Giant of the West

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Occasionally, like an aging but still truculent eagle, San Francisco's Banker Amadeo Peter Giannini feels an urge for solitude, flaps eastward to survey his Pacific Coast empire from a distance. In the past these vigils were often disturbed by the sight of an enemy and Giannini's instinct for plummeting into violent battle. But last week in Palm Beach the 75-year-old Giannini sunned his scars in peace, lazily observed the movements of lesser birds, and gazed west with a benevolent softening of his hooded eyes.

The big, white-haired, white-mustached founder of the world's richest branch banking system was spending the winter as befitted his station--amid the surf-edged, palm-shaded luxury of the Breakers Hotel. Certain necessary trappings of state were in evidence--telegrams were delivered, long distance calls put through, and a fitting number of moist, pink vice presidents arrived to intone, "Yes, A.P.," at proper intervals.

Giannini allowed none of this to interfere with his joy in the simple life. Mornings he lay all but naked atop a bathhouse, his sun-blackened, 6 ft. 1 1/2in., 215-lb. bulk streaming inelegant rivulets of sweat. He swam, indulged himself in a rubdown, sat up with a towel around his ample middle to address those around him in .a hoarse, booming voice.

But he had nothing to do with Florida's night life, shunned cocktail parties and dinners ("If you go you have to return invitations") and, as a rule, refused to get into a boiled shirt. As always, he had no use for golf, gambling, the races, fishing, or "that damned gin rummy." Work was his play. He had never bothered to learn the small tricks by which lesser fry relax.

Triumph. For A. P. Giannini, who had once peddled vegetables, it was enough to meditate in fierce and profane triumph. He still had enemies, but he had smitten the big ones hip & thigh. Wall Street, and the "goddamned Eastern bankers" who had once tried to swallow him, could only watch him impotently now, with half-reluctant admiration. This week, after 42 years of struggle, his Bank of America National Trust & Savings Association, which covers California with 494 branches in over 300 cities, had become the biggest private bank in the world. Once before, Bank of America had passed Manhattan's Chase National Bank in total deposits, only to be overtaken again. But now it had a triumphant lead: $5,231,000,000 to $5,140,000,000.

The future of Giannini's empire--founded on the passionate belief that banking opportunity lies with the little fellow's money--seemed bright. From the Strait of Juan de Fuca to the Mexican line, the West Coast was booming, its fears of postwar slump almost forgotten.

All along the coast, hearts were high; but they were highest in California. The westward wartime migration which had increased California's population from 6,907,000 to 9,000,000 by V-J day was growing heavier. Despite the fact that California was jammed to the last shack and trailer, 383,252 people had arrived by automobile alone in the first two months of the year. And they were no longer just the aged from Iowa, going west to die. Many were young and vigorous, their future bright before them. A wartime poll of servicemen stationed in California showed that 52% wanted to stay there.

And with the new people, like gold dredges floating along a rich stream, came new industry, eager to scoop into California's new buying power. New stores, new shops appeared everywhere. The steel skeletons of new factories stood by the dozens in small towns around Los Angeles, where industry hoped--but not too firmly--that labor would be rendered patient and tractable by sun, fresh air and country acreage.

Jergens in Van Nuys. The list of new industries moving to Southern California alone was tremendously impressive. Ball Brothers would make Mason jars in a $3 million plant at El Monte, the Sylvania Electric Products Co. would make radios at Riverside, Ford would assemble Lincolns and Mercurys at Maywood and Jergens would make cosmetics in Van Nuys. Also moving or expanding: The Universal Sanitary Manufacturing Co., Sylvania Electric Products Inc., Hazel-Atlas Glass Co., Taylor Fibre Co., United-Rexall Drug Co., Ralston Purina Co., Universal Match Corp., Eastman Kodak Co., General Mills, Nash-Kelvinator, Chrysler Corp., the Upjohn Co., Joseph T. Ryerson

& Son, Inc. Scores of other companies were moving secretly, with a conspiratorial air worthy of the opium trade, so as not to tip off their competitors.

And steady currents moved beneath the turbulent surface of the boom. California was fabulously rich. In six years bank deposits had increased from $4.5 to 11 billion. Despite the influx of new people, average income was $1,500 as compared to the national average of $1,100. Agriculture alone was a $1.75 billion industry; oil would gross a quarter billion this year, manufacturing two billion, tourist trade over a half a billion. Motion picture studios would spend a quarter billion in the first year of the postwar race for Technicolored glory.

Just how much would be spent, and earned, in new housing, no man could say. But the state echoed to the bang of hammers; forty percent of California's renters planned to build.

