Palo Alto, page 4
Other than grains and grain-fed animals, California’s biggest gold rush–era agricultural crops were grapes and apples, partly because the best way to get gold miners to eat fruit was to squeeze it into alcohol. The global demand in the 1860s for wine spiked following the Great French Wine Blight, caused by the inadvertent importation of the grape phylloxera aphid from North America to France after intercontinental commerce accelerated in the 1860s and mining capitalists reinvested capital in the cash crop of the moment. As a result, even after French scientists repaired the massive damage, mining colonies from the nineteenth century still provide the world with some of its best wine: South Africa, Australia, Chile, Argentina, and, of course, California. Locally, the demand for wine and cider was higher than the demand for fresh fruits and vegetables, especially among Anglo-Americans and Mexican-Americans, who were used to diets high in grains and meat. Anglo farmers grew subsistence plots with root vegetables and cabbage, but among the miners, only the Chinese were accustomed to a diet that featured fresh produce, and Chinese immigrant communities placed a premium on familiar dishes—a reasonable choice considering the nutritional deficiencies endemic to colonial foodways. Chinese shippers imported boatloads of preserved foodstuffs for the comparatively well-paid Gold Mountain expat community, and some left the mines to grow produce for local (and then regional) consumption. White miners didn’t fight their Chinese counterparts for agricultural space the way they booted them off gold claims. Left alone in the culinary labor-market niche, California Chinese found employment as cooks, both in the mining districts and in the fast-growing cities.
The railroad (as I’ll explain in the following chapter) absorbed more Chinese laborers in the 1860s than California had to offer and as a consequence supercharged the trans-Pacific labor contractors. Increasing the supply of Chinese workers increased the demand for Chinese food, and the new cohort of California Chinese gardener-peddlers found they could make a decent, reliable living on relatively small plots, and without the risk or trouble of the gold business. The gardening work was much more labor-intensive than industrial wheat farming, but the produce sold for a lot more, and the cultivators could vend their products themselves locally or in the surrounding region, vertically integrating their operations and cutting out the middlemen and the speculators. Until the introduction of refrigerated train cars at the end of the 1880s, these perishable goods mostly fed California, not Europe or other nodes on the global market. It’s also worth noting that small, internally diverse plots made for a much stronger food system and a more resilient income stream for the growers. They came to be called truck farms—show up early to a farmer’s market and you’ll know why—and scholars apply the term retrospectively to what were more accurately called cart farms and even bucket farms. Much to the consternation of some white customers, Anglo-Americans were not eager to compete with the Chinese, who were working with a deeper body of agricultural knowledge. As a result, the California Chinese grew crops for the vegetably distinct Anglo market as well.
In Santa Clara County, mercury capital of the West Coast and ground zero for the wheat boom, planter capitalists started to figure out that the most efficient way they could use their land was to lease it to Chinese agriculturalists, finance whatever equipment they needed, and get out of the way. In 1860, the county census counted 22 full-time residents of Chinese extraction; in 1870, Santa Clara had over 500 full-time Chinese farm workers and another 500 who helped with the harvest, half of them in strawberries.21 But whereas in other areas the California Chinese sought out land to rent on a fixed basis, in Santa Clara County the agricultural landowners “appear to have been instrumental in bringing Chinese into the area,” concludes Sucheng Chan in This Bittersweet Soil: The Chinese in California Agriculture, 1860–1910, her study of the Chinese role in California agriculture in the post-gold-rush era.22 These men leased land on a partnership or sharecropping basis, depending on how you looked at it. That is, the owners provided operational financing and split the proceeds with the farmers and, later, the Chinese labor contractors who provided a layer of distance between the two. Berries—strawberries predominantly, but also raspberries, blackberries, and gooseberries—became a Santa Clara County specialty, and literally 100 percent of the industry’s workers were Chinese, from the introduction of the crops, in the 1860s, through the 1880 census. As you’ll read in the following chapter, that was a temporary peak of the California Chinese population, after which white capital and labor came together to ban further competition.
