A.P. Giannini-The People’s Banker and Founder of Modern Banking
The son of immigrants, Amadeo Pietro Giannini provided loans to underserved communities—immigrants, women, and the working class—customers other banks refused. His banking practices revolutionized the industry, fueled the growth of California’s motion picture, agricultural, and wine industries, and made countless American Dreams possible. 

At age six, Amadeo Giannini, the founder of Bank of Italy and its successor, Bank of America, discovered that small sums of money could mean everything to some people. Amadeo, pictured here standing next to his brothers, learned this lesson in the most tragic way possible.

It was a sunny day in 1876, and six-year-old Amadeo was helping his father, Luigi, on the family’s modest farm near San Jose, California. Amadeo heard Luigi arguing with a farm laborer. A week later, the disgruntled worker returned to the farm and, as Amadeo looked on, pointed a gun at his father and pulled the trigger. Luigi fell to the ground, bleeding profusely. Horrified, Amadeo ran to his father’s side as Luigi took his last breath. The disgruntled worker had murdered his father over a debt of less than $2.

Virginia Giannini, a widow at age 21 and pregnant with her third child, was determined to keep the farm and provide for her children. With Amadeo at her side, she traveled 42 miles by boat to San Francisco, where they sold the farm’s produce. She soon remarried Lorenzo Scatena, who was very fond of Amadeo and his siblings. Lorenzo christened Amadeo with the nickname A.P., and Amadeo referred to Lorenzo affectionately as “Pop.”

The family moved to North Beach, the Italian neighborhood in San Francisco, and A.P. worked alongside Lorenzo in his produce business. While A.P. had little interest in academics, he was incredibly intelligent. At age 14, A.P. left school to work as a produce broker for Lorenzo. By age 19, A.P.’s business acumen had earned him a partnership in the business. Ten years later, A.P. had helped grow the company into the largest wholesale produce firm on the San Francisco waterfront.

By age 31, A.P., pictured here with his wife, Clorinda Cuneo, had saved enough money to retire, and he sold his portion of the business. One year later, A.P. was asked to join the board of a small bank in North Beach. He soon discovered that the bank, like others of the era, serviced only wealthy or well-connected clients. A.P., who deeply identified with the common man, attempted to persuade the bank’s directors to reconsider, but they refused.

In 1904, Giannini founded the Bank of Italy in San Francisco with $150,000 raised from friends and family. The bank would be a lending institution for the common man, providing savings accounts and loans. It operated on Giannini’s theory that large concentrations of capital could be built from small deposits of ordinary Californians. Prior to Bank of Italy, working people typically hid their savings in their homes. Loan sharks, who charged astronomical interest rates, were often their only option for borrowing money.

Giannini began educating underserved communities about the role and purpose of banks, and how banks could help them purchase a home or start a new business. He judged customers not by how much wealth they had amassed, but by the content of their character. Within a year, Bank of Italy had over $700,000 in deposits from working people, which would equate to approximately $20 million today.

Two years after the Bank of Italy was founded, tragedy struck San Francisco. The San Francisco earthquake, registering a magnitude of 7.7 to 8.25, and subsequent fires destroyed 80 percent of the city, killed 3,000 people, and left approximately 75 percent of the city’s population homeless.

In the early morning hours following the quake, while looters roamed the streets, A.P. sifted through the rubble of his destroyed bank, gathered $80,000 in a garbage wagon, disguised it as trash, and drove it out of town to safety.

To restore confidence, Giannini set up a temporary bank immediately, using two barrels and a piece of wood as his desk. While other banks remained closed, Giannini collected deposits and made loans that allowed people to begin rebuilding. “San Francisco will rise from the ashes!” Giannini proclaimed.

Because most San Franciscans had lost everything, including their identification papers, Giannini issued loans based on signatures and handshakes. Every loan he made was purportedly repaid in full. Giannini became a hero, and his actions spurred the city’s redevelopment.

In the years that followed, Giannini, the founder of branch banking, expanded the Bank of Italy throughout California, with outlets in San Jose, Stockton, Venture, Merced, Modesto, Los Angeles, and elsewhere. In 1915, it had seven branches, resources of $22 million, deposits of $20 million, and capital of $1.2 million. By the end of 1918, it had 24 branches, resources of $93 million, deposits of $85 million, capital of $5 million, and had grown like no other bank in the history of California. By the mid-1920s, it was the third-largest bank in the United States.

To encourage its customers to save money and provide a secure means of doing so at home, Bank of Italy provided portable safes such as this one, which dates to the mid-1920s. When a customer wished to withdraw money from the safe, or deposit the money it held into a bank account, he or she visited a Bank of Italy branch, where the safe’s key was held.

