Amadeo Peter Giannini: The World's Bigger Banker (Part 1 of 2)

This is the first part of the story of Amadeo Peterpiers at the port being a convincing person wasn't
Giannini, an Italian emigrant who arrived in America stillenough and Amadeo - at the age of 15 was already 6
in his mother's womb. Amadeo was born in 1870 infeet tall and weighted 180 pounds - was able to make
San José California, and starting without anything,his point even by taking part in brawls.The company
in just 40 years he was able to create the world'swas doing so well that Scatena, made him a partner in
biggest bank.the company to award him, first with a 30% share and
In 1902 Giannini was already the director of a Santhen increased it to 50%.By the age of 20 years old,
Francisco bank , where a lot of the Italian emigrantsAmadeo Peter Giannini had already become one of
went to send their savings to their homeland. Gianninithe most successful and admired in the Italian colony.
regretted that the Italians had to pay 8/10% tax for theKnown for being a correct person and admired for his
transfer and they had to accept unruly exchangefascination. He was more than 6 feet tall and most of
rates. For two years he struggled to change thethe girls considered him one of the most handsome
bank's policies, which only paid attention to the well-offmen of the city. In 1892, at 22 years old, he chose a
clients.woman who was his same age Clorinda Flores
When he realized that there was nothing to do, inCuneo, who was the daughter of one of the richest
1904 he decided to open a new bank that he calledItalo-americans in San Francisco. And this turned out to
Bank of Italy. Sending money from his bank cost onlybe one of the many lucky events of his life.As Giannini
2% and the exchange was fair. It may seem incredible,made his way on the road to success, he also
that this modest bank, which was seated in a saloon inrevealed to be extremely lucky thanks to his parents
North Beach, a poor part of San Francisco where thetaught him deep respect for the values of tradition.
Italian community lived, became the biggest bank in theThis tradition was the exact opposite of the
world.conservatism, because they taught him the base
The most surprising thing is not what he did, but howvalues, that everyone should take their own life path,
he did it! All his life he operated totally out of the logicalbanking on the certainty that they are heading in the
way of making profits with the ambition of helping theright direction.
people that were the most in need.His lifeAnd all his life, Giannini continued in this manner, without
demonstrates that that even if you don't place moneybeing attracted by either the euphoria of success, or
as the highest value, it's possible to make considerableby greed that people usually get when they become
profits and make money for yourself and others.rich.In 1901 he thought that it was no longer worthwhile
But let's with all great stories, let's start from theto continue working in order to make more money. He
beginning.Amadeo Peter Giannini's parents were twohad an income of $250 a month from property rentals
emigrants. Just like many others who left theirand he decided to sell half of his part of the company
birthplace searching for a better life: Favale di Malgaro,"L.Scatena & C" to his employees who would paid him
which was a hamlet in the inland of Ligure where hiswith their future earnings - his share was valued at
grandparents and also his great grandparents were$100.000 - and this assured him an income that
born. A small village withallowed him to pay for daily needs and it allowed him
two thousand citizens, surrounded by the mountainsto not have to worry about daily tasks and it gave him
that is found just behind Rapallo, in the Fontanabuonathe opportunity to be able to invest in himself, to read,
valley where only a few more than 500 people livetravel and to get to know the world.
