San Francisco Feud

In the modified superlative so dear to the West Coast, the Central Bank of Oakland is the "largest California bank outside of San Francisco and Los Angeles" (resources: $43,000,000). Its 15-story building at Broadway and 14th Street, where 15 Oakland trolley lines converge, is described by the bank as "sublimated and refined Italian Romanesque." Last week Amadeo Peter Giannini, who if not precisely sublimated or Romanesque is at least refined Italian, reached out across the Bay from San Francisco, firmly grasped the stoutly independent Central Bank of Oakland.*

For Banker Giannini's move there were two explanations. His was simply that Bank of Oakland was a good bank with four branches and the best location in the busy East Bay City. It fitted naturally into Transamerica Corp.'s branch-banking setup. San Franciscans had another and more popular explanation: that was the bad blood between Banker Giannini and Arnold John Mount, broad-shouldered, bespectacled head of Bank of Oakland. The purchase was spite work. Snapped Lawrence Mario Giannini, swart, enigmatic heir apparent to his father's banking empire: "Ridiculous nonsense!"

From poor beginnings, with only a grammar school training, Banker Mount worked himself up in 15 years to a president-&-cashier's job in the Oakland Bank. There Banker Giannini discovered him in 1921, plucking him out to make him head of the Oakland branch of Bank of Italy (now Bank of America, N. T. & S. A.), the Giannini bank. Impressed by this hardheaded, hard-working young man, Banker Giannini later took him to his head office in San Francisco, shortly made him big Bank of Italy's president.

There, directly beneath the Giannini throne, Banker Mount watched the start & finish of the Depression battle for control of Transamerica, which owns among many other things Bank of America. Protagonists in this historic struggle were Amadeo Peter Giannini and Elisha Walker, who entered Transamerica by way of its investment banking affiliate, Bancamerica-Blair, Mr. Walker having been head of the Blair part. Banker Walker and Banker Giannini differed on a fundamental point. It was Mr. Walker's theory that banks should be divorced from holding companies. Mr. Giannini had spent a great deal of effort doing just the opposite. Upshot was that Mr. Walker unseated Mr. Giannini. Then after a spectacular proxy campaign, Mr. Giannini unseated Mr. Walker.

Meantime Banker Mount gave his allegiance to the wrong commander. As soon as Mr. Giannini recaptured his empire, Banker Mount packed his trunks, departed with his wife and three children for a leisurely trip around the world. Mr. Mount and Mr. Giannini have not spoken since.

Back from his junket, Banker Mount returned to his old institution in Oakland, which was then actually two banks, Central National and Central Savings. National failed to reopen after the 1933 banking holiday, though Savings did. As president of Savings and conservator of National, Banker Mount dug in. National's depositors were paid off 100 cents on the dollar and Savings became rock-solid Central Bank of Oakland.

At No. 1 Powell St. in San Francisco the memory of Banker Mount's defection in the Transamerica battle is supposed to have burned on in the Giannini mind, as other unforgiven deeds of other Giannini enemies always did. Opportunity to reach across the Bay was opened by a widow, one of Central's founders, who turned over her chief asset, 2,314 shares in sound Central Savings, to the receiver for Central National to help make up her double liability on the stock of that closed bank. On a bid of $117.50 per share the U. S. Comptroller of the Currency awarded the stock to Banker Giannini.

With 600 shares of Central Bank which Transamerica had held for years, Banker Giannini now had a comfortable minority of nearly 3,000 of the 12,000 shares outstanding. Promptly Banker Giannini started to round up more, by last month driving the price to $450 bid. Thoroughly alarmed, Banker Mount & friends pooled their holdings of 6,491 shares--held control--agreeing not to sell to Mr. Giannini's Transamerica at any price. Banker Giannini offered $550 per share to the pool for enough stock to give him control, was reported to have offered as high as $1,000 to individual members.

Last week the stalemate was broken. Through an intermediary, Banker Giannini offered to 1) sell all his stock to the pool at $400 per share or 2) buy all the pool's stock at $400 per share. Weary Mr. Mount & friends decided to sell out. Preparing to retire to an office in San Francisco's Russ Building next year, there to "watch the wheels go round," Mr. Mount explained his acceptance: "I'm not going to have Giannini gunning for me for the rest of my life." Said his wife: "I wonder what he'll do to us next."

* Also north to Oregon stretched the Giannini hand last week for three little banks with total resources of $2,750,000.

This file is automatically generated by a robot program, so reader's discretion is required.