At six, he witnessed his father's murder. At 12, he regularly sneaked out to the waterfront at midnight. At 15, he quit school. At 30, he retired, a self-made man. Then the real work of his life began. In 1904, A. P. Giannini (1870-1949) founded Bank of Italy, the predecessor of today's Bank of America, to serve his ethnic neighborhood in San Francisco. Against a backdrop of earthquake and fire, anti-immigrant fervor, war, and the Great Depression, he broke every rule and tradition on his way to a showdown with Wall Street. This riveting story of an outsider with something to prove is an American classic.
A. P. Giannini
The Man with the Midas TouchBy Dana Haight Cattani Angela B. HaightAuthorHouse
Copyright © 2009 Dana Haight Cattani and Angela B. Haight
All right reserved. ISBN: 978-1-4389-5492-9Contents
Preface....................................................xi1. Sneaking Out............................................12. Turning Oranges to Gold.................................53. Sticking to Business....................................74. Courting Clorinda.......................................135. Beating Boss Buckley....................................176. A New Career............................................217. Bank of Italy...........................................258. The Inferno.............................................299. The Escape..............................................3910. The Bank on the Wharf..................................4511. Business as Usual......................................5112. Staying Calm in a Panic................................5513. Expanding the Bank.....................................5914. Invading Los Angeles...................................6515. From Suffrage to Savings Accounts......................6916. Outgrowing North Beach.................................7317. Joining the Wall Street Club...........................7718. Hard Times.............................................8319. Building the Golden Gate Bridge........................9120. Lending a Hand to the Seven Dwarfs.....................9521. Banking on the Home Front..............................9922. The Peace Dividend.....................................10723. Retiring Once More.....................................111Authors' Note..............................................116Glossary of Financial Terms................................118What's the Big Deal about Interest?........................122Which is More: Dollars or Quarters?........................124Timeline...................................................126Bibliography...............................................128Websites...................................................130Answers....................................................131
Chapter One
Sneaking Out
1882 Jackson Street San Francisco
A. P. Giannini tiptoed to the back door. He carried his shoes so he would not wake his mother. She would be furious if she caught her 12-year-old son sneaking out again, but A. P. could not resist following his stepfather, Pop, to work. About midnight, the paddle-wheel steamers began arriving at the Washington Street wharf, and A. P. wanted to be there.
He hurried through the darkened streets. When he reached the wharf, the docks buzzed with sound and activity. By the light of smoky oil lamps, workers unloaded crates of fruits and vegetables from the ships. Produce sellers hawked their goods in many languages. Pop carefully inspected the fruits and vegetables. He bargained for some of the best. Then he sold it to restaurants and grocery stores in the city.
A. P. wanted to help. Each ship carried a manifest, or list, of its cargo and passengers. When the steamers docked and the other traders were busy, A. P. copied each manifest in tidy penmanship for Pop. Once Pop knew exactly how much produce was available that night, he could decide how much to buy and how much to pay.
Night after night, A. P. watched attentively. He learned the names and faces of everyone on the wharf. Pop and his friends talked about freak storms and cold snaps, pests and drought. They complained about shortages, price gouging, and cheats. They celebrated bumper crops and bargains. They talked about the money they sometimes borrowed from the produce companies. A. P. breathed in all this information along with the chill night air.
When the sun rose, wagons carried off the produce, and the night's work was done. A. P. rushed home to eat. After breakfast, it was time for school. A. P.'s mother insisted that he learn to read and write in English. He did, and he was determined to be the best in his class. A. P. liked Washington Street Grammar School, but it was the Washington Street wharf that he loved.
Chapter Two
Turning Oranges to Gold
1884 411 Green Street San Francisco
Early one morning, A. P. woke to the muffled voices of his parents talking in the kitchen. He lay very still, trying to make out their words. He knew his mother was worried about him. She was busy with a toddler and new baby, but not too busy to worry about her three older sons. She thought A. P. was spending too much time at the wharf and neglecting his schoolwork. His afternoon naps and early nights were not enough sleep for a growing boy. How would he ever graduate from high school or college if he worked half the night and was too tired to study?
Pop had an idea. His business, L. Scatena & Company, had grown, and he and the family had moved into a new home. They were moving up in the world, and the house had a bay window with a view. Pop sold many kinds of local fruits and vegetables, including sugar beets, potatoes, corn, turnips, cantaloupes, pears, and plums. Oranges, however, were a luxury item. The best orange groves were hundreds of miles away in Southern California.
Pop told Virginia that he wanted to challenge A. P. to buy a boxcar of oranges from any farmer who was a new customer. It was difficult for experienced traders in San Francisco-much less a 14-year-old boy-to find and buy oranges. Pop said he would promise to buy A. P. a new gold watch if he could do it. Pop figured the task was nearly impossible and that A. P. would get discouraged with business and think more about school. A. P.'s mother thought the scheme might work.