today, but over the last century more then threeConcerning this point, in his biography it is said that at
thousand of Favale's citizens went to America, andthe age of thirty three, one year before establishing
most went to California.the Bank of Italy, he had already developed a theory
Giannini's house was modest and isolated and built onabout money: "I don't want to become too rich, " he
a hill made of stone and clay, with just one big roomsaid, "because not one rich person controls richness,
that was above a barn and a stable.Right after theybut is controlled by it". And contrary to people who
got married, A.P. Giannini's parents, Luigi who was 29preach goodness, but who don't practice these
years old and Virginia Demartini who was fourteen,principles, Giannini stuck to this rule.In 1902 the death of
decided to go to America with the idea of makinghis father in law marked a turning point in Giannini's life,
fortune and to escape from the misery - that couldwho was already well off due to his well known
even be considered dignifying- where the mountainousintegrity and correctness, was asked by the large
people lived.number of his wife's siblings to manage the entire
When they arrived in California - with the railway transfamily's fortune, that was made up roughly of half a
continental railway that was just inaugurated, theymillion dollars.Among the assets that Amadeo Giannini
decided to venture North and they stopped in Sanmanaged, there were also of one of the most
José, a small city between Los Angeles and Sanimportant banks in San Francisco, the COLUMBUS
Francisco where, they hoped to buy a piece of landSAVINGS AND LOAN, who asked him to become
with money that they collected from relatives beforetheir senior manager that same year.Giannini thought it
leaving Italy. But the information that they had on thewould be possible have a prestigious position where he
price of the land was not up to date and they realisedwould have been able to help society, so he decided
that they wouldn't have been able to buy a piece ofto dedicate himself with his heart and soul.Giannini
land big enough for them to survive. They rented aworked their for 2 years, hoping that he would be able
house with a few rooms and they transformed it in ato change their financial strategy.The partners with a
type of guest house. After six months of working verybigger stake at COLUMBUS worked only with well off
hard the guest house became an Inn with twentypeople and offered credit only to companies and
rooms. And that was where on May 6th, 1870 theentrepreneurs who were already consolidated.
most important banker in the world, Amadeo PeterGiannini said that a dignified banker shouldn't refuse
Giannini was born.The hordes of emigrants from allcredit to anyone because he was honest
over the world, arrived in California attracted after theHis dream was a bank for people who had never
discovery of gold, helped Giannini Inn to prosper andentered in a bank before, a bank for the
after a few years it became a Hotel.emigrants.After coming to California the poverty
For Luigi Giannini, the hotel proved to be a smallstricken people who had nothing, were eager to work
goldmine which he sold after a few years. And withto feed themselves, lived between hardship and
the money he made from it he bought a piece of landhumiliation. They didn't know the language and the
with 40 acres halfway between San Francisco andAmericans from the older protestants class looked at
the bay. A perfect choice, since later it became anthem with distrust and kept their distance from
area of considerable value.them.Giannini, remembering his origins, knew that most
But before he could enjoy the benefits of his choice,of the Italian immigrants, and particularly those who
six years after he bought it, Luigi Giannini was killed bywhere not only armed with desperate courage but
an employee; in an argument over a "one dollar" debt.also with descent principles, would become backbone
A crying Amadeo saw the scene first hand and wasof development in California. He then resigned and
the one who came to save his dying father.From thatdedicated his life to them.
moment Amadeo realized that money could poisonIn spite of the fact that Amadeo had left his father's
you, or even worse, could kill you.company, when he decided to open a bank, his
Virginia became a widow when she was only 22stepfather Scatena was happy to take part in this
years old. She left behind three children, the oldestadventure investing his own patrimony and
being Amadeo, who was seven years old at the time.collaborated actively. But once he decided to establish
Virginia was a beautiful woman, and above all therethe bank, he had to find a headquarters. Giannini knew
where not so many women left in California, so shethat the emigrant Anania Quilici, who had a bar at a
had the possibility to choose a new husband fromvery strategically North Beach intersection, wanted to
many suitors and she chose well.She married Lorenzoquit. And she offered her rental contract for 1250.On
Scatena who was twenty-six years old at the time,the 17th October 1904 Amadeo Peter Giannini opened
who's only asset was a pair of horses and a carriageThe Bank of Italy. Investing all that he had, as well as
that he used to transport produce to the docks on thehis spouse's entire patrimony, his step father's major
