$30,000,000 for Giannini

Like most bankers, Amadeo Peter Giannini has no use for the New Deal. Unlike most, he has no use for Wall Street either. His quarrel with Wall Street dates from 1931, when, in a famous proxy fight, he came out of retirement to oust Elisha Walker (now of Kuhn, Loeb) from the chairmanship of Transamerica Corp., which controls 495-branched Bank of America, fourth largest U. S. bank. His quarrel with the New Deal began in 1938. Late that year SEC, threatening to delist its stock, charged that Transamerica's registration statement contained "false and misleading statements." Old A. P., a born battler, haled SEC to court. While still there, SEC bit him again. Bank of America was accused of helping Timetrust, an investing company which owns Bank of America stock, in a "device, scheme and artifice to defraud" buyers of its certificates.

As though SEC were not enough, A. P. also joined battle with the Secretary of the Treasury, his pet hate. In September 1938, just before meeting, the directors of Bank of America got a telegram from the U. S. Comptroller of the Currency, one of whose jobs is to watch the capital-deposit ratios of national banks. The telegram threatened to cite the directors to the Federal Reserve Board if they declared the bank's regular dividend. A. P. and his directors defiantly declared it, have continued to ever since. Blaming Walker for telling secrets to SEC, blaming Morgenthau for the Comptroller's "hostile attitude toward our institution," old A. P. Giannini regards the whole thing as a Wall Street-New Deal Jewish conspiracy to get him and ruin his bank.

By last March Bank of America's feud with the Comptroller had cooled sufficiently for a compromise. Its terms: 1) the bank's dividend policy to remain unchanged; 2) establishment of a $6,900,000 reserve for possible writedowns; 3) reappraisal of its property holdings; 4) changes in its bond and bookkeeping practices; 5) a $30,000,000 increase in its capital by next June. To finance the capital increase, RFC offered a helping hand, for A. P. has no feud with Jesse Jones.

But last week imperious, resourceful A. P. brushed even RFC aside. Instead, he undertook one of the largest privately underwritten bank financings in U. S. history: 600,000 shares of convertible Bank of America $2 preferred at $50 a share. Swiftly and smoothly underwritten, its provisions are characteristic of A. P. First call on the shares wall go to Bank of America's 145,000 present stockholders, biggest of whom is Transamerica, most of whom are small-money Westerners who admire old A. P. Among them they will absorb more than half the issue. To assure widespread distribution, nobody can buy more than $50,000 worth (without special permission). Heading the syndicate are Ladenburg, Thalmann & Co., John J. Bergen & Co., Ltd. and Cyrus Eaton's Otis & Co. of Cleveland, a widespread-distributionist from way back. Among the 80 underwriters, conspicuously few are Wall Street firms.

A pioneer in the small loans field, A. P.'s bank earned $12,000,000 last year, has averaged earnings ten times its new preferred dividend requirements over the past five years. It has 600,000 borrowers, 2,300,000 depositors (one Californian in every three). This week old A. P. Giannini forgot his troubles long enough to make the second speech of his career. Occasion: a banquet in honor of his "70th birthday, given by his 9,000 employes.

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