Trcmsamerica Loses

"You're trying to put us out of business, and you can't do it. None of your gang can." Thus growled old Banker A. P. Giannini at Federal Reserve Board Member Marriner S. Eccles three years ago, when the FRB opened hearings on charges that Giannini's Transamerica Corp. had monopolized West Coast banking.

Old A. P. died (TIME, June 13, 1949), and Eccles, who had inspired the first antitrust suit in FRB's history, left the board. But FRB continued to press the case, and last week, after 12,959 pages of testimony, brought in its verdict. It found that Transamerica Corp., the Giannini-controlled bank holding company, dominates 41% of all banking offices, 39% of all bank deposits, and 50% of all bank loans in California, Oregon, Washington, Nevada and Arizona. This dominance, said FRB, does indeed hold the threat of monopoly. It ordered Transamerica to sell its controlling stock in 47 banks*with 667 offices, and to start doing so within 90 days or be haled into court.

FRB member J. K. ("The Commodore") Vardaman, Truman's onetime St. Louis crony, took Transamerica's side. So did Oliver S. Powell, ex-officer of Minnesota's Federal Reserve Bank. Powell argued that the board had failed to establish a yardstick for the measurement of monopoly, and certainly had not proved that Transamerica threatened the independence of competitors. Two other members, who joined the FRB after the hearings began,*disqualified themselves. Chairman William McChesney Martin and Member M. S. Szymczak voted against Transamerica. The 2-to-2 tie was broken by Rudolph M. Evans, who conducted the hearings and had brought in a finding against Transamerica last June (TIME, June 25). Snapped Transamerica's President Sam Husbands: "A weird climax to a weird proceeding. With two members not participating and two others voting in our favor, we have the amazing spectacle of an adverse decision by a minority of three, with the hearing officer, whose findings were supposed to be under review, casting the deciding vote in his own favor."

Neither Husbands nor his boss, Lawrence Mario Giannini, old A. P.'s son, had any intention of knuckling under to FRB. They planned to fight the order through to the U.S. Supreme Court. Said Husbands: "At long last we can now go into court and have a fair hearing."

*The order does not affect the Bank of America, the world's largest bank and the original foundation of the Giannini pyramid. Transamerica once owned 99% of the bank's stock but has trimmed this to 5.6%.*J. Louis Robertson disqualified himself because he was deputy comptroller of the currency when his office, two years ago, permitted Transamerica to sell 22 banks to the Bank of America (TIME, July 10, 1950). Abbot L. Mills, who came to the board from the U.S. National Bank of Portland, Ore., disqualified himself because his former boss had testified for Transamerica.

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