San Francisco bay. He actually was quite clever, acontribution and money from partners from Italian
characteristic that developed with his loving spouse'sorigins.However, once he established the bank he
help.Scatena was completely in love with Virginia, andneeded publicity. He was great doing this job, since he
as someone who really knew how show affection,was well known by almost all the Italian emigrants. He
also loved her three children. He particularly was fondwent around to every house, offering services, help
of the oldest one, Amadeo, who even while studying,and loans, he suggested to start businesses, to buy
helped his stepfather not to tend the fields, but also toland, real estate, and to open companies and in any
manage the produce business. After a few yearscase to start their own businesses.In the beginning of
Lorenzo Scatena who took his wife's suggestion fromthe nineteenth century it wasn't easy to have credit
his wife that the produce business was morefrom a bank, especially for immigrants. The institutions
profitable than farming and so they moved to Sandidn't agree to give loans of less than $200 and, in
Francisco in 1882, where ships arrived every day tocase of need, the emigrants had to turn to loan
stock up on fresh fruits and vegetables. Luigi boughtsharks.At the Bank of Italy, after asking a few
his produce directly from the farmers in the Californiaquestions, Giannini gave loans starting at $25 and as a
valleys, brought them to the shore and then sold themguarantee he looked at the calluses on their hands and
directly to the ships, who were just berthing their ships.at their faces. He personally chose his personnel who
Scatena became in a very short time a veryhad to know many languages. In particular he wanted
successful produce distributor. The farmersPedrini, the teller at COLUMBUS to work for him. In
appreciated Scatena for his politeness and at the dockorder to convince him he offered double the salary. His
his was known as a real gentleman.After going topartners protested but Amadeo said that Pedrini was
school in San Jose until the age of 12, he continued toa good worker, courteous with the businessmen, and
study in San Francisco, where he took a five monthpolite with people that had problems. In order to ease
economics course. But while studying he had alreadythe protests he decided to give half of his own salary
started to take part in his father's business. He read ato Pedrini. This clause was nullified after they had seen
lot, but above all he went around to get all thethat Giannini was right.
information about new techniques in agriculture. A lotGiannini didn't want to be the president of The Bank
of the emigrants were farmers from all differentof Italy, and since he didn't need the power that
countries and Amadeo asked for explanationsderived from the position, he assumed the position of
innovative methods being used all over the world. Hevice-president and, after only a year he made his
then suggested to the farmers what they should growstepfather Lorenzo Scatena the vice president.One of
and he gave them strategies to increase production.the regulations that was put into effect was that the
Above all he suggested early harvesting, when theadministrators would have worked without pay, until
first fruits were still fresh and tender. They weighedthe Bank of Italy started making a profit.He decided to
less , but they were worth much more. They not onlyhave a popular shareholding; he didn't want anyone to
were focusing on the quality of the product, but theyhave more than one hundred of the 3000 shares that
emerged as having the best prices. In addition, hewere distributed. He also limited the value of the
convinced his father to make loans to farmers whoshares to a maximum of $100. He made sure himself
wanted to buy new equipment, or who were goingthat went to by bakers, fishermen, grocers, plumbers,
through rough periods, and that way he was able tohairdressers, everyone who had never been in a bank
create a loyal clientele.Scatena was very proud of hisbefore. He was only satisfied when he verified that
son, not only for his hard work but also for his moralmost of the shares were given to shareholders who
integrity that he had taught and that Amadeo hadhad from one to four shares.After only two months
adopted as his own. And in no time he became theThe Bank of Italy had deposits worth $70.000, but the
most important person in the company, and inloans were more than $90.000. The partners where
eventually Scatenas alter ego. Nobody cured the publicworried, but Giannini knew that this was the only way
relations like he did. To increase Lorenzo Scatena &to gain the public's recognition and trust. How could you
Company's business he wrote lots of handwrittennot be grateful to someone who allowed you to rent a
letters every day, to all the potential clients anddecent house or to send your children to school?
suppliers. Writing all those letters he didn't promiseBut Amadeo went beyond that: he subsidized builders
anything he couldn't maintain. And if the didn't answerwho built public housing on the condition that they gave
his letter, , he dressed up elegantly, he went to seefavourable prices for the buyers.... to be continued ...
them, and concluded his business in person.On the