BANKING: Turnabout

By gobbling big & little banks and begetting new ones, crusty, crafty old (78) Amadeo P. Giannini had built his Bank of America into the world’s biggest (522 branches). His Transamerica Corp., which owns 23% of the bank, had become the world’s biggest bank holding company. Many big & little bankers have viewed his bigness with alarm, but none more loudly than Federal Reserve Board Member Marriner S. Eccles.

Last week, in FRB’s Washington hearing room, Giannini and Eccles met face to face. In the first use of its antitrust powers in 34 years, FRB was out to prove Transamerica a monopoly. To the witness stand went Eccles. He had disqualified himself as a judge in the case, only to find that as far as Giannini was concerned, it was Eccles who was on trial.

While A.P. glowered, Eccles testified that Transamerica had agreed to stop buying up banks, except with FRB approval, after 1940—and then had gone right on with “a dangerous and unjustifiable expansion.” Not so, claimed Transamerica attorneys. FRB had added restrictions which made it impossible for them to comply with the agreement.

During a recess, Eccles stopped by Giannini’s seat and extended his hand. “Nothing personal intended, you know,” he began. A.P. blazed: “You’re trying to put the Bank of America out of business and you can’t do it. None of your gang can!”

With a faint, embarrassed smile, Eccles walked back to the stand. A.P.’s attorneys tried to lay the complaint to Eccles’ “personal bias and prejudice.” Eccles conceded that, through the Eccles Investment Co., his family owns 44% of the stock of First Security Corp. of Ogden (Utah), which advertises itself as “the largest banking institution in the intermountain states.” But he insisted that that had nothing to do with his fear that Transamerica was a monopoly.

As FRB was trying its own complaint Giannini seemed to take it for granted that he would get no favorable decision. But neither A.P. nor Eccles thought that the hearing was any more than a sparring round. The fight to the finish would probably be in the U.S. Supreme Court.