Too Big?

As its shadow grew across the West, Amadeo Peter Giannini's vast (516 branches) Bank of America has been the target for assorted stones from many a sling. For two years the Department of Justice's Antitrust Division investigated; off & on for eight years the Securities & Exchange Commission let fly, with everything from pebbles to paving blocks. Every shot bounced off the tough hide of old (78), imperious "A.P." Last week Bank of America reported record resources of $5,859,234,000, putting it farther out in front than ever as the biggest U.S. bank.*

In recent weeks a small army of Federal Reserve Board agents has been reconnoitering deep in the territory of Bank of America and Giannini's holding company, Transamerica Corp. (which also controls 40 smaller banks, owns stock in dozens of industrial and insurance companies). Guided by their reports, FRB last week swung its sling. Under a section of the Clayton Antitrust Act that has never been used before, it quietly issued a stern order to Transamerica: show cause why FRB should not order it to end certain "monopolistic" practices. (Transamerica must answer the charges at a closed hearing in November, may appeal FRB's decision to the courts.)

Samples of FRB's carefully gathered evidence: Transamerica controls about 80% of all deposits in Nevada, 39% in Oregon, 42% in California, including 100% in 13 counties. The complaint was based on more than a general charge of the Brandeisian sense of bigness. According to the complaints of scores of bought-out banks, Giannini played unfair ball by hiring away their top officers and paying fantastic prices to their stockholders.

To some, it all sounded like a renewal of the feud between Giannini and FRB's Marriner Eccles, whose family's banking empire in the Rockies (TIME, May 10) stands smack in the way of A.P.'s ambitions to expand eastward. It was bigger than a personal feud. The board's complaint was unanimously endorsed by its seven members. Its result might well be a crucial test of one of the strongest Strong Men in U.S. financial history.

*Next in size, according to their latest (first quarter) reports: Manhattan's National City Bank, with resources of $4,850,380,620; Chase National Bank, with $4,675,876,956.

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