The workers were all Chinese but the landowners were white, and the contracts between the two increased in complexity. Landowners dictated what grew where, if not how, as well as the type of person to be employed, if not who specifically (vetoing the “quarrelsome or lazy or incompetent”). It was a complicated dance between capital and labor that rarely took the straightforward form of wage work, at least at first. “Chinese agriculturalists in California followed a reverse sequence,” writes Chan. “Only some two decades after they began to grow crops as owner-operators and tenants did many of their members become agricultural laborers.”23 She describes this “reverse mobility path” as a kind of proletarianization, a proletarianization in which Anglos induced Chinese farmers in the 1860s to manage the land, rescuing the wheat-ravaged state, and then snatched control back, along with the increased rate of profit the Chinese delivered. Spurred by the Comstock Lode, interest rates fell, and more owners were prepared to behave like investors rather than mere landlords. And with the Central Pacific Railroad’s link to the Midwest completed in 1869, more whites were on their way, even if they weren’t quite white yet.
A link to the Midwest was a link to the East and, just as important, a link to Europe. Once the pipes were connected, European immigrants began to flow west fast—from the starved, colonized island of Ireland, from proletarianized France and the Swiss cantons, from the Portuguese Azores Islands, and from the newly formed nations of Germany and Italy. WASP Americans looked down on the newcomers, while the Mediterraneans in particular were not thrilled with the Atlantic end of the North American climate. Many set off for the West, where the old-stock Anglo-Americans were fewer and farther between and the weather was more like that of home. There they encountered a very different mobility path from the one imposed on Indians, Chicanos, and the California Chinese as well as on arriving Japanese, Filipinos, Punjabis, and some black migrants from the American South. This inequality—a product of discrimination at the individual, social, and legal levels—dried to whiteness in the California sun decades before the U.S. federal government codified it in immigration law.
When this wave of European immigrants arrived in the Golden State, most of the gold already belonged to someone else. Instead of slugging it out with the Anglo hydrolickers or the Chicano mercury miners, they took up the intensive agriculture model pioneered by the California Chinese. Like the Chinese and unlike the Anglo forty-niners, these Europeans were familiar with fruits, vegetables, and the cultivation thereof. The Portuguese Azoreans, for example, settled almost entirely in the Bay Area, where they took up truck farming for fruits and vegetables, as well as the operation of small chicken coops and dairies. “They would work for wages for a while, then rent land, and then finally buy land,” writes one historian, describing the familiar white-immigrant mobility narrative as the Bay Area Azoreans encountered it.24, 25 It was a workable plan, and thousands of Azoreans moved to the area in the 1860s and ’70s, edging Chinese truck farmers into seasonal wage labor.iii
The most successful group of proto-white Catholic European immigrants in early U.S. Alta California were the Irish, whose infamous famine and one of their failed uprisings lined up perfectly with the gold strike. With the precise structure of the West Coast racial order still up in the air, the Hibernians found fewer barriers to social advancement there than they found in other American destinations. In San Francisco in particular, Irish immigrants assumed an important role in municipal organization from the beginning of Anglo rule. Quick on their heels were the Swiss-Italians, who took to the familiar climate and established the region as the capital of the nation’s wine industry before expanding into other roles in the intensive agriculture sector. One of those Swiss-Italians was Theo Medici, who put his name on two big signs on the 22-room Swiss Hotel he owned on Market Street in San Jose, next to a giant flag logo familiar from the army knives. In 1869, Medici rented the hotel to another Italian-speaking immigrant, the forty-niner Luigi Giannini, whose California adventure netted him enough gold to go back to Italy, find a wife, and persuade her to join him on this new move.26 The hotel did well enough to support three children, and Giannini followed the class mobility path to a deed on a 40-acre farm, where he took a big stumble. Accounts differ regarding who killed Luigi—whether it was an angry workman to whom he owed $1 or an eccentric neighbor who owed him the buck—but somebody stabbed him to death over a pittance. Yet even death couldn’t arrest the Giannini family’s progress. Watching his father bleed out was Luigi’s eldest son, Amadeo.
