Like the rest of San Francisco, Little Italy was devastated by the earthquake and fire of 1906. Many immigrants, especially the most recent ones, lived in shanty-like cottages on Telegraph Hill, or in unsanitary tenements between that Telegraph and Russian Hill. More than the earthquake, the ensuing fire wiped those residences out. However, Little Italy, much like Chinatown, recovered more quickly than other areas of the city. There were two key reasons for this development. The first was the commitment of the inhabitants to rebuild. The sense of community that existed at the time encouraged most residents of Little Italy to stay put. The second reason was the foresight of Italian-American bankers, especially A.P. Giannini of what is now the Bank of America to continue to operate immediately after the natural disasters.
Crucial to the physical rebirth of Little Italy was its economic recovery. Giannini realized both the opportunity and the necessity of keeping his bank open and almost immediately after the Fire had been put out, set up shop "on the wharf, using two barrels and a plank as a desk, and only asking to see the calluses on his customerís hands as collateral for small loans." The trust that this engendered among the inhabitants of Little Italy encouraged them to deposit their own money and encourage their friends to switch to Giannini to the point that he did not lose any money in emergency loans. This also enhanced his reputation and allowed him to expand by opening the branches that he so eagerly wanted to implement.
The Italian community in San Francisco came out of the aftermath of the Earthquake in much better shape than before. The fact that the majority of them worked in industries such as fishing and farming in which cash was the sole form of money allowed them to keep the Italian-American banks afloat in currency. Rather than being a low point in their story, Italian-Americans turned the aftermath of the earthquake into its pinnacle. This wave of determination and optimism would continue until 1924, when the National Origins Act reduced the number of Italians that were allowed to come to California and the rest of the United States. At the same time, though, the 1910s and 20s turned into a "golden age" for Italian-Americans in California, as some of their small investments and ventures began to pay big dividends.