Old A. P.

You do not spend the second 30 years of your life building a little Italian bank into the fourth richest in the U. S.--and keeping it--without making enemies. Toward his, San Francisco's Amadeo Peter Giannini is popularly credited with a temper to match that of the elder J. P. Morgan. Last week it seemed to San Franciscans that, for reasons not wholly clear, old Amadeo was out gunning for Frank Shaughnessy, president of the San Francisco Stock Exchange.

Leading up to this supposed vendetta was one of the most important changes in the West Coast banking picture since 1928, when Banker Giannini formed Transamerica Corp. as a holding company for the Giannini interests. Transamerica Corp., holding 99% of Bank of America stock, controlling the Giannini branch banks (485) in California besides other banks in Oregon, Nevada, Washington and Arizona, was the largest bank holding com-pany in the world. But last spring Transamerica's Chairman Giannini, a great admirer of the New Deal, perspicuously announced that "the day of bank holding companies is gone," proposed to turn Transamerica into what would amount to an investment trust, beginning by redistributing 57% of Bank of America stock to Transamerica stockholders.

Approved by Transamerica's directors last May, this plan immediately provoked howls from one quarter and difficulties in another. The howls came from the National Association of Supervisors of State Banks, old foes of branch banking, who were alarmed by A. P.'s plain admission that Bank of America's nominal freedom from Transamerica would better enable it to extend branch banking through the seven States of the 12th Federal Reserve District if this should become lawful by passage of the McAdoo Bill. Trumpeted the Association's chairman: "Mr. Giannini's program shall not prevail." This did not annoy Mr. Giannini, but the difficulties raised on the San Francisco Stock Exchange did.

By the Giannini plan Transamerica's stock was also to be spliced, one share for two, reclassified from no par to $2 par. To protect marginal holders of these stocks, whose values would be lowered by distribution of unlisted Bank of America stock, Mr. Giannini announced to stockholders that a Transamerica subsidiary would furnish margin. The San Francisco Exchange saw fit pointedly to caution its members against volunteering information of this service.

"Gratuitous," snapped Transamerica's President John M. Grant. But this was not all. Exchange authorities objected to a sentence which they considered not quite cricket in a review of Transamerica prospects put out by Howell, Douglass & Co., a brokerage house known to be favored by old A. P. The incident passed, but by this time President Shaughnessy had apparently succeeded in making himself a bogeyman to Amadeo Peter Giannini.

Front-page news in San Francisco papers last fortnight was a report that Transamerica's chairman would never list Transamerica's new stock on the San Francisco Exchange until Frank Shaughnessy was deposed. For San Francisco brokers this was a serious matter because for years old Transamerica stock has been the issue most traded on the Exchange. In 1932 it made up 41% of the trading, in 1935 35%, last year 27%. Rather than lose this trading to Los Angeles and Manhattan, many a San Francisco broker would willingly see a change in Exchange management. Last week the first day set for trading in new Transamerica came around and the company still had not applied for listing. President Shaughnessy, however, took advantage of a Securities & Exchange Commission rule allowing trading until Sept. 11, opened the floor to transactions in Transamerica and sat tight.

Now 49 and greying, Frank Shaughnessy is a Los Angeles-born Irishman of aspect twinkling and benign. As a young man he won the liking of famed Francis Marion ("Borax") Smith, promoter of the "Twenty Mule Team" product, who bought him his first seat on the San Francisco Exchange in 1912.

He has been president of the Stock Exchange since 1934. Day before trading opened in the new Transamerica stock, Bachelor Shaughnessy was at the Bohemian Grove, exclusive redwood club of rich Californians. Burly old A. P. Giannini had always been cordial to him. That day they encountered each other at the Grove, passed with only a nod.

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