Amadeo Peter "A.P." Giannini

"I have worked without thinking of myself. This [is] the largest factor in whatever success I have attained."-Amadeo Peter "A.P." Giannini

 

It may seem strange today, when there are banks on just about every corner and lenders incessantly hawk low-interest loans on TV and radio, but at the turn of the century, banks were only interested in lending money to the wealthy. In fact, many things today's bank customers take for granted, such as checking accounts, saving accounts, home mortgages, auto loans and other installment credit simply didn't exist. At least not for the working man. They had to hide their savings under mattresses and borrow from loan sharks at astronomical interest rates. But Amadeo Peter "A.P." Giannini changed all that. Through his dogged determination and unusual focus on "the little people," Giannini built what was at his death the largest bank in the country, and created the model for modern international banking.

The son of poor Italian immigrants, Giannini was born in San Jose, California, in 1870. At age 14, he quit school to assist in his stepfather's produce business. By 19, the amiable young charmer was a partner in the thriving enterprise, built largely on his reputation for fairness and integrity.

 

In 1892, Giannini married Clorinda Cuneo, the daughter of an Italian immigrant who had made a fortune in real estate. At the time, Giannini had income from investments of about $250 a month, plus his half-interest in his stepfather's firm. He decided that was enough. "I don't want to be rich," he said. "No man actually owns a fortune; it owns him." So he sold his interest in the family business to his employees for $100,000 and "retired" at the ripe old age of 31. But fate had other plans, and unbeknownst to Giannini, his real career was about to begin.

Less than a year after Giannini went into retirement, his father-in-law died, and Giannini took over his seat on the board of the Columbus Savings and Loan Society, a small bank in San Francisco's "Little Italy" section of North Beach. But Giannini soon found himself at odds with the other directors, who had little interest in lending money to hardworking immigrants. Like most banks of the day, the Columbus S&L dealt only with businesspeople and the wealthy. Giannini tried desperately to convince the board it would be immensely profitable to lend to the working class, which he knew from personal experience to be hardworking and very creditworthy. But the board turned a deaf ear, so the determined entrepreneur decided to strike out on his own.

In 1904, Giannini raised $150,000 from his stepfather and 10 friends, and opened the Bank of Italy in a converted saloon directly across from the street from the Columbus S&L. It was the first of what is known today as a full-service bank, providing both savings and commercial checking accounts, while also offering small loans. From the very beginning, Giannini intended his bank to be for "the little fellow," and he routinely lent money to farmers, merchants and laborers, most of whom were immigrants. He also encouraged recent immigrants to move their small savings from their mattresses to his bank.

The Bank of Italy continued to grow and prosper until the morning of April 18, 1906, when, like a lot of folks in the Bay Area, Giannini was thrown from his bed as the Great San Francisco Earthquake turned much of the city to rubble. After ensuring the safety of his family, Giannini raced to North Beach in a vegetable wagon, arriving at his bank just ahead of the fire that was sweeping through the downtown area. Sifting through the ruined building, he discreetly loaded $80,000 in gold, coins and securities into the wagon and, wary of looters, covered it all with a layer of fruits and vegetables.

In the days after the disaster, most San Francisco bankers wanted area banks to remain shut until the damage could be sorted out. But Giannini had a different plan. He set up shop on the docks near North Beach. With a wooden plank straddling two barrels for a desk, he extended credit "on a man's face and a signature" to small businesses and individuals desperately in need of money to help rebuild their lives. Giannini became a hero, and his actions spurred the city's redevelopment.

Giannini's experience in 1906 left him a changed man. "At the time of the fire, I was trying to make money for myself. But the fire cured me of that," he recalls. He saw how the power of banking could improve people's lives and made that his life's mission. He came up with the idea for a statewide system of branch banks that could bring monetary resources to far-flung communities. "By opening branches, I foresaw that we could give better service to everybody," he explains.

At the time, no other bank in America had such a system, prompting many in the business to deride Giannini's dream as mere folly. But in 1909, Giannini opened his first out-of-town branch in San Jose, and in 1913, he expanded into Southern California. In less than 10 years, Bank of Italy had 24 branches throughout California and was the fourth-largest bank in the state. Then in 1928, Giannini established the Transamerica Corp. to act as a management company for his extensive businesses, which now included industries other than banking. The following year, he combined Bank of Italy with other banks he had acquired, under the name Bank of America. By the end of the 1920s, Bank of America had become one of the largest banks in the country.

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