A P Giannini, The People's Banker by Francesca Valente

A P Giannini, The People's Banker by Francesca Valente

Author:Francesca Valente [Valente, Francesca]
Language: eng
Format: epub
Publisher: Barbera Foundation, Inc.
Published: 2017-10-02T04:00:00+00:00


10

Nationwide Banking: A Life-long Mission

Besides his educational and civic aspirations, A.P. still dreamed of a nationwide branch banking system, extending from coast to coast and ultimately globally. Deep down he knew he had to purchase a prestigious bank, a bastion within the Wall Street establishment, as the first step towards making his goal of transcontinental banking a reality.

The banking capital of the nation was three thousand miles away and the most powerful banks in the country had their headquarters there. Never one to think small, A.P. wanted his bank to stand beside them, and now he had the financial power to make it so. Moreover, by the late 1920s there were already eight hundred thousand Italian immigrants living in Manhattan, Brooklyn, and the Bronx, almost twice as many as in the whole of San Francisco.

His desire to conquer Wall Street had already surfaced in 1912 when he traveled to New York with a view to opening a branch with the leaders of the Italian community. He had sent Armando Pedrini to negotiate the deal, which fell through because he was not then ready to leave California to manage the branch as the sellers had requested. In 1919, he bought the East River National Bank as a first outlet in New York and sent his brother Attilio to direct it. But this was not enough.

To reach his goal, nine years later he sent his agent, Leo Belden, to scout New York’s banking scene and finally decided to acquire the Bank of America at 44 Wall Street, one of the city’s oldest financial institutions. Founded in 1812, it had a sterling reputation and historically it had absorbed the First United States Bank, which attempted branch banking as far back as 1791.110 Moreover, it had close connections to the legendary House of Morgan.

Giannini had no idea of the high price he would have to pay to fulfill his lifelong banking dream, which would entail first coming to terms with J.P. Morgan, the New York tycoon. He felt he had to ask for Morgan’s consent since he was still the most powerful single financial force in the country, but this proved to be a fatal miscalculation on A.P.’s part. The House of Morgan was at the corner of Wall and Broad and was often referred to as “the Corner.” The transaction was concluded in March 1928. Giannini bought a majority of shares in the Bank of America for $17 million and merged it with Bowery East River National Bank and the Commercial Exchange to form the Bank of America National Association.

Suddenly Giannini owned the third-largest bank in New York. This major acquisition was possible thanks mainly to the record profits of Bancitaly. Giannini’s three headquarters now were San Francisco, New York, and Los Angeles and according to the San Francisco Bulletin of the same year, an invasion of “London, Paris, and Berlin appears to set the stage for entrance of A.P. Giannini as the new colossus of the world finance.”111

In the few weeks before



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