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A. P. Giannini and the Giannini Foundation of Agricultural Economics

01 Apr 2011-American Journal of Agricultural Economics (Oxford University Press)-Vol. 93, Iss: 3, pp 911-912
About: This article is published in American Journal of Agricultural Economics.The article was published on 2011-04-01 and is currently open access. It has received None citations till now.

Summary (8 min read)

Editors' Introduction and Acknowledgments

  • The funds supported an earmarked endowment for the establishment of the Giannini Foundation of Agricultural Economics and construction of Giannini Hall on the Berkeley campus.
  • In May 2006, the 75th Anniversary Symposium of the Giannini Foundation of Agricultural Economics featured both retrospective presenta tions regarding A.P. Giannini and the Giannini Foundation and discussions of the contributions of the Foundation to the changing context of California agriculture.
  • The majority have been appointees since 1980.
  • Her touch and careful review contributed much to the readability and, the authors hope, the usefulness of this effort.

A.P. Giannini's Early Years and Career One-Produce Broker

  • There has been much written about A.P. Giannini, including that by distinguished historians in this audience, so their task is, to say the least, challenging.
  • The authors admit at the end of the book that it reads like a biography of A.P. Giannini because "In truth, he was the Bank of America" (James and James 1954, p. 503) .
  • He passed this informa tion along to his growers, who rewarded him with more business.
  • "By the time he was twenty-one, A.P. had already developed many of the qualities that characterized him during his business career" (Nash 1992, p. 15) .
  • In 1892, A.P. married Clorinda Cuneo, daughter of a wealthy Italian-American real estate owner in San Francisco.

Career Two-Real Estate Dealer and Manager

  • He "decided to plunge into the precarious but potentially lucrative world of San Francisco real estate" (Bona dio 1994, p. 22) .
  • He rented desk space at a respected real estate firm and set out in earnest to learn about the trade.
  • Rather than fight over division of the estate, the children placed the management of more than one hundred properties in the hands of their brother-in law, A.P. Giannini.
  • One of Cuneo's other business activities was to sit on the board of directors of a small North Beach bank that had been founded by John Fugazi in 1893, supposedly to serve the Italian-American community.
  • "A.P. recognized that in the twentieth century large profits could be made by catering to the masses-to millions of people with modest means" (Nash 1992, p. 23) .

Some Closing Comments

  • The story is of a remarkable man, driven to build his banking empire, come hell or high water.
  • The academic authors are indebted to Grace Dote for carefully documenting past and current Giannini Foundation members located on the Berkeley, Los Angeles, and Riverside campuses.
  • Consider ing depreciation, that was less than he had been worth before he went into the banking business.
  • In 1924, his strategy to facilitate further expansion changed with the plan to use Bancitaly Corporation to become the prime instrument for the purchase of additional banks in California.
  • Giannini was not in attendance at the April 1926 meet ing at which Bancitaly's directors voted to compensate him with 5% of the corporation's annual net profits with a guaranteed minimum of $100,000 "in lieu of salary . . . and in recognition of his extraordinary services" (Bonadio 1994, pp. 115-116) .

Timetable of Events Establishing the Giannini Foundation of Agricultural Economics

  • Things moved quickly after the January 20 vote by Bancitaly's board of direc tors (Table 1 ).
  • Branch banking made it possible to pool and to move loan funds among branches to meet the seasonal and spatial needs of California's rapidly growing agricultural industry.
  • California agriculture "came to the beginning of the decade of the Great Depression with a vastly expanded and as yet unadjusted producing plant, with little experi ence in meeting depression conditions and with a comparatively heavy load of debt" (Benedict 1946, pp. 410-411) .
  • Two years later, in 1930, A.P. Giannini was voted an honorary alumnus of the Univer sity of California by the California Alumni Association "as a mark of appreciation of his recent $1,500,000 gift to the university" (San Francisco Chronicle 1930) .

Image provided by the Bank of America Historical Collection.

  • Agricultural Economics at the University "Farm Management and Farm Policies" was the first course in the field of agricultural economics.
  • In 1915/16, two courses, one in cooperative marketing and the second in "Rural Credits and Land Settlement," were introduced in the new Division of Rural Institutions.
  • Several of the divisions were effectively the territorial provinces of individual professors.
  • What he did was the controlling factor, and his problems were very largely those concerned with production.
  • These events, together with the 1928 gift for establishment in the university of the Giannini Foundation of Agricultural Economics, would catapult research to the forefront of the emerging agricultural eco nomics profession and bring validity to additional areas of economic inquiry beyond the heretofore focus on farm management economics and rural institutions.

