Article Text
THE BANK of ITALY and P. GIANNINI Rumors were sent drifting up and CHAPTER 21 down California. They some 111 About April 15, 1921. Giannini was effect, but Giannini went forward as waited upon by delegation from the usual. National Bank of Visalia and its During the writing of this story of filiated state bank This delegation Giannini and his banking institutions urgently requested the Bank of Italy some of the Bank of Italy's most con- to take over the fidential files concerning its trials Farmers in the San Joaquin valley tribulations and successes have been had been hard hit in common with shown me. farmers the nation over. They had "There is nothing to hide from you gambled in land They had paid trethe public," Giannini told when mendous prices for property and kept he gave me this most unusual priv. increasing their holdings in the belief ilege. that war and post-war prices would In this correspondence have read continue for all time. When the land letters from the State Banking De- values went up during the war thouspartment during the regime of Stern, ands upon thousands of acres of raw banking superintendent, and signed by land were broken and put into cultivahim, containing the most free use of orchards such words and phrases Disquiet- farms. tion. The result was overproducing." "In creating mosale of many In consequence prices fell and the units, are adding to your stature": "We are very seriously with farmers could not meet the interest the situation that we find. from the due on their mortgages and crop standpoint of safety and the ultimate loans. The great valley, which had enjoyed riding on solvency of your institution." etc. tremendous boom, had wakened to find deflation Source of Concern in the saddle. The great raisin indus"It is not surprising that such bad try was in dreadful state. Co-operafeeling and antagonism from the su- tive organizations were near bankperintendent of banking in California ruptey, together with their thousands soon became widely Giannini of explained "It was not long The banks of the valley were equalbefore our frineds up and down the ly hit. Their money tied up, state began tell the rumors large extent. with the farmers. The reaching them that the Bank of Italy National Bank of Visalia, Giannini was source of serious to the was sold. was in such frozen and bad State Banking Department. condition that unless he took it over "These rumors must have started the bank must close its doors. after leaking out from the department Only the Bank of Italy could save itself. Our competitors apparently the Visalia Giannini was had most intimate knowledge of the told. was situation lack of harmony existing between the for the city of Visalia, its people and department and the bank. the countryside about-more was in"The rumors that we had grown too solvent than just bank. Unless the fast. that we were 'riding for fall,' Bank of Italy came to the rescue ruin and of kindred kind. We ourselves did faced hundreds of farmers and businot become alarmed, but it was pro- ness men. voking. We went ahead consolidating Credit had to be forthcoming or our position and growing whole community would sink in finanall the time." cial tragedy. These rumors and this talk did Giannini saw two things very clearcause trouble. In fact they caused One was the opportunity to help run on the branch of the fellow Californians in adversity as bank at Santa Rosa. is had helped them in San Francisco folmany that the adverse comment did lowing the fire of 1906 and the panic not cause even greater 111, because of 1907. He furthermore saw an opsuch talk sometimes the most portunity to demonstrate the elasticity blighting thing that can happen to of and real worth of branch banking bank. Many banks have thus been when carried out over wide terriruined or seriously affected by enetory. mies. Closed for Hour Giannini had the means to help. There sections in California that But even the unpleasant experience had built up surplus over their own at Santa Rosa might have been requirements. There were thousands avoided had the manager of the depositors in branches of the Bank branch been more alert and resourceof Italy over the state who had more ful. Bank officials say this manager money on deposit with the bank than had heard of such "talk" in Santa was needed for their own business or Rosa for several days without running living needs. down, and, to cap It all, had closed Giannini consented to step in and the bank for an hour one afternoon. help save the situation. Every other bank and house told the delegation we would go Santa Rosa had done the same thing out of the memory of in and do everything possible to save the Visalia situation.' says Giannini. respected and beloved old resident "but explained to them that Superthe city, "hose funeral was taking place. intendent Stern of the State Banking They all paid this respect. but the Department had said we could take over no other banks and that he would "talk" caused the Bank of Italy to be the only one to suffer. not permit us go into Visalia. Therefore necessary for them On the locked door of the Santa Rosa branch the manager pasted to convince Stern that it was his duty to permit our sign with the word "CLOSED" in The wasted no time. Its large letters. The reason for the locked doors was printed in type much members, the leading men and ranchers of the district, immedismaller at the bottom the card. Beately telephoned Stern. That was in cause of what and other the morning. The entire afternoon similar in the banking world, was spent Stern's office. Bank of practically all banks now give the reaItaly officials also were there. son in large letters every time their The Visalians told Stern what they doors are closed for holidays or any had told unless aid was other purpose during what would be regular banking immediately forthcoming the National hours. Bank of Visalia and its affiliated state While the funeral was in progress bank would close their doors the folan old lady-a foreigner- to the lowing bank. All she could learn was that was "Closed." In alarm she hurried All the men present at that meeting knew what bank closing would to spread her fears and knowledge to would bring chaos wide like herself and rich Other news. they say, travels fast. might be swept to This time took an automobile. Stern asked Giannini to take over An but laundry the two banks through the auxiliary driver did his too well. He picked up the old lady's tale and car- and operate them independent units Giannini refused. He stood ried the story from door