Amadeo Giannini

Alex Rover | August 11, 2022

Summary

Amadeo Pietro Giannini, also known as Amadeo Peter Giannini or A. P. Giannini, (May 6, 1870 – June 3, 1949), was an American banker who founded the Bank of Italy, which would later become the Bank of America. Giannini is credited as the inventor of many modern banking practices. In particular, Giannini was one of the first bankers to offer banking services to middle-class Americans, rather than just the upper class. He also pioneered the holding company structure and established one of the first modern transnational institutions.

Amadeo Pietro Giannini was born in San Jose, California, of Italian immigrant parents. He was the first son of Luigi Giannini (1840-1877) and Virginia (née Demartini) Giannini (1854-1920). Luigi Giannini emigrated to the United States from Favale di Malvaro near Genoa, Liguria in the Kingdom of Sardinia (later part of Italy) to prospect in response to the California Gold Rush of 1849. Luigi continued to prospect for gold throughout the 1860s and returned to Italy in 1869 to marry Virginia, bring her to the United States and settle in San Jose. Luigi Giannini purchased a 40-acre farm in Alviso in 1872 and grew fruits and vegetables for sale. Four years later, Luigi Giannini was shot and killed by an employee over a wage dispute. His widow Virginia, with two children and pregnant with a third, took over the operation of the fruit and vegetable business. In 1880, Virginia married Lorenzo Scatena (1859-1930) who founded L. Scatena & Co. (Of which A.P. Giannini would eventually take over). Giannini attended Heald College, but realized he could do better in business than in school. In 1885, he retired and took a full-time position as a produce broker for L. Scatena & Co.

Giannini worked as a produce broker, commission merchant and farm produce distributor in the Santa Clara Valley. He was successful in that business. He married Clorinda Cuneo (1866-1949), daughter of a North Beach real estate magnate, in 1892 and eventually sold his interest to his employees and retired at the age of 31 to manage his father-in-law”s estate. He later became a director of Columbus Savings & Loan, in which his father-in-law had an interest. Giannini saw an opportunity to serve the growing population of unbanked immigrants. At odds with the other directors who did not share his sentiment, he resigned from the board in frustration and opened his own bank.

Giannini founded the Bank of Italy in San Francisco on October 17, 1904. The bank was located in a converted saloon as an institution for the “small member”. It was a new bank for working immigrants that other banks would not serve. Deposits on that first day totaled $8,780. Within a year, deposits exceeded $700,000 ($13.5 million 2002 dollars). The 1906 San Francisco earthquake and fires leveled much of the city. In the face of widespread devastation, Giannini established a temporary bank, collecting deposits, making loans, and proclaiming that San Francisco would rise from the ashes.

Immediately after the earthquake, he moved the money from the vault to his home outside the fire zone in then rural San Mateo, 30 kilometers away. A garbage cart was used to transport the money, hidden under the garbage. The fires had warmed the vaults of other large banks, so the sudden change in temperature when they were opened meant that the contents risked being destroyed, and because of this many vaults were kept closed for weeks. During this period, Giannini was one of the few bankers who could satisfy requests for cash withdrawals and make loans, operating from a table across two barrels on the street. Giannini made loans on a handshake to those interested in reconstruction. Years later, he would relate that all loans were repaid. As a reward to the garbage man whose cart hauled the bank”s assets, Giannini gave the man”s son his first job when he turned 14.

Giannini introduced branch banking shortly after the 1909 legislation allowing bank branches in California. His first branch outside of San Francisco was established in 1909 in San Jose. By 1916, Giannini had expanded and opened several other branches. Giannini believed in branch banking as a way to stabilize banks during difficult times, and to expand the capital base. He purchased banks throughout California and eventually the Bank of Italy had hundreds of branches throughout the state.

Bank of America, Los Angeles was established in 1923 by Orra E. Monnette. Giannini began investing in Bank of America, Los Angeles because conservative Los Angeles business leaders were less receptive to Bank of Italy than San Franciscans. Bank of America, L.A. represented a growth path for Giannini, and Monnette, a director and chairman of the board, was receptive to Giannini”s investments. Upon completion of the merger, Giannini and Monnette agreed that the Bank of America name idealized the broader mission of the new bank. By 1929, the bank had more than 400 banking offices in California. The new institution continued under Giannini”s presidency until his retirement in 1945; Monnette retained his board seat and officer position. In addition, as a condition of the merger, Monnette was paid to turn over to Giannini the rights to the bank”s “Foundation Story,” which was a decision Monnette later regretted. Prior to Monnette”s creation of the Bank of America Los Angeles network, most banks were limited to a single city or region. Monnette was the first to create a centralized processing, accounting and cash delivery system. By diversifying the scope of the community Bank of America served after its merger, the institution was better prepared to deal with minor local economic problems.

Giannini helped nurture the film and wine industries in California. He loaned Walt Disney the funds to produce Snow White, the first animated feature to be made in the United States. During the Great Depression, he bought the bonds that financed the construction of the Golden Gate Bridge. During World War II, he financed industrialist Henry Kaiser and his companies in support of the war effort. After the war, he visited Italy and solicited loans to help rebuild Fiat”s war-ravaged factories. Giannini also provided capital to William Hewlett and David Packard to help form Hewlett-Packard.

Giannini founded another company, Transamerica Corporation, as a holding company for his various interests, including Occidental Life Insurance Company. At one time, Transamerica was the majority shareholder of Bank of America. These were separated by legislation enacted by the U.S. Congress in 1956, when Congress passed the Bank Holding Company Act, which prohibited bank holding companies from engaging in industrial activities.

Giannini had long been a Republican, but with the collapse of the Republican Party in the Great Depression, he became concerned about Democratic state politics. In the 1934 California gubernatorial election, Giannini worked hard to prevent left-wing novelist Upton Sinclair, from winning the primary for the Democratic nomination. He failed, and with White House support he backed and helped finance the Republican candidate, who defeated Sinclair.

After Giannini”s death in 1949, his son, Mario Giannini (1894-1952) assumed leadership of the bank. Giannini”s daughter, Claire Giannini Hoffman (1905-1997), took her father”s seat on the bank”s board of directors, where she remained until the 1980s. Giannini is buried at Holy Cross Cemetery in Colma, California.

Sources

1. Amadeo Giannini
2. Amadeo Giannini
3. «Who Made America?: A.P. Giannini». PBS. Consultado el December 21, 2014.
4. James, Marquis & Bessie R. (1954). Biography of a Bank – The Story of Bank of America N.T. & S.A.. Harper & Brothers. p. 16.
5. ^ “Who Made America?: A.P. Giannini”. PBS. Retrieved December 21, 2014.
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