Second Empire

In October 1928, burly Amadeo Peter ("A. P.") Giannini clearly asserted his intention of throwing a network of banks across the U. S. when he named his bank holding company Transamerica Corp. That year the No. 1 U. S. branch banker was well on his way toward his goal, with 2,000,000 loyal depositors, mostly of Italian origin, in a formidable lineup of banks in California, New York and Italy. Already he had begun nosing into Chicago, Kansas City, St. Louis and New Orleans, dabbling in the security trading business through Bancitaly Corp.

In June 1928, while visiting in Italy, "A. P." Giannini was reported to have a paralytic stroke. San Francisco rumor had him dead and Bancitaly stock dropped 100 points in three weeks. His frightened right-hand man, Leo Belden, hastily obtained the support of Manhattan bankers at a stiff price. By the time Giannini somewhat recovered, reappeared in Manhattan, he was obliged to put a bold face on his troubles by announcing that he had picked Elisha Walker, head of the old, eminent and sage private banking house of Blair & Co. as his successor. Year later Giannini retired, making Mr. Walker chairman of Transamerica and Mr. Walker predicted a great future for branch banking, In 1931 Mr. Walker ruthlessly swept the remaining Gianninis from Transamerica's board of directors, proposed to sell the whole Giannini chain of banks because "there is no apparent likelihood that nation-wide branch banking will be authorized by law in the near-future."

To this shocking challenge old "A. P." Giannini rose magnificently. A Trans-american stockholders' protective committee was formed in San Francisco. Giannini returned from retirement to lead it into a bitter proxy fight for control of Transamerica. After he had toured Italian colonies in California his friends and countrymen rallied to boot Mr. Walker and his friends and countrymen out of Transamerica.

Last week Leo Belden was a Wall Street stock broker and Elisha Walker was a partner in Kuhn, Loeb, while "A. P." Giannini was once again busy spreading his banking empire over the western U. S., which is legally kinder to branch banking than any other section. In 1931 he accepted the loss of his Manhattan bank, concentrated on bringing little Western banks into the fold of San Francisco's great Bank of America National Trust & Savings Association (with 447 California branches) and Portland's First National Bank (with 28 Oregon branches). Two years ago Transamerica edged eastward, bought up Reno, Nevada's First National Bank, made it the centre of a cluster of seven Nevada branches.

Last week acquisitive old "A. P.'' Giannini made his first foray into the State of Washington by purchasing some 51% of the stock of the $18,000,000 National Bank of Tacoma. Sellers were National's Chairman Samuel Morley Jackson and the estate of the late Chester Thorne. By amicable agreement, the great lumber family of Weyerhaeuser retains two directors' chairs on the board and local officers will stay in office. Presumably the Tacoma bank will become the centre of Trans america's incipient Washington network.

Strictly the Giannini system is not national branch banking, since each big bank confines its expansion to its own State. Transamerica functions not as a bank but as a holding company. Thus Transamerica keeps within the letter of the law of the 1935 Banking Act but cannot similarly invade most Eastern States where laws forbid State-wide branch banking. To unit (one-bank) bankers who violently oppose him as a financial monopolist, Banker Giannini says: "Under a unified banking system it will be possible to have the equivalent of an up-to-date central clearing house for the nation . . . and the status of the nation's banking structure will be clear at all times." Last month, announcing that Bank of America N. T. & S. A. deposits had, in the year ending June 30, jumped $250,000,000 to a total of $1,242,000,000, loans had been upped $40,000,000 to $478, 000,000, Mr. Giannini got word that Oregon will hold a referendum this autumn to decide whether it, too, shall go into the banking business with a State-owned bank for State funds.

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