The reason the harmony vocals on the Live in Montreaux recording sound so crappy, is because that recording is taken directly off the soundboard, before any levels are adjusted so that the audience hears a more balanced mix. So we're not actually hearing what the audience at that concert heard. As a testimate to the band's harmonizing, one needs to look no further than the Live in New York city radio show Gord did in 1977. Both Rick and Terry sing harmony on that recording and their voices on "Race among the Ruins" and "The Circle is Small" are absolutely spot-on. I wish they were still miked today as they add a such a depth to Lightfoot's singing.
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