A Time When Bankers Were Heroes to Public

March 22, 2009 -- Virginia Hammerness says that the people running Bank of America right now are "a bunch of idiots." But Hammerness is not just another angry stockholder. Her grandfather was A.P. Giannini, the founder of Bank of America.

Giannini was something many would find surprising today – a revered banker. He was on the cover of Time magazine twice and was even thought to be the model for Jimmy Stewart's character in "It's a Wonderful Life."

His career started in 1904, when he quit his job at an established bank because it refused to lend to little guys. So Giannini started up a bank that would, opening his office in a converted saloon and calling it the Bank of Italy. Decisions on credit were rooted in the real world, says granddaughter Hammerness.

"He probably just looked at a person and looked at their hands," she says, "and if they wanted a loan, if they looked honest and they had hard-working hands, he gave them a loan."

Giannini became a legend after the great San Francisco earthquake of 1906 when he was one of the only bankers to start lending again. He reputedly set up shop on a wooden plank and two barrels to start granting loans and help people rebuild their lives.

Giannini went on to become a key backer of California's fledgling movie industry, lending Walt Disney the money he needed to finish "Snow White and the Seven Dwarfs." He also helped finance the Golden Gate Bridge.

And when Giannini retired, the bank tried to give him a $1.5 million bonus, but he refused it. "He didn't believe in having a lot," his granddaughter recalls. "He says too much money is bad."

Given this family history, Virginia Hammerness was horrified when she learned that Bank of America went ahead with its purchase of the struggling Merrill Lynch last fall, even after learning that the outgoing CEO paid lavish bonuses to the same executives who oversaw Merrill's downward spiral.

"When they were given those bonuses," Hammerness says, "I think Bank of America should have said, 'Go drown. Go drown yourselves.' I'm sure he and my father are turning over in their graves. I'm sure they are."