In 1973, the U.S. Postal Service issued a special 21¢ stamp with a portrait of Amadeo P. Giannini. If you haven’t heard of Giannini, you’ve probably heard of the bank he founded: The Bank of America.
Born in 1870 in San Jose, California, Giannini was born to two Italian immigrants originally from Favale di Malvaro, a town near Genoa in Liguria. Perhaps because his father was shot trying to collect a 10 dollar debt, Giannini took an interest in banking after his graduation from Heald College in San Francisco. His career was to be a stupendous success and stellar example of the innovation that Italians have brought to the United States.
At the turn of the 20th century, the American banking industry was primarily focused on loaning to the connected and well-to-do. Giannini founded the Bank of Italy – yes Italy – in 1904 to cater to the immigrants that were being denied financial assistance from the other big banks. The bank was housed across the street from the Columbus Savings and Loan bank in San Francisco. He offered loans on a handshake and judged his debtors on their character…a remarkable step forward in the facilitation of financial equality in the United States.
On the first day he received $8,780 in deposits, and within a year deposits at Giannini bank soared to $700,000 (over $15 million in today’s dollars). Clearly, Giannini found his niche.
Then, the great earthquake of 1906 struck and San Francisco was leveled. Giannini immediately set up a street-side bank, operated on a makeshift desk built with a few planks and two barrels. He proclaimed that San Francisco would persevere and lent money to those who wanted to rebuild the city’s magnificence. The ferocious fire after the earthquake had heated many of larger banks vaults to very high temperatures. Consequently, these banks could not open their vaults for several weeks – doing so would ruin the money inside. Not having this problem, Giannini was very much open for business.
And business blossomed. Building on the boon from the 1906 earthquake, Giannini expanded his banking operation over the next twenty years to a behemoth with hundreds of branches and assets valued in the tens of billions. In 1928, he merged his operations with a Los Angeles-based bank to create The Bank of America. Today, Bank of America is the second largest bank holding company in the United States with 5,600 branches. It has relationships with 99% of the US Fortune 500 Companies.
Giannini is credited as innovating the banking sector to lend money to the middle class, as well as pioneering the holding company structure. With his loans, he helped grow the wine and motion picture industries in California. He even loaned cash to Walt Disney to produce Snow White, the first full-length animated motion picture made in the US. He helped finance the Golden Gate Bridge and even facilitated loans to rebuild Fiat factories in Italy after World War II. What else? He made initial capital contributions to William Hewlett and David Packard who formed Hewlett-Packard in 1939. Time magazine named him one of the most important people of the 20th century.
How fantastic that the Bank of America started as the humble Bank of Italy and enabled the immigrant community to grow financially. The notion of financial access based on creditworthiness – not class – is a quintessentially American ideal, and we owe its development, in a large part, to Amadeo Giannini.