When Pop presented the plan, A. P. pretended to be surprised. He accepted immediately. He loved a challenge, especially a difficult one.
A. P. spent his afternoons writing letters to farmers, promising fair prices and good service if they would sell to Pop's firm. Three weeks later, he handed Pop a contract for not just one, but two boxcar loads of oranges. Pop's plan had backfired, and A. P. had earned his gold watch.
A. P.'s mother was both proud of her ambitious son and distressed that he had succeeded. Would he ever finish school so he could make something of himself?
Chapter Three
Sticking to Business
1886 Sacramento River Valley Central California
A. P. reigned in his horse on a hillside overlooking a farm, one of the biggest in the valley. After lunch, the sixteen-year-old hoped to sign a contract with the farmer who owned this land. A. P. dismounted and tied his horse to a tree. Sitting down in the shade, he pulled some bread and mozzarella cheese from his knapsack. He had not eaten since leaving a boarding house in Sacramento before dawn.
A. P. had met with several farmers already that morning. He asked lots of questions. What crops would they grow this year? How many acres? How was the soil? Were the trees ready to bear fruit yet? A. P. listened carefully. Would the farmers be interested in a contract to sell the harvest to L. Scatena & Company? Some were, and they signed agreements.
As he finished his lunch, A. P. noticed a cloud of dust far down the road. A team of horses was traveling toward the farm. A. P. strained to see. He thought he recognized the rig from a rival produce firm. He stuffed the remaining bread and cheese into his knapsack and untied his horse. The long road to the farmhouse curved around a marsh, but A. P. cut across a field and rode straight to the muddy shore. He tethered his horse, stripped off his pants and shirt, and waded across, holding his clothes over his head. Dressing quickly, he hurried to the front door. By the time his competitor arrived, A. P. was negotiating a deal with the farmer.
At fifteen, A. P. had announced that he was quitting school to work full-time with Pop. To satisfy his disappointed mother, he enrolled in a three-month course in accounting at a local business college. Restless and eager to finish, he took the final exam after only six weeks, and he passed. He knew what he wanted to do and felt that there was no point in putting it off.
A. P. had good ideas and lots of them. He promised farmers payment in cash and on time. Pop honored those promises, and the farmers learned that they could expect honesty and integrity from L. Scatena & Company. They also could expect accuracy and attentive customer service. A. P. always remembered the farmers' names. In fact, he remembered the names of their wives and children. He also remembered dates and prices and quantities. This impressive memory won the confidence of potential customers and convinced many of them to do business with Pop's firm.
A. P. wanted to lay a foundation of trust and goodwill for L. Scatena & Company. To him, the work was not only about making that day's sales. He wanted to build relationships that would support Pop's business over time. New customers were important, but A. P. knew it was easier to keep existing customers happy than to find new ones. He tried to do both.
With Pop's approval, A. P. paid farmers in advance if they needed extra cash before their crops were ready to sell. If the farmers wanted to purchase more land or equipment, A. P. arranged for loans through the business. He hoped that their farms would thrive, and that they would remember that Pop's firm had been a steady partner in good times and bad.
A. P. was not always successful. In some small towns, farmers viewed him as an outsider. Competing merchants felt threatened by his interference in their territory. Sometimes they spread misleading rumors to harm his reputation. Although A. P. had been born in California, they said he was a foreigner. They hinted that as a Catholic, he must work for the Pope in Rome. They whispered that he had ties to Italian crime mobs. A. P. never responded publicly to these accusations. He stuck to business.
During the summer of 1887, A.P. became convinced that there were not enough pears growing that year to meet the demand during the fall season. He traveled throughout the Sacramento River Valley, making agreements with farmers to buy their crops. After a small harvest, the price of pears doubled. L. Scatena & Company earned $50,000 because A. P. had paid attention to a hunch. His timely action allowed him to help Pop's firm benefit from a shortage that surprised his competitors.
Earnings at L. Scatena & Company rose dramatically after A. P. started to work full-time. At the end of his first year, net profits were $10,000. The next year, they were $15,000. Two years later, net profits were nearly $100,000. Most of this growth came from business that A. P. had brought to the firm. He had purchased hundreds of tons of produce. He had brought in thousands of dollars in new business. In recognition of his importance to the firm, Pop made A. P. a partner when he was only 19 years old.
Besides the fertile agricultural areas of the Santa Clara and Sacramento Valleys, A. P. knew there was a vast opportunity farther away in the San Joaquin Valley and the Los Angeles basin. Other San Francisco merchants had not ventured to trade much beyond a 200-mile radius from the city. However, the usual boundaries could not contain A. P.'s ambitions.
Chapter Four
Courting Clorinda
1892 North Beach San Francisco
A. P. slipped quietly into a back pew of the old Spanish church. He lay his top hat and gloves down beside him and rested his cane carefully on the floor. He straightened his Prince Albert coat, nodding to his neighbors. They smiled in return. At six feet two and a half inches tall, with thick dark hair and a fashionable handlebar mustache, A. P. cut a fine figure around North Beach.