Giannini’s entry into Los Angeles in 1913 was met with skepticism from the banking establishment and undertones of racism from the media. The city's banking industry was largely controlled by Joseph Sartori, pictured here, a Swiss-Italian American, who established one of the city’s earliest banks, Security Trust and Savings, in 1889. The bank played an integral role in Southern California’s growth, funding projects such as the Biltmore Hotel and Los Angeles Aqueduct. A staunch conservative, Sartori attempted to have Giannini barred from operating in the city. Rumors surfaced that Giannini was a member of the “Sicilian mafia,” worked for the Pope, and planned to overthrow the American government.

Giannini advertised Bank of Italy as “The Bank for Just Plain Folks,” and announced proudly that it offered money to “small mortgage borrowers.” Giannini also established divisions where Italians, Chinese, Greeks, French, Portuguese, Yugoslavians, Slovenians, Russians, and Spanish speakers could converse with bank staff in their native tongues.

Giannini’s strategy worked. Lincoln Heights resident Alfonso DeMaio, pictured here, who raised his daughters as a single parent on a shoe-maker's salary, faithfully deposited his earnings into a Bank of Italy savings account, the first and only account he ever had. A teller at the Los Angeles branch of Bank of Italy shared the anecdote of an Italian customer who came to the bank looking to establish an account. He produced a newspaper-wrapped package containing $24,000 in $5 and $10 bills. The money smelled of garlic and vegetables; apparently, he had hidden the money for years in his basement, inside a vegetable bin.

After noticing an increase in female owned businesses, Giannini established a women’s banking division in 1921, staffed by 17 female bankers, where women could receive start-up capital, loans, and investment advice. Giannini also taught children the importance of saving through the School Savings Program, which allowed elementary and high school students to open accounts with as little as one cent. By 1963, the bank had 1.6 million school savings accounts in California, with $40 million in deposits.

In 1920, United States women received the right to vote. Even then, many could not own property or exercise control over their earnings. Fluent in Italian, Lucy Scarcella worked as a teller at the Los Angeles branch of Bank of Italy’s Women's Banking Department. In this passbook, Lucy wrote instructions for calculating interest.

In 1922, Edward Frye, an elementary school student in San Francisco, began saving with Bank of Italy's School Savings Program. After filling two booklets with fifty one-cent stamps, Bank of Italy provided the student with a passbook and began paying the account holder interest.

In their willingness to provide loans to farmers when other banks would not, Giannini and the Bank of Italy made California’s modern agricultural and wine industries possible. Giannini recognized the economic might of California’s Central Valley and frequently traveled its rural roads in his Packard, speaking with farmers and seeking new customers.

He provided extensive support to farming cooperatives, including the California Associated Raisin Company, which became Sun-Maid Raisins. In 1919, more than 50 percent of the $74 million Bank of Italy loaned went to farmers, packers, and canners.

In 1928, Giannini arranged a merger between the Bank of Italy and the smaller Bank of America Los Angeles, to become Bank of America, which would eventually become the largest bank in the United States. The bank’s success was proven during the Great Depression.

As countless banks failed, Giannini, through the bank’s loan policy, helped farmers and homeowners keep their properties. During the bleakest days of the Depression, Giannini funded the construction of the Golden Gate Bridge. He also loaned money to William Hewlett and David Packard, the founders of Hewlett-Packard (HP).

Bank of Italy and its successor, Bank of America, helped fund Hollywood’s film industry. With the advent of sound, which made motion pictures more costly to produce, Giannini provided the necessary capital for Walt Disney’s Snow White and the Seven Dwarfs, MGM's Gone with the Wind, West Side Story, Lawrence of Arabia, and the creation of United Artists studio.

Director Frank Capra modeled the main character of American Madness, as well as George Bailey from It’s a Wonderful Life—a film also funded by Bank of America—after Giannini. The bank would later finance Walt Disney’s later films, including Fantasia, Pinocchio, Peter Pan, Cinderella, and Bambi, as well as Walt Disney’s dream, Disneyland.

Believing that amassing wealth would put him out of touch with the people he served, Giannini frequently said, “I don’t want to be rich. No man actually owns a fortune; it owns him.” When he was given a $1.5 million bonus, he donated the entire sum to the University of California. At the time of his death, Giannini’s estate was worth a fraction of what it could have been, but hundreds of ordinary people attended his funeral to pay tribute to the man who made their American Dreams possible.