To thousands of Westerners all this was just a beginning. Many a man contemplated the day when luck, daring and circumstance might bring the West abreast of the static and ponderous East--when Los Angeles might be greater than New York, when the ports and airfields facing the Orient might fill with commerce; when the hydroelectric power of the mountains might make goods for half a world across the Pacific.

One thing was certain: boom or bust, the House of Giannini would dominate Western finance. Even to Californians this fact still seemed a little incredible, as if one man had erected a duplicate of Mt. Shasta with no more tools than his own ego, intuition, ambition and capacity for work and vendetta.

World of Commerce. Amadeo Peter Giannini had all these tools. As a boy, he knew nothing of money, or of the fortunes which were being reflected in rococo mansions atop San Francisco's Nob Hill. He was born of Genoese immigrants in a cheap hotel room in San Jose. When he was only seven his father died. But the boy loved work. When his mother married again he discovered the brave and exciting world of commerce. His stepfather, Lorenzo Scatena, owned a small San Francisco fruit and vegetable commission house. Young Amadeo could not stay away from it.

He had a trick of straying boyishly aboard steamers, eyeing the manifest, and bringing back information other commission houses never got. He was also a born trader. At 15--a big, thick-armed youth with an eye like one of Garibaldi's lieutenants--he was traveling the Sacramento and San Joaquin Valleys with a horse & buggy, buying produce. He carried bread and cheese in his pocket, to avoid the necessity of talking business at farmers' dinner tables.

At 19 he was a partner in Scatena's growing firm. In a few more years he was half owner and running it. Then, suddenly, at 31, he retired. He explained: "We became the top firm in San Francisco. We'd fought our way up. We'd either merged or driven out of business all the firms that had fought us--so I lost interest." He had married Clorinda Agnes Cuneo, daughter of a wealthy Italian family, and had a guaranteed income of $250 a month./-

But indignation soon plunged him into a new career. When his father-in-law died, Giannini inherited a seat on the board of San Francisco's Columbus Savings & Loan Society. It was the day of gaslit chandeliers, mutton-chop whiskers, dignity--and loans for the favored few. When the new director suggested changes, the board eyed him with alarm and distaste. Giannini glared back--a bulky, hairy, black-mustached man who walked heavily in shiny, pointed shoes. He tried to buy control of the bank. The board refused to sell. He walked out to start the Bank of Italy.

Giannini's Way. It opened in a remodeled saloon at Washington Street and Columbus Avenue. It was operated, from the first, exactly as San Francisco financiers predicted an ex-vegetable king might run a bank. Giannini kept the saloon's bartender, one Armando Pedrini, as assistant cashier--an experiment dramatized by Pedrini's habit of waiting near the door to yank in hesitant customers. Bank of Italy made loans to the kind of people who had contributed to its $150,000 of capital--small merchants, even laborers, most of them Italian. Worse, Giannini tramped the streets soliciting business.

But, in the face of tradition, the bank's assets multiplied 60 times in its first ten years, moved twice to better quarters.

Then, in the early morning of April 18, 1906, opportunity knocked thunderously at Giannini's door. The banker was awakened in his home at San Mateo by the thrust and heave of the great San Francisco earthquake. He dressed, got to the city by running, walking, hitching rides on wagons. Flames were roaring a half block from the bank.

Giannini headed for Scatena's commission house, found a team of horses named Chub and Babe, hitched them to a wagon, drove back to the bank. By the time the flames had reached the building he was driving through drunken looters with close to two million dollars in gold and securities hidden under heaps of vegetables in the wagon bed.

As soon as the flames had died, he drove his precious load to the Van Ness Avenue home of his brother, Dr. Attilio H. Giannini; Bank of Italy was the only San Francisco bank which was open for business. To thousands of San Francisco's masses, the name Giannini suddenly became a symbol of wisdom, daring and integrity.

This week, as the 40th anniversary of the Great Fire neared, Amadeo Giannini could reflect on the part he had played in raising San Francisco from the ruins. Almost before the earthquake's rubble had been cleared, his bank's prestige was enhanced again, and again by disaster. When the Panic of 1907 hit the city, many a bank was forced to use clearinghouse certificates for cash. The Bank of Italy honored its passbooks with carefully hoarded gold.

Gospel. By the '20s, California bankers had quit smiling at Giannini, who was buying little banks by the score. Competitors stormed, but the public listened with respect to his gospel: a big bank's branch could put vast resources at the disposal of small towns; the bank would profit through increased business; the likelihood of bank failure would be reduced.

Giannini had a horror of failure and what it implied for little depositors. He once stopped a run on Sacramento banks by stuffing mail sacks with $5,000,000 in small bills, hiring an airplane to deliver them to the Bank of America branch. He followed by automobile, strode through the amazed depositors gesturing at the sacks and growling, "Money talks."