He also earned a good living. Pop's business was larger than ever, and A. P. continued to acquire new customers all over the state, including orange growers in tiny farming communities as far away as Hollywood, a few miles outside Los Angeles. He had been focused on the produce business since he was twelve years old, but he knew there was more to life than fruits and vegetables.
Mass began, and A. P. gazed around the church. In the choir, he spotted an attractive young woman. He glanced at her all through the service. When the mass ended, A. P. asked an older man sitting nearby who she was. Her name was Clorinda Agnes Cuneo, and she was the daughter of Joseph Cuneo, a wealthy North Beach resident.
Joseph Cuneo had immigrated from Italy to work in the California gold fields. After ten years, he opened a grocery store in North Beach. Although he never learned to read or write, he acquired numerous pieces of property and made a fortune in real estate. Clorinda, a well-known singer, was the youngest of his fourteen children.
A. P. wanted to court Clorinda, but there was one problem. She was already engaged. Her fianc was a young doctor who was studying childhood diseases in Germany. They planned to marry as soon as he returned.
A. P. did not consider the absent fianc a serious problem. He began a campaign to win Clorinda's affections. He showered her with flowers and candy. He planned picnics. He took her to the theater. In his beautiful penmanship, he wrote her passionate love letters.
Courting was exhausting. Sometimes A. P. took Clorinda home after a dance, changed from his black formal coat with long tails into his worn work clothes, and headed to the wharf to spend the rest of the night on business. He would have to sleep in the morning.
Clorinda was not immediately impressed by A. P. However, he was handsome and persistent, and he seemed to have a bright future. After three months of A. P.'s persuasive attentions, Clorinda broke off her engagement and agreed to marry him. Once again, A. P. had proven himself to be a determined competitor.
He and Clorinda were married on September 12, 1892, in Old St. Mary's Church. The newlyweds moved into a small frame house in North Beach not far from the waterfront. After a year of marriage, Clorinda gave birth to their first son. Over the next twelve years, four more sons and three daughters would join the family. A. P. loved Clorinda and the children, and he was happy with his personal life.
In his professional life, however, he began to feel restless.
Chapter Five
Beating Boss Buckley
October, 1899 New Charter Democratic Club Corner of Union and Powell Streets San Francisco
A. P. glanced over his shoulder. He wanted to be sure that no one was following him into the meeting. He did not want any of the thugs who worked for Blind Chris Buckley, the city's sightless but ruthless political boss, to bother him. He did not want them to bother his family at home on Green Street. He did not want thugs to bother anyone. A. P.'s active imagination often conjured up enemies to his business, but this time the enemies were real, and they were not afraid of violence.
The volunteers and local officials at this New Charter Democratic Club meeting were discouraged about their prospects in the upcoming election. Boss Buckley's men were determined to defeat any opponents. They threatened to hurt citizens who voted for other candidates. It was easy to know how someone voted because San Francisco did not use secret ballots. Given the dangers, many citizens simply did not vote.
The city had a well-deserved reputation for corruption. In the 44th Assembly District, which included North Beach, the deputy sheriff and the secretary of the Fire Commission controlled neighborhood life. Both were close associates of Boss Buckley. They offered five dollars to anyone who would vote for their friends in city elections. They demanded bribes and payments in exchange for not harming people or damaging their property. Paying bribes was expensive and discouraged new merchants. The neighborhood's bad reputation made it difficult for local business owners to secure loans. Bankers considered the area too risky. Corruption was bad for business.
A. P. believed that San Francisco needed honest leaders and reformed laws. Although he was busy at work, as the harvest season ended he made time to join the campaign to elect new leaders. Women could not vote at the time, so the focus of the campaign was only on men. A. P. organized the New Charter Democratic Club and rented a three-story building at Union and Powell Streets to serve as headquarters. He posted huge green and white signs advertising meetings. He strategized with local leaders and arranged for rallies at factories and shipyards where many men worked.
When candidates visited North Beach, A. P. introduced them to the crowds. Public speaking always made him nervous, but he was willing to do it for this important issue. Speaking in English or Italian, he explained how the reform candidates could improve neighborhood conditions. Many people were unhappy with city government, and they listened. They wanted change, too, but they were afraid to go to the polls and vote as they wished.
At the New Charter Democratic Club meeting, A. P. suggested a solution to this problem. He offered to pay for 75 wagons to drive men to the polls and deliver them safely home again. He called for volunteers with rifles to accompany the wagons and guard the district's polling places. Energized by his leadership and organization, many people offered to help. Boss Buckley's men had a plan, but now the reformers did, too.
On election day many North Beach citizens rode to the polls in the wagons. A. P. escorted some of the wagons himself. When the votes were counted, Boss Buckley's candidates had been defeated by majorities of six to one.
(Continues...)
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