Our heritage: Loans on a handshake

Within days of a disaster, our bank reopened for business, issuing credit to those in need.

The Bank of Italy was barely two years old when, just after 5 a.m. on April 18, 1906, the earth shook and everything changed. After walking a good part of the 17 miles from his San Mateo home, A.P. Giannini reached the Bank of Italy to find the bank standing and its cash secure. But as the afternoon wore on and more fires raged, Giannini determined to move his depositors’ cash away from the imperiled city. Books, records and furniture were loaded into two horse-drawn wagons, and the money was hidden under crates of oranges. After a journey that lasted all night, the bank's assets were placed in the ash trap of Giannini’s living-room fireplace.

Within days of the disaster, the Bank of Italy was “open for regular business” in a makeshift office on Washington Street Wharf. A.P. himself manned the desk on the dock. He issued credit to his distressed clients solely on the basis of his personal knowledge of their character and their balances.

Knowing that his little bank could not possibly provide all the funding that was needed to begin the staggering task of rebuilding, Giannini instituted a policy that doubled cash flow to the North Beach community. Borrowers got only half of what they asked for and only on the condition that they raise the rest themselves. In this way, they became their own financiers, reaching out to the community and enabling money that had been hidden for years in coffee cans and mattresses to be dug up and put to use.