to door on his run. He did not tarry at these despite hours of pressure. Stern finally gave He consented to doors, but as quick he could Im. branch Visalla The "strong arm' part his news at one place he was off tell had weakened. to someone The combination of the ignorant old CHAPTER 22 foreign woman, the sensational laun Giannini, the Bank dry driver and the ugly rumors that had been bandied about Santa Rosa Italy, admits great fear during all that was required to precipitate the run. The matter which caused the fear probably would have most "The branch bank was caught with men in exactly an opposite manner Its usual mimimum supply counter was brought about by the opening cash," Giannini tells of the episode, of the new head office at Powell and "and even though the flurry began Market San Francisco. in the later on the same afternoon of the heart of the retail shopping district funeral. our did not notify The years the bank. the until about noon of er's existence had been passed in the the next day, by which time he had produce and district at out of money. the edge of the financial section "The crowd was gaining in size and Headquarters had been at Montgom and becoming more and ery and Clay streets Around that As soon as learned of the situation territory Giannini had spent his en we immediately rushed an automotire business bile to Santa Rosa with in The new head office was opened for currency This was more than the business on July total deposits at that time. "When moved up there expertWe forced our way through the enced the only fear ever have felt wildly milling crowd into the bank In business says had and dumped the sacks upon long ta sinking feeling My thoughts were ble behind the counter This restored all wondering whethconfidence. The run was over. Inhad made blunder through movstead of harming us It strengthened Ing from the place where all my suc- aftoo, cess been laid. wondered old friends and associates would believe we were merely 'putting on dog'." Largest Bank In America That bank is the largest building on the North continent devoted exclusively to banking monument to the growth of the Bank of Italy and the time of oc cupancy was considered large enough to fill all needs for years to come. Seven years later It was over. Some officials of the bank wanted have private offices fitted out in the building for the higher exocu- "For years we have kept everybody in the open." he declared. "We are going to continue that policy My desk will be right out on the floor Montgomery street. So will the others. One of the things that made this bank and this building possible is the fact that we kept in personal touch always with our customers. and then any of them, no matter nini. how small in wealth and could talk to any official from the president down without going through of red tape. There are few private offices in the head office but they are except for or staff meetings. Giannini had private office in the bank, since his retirement belongs to James Bacigalupi. the present president. seldom used and was seldom used by Giannini. Thirty minutes day would be liberal estimate of the time it is occupied Doesn't Like Them Giannini not only does not believe in private offices, he does not like them. want to be in the open." he says. don't want to be cooped up. want to see what is going on. keeps me in closer touch with everything. Three years was all Giannini stayed away street officially, and much of that time he in Los Angeles or other places. day as president of the Bancitaly Corp., he makes his headquarters down in the old district where he knows everybody and everybody knows him It much less pretentious building. The quarters are less ornate. Giannini is back among his own. A few days before the head ofBANK'S PERSONNEL HEAD was reached when the first store was established San Francisco. This was the insistence of Prentice Cobb Hale, figured the metroplis of the West was ripe for the somewhat revolutionary merchandising ideals that had met with such marked success elsewhere. New Store Takes Lead "P. C." was thereupon made vicepresident of the system, his brothers, W., Marshal Hale Jr. and R. B., and D. Cobb, serving with him as directors and Hale was The new San Francicso store was soon a leader in its field. For many years Prentice Cobb Hale divided his time between New York and San He returned permanently to San after the 1906 fire. In 1896 he was made president of Hale Bros., post he has held since. The first contact of the Hales with the Bank of Italy with the purchase 1909 of the Commercial and Savings Bank San Jose by Giannini, the first extra-city branch of the Bank of Italy. Hale was stockholder in the San Jose bank. He took stock with Giannini for his holdings, and few years later became actively identified with the Bank of Italy and other Giannini institutions. P. C. Hale Joins Bank In 1913 Prentice Cobb Hale became director in the Bank of Italy and member of the executive and finance committees. He was tendered the position of executive president and accepted. During absences of Glannini he was in actual charge the bank. Hale was foil to He had great ability an organizer He was committed to the policy of but he ways insisted on sane and cautious lines growth. He one of the great factors in helping Giannini to plot his course. Hale also is vice-president of BancItaly Corp., in the interests of that company has toured Europe CI. annial. He still of the Bank of Italy but retired from the senior post now held Pres. Bacigalupi by Marshal likewise partner in Hale Bros. After he retired as president of the Liberty Bank continued to chairman of the board. Upon of Liberty and Bank Italy he became director of the In taking George Webster into the Liberty Bank, Giannini obtained the services of the one who. in the old days of the commission had earned the of being able to beat in trading. Webster and Giannini are large, dominant men. Both are magnetic and vitally in life itself- other men. Both have been from boyhood. and still are handsome. Both are of red blood. A. Giannini. in the "old days." was the commission salesman: Webster was the -the buyer supplied the retail merchants. The nature their posttions made natural they would clash. They did. and often. "Webster was the hardest man had to sell Giannini declares. "Giannini was the toughest man from whom bought," answers Webster. Glannini admits Webster bested him at times. Webster gives "A. credit for often beating Chamber of Commerce reports show that the automobile industry ranks first in the United States in the value