Defining Possible Activities of the Giannini Foundation

  • It would appear that a clear focus for the use of the Giannini Foundation fund did not exist when the Bancitaly board of directors voted to make the gift to the university on January 20, 1928 .
  • These needs appeal to the money-making instinct and it may be supposed that from time to time appropriations for them will be increased.
  • Professor Erdman also wrote the introduction to Swett's oral history, reporting therein that Swett had been very critical of those planting fruit already in oversupply as early as 1912 and that Swett had suggested the need to establish a chair of agricultural and horticultural economics at the university.
  • Well, they argued, more or less, and finally one of the advisors said, "A separate foundation-you want something to endure.
  • One does not know what other interests may have vied for support of Giannini's announced gift during a short span of time, nor do the authors know who, within a couple of weeks, drafted the February 10, 1928 , letter to the regents that identifi ed activities of the Giannini Foundation of Agricultural Economics in very broad terms.

Getting Going: Giannini Foundation of Agricultural Economics

  • The relations between conditions existing in the farming industry and the general economic conditions prevailing in the nation and interna tionally; d) Well, I listened to him carefully and the authors talked about the possibilities, etc.
  • He continued as director of the Foundation for an additional year after being named dean of the universitywide Col lege of Agriculture in 1930.

Table 2. Founding Members of the Giannini Foundation of Agricultural Economics

  • Hutchison's next step was to round up more people to grow and develop the Foundation.
  • He was trained as a mathemati cian and was hired from the U.S. Department of Agriculture (USDA), where he had developed work in quantitative and analytical aspects of farm management, including multiple correlation and input-output studies; shaped research programs to provide data and techniques of analysis; and initiated outlook work in the USDA Bureau of Agricultural Economics.
  • 14 Consequently, for much of the period 1931-1936, the Foundation was under acting directors (Ed Voorhies and Murray Benedict) before Hutchison again sought to put a new director in place.
  • Wellman would serve in that capacity 16 for the next ten years.

The First Twenty Years: To 1950

  • The very first issue of the Giannini Foundation librarian's report, Economic Research of Interest to Agriculture (ERIA), was released on the eighty-first birthday of A.P. Giannini.
  • It reflected on the Foundation's accomplishments during the period 1928-1950.
  • The Foundation broadened the research activity of a small cadre of Berkeley agricultural economists and Extension specialists with predominant expertise in farm management and organization and in agricultural marketing and cooperatives.
  • The general area of marketing and marketing efficiency maintained its importance at Berkeley, though the focus of marketing research became quite different.
  • Cita tions noted in this and subsequent issues of ERIA include all cataloged materials contained in the Giannini Foundation Library, whether Experiment Station publications, Giannini Foundation reports, reports to agencies, expert testimony, or articles published in professional journals.

Economic Research of Interest to

  • Farm Management and Tenancy (line 2) involves mostly farm enterprise effi ciency reports for regions and crops or livestock types.
  • Immediately after the Foundation was organized, Crocheron headed a study team hoping to expand the sales of California dried fruit to eastern Asia.
  • Other reports dealt with new federal legislation-the Agri cultural Marketing Act; activities of the Federal Farm Board with respect to potatoes, grapes, and wool; transportation rates, shipside refrigeration, and tariff issues; public regulation of milk marketing; and marketing studies for fruits, vegetables, 21 and milk.
  • Agricultural Cooperation (line 5) reveals the ramped-up effort and interest in the earliest period for achieving orderly marketing and increased grower returns but substantially less activity in the 1947-1950 period.

Percent of Citations by Economic Classification

  • Rapid postwar growth in student enrollment was a driving force for institutional change and for the development of additional campuses of the university.
  • Instruction in a limited offering of degree courses was by Berkeley faculty 22 who commuted on the Southern Pacifi c railroad from Berkeley and by various assistants, instructors, and lecturers who also taught in a two-year nondegree program 23 in agricultural economics.
  • Various suggestions were offered to revitalize the Foundation, including thoughts about estab lishing a cadre of nonacademic staff researchers within the Foundation, thoughts of publishing a Giannini journal of agricultural economics, and expressions of the need to reevaluate the growing commitment of Foundation support to the Giannini library at the expense of other possible initiatives.
  • A very rough descrip tion of the activity of the new generation of Giannini Foundation agricultural economists is partially revealed in Table 5 , which summarizes the distribution of citations for the period 1970-1999.