To independent bankers he seemed like a monster. The harder they fought to contain him the bigger he grew. He gave top-heavy prices for small banks, sometimes offered owners a free trip around the world to clinch a purchase. In the end his offers were usually accepted. The veiled threat of cutthroat competition always moved with his agents. By 1930 the empire had outgrown its old name, became Bank of America. As branches spread into agricultural regions, the Bank of Italy lent on crops. When frost wrecked orange groves, Giannini saved many a grower; when hard times bore down on the vineyards, he bore them up with cash.

The banks lent up to $300 to any honest man who had a job. Giannini furnished vast sums to Charlie Chaplin, Mack Sennett, Darryl Zanuck and other motion-picture producers, when most banks considered Hollywood a klieg-lighted gambling den populated by blondes and madmen. In the 19205, when he bought banks in New York, Giannini money financed Florenz Ziegfeld and many another Broadway showman. His rate of loss was, infinitely small. (Today, on small loans, it is but 18/100 of 1%.)

"That Dago." His prestige rose monumentally in California--then, in 1931, almost collapsed of its own weight. The stock of Transamerica, Giannini's holding company which owned the Bank of America, plunged from its 1929 high of 67 to two. An army of men & women lost their money; thousands lost their faith. In San Francisco, Giannini was "That Dago."

But he survived even this bitter thrust. He plastered California with billboard advertising. He went on lending even in the depression. And he went on expanding.

He made one big mistake. In 1930, confident that his empire was secure, he retired. In his search for a successor he hit upon a Wall Street man, well-starched, dignified, M.I.T.-educated Elisha Walker of Blair & Co., turned over control to him, departed for Europe.

Next year he was furiously booking passage home again. Walker had publicly announced that the books of Transamerica were padded with good will, inflated evaluations of subsidiary companies; that Giannini's $1,100,000,000 estimate of its worth was $800 million too high. He had sold the New York banks, booted Gian nini men out of Transamerica, was preparing to shuck off Bank of America too.

Giannini landed at Quebec, crossed Canada secretly, got to Lake Tahoe before anyone knew he was in the U.S. He began a giant proxy fight, barnstormed California, finally recaptured control, with 63% of the stockholders' proxies. He went back in triumph to the Bank of America's big building in San Francisco.

Padrone. Today, although he is technically retired, Amadeo Peter Giannini is still in control of his sprawling Goliath. A widower, he lives with his daughter in the gabled house he built in San Mateo before the earthquake. "She has her guests in," he explains, "and they talk or play cards. I sit in a corner and listen to the radio." Every facet of his business still interests him. "My brain never stops," he says. "I think while I sleep."

The bank should satisfy the critical eye of its padrone. It has 3,300,000 depositors, one for every three people in California. Every day 3,000 men & women walk into its multiple lobbies, walk out with loans. Bank of America is still Hollywood's great financial house; last week it had passed over a staggering sum to the new producing company which will film Erich

Maria Remarque's Arch of Triumph. It had financed Dark Mirror, starring Olivia de Havilland.

As the boom brawled on, the Bank of America would finance the lion's share of all California's crops, of all the new automobiles, iceboxes, radios, houses. Bank of America was now training 1,000 veterans to go out as veterans' business councilors. It was making loans as low as $10 to members of 4-H Clubs. It had lent $1,500 to Joe Szabo, clothing operator, who in four years boomed it into a $1,500,000-a-year business. Vyrl Coppersmith, farm boy of Chino, had got $250, bought himself two steers.

Bank of America employes pushed and prodded business. They got help from above. Said a B. of A. handbook:

"Your field of non-customer prospects is broad and rich. It includes both tradesmen and professional people, your landlord, your insurance agents, your bridge group, your golf foursome, members of your church, lodge, alumni club."

No B. of A. employe is permitted to gamble, make a customer repeat his name over the telephone, make an overdraft against his deposit account, borrow money from a client, or buy securities beyond his ability to pay. All of them know that Giannini refers to them as his "boys & girls." And while salaries are not startling, all know they can retire--after faithful service--with a comfortable pension. Most seem to like the setup.

So does Founder Giannini. As he sunned himself in Florida last week, he knew that the future of his state and region depended, as much as anything, on the giant he had built. He had armored the West for the battle of peace.

* Last year Banker Giannini decided that his personal fortune was too big. He hurriedly put $500,000 of it into a fund for bank training and medical research. His explanation: "Hell, why should a man pile up a lot of goddamned money for somebody else to spend after he's gone?" His estimate of his wealth today: between $300,000 and $400,000.

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