The earth began to shake at 5:12 in the morning. The quake continued for about 42 seconds. It left a city devastated. Panic and chaos were soon to follow.
A.P. Giannini was awakened by the quake despite living 17 miles south of San Francisco. Once assured his family was safe, his thoughts turned to his business. Giannini had started business with a fruit cart that grew into several produce wagons making deliveries. By that morning in 1906, he had morphed his business from produce wagons to banking.
San Francisco, 1906
In 1906, banks were an institution for the rich. Giannini founded his Bank of Italy by providing services to the middle class. Despite consisting of only one room, the Bank of Italy was a full service bank, providing savings accounts and making loans at reasonable rates to working people – something bigger banks would not do. Giannini was sure common people were as trustworthy as the rich when it came to repaying loans.
With the trains knocked out by the quake, Giannini walked to his bank in San Francisco. By the time he arrived, huge fires had taken hold in the city and were sweeping toward his bank. Looting was also in full swing, with the worst elements of the city coming out in full force to take advantage of the chaos.
The big banks had secure vaults to hold their assets of bonds, gold and silver coins. These bank vaults were designed and constructed to be impervious to disasters like earthquakes. Large and unwieldy, there was little concern about roving bands of looters carrying them off. Safe-crackers were few and far between. These banks were not concerned about their vaults.
Disaster Recovery – The Bank of Italy
Giannini didn’t have a large, unwieldy vault. His was a small bank. With the help of neighbors and employees, Giannini put a plan to save the bank and its customer’s assets from the fires and looters into motion.
They loaded the approximately $80,000 in gold and silver coinage into a wagon. To avoid the gangs of looters, they disguised the wagon to hide the value it contained. Accounts vary, some claim the cash was hidden beneath crates of fruit, while others maintain it was a garbage wagon. In any case, the cash assets of the Bank of Italy made it safely out of the city to a new secure location.
At this point, the real success story of the Bank of Italy begins.