Isaias W. Hellman was 16 when he came to Los Angeles from Bavaria in 1859. He got a job at his cousin's dry-goods store. Six years later, he opened up his own store, in which he kept a $160 Tilden & McFarland safe. There were no banks in Los Angeles at the time — farmers and merchants used to keep their money underneath their mattress or floorboards. As a courtesy, Hellman began keeping customers' gold inside his safe, free of charge. Pretty soon, he had more than $200,000 of the city's wealth.
"Banking remained a side business for Isaias," writes Frances Dinkelspiel in Towers of Gold, "until he had a run-in with a bleary-eyed, irate miner."
The miner, on a drunken bender, had repeatedly withdrawn money from Hellman's safe. Now sober, the man demanded to know where all his money had gone. "You dirty Jew!" he yelled, lunging at Hellman. "You have stolen my gold!" A friend calmed the man down, but the incident made an impression on Hellman. He decided to make his bank legitimate. And that's how Isaias Hellman became L.A.'s first banker.
In 1871, he partnered with former governor of California John Downey to form the Farmers and Merchants Bank. That institution would dominate finance in Los Angeles for the next 40 years, lending General Harrison Gray Otis the money he needed to buy the Los Angeles Times, and Edward Doheny the money he needed to start drilling for oil. Hellman also invested in Henry Huntington's Pacific Electric Railway, and helped found the University of Southern California.