Going Forward -The New Millennium and Beyond

  • Much has happened in the last seventy-five years.
  • California has now grown to be the nation's most populous state.
  • The Central Valley is no longer "the great undeveloped field" described by Giannini in the 1920s.
  • Many issues now relate to competing demands for resources and quality of life.

Introductory Comments

  • Cornelius "Corny" Gallagher A griculture was and has always been a key economic sector in Cali fornia.
  • The bank was also there with loans provided from the beginning of the agricultural processfinancing irrigation and field preparation, harvesting, marketing, and even canning and preserving of agricultural products.
  • Through its network of regional branch banks, it was able to amass more capital than its competitors and was able to move it throughout its system as needs arose.
  • It also helped in the formation and financing of many grower cooperatives and always placed stabilization of a crop above all else in its efforts to make them a success.
  • My story happened on the night in 1975 when, as members of Chairman Clausen's Junior Advisory Council, the authors visited A.P.'s home, which was called Seven Oaks, to visit his daughter, Claire Giannini Hoffman.

Retrospective Comments

  • The economy of California was growing very rapidly during A.P.'s early days as a banker.
  • There are still current customers who began banking with A.P.'s bank in the 1920s and 1930s, starting their banking with small deposits to their school savings accounts.
  • That program and Christmas Club accounts were very popular.
  • He is given credit for introducing branch banking in the United States.

Reflections on the Giannini Foundation

  • Kenneth R. Farrell M y association with the Foundation dates back nearly fifty years to 1957 when I was appointed Agricultural Extension specialist in the Department of Agricultural Economics at Berkeley and thereby a member of the Foundation.
  • Many of those hired during this period brought with them strong interests and skills in applied research and quantitative methods.
  • The California Department of Agriculture had substantial marketing, regulatory, and data gathering programs and a cadre of specialists who encouraged and complemented the research and outreach programs of the Foundation.
  • As even a cursory review of publications in the Foundation monograph, research report, and information series would reveal, this was an era of remarkable productiv ity and achievement in Foundation research programs.
  • The applied, commodity-centered agenda of the 1950s and 1960s has given way to issues evolving from the changing nature of agriculture and, to some extent, to the changing orien tation of the agricultural economics profession itself.


  • A.P., as Giannini liked to be called, has been referred to in many ways: the Little People's Banker; the Great Quake Banker; the Cow Banker; the father of home mortgages, auto loans, and installment credit; and the father of branch banking and the Giannini Foundation.
  • Like the Empire State Building, which also is turning seventy-five, he was a giant of a man who changed the shape of California, banking, farming, and the nation.
  • That was the origin of the $1.5 million given to the university to start Giannini Hall and the Giannini Foundation of Agricultural Economics.
  • He wanted to help California farmers, his original customers and the backbone of his banking empire.


  • The economic consequences of increased production which result from improved seed grains, improved nursery stock, improved livestock, improved machinery, and improved methods of farming; b).
  • "Profitable Marketing of California Production" Item (e) methods and problems in disposing of products profi tably, also known as Theme II.
  • The remainder of the first paper focuses on market studies.
  • This statement was probably prepared by Loy L. Sammet, who was director of the Foundation at the time.

• Giannini Foundation Contributions to Agricultural Marketing Studies

  • T he purpose of this paper is to review and evaluate the research activi ties and achievements of the economists who have served as members of the Giannini Foundation of Agricultural Economics over the past seventy-five years with specific reference to marketing of California farm products.
  • Foundation members have made scholarly contributions, both directly and by having influence on the work of others, especially graduates from the departments at Berkeley, Davis, and Riverside that make up the Foundation.
  • For the present purposes the key distinction is between "marketing" and "production" (which is covered elsewhere in this volume by Sumner), each of which could encompass the entire marketing chain from one perspective or another.
  • Hence, their coverage of scholarly work in agricultural marketing relates to the study of markets and market ing institutions, including studies of private individual and collective marketing activities, and of the causes and consequences of government intervention in the market.
  • The paper concludes with a caveat recognizing some limitations of their work.