The prohibition of alcohol in the United States began in 1920 and continued until 1933. The movement’s supporters aimed to eliminate alcohol’s corrupting influence and rid society of crime, poverty, alcoholism, and immorality. However, Prohibition would lead to an increase in crime and violence, create an illegal liquor trade, and fail to curb the nation’s appetite for alcohol.

In the Italian American community, Prohibition criminalized millennia-old cultural practices and cemented the association between Italians and organized crime. The economic effects of Prohibition were especially great; it led to the near-destruction of the wine industry and the elimination of tens of thousands of jobs. Of the approximately 100 wineries that existed in Los Angeles prior to Prohibition, less than a handful survived.

The consumption of alcoholic beverages had been a controversial topic in the nation since the Colonial era. In the mid-19th century, the American Temperance Society and the Women’s Christian Temperance League launched campaigns to promote abstinence from alcohol.

Though often perceived as a conservative crusade, Prohibition was one of the Progressive Era’s (1890-1920) many reform movements. Women’s suffrage, child labor laws, the Food and Drug Administration (FDA), and early environmental protection acts are a few legacies of the Progressive Era.

Prohibition represented the conflict in values between rural, Protestant, and native-born Americans and the rapidly-expanding urban, Catholic, and immigrant—especially Italian, Irish, and Jewish—America.

The 18th Amendment of the United States Constitution, ratified in 1919, prohibited the “manufacture, sale, and transportation of intoxicating liquors.” However, the law failed to define what was considered “intoxicating liquors,” or how Prohibition would be implemented. Many of the legislators who voted for the amendment did so believing that it would ban “hard” alcohol, including whiskey and gin, while beer and wine would remain legal.

Introduced eight months later, the National Prohibition Act, commonly known as the Volstead Act, provided the “teeth” for enforcing Prohibition. It defined “intoxicating liquors” as anything greater than 0.5 percent alcohol. By this definition, vanilla extract was considered an “intoxicating liquor.”

The law contained several exceptions: alcohol for scientific, medicinal, religious and industrial use would remain legal. The consumption of alcohol also remained legal. These loopholes would be exploited by individuals seeking to profit from alcohol’s ban, as well as by common people simply desiring a drink.

Many private clubs and the nation’s affluent began to stockpile liquor, as the law entitled them to keep alcohol owned prior to the law’s passage. In Los Angeles, Charlotte Hennessey, (center) the mother of starlet Mary Pickford, (left), purchased the entire inventory of a liquor store and had it delivered to her basement.

In the early days of Prohibition, it seemed that the amendment was working; liquor consumption fell by 30 to 50 percent, as did arrests for public drunkenness and drunk driving.

However, as saloons closed their doors, illicit bars, also known as “speakeasies” and “blind pigs,” sprang up across the country. An estimated 400 such establishments existed in Los Angeles alone, including one in this building.

Drugstores and pharmacies replaced liquor stores, and dispensed alcohol—100-proof whiskey—to individuals who, for a $3 fee, had obtained a doctor’s prescription. “Medicinal” alcohol prescriptions could be refilled every 10 days, and by the end of Prohibition, six million prescriptions had been issued.

Made possible by a loan from Marianna Gatto.

The Padre Vineyard Company, established in 1870, and owned by brothers Giacomo and Giovanni Vai, produced award-winning wines. To survive prohibition, the brothers created a line of medicinal tonics, which they pledged would be “recommended without hesitation” by health professionals.

This pocket-sized bottle of the Vai brothers' California Padres Wine Elixir Tonic contained approximately two doses of the medicinal tonic. The measuring glass, also produced by the Vai brothers, reads vino chinato, which is a traditional Italian medicinal liqueur.

Made possible by a loan from Marianna Gatto.

As an essential part of the Jewish Sabbath and the Catholic sacrament of Communion, the Volstead Act exempted alcohol used for religious purposes. Sacramental wine orders increased by millions of gallons, and individuals claiming to be religious clergy received licenses to distribute to non-existent congregations.

Many churches and temples witnessed their congregations grow exponentially. In Los Angeles, Congregation Talmud Torah increased from 180 families to 1,000 families in a year's time. One rabbi remarked, “When [the new members of the congregation] come, the first thing they ask for is ‘the wine, the wine!'”

At the dawn of Prohibition, 90,000 acres of California soil was planted with wine grapes. Valued at $75 million, the state’s annual crop was central to California’s economy. Prohibition shuttered hundreds of California wineries; those that remained open shifted their production to grape juice, tonics, or sacramental wine.

