The making of Los Angeles into a metropolis
Bank of America’s oldest heritage bank in Los Angeles, the Farmers and Merchants Bank, was instrumental in the development of the city into a thriving urban metropolis.
A man who can calm widespread financial panic by stacking gold on the counter of a bank in public view, demonstrating confidence and financial stability, is one we’re proud to have as part of our heritage.
California was just a few years old in 1859, having recently been admitted to the union, and was saturated in Mexican culture with Pueblo style buildings and Spanish society rules. That year, an immigrant named Isaias Hellman arrived in Los Angeles from Bavaria and began a career in the clothing business working with his cousins. It didn't take long for Hellman to become a trusted merchant with whom customers wanted to leave money for safekeeping. He began his banking career in a corner of the clothing store where he kept deposits in a small safe.
In 1865, Hellman opened a general store and sold dry goods, continuing the side business of banking along the way. By the end of that decade, Hellman's banking services had grown enough for him to sell the store and open an official bank—Bank of America's oldest heritage bank in Los Angeles—the Farmers and Merchants Bank. The bank was a success from the start, with some of its earliest customers including Pio Pico, the last Mexican Governor of California, and Diego Sepulveda, from a prominent family that dated back to the founding of Los Angeles. The Sepulveda name adorns the longest street in Los Angeles, stretching 42 miles, Sepulveda Boulevard.
With the bank's rapid growth and its dedication to the development of Los Angeles, Framers and Merchants joined forces with city leaders to help establish the University of Southern California. The group donated 308 lots of subdivided property to the trustees of the foundation for the university. To this day, the Farmers and Merchants Bank is credited with the conception of the thriving university.
In 1885, the Santa Fe railroad entered southern California, inciting a rate war with the existing railway, the Southern Pacific. Train fares dropped to as low as $1 for a trip from Midwest cities such as St. Louis and Kansas City to Los Angeles. The low fares led to a massive influx of people, as many as 120,000, by train in 1887 alone. This, combined with a campaign to promote southern California as the best place to live, caused Los Angeles to quickly become a thriving American city.
The Farmers and Merchants Bank was instrumental in the development of the necessary building construction and infrastructure needed to accommodate the city’s ballooning population. A real estate boom started in the 1880s that urbanized Los Angeles County. In one year, an acre of land there went from $100 in value to $1,500. From 1884 to 1888, more than 100 new towns were planned and in 1889, Orange County was separated out because its population was so large.
In 1893, the collapse of railroad overbuilding and shaky railroad financing set off a series of bank failures and led to “The Panic of 1893.” It was considered the worst economic crisis to hit America before the Depression of the 1930s. Library Journal attributed Hellman with single-handedly stabilizing the financial panic of 1893 in Los Angeles by confidently stacking $500,000 worth of gold coins on the counter of the Farmers and Merchants Bank in plain public view. Because of its strong financial backing, the Farmers and Merchants Bank went on to help develop at least seven other industries that shaped California: transportation, oil, electricity, land development, water, wine and education.
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