For as good as recording was in the 60's and 70's, live sound system technology had really only started and lagged far behind. The systems were tiny by today's standards, with a lot of non-matching components used by PA owners just to be able to cover the audience. Plus, on-stage monitoring was still in its infancy, so every artist had a difficult time hearing themselves. This is what prompted the Dead's sound crew and Alembic to come up with a way for the band to not only hear themselves, but to give the audience the best possible listening experience as well.
The "Wall of Sound" was actually comprised of 11 independent sound systems, as you can see from the picture on the left. There was one system for the vocals placed in the center, one for each guitar, one for each string of Phil Lesh's bass (yes, you read that correctly), one for the piano, one for both drummer's bass drum, and one each for the rest of each drummer's kit. Each system was placed behind the player so they could hear it, and since each system was made up of multiple speaker cabinets, could be directed so that most of the sound was aimed directly at the audience instead of bouncing around the venue. The individual systems were powered by 300 watt per channel McIntosh amps, which were always noted for excellent sound and about the most powerful amp that you could get at the time.
The crew came up with an innovative idea for vocal miking using differential mics that really made the whole thing work however. They put two directional mics out-of-phase with each other and spaced them 60mm apart as on the left. This meant that anything coming into the mic other than a vocal sung very close to one mic would cancel out, so you'd only hear the vocal in its particular sound system and nothing else from off the stage.
The reports were that the system sounded incredible and was insanely loud and clean for the time, so it garnered nothing but raves.
Back then this system was light years ahead of any other sound system on the planet, and in many ways, it's never been duplicated. The Dead only used it for a single tour because it was unusually costly to transport and very labor-intensive to set up, but it's something to marvel at even today. You can read more about it here and here, which has mostly the same info but different pictures. The pictures were taken by Richard Pechner, and you can view more images of The Grateful Dead and their Wall of Sound on his website.
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