Sorry, Ron, I just don't buy it. I'm very familiar with M-G-M musicals...and the extneded sequence of which you speak. It may have been economics (economics based on the fact, the movie wouldn't have played in the racist South), but I don't think it was an overt act of racism on M-G-M's part.
Besides which Bruce brings up an excellent point...which again stresses economics... M-G-M's thinking: "Let's see, major, big, big star Ava Gardner...or Lena Horne...Cabin in the Sky and what else has she done?...Besides dealing with the economic and social realities at the time, the studio also had to figure that just purely on an artistic level, there was no guarantee that Lena Horne could carry a major role like Julie in an major motion picture. Did she ever after that? How is she in DEATH OF A GUNFIGHTER, I've never seen it.
When Showboat came along, I think, aside from Cabin in The Sky and Stormy Weather, everything else was purely musical spots. And there in lies the crux. Lena was more a singer than an actress...which is another reason I don't put much credence in her lament about losing the part.
I did say I can't ever remember a black woman ever playing Julie, but am I wrong about that? I have some vague memory that Lonette McKee may have played it at one time. It's been a long time since I've seen Lonette McKee but her in the role sounds much more believeable to me than Lena.