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Tenn. Banker’s Action Prevented Bank’s Collapse

The early 1930s were frightful times for bankers. Amid a nationwide panic, recently inaugurated President Franklin D. Roosevelt declared a bank “holiday” in 1933, ordering banks to close for several days to stave off further bank collapses. In the Southeast alone, 62 Federal Reserve member banks never reopened after the holiday, and 52 of them owed the Federal Reserve Bank of Atlanta a combined $11 million (equal to nearly $160 million today). That amount exceeded the Reserve Bank’s 1934 capital and surplus of $9.9 million.

During those dark days, heroic work from bankers, businesspeople, and regulators throughout the country and the South saved many institutions. One such institution was the First National Bank of Bristol, Tenn. Russell Cherrington Driver chronicles the story of that bank’s rescue in a book about his grandfather, Leslie Rowles Driver: The Fruitful Prince (Maryville, Tenn.: Script Press, 2002).

The elder Driver joined the First National Bank of Bristol

Leslie Rowles Driver
as a vice president in 1931, six months before it reorganized amid plummeting deposits and deteriorating bond investments. Within a year, the bank’s deposits declined by more than $1 million. And First National was forced to call loans and borrow from the Reconstruction Finance Corp., a federal government agency formed to help resuscitate the Depression-addled economy, to meet customers’ demands for cash.

With widespread public support, the bank management, directors, and shareholders successfully reorganized and recapitalized the institution. In the end, Driver writes, no depositor lost a cent.

The bank weathered the storm. It would subsequently become the First National Bank of Sullivan County in 1961, First Eastern National Bank in 1982, and shortly thereafter First American National Bank. It is now AmSouth Bank.

Leslie Driver became president of the Tennessee Bankers Association in 1939 and president of the First National Bank of Bristol the following year. He served as president of the bank for 21 years. He also was a director of the Federal Reserve Bank of Atlanta from 1950 to 1955.