Chattanooga National Bank
First National reorganized as Chattanooga
National
In December of 1932 the 1st National Bank of Chattanooga deposits decreased
and withdrawals accelerated sharply. On December 31, 1932, the bank directors
spun off the highly depreciated real estate holding as a separate company
and changed the bank to the Chattanooga National Bank. Headlines on the
name of the front page of the Chattanooga Times newspaper on New Years
Day proclaimed "NEW CHATTANOOGA BANK WITH CAPITAL OF $3,000,000 OPENS
TUESDAY MORNING". W. E. Brock took over as President of the newly
formed bank. The newly formed bank took over the strictly banking functions
of the 1st National Bank. A large half page advertisement on page 3 of
the Chattanooga Times listed the new officers, assets and liabilities
and proclaimed the new bank had $2,500,000 of new money and cash paid
in. It also indicated a million and a quarter dollar reserve had been
set up to secure the new bank against any losses from assets taken over
from the 1st National Bank. It also indicated the 1st National Bank building
was written down from $1,500,000 to $1,000,000 in line with current real
estate values. An advertisement in January 2nd paper proclaimed a success
of the new bank "TODAY $102,057.54 will be credited to the accounts of
our Happy Throng of Savings Depositors".
Chattanooga National Scrip
The governor of Tennessee declared a volunteer "banking holiday" on March
1, 1933. American Bank and Trust, Chattanooga National and Hamilton National
remain open for business but did not accept checks from banks that were
closed. After a day of heavy withdrawals Chattanooga National decided
to observe the "banking holiday". It remained closed during the national
"banking holiday".
Chattanooga National Bank ordered $250,000 in depression scrip; $50,000
in $1 scrip, $100,000 in $5 scrip and $100,000 in $10 scrip from Brandon Printing
Company on Wednesday March 8, 1933 and started issuing it on Friday March 10th.
The Chattanooga Times reported Friday March 10th, that "The scrip will
issue individually (today) by the Chattanooga National Bank...and will
be in denominations of $1, $5 and $10." The National Bank Depression scrip
reverse for each denomination is identical for all banks. "The Standard
Catalog of Depression Scrip in the 1930s Including Canada & Mexico" does
not list any scrip from Chattanooga National but this Crisp Uncirculated
(CU) $1 note, Two Fine (F), three Very Fine (VF), and 1 Extreemly Fine (EF) $1 notes are known as of 11/15/2016. None
of the seven known notes are canceled. The scrip is signed by W. H. DeWitt, cashier.
One unissued $5 note was purchased 6/30/2018. It was punched canceled Branden Publishing
/ Nashville. It was probably a specimen note. It is the only $5 known to have survived.
Chattanooga National Closes
Tuesday, March 14th the Chattanooga Times reported the Chattanooga National
will open today. "The authorization for the Chattanooga and Hamilton to
reopen was sent by telegraph from Gov. E. R. Black of the Atlanta Federal
Reserve Bank." However the Times reported Wednesday, "The Chattanooga
National was closed yesterday morning with a public announcement that
the license to reopen had been withdrawn by the federal reserve.." Chattanooga
National was put in receivership. The newspaper reported on March 18 that
the bank was open on a limited basis and would redeem the Chattanooga
NB scrip. Eventually it paid 108% of claims of 1st National and 88% of
claims of the Chattanooga National.
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