Founded in 1917 by Santo Cambianica, an immigrant from Lombardia, Italy, the San Antonio Winery, located in Lincoln Heights, is the city’s oldest winery.

Shortly after Prohibition’s passage, the Archdiocese granted Cambianica, a devout Catholic, permission to manufacture wine for religious use. The winery flourished. Of the nearly 100 Los Angeles wineries that existed before Prohibition, the San Antonio Winery is the only one to survive.

For the law’s targets—immigrants and the working class—Prohibition’s loopholes created widespread confusion.

Section 29 of the Volstead Act permitted adults to produce up to 200 gallons of wine and cider for home consumption annually, but local and federal authorities often disagreed on the interpretation of this clause.

As the home-production of alcohol skyrocketed, raids of Italian American residences grew increasingly frequent. In 1923, as a crowd looked on, the Harbor Dry Squad destroyed over 1,700 gallons of pre-Prohibition, homemade wine in San Pedro’s Italian enclave.

Few of the community members present wished to risk fine or imprisonment by defending their claim of possessing wine that was legally produced prior to Prohibition for home use.

In October 1925, 69-year-old Dogtown resident Cecilia Scottini harvested and crushed grapes to make wine for her family. After receiving a complaint about a “suspicious” odor, police officers arrived at the Scottini residence and discovered ten gallons of fermenting must, or grape juice, in the garage. Although within the legal limit, Cecilia was arrested and charged with bootlegging. To be released from jail, Cecilia posted $75 bail, the equivalent of $1,100 today; a judge later sentenced her to probation.

Companies marketed “wine bricks,” or grape concentrate, which spared consumers the trouble of crushing grapes. After being soaked in water and fermented, the concentrate became wine. The manufacturers coyly warned customers, “After dissolving the brick in one gallon of water, do not place the liquid in a jug in the cupboard for twenty days or it will turn into wine.”

Throughout the country, organized crime syndicates supplied the thirsty nation with liquor, and when disputes erupted between competing groups, the nation’s streets often became battlegrounds.

Between 1920 and 1933, homicides, burglaries, and assaults increased significantly nationwide. Southern California’s secluded canyons, coves, and beaches provided ideal locations for bootleggers to hide illegal stills and deliver products.

The king of Southern California’s rumrunners was Tony Cornero, who smuggled Canadian Whiskey, and manufactured 5,000 gallons of alcohol a day in his Culver City warehouse. Cornero also operated gambling ships in the coastal waters of Los Angeles. He is recognized as one of the founders of Las Vegas as we know it today. In 1931, he established The Meadows, one of the earliest major casinos in the Las Vegas area, and, in 1958, built the famed Stardust Hotel and Resort.

While bootleggers belonged to a number of ethnic groups, local newspapers frequently reported on the nefarious criminal activities of the “Sicilian Colony.”

Prohibition was a bizarre concept for Italian Americans, who considered wine to be food and seldom drank other alcoholic beverages. Prohibition made wine, an essential part of Italian socio-cultural rituals, morally suspect.

In the end, Prohibition was most successful in eliminating an important source of federal revenue and tens of thousands of jobs, mostly among immigrant groups, which would have dire consequences as the United States entered the Great Depression.

Credits: Story

Content Author- Marianna Gatto
Design- Robert Checchi
Curation- Marianna Gatto and Robert Checchi
Video Projections- Christopher Sprinkle
Graphics- Robert Checchi and Clyde Crossan
GCI Videos- Francesca Guerrini

Images Courtesy of the Italian American Museum of Los Angeles, Bank of America Archive, Disney, Greg Gaar, IF 1933, Joseph Filippi, Library of Congress, Library of Congress (Currier & Ives), Library of Congress (Harris & Ewing), Los Angeles Public Library, Los Angeles Times, Margaret Herrick Library, Magnes Collection (University of California, Berkeley), San Antonio Winery, San Francisco History Center, San Francisco Public Library, Santa Monica History Museum, Virginia Hammerness, Underwood Photo Archives, University of Southern California, Special Collections, Walter P. Reuther Library, Wayne State University, Warner Brothers Entertainment, Inc., Wisconsin Historical Society
Special thanks to Virginia Hammerness, Charity Castro, Marilyn Gonzalez, Josephine Mahoney, Chris Gerola, the Riboli family, DeMaio-Cornaggia-Tortomasi family, Josephine Romano-Lyden, Nuremberg family, Marianna and Damian Gatto, Erminio Bugliosi,William Fasoli.

Credits: All media
The story featured may in some cases have been created by an independent third party and may not always represent the views of the institutions, listed below, who have supplied the content.