Virginia Giannini was now a twenty-two-year-old widow with three sons, which made her a catch on the Alta California Italian marriage market. She wed Lorenzo Scatena, who was significantly younger than her ex but climbing a similar path up the class ladder. He seems to have been a decent person, and he treated Virginia’s young sons well. Rather than a landowner like Luigi, Scatena became a produce middleman, filling his cart with fruits and veggies at the wharf in the morning and bringing the load downtown to distribute among small retailers in San Jose. His stepson Amadeo joined Lorenzo in the cart and displayed an aptitude for business. Amadeo studied the subject (in what passed for a semester of college in California) as a young teenager and then joined his stepfather’s growing distribution concern. Tall and big, first for his age and then simply in general, Amadeo established relationships with farmers up and down the state, mailing cold-call letters. He encouraged Lorenzo to make small loans to the farmers they worked with and to use the company’s knowledge of the urban market to nudge them toward profitable planting decisions. The more Scatena and company behaved like investors, the more they turned truck farmers into specialized suppliers, which allowed them to scale up their plots. By the age of nineteen, Amadeo was a partner in the business, and by the age of twenty-one he owned half of it in his own name. Strutting around San Francisco’s seaside Italian neighborhood of North Beach, the young, handsome, and increasingly prosperous businessman attracted the interest of Clorinda Cuneo, the heir to a bunch of North Beach real estate and a share of the neighborhood’s sole small bank. They married (both at the age of twenty-two), and in fewer than 10 years Amadeo built the Scatena business up to the point where he could sell his half to some employees for $100,000 (a few million dollars in 2022 money) and retire. When his father-in-law died the next year, Amadeo took his seat on the bank’s board of directors.
Amadeo Giannini was a capitalist organizer from his first days, always partnering with new associates and figuring out profitable ways to meet their needs. He helped centralize intensive produce production, and by putting himself and his family in the middle he learned how much money there was to be made from financing the suburban truck-farm archipelago. Now a dynamic young banker, he took his energy into his new field. Amadeo wanted to loan money to the North Beach Italians the way local Irish and German banks loaned money to their ethnic communities. He wanted to transform the bank into an urban institution that would finance the block-by-block growth of San Francisco and the rest of the Bay Area, not just speculate on big mine projects and distant wheat fields. Amadeo saw a whole city full of Amadeos ready to burst forth, and he knew they were a good investment. But most of the bank board didn’t agree, so he quit and called his friend James Fagan—the banker for Scatena and company, known as Giacomo to Amadeo—and asked him how to start a bank. With a group of ambitious Italians (plus the Irish consigliere Fagan), they formed the Bank of Italy. Giannini’s determination set their organization apart. When the 1906 earthquake and the subsequent fire burned down San Francisco’s financial center, Amadeo took a bag of gold and a plank of wood and set up a teller window on the docks. It didn’t matter that the displayed wharf reserves were only 10 percent of deposits on the book; like a jealous husband reassured by the mere presence of his wife’s car in the driveway, bank customers saw the sack of gold, and instead of pulling their money out, they put more in.27 Stacking gold in the teller window where customers can see it became the standard Giannini move for warding off doubt in the event of crisis.
Watching his dad get stabbed to death over a dollar—one detail where the accounts agree is that the boy saw it happen—couldn’t stop the young man from becoming a professional lender; there were much bigger forces at play. Banking was supposed to be a dull job, but Giannini wasn’t a dull guy, and neither were the young Italian hustlers he hired. While the existing players sat in their offices waiting for the money to walk in the door, the Bank of Italy pursued every Italian dollar in the state of California, and not only as deposits. They encouraged clients to buy into the bank, reserving shares to sell to working-class depositors. Giannini eliminated minimum deposit requirements, bought advertising wherever he could, and sponsored community events. He brought customer service to California banking, and in 1909, when the state officially legalized branch banking, with its satellite storefronts, the Bank of Italy turned Italian communities throughout the state into financial outposts. Soon they probably did have an actual majority of the California Italians’ deposits, and some branches (including the one in San Diego) claimed to hold 100 percent of the deposits in their localities. By getting regular people’s money in the bank and lending it out, Giannini made the savings of the Italian working class available to capitalists at his discretion, accelerating the state’s growth and tying its fortunes to the bank. He turned the Bank of Italy into the state’s largest farmer, accumulating mortgages on around 10 percent of California farms. Giannini then compelled farmers to behave like businessmen, requiring standardized record keeping from his borrowers. If you wanted the good interest rate, you had to modernize in ways that made the good interest rate possible. And since rationalized farming was more efficient, farms that didn’t borrow from Giannini still had to change in order to keep up with the ones that did.
