 1946 Capitol had sold 42 million records and was established as one of the Big Six studios. In 1950 Capitol built its own studio on Melrose Avenue in Hollywood.
By the mid-1950s, Capitol had become a huge company, concentrating on popular music. Its roster included Nat King Cole, Stan Kenton, Wingy Manone Peggy Lee, Dean Martin, Frank Sinatra, Judy Garland, Keely Smith, and Nelson Riddle. It started a subsidiary label "Angel Records" for classical music; most of the recordings were recorded in Europe and pressed from masters leased from European labels.
In 1955, the English record company EMI acquired Capitol Records for $8.5 million. Soon afterward, EMI built a new studio (The Capitol Tower at Hollywood and Vine to match its state-of-the-art Abbey Road Studios in London.
The Capitol Tower
The Capitol Records building is one of the most distinctive landmarks in Hollywood. The 13-story earthquake resistant tower, designed by Welton Becket, was the world's first circular office building. The wide curved awnings over windows on each story and the tall spike emerging from the top of the building combine to give it the appearance of a stack of vinyl 45s on a turntable. The rectangular ground floor is a separate structure, joined to the tower after it was completed. It was built in 1956 just north of the intersection of Hollywood and Vine.
The blinking light atop the tower spells out the word "Hollywood" in Morse code. In 1992 it was changed to read "Capitol 50" in honor of the label's fiftieth anniversary. It has since returned to spelling "Hollywood."
The acquisition of Capitol Records by EMI created a large conglomeration, which owns the U.S. rights to The Beatles, the Beach Boys, Pink Floyd, Bob Seger, Duran Duran, Bonnie Raitt, Robbie Robertson, Steve Miller, Tina Turner, the Beastie Boys, and Garth Brooks.