Influences on Marketing Economics in the Giannini Foundation

  • Like other applied scientists, agricultural economists are influenced by their circumstances.
  • What the authors find interesting to work on depends on what is happening in the world, what is hap pening in their parent disciplines, and the types of resources that are available to us and the strings that are attached to them.
  • Thus, as their circumstances have changed, the authors have wit nessed changes in the work of the economists in the Giannini Foundation.
  • At the time when the Giannini Foundation was first established, California agriculture and agricultural economics in the University of California were very different from today.
  • With the evolution of the state's agriculture, the authors have witnessed an evolution in the scale and focus of the agricultural econom ics enterprise conducted initially at Berkeley and progressively over time also at Davis and Riverside.

Critical Features of California Agriculture

  • California agriculture today is large, complex, diverse, dynamic, economically important, and different in many ways from agriculture in most of the rest of the United States.
  • Because of differences in the nature of demand, the nature of supply, or the nature of the prod uct and how it is marketed, the relevant marketing and policy issues in California specialty crop industries may differ from those that are important for the intensive livestock and annual grain crops that predominate in other states.
  • The Professional and Institutional Context of the Giannini Foundation Some useful perspective is gleaned by considering the Giannini Foundation in the context of the California Agricultural Experiment Station (CAES) and the University of California more generally, and also beyond that in the context of the broader national and global agricultural economics industry.
  • Even though the Giannini Foundation does not provide a very large share of the total resources spent by its members, the funding is high powered because it is incremental and, at least to some extent, flexible, whereas most of the other resources are not.

Developments in the Broader Economics Profession

  • Like most other disciplines, economics has been evolving in the direction of increasingly nar row individual specialization within the field in terms of subject matter or methodological focus.
  • In many places, socalled agricultural economists today are generally more narrowly focused and more technically oriented than their predecessors were seventy-five or even twenty-five years ago, to the extent that many of them nowadays do work that does not have much specific relevance to agriculture.
  • These developments are perfectly consonant with the missions of the university and the Experi ment Station but perhaps less so with the original charter of the Foundation.
  • The University of California occupies a special place in a world that has depended on the United States to provide a predominant share of all science funded and conducted in both the public and the private sec tor.
  • As shown by Pardey and Beintema (2000) , a small number of rich countries have provided the lion's share of global investments in all science, including agricultural research and develop ment (R&D) and the United States has played a particularly important role in generating past global agricultural productivity improvements.

Overview of Marketing Economics in the Giannini Foundation

  • An assessment of marketing economics in the Giannini Foundation can be conducted by reviewing the published research of the members and this section is devoted to doing that.
  • Much of the work conducted by members of the Foundation is oriented to more general questions related to broader economic issues, to theoretical questions, or to techniques and methods and is not associated with agricultural "marketing" per se but may have relevance for more applied or empirical agricultural economics work in California or elsewhere.
  • Conversely, contributions of a more general sort are often the result of problem solving, which may be done in the context of a specific project that is directly relevant to the Giannini Foundation.
  • Marketing Publications by Members of the Giannini Foundation,.
  • The scope, size, and evolving nature of these contributions can be seen by considering the publications that are the most tangible evidence of the effort.

Leadership Roles by Members of the Giannini Foundation

  • The members of the Giannini Foundation and their former students tend to be dispropor tionately represented in the literature.
  • As Table 7 shows, 29.2% of the authors of chapters in the handbook were members of the Giannini Foundation and a further 26.2% were graduates from the Department of Agricultural and Resource Economics at Davis or Berkeley.
  • Thus, more than half of the authors are either members of or graduates from Foundation departments.
  • The faculties at Davis and Berkeley were instrumental, for instance, in estab lishing the IATRC, which is funded jointly by the USDA and the Canadian government.
  • This institution has significantly enhanced research and communication about agricultural trade.

Table 7. Giannini Foundation Authors in the Handbook of Agricultural Economics

  • Policy with particular reference to the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO).
  • Members of the Giannini Foundation have played significant roles in contributing tailored research programs that feed into other policy processes.
  • The congres sionally mandated "Embargo Study" (McCalla et al. 1986) is another good example of a case where events in the world-the U.S. embargo against wheat exports to the Soviet Union-led to a demand for analysis that was met with leadership and other participation from members of the Giannini Foundation and other members of the IATRC.

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01 Jan 1890
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