Giannini was an uncommonly talented banker. He turned the maximizing gaze that Santa Clara County was so good at developing onto money itself. Part of what made him so successful was better information: A roving squad of bank detectives assembled a file of typed three-by-five cards at the San Francisco headquarters, one for each California Italian, listing basic information as well as subjective assessments related to creditworthiness. Making good loans meant the Bank of Italy could make more loans and on better terms than its competitors, and Giannini put nearly everything the bank had back to work. He invested in farms of course, but he also invested in housing developments and the extremely early motion picture industry, putting $500 into a San Francisco cornershop nickelodeon in 1909 and spotting $250,000 ten years later for Charlie Chaplin’s debut, The Kid.28 Crucially, Giannini also bought other banks, which had high rates of failure during the era, and converted them into branches. This was a way to circumvent the state supervisors who, concerned about what the chairman called Giannini’s “weird mosaic” of bank offices, stopped issuing him new charters.29
Amadeo single-handedly inspired the creation of the California League of Independent Bankers, who all vowed not to sell out to the finance prodigy. The group’s president told a congressional committee investigating branch banking that the Bank of Italy had tried to trigger a failure at a small California bank that refused to sell, buying up tens of thousands of dollars in deposits and then withdrawing them when they figured the institution’s reserves were at its lowest.30 But no one could argue with the numbers: The Bank of Italy loaned money more cheaply than the other banks did. Who would want to regulate that away? One retrospective study found that Giannini’s aggressive expansion strengthened California’s bank system because he forced not just his branches but also his competitors to be more efficient, just as he nudged the truck-farm industry into rationalizing first as a distributor with Lorenzo Scatena and then as a mortgage lender.31 The Bank of Italy was like a constant stress test on its competitors, and the state’s banks performed better than average during the Depression in part thanks to Giannini.
In the 1920s, the Bank of Italy pursued a conscious ethnic diversification strategy, hiring multilingual bankers to work with the region’s many other (non-Italian) immigrant communities and pursuing them with a similar zeal. At the end of the decade, they had the most California Chinese deposits of any bank in San Francisco. The banker, who was using the distinguished moniker A.P., for Amadeo Pietro, named his first son for his kind and generous stepfather Lorenzo, but in a nod to their new homeland he anglicized the name to Lawrence. A.P. picked a new name for his bank, too, one befitting his role in the changed society: Bank of America.
A.P. Giannini was an exemplar of the national melting pot. “Before Giannini I was a dago,” one North Beach customer told a reporter in an oft-cited quotation from 1928. “Now, I am an American.”32 Giannini’s role was much more than representational, and he worked with his friend and fellow successful assimilant Joseph Kennedy to finance the presidential election of assimilator in chief Franklin Delano Roosevelt. The change from the Bank of Italy to the Bank of America stands for a whole slew of national, racial, and financial transitions underway at the close of the nineteenth century. In one lifetime, in a single county, the Italians (and more) became white and the Chinese didn’t. Indians became Mexican workers, and California’s Indian land became not just the United States of America but the Bank of America. California’s white dictatorship literally prepared the ground for capitalism; settlers turned the ecological abundance that supported a dense collage of indigenous communities into the farms that capitalized Giannini’s “weird mosaic” of bank branches. Anglo-American West Coast history is so brief that there is no California fortune we can’t trace back through these original expropriations of land and labor. It takes work not to see it.
