Earl Freudenberg: The Day The Hamilton National Bank Collapsed

  • Friday, September 16, 2022
  • Earl Freudenberg
photo by Herman Lamb

The number one news story that I covered while a reporter would have to be the 1976 collapse of the Hamilton National Bank.  It was my family’s bank for nearly 50 years while they operated a grocery store on North Market Street and where I opened my first checking account at the Northside branch. 

February 16th wasn’t an ordinary news day as one of the city’s most familiar skyscrapers would soon bear a new name. 

When I walked into the radio station that morning I was met by Advertising Manager Bryan J. Bush.  The “deacon”, as he was known to fellow employees, asked if he could see me in his office for a few minutes. 

Mr. Bush closed the door; his favorite line was, “Keep this under your hat” and that’s the way our conversation started.  Mr. Bush handed me a small piece of paper with the name of R.T. “Rice” Russell and his phone number.  Mr. Russell was an official of the Bank.  Mr. Bush said, “I believe you know this man.”  I answered, “Yes Mr. Bush, I worked for him for three years.”  Mr. Russell was one of the owners of WAPO where I started in radio. 

Mr. Bush went on to say, “Hamilton National Bank will be no more by day's end; call Mr. Russell and he’ll talk to you but you’ve got to keep this under your hat.” 

I called Mr. Russell and he invited me to his office right inside the Broad Street entrance of the bank. Mr. Russell didn’t want to chat on the phone.   I found my parking spot near the entrance.  It looked like business as usual near the tall bank building.  

I walked in and Mr. Russell was waiting for me.  As I remember, there were only a few people in the bank.  Mr. Russell said, “I’m sure Mr. Bush told you what was going on.” I responded, “Yes Sir.”  Mr. Russell handed me a piece of paper with the name of Vice President Brandon Davis, First Tennessee Bank, Memphis and his phone number.  Mr. Davis would be handling the media in what was to happen in the next 24 hours.

Standing behind a large executive desk empty of any papers or ink pens, Mr. Russell instructed me to please wait about 30 minutes before calling Mr. Davis. Mr. Russell wanted time to leave as he was heading out of town before the day’s events would start to unfold.   

I thanked Mr. Russell and told him I appreciated what he’d done for me through the years as he approved my first radio job.  As I was leaving the bank another friend told me the federal government had identified Hamilton National as one of seven troubled banks.  I thought, I couldn’t mess this up.

I left downtown and returned to the WDOD studio next to Baylor School.  I waited exactly 30 minutes before making one of the most important calls of my career.  Mr. Davis answered and I told him what I was calling about.  He wanted to know who told me about what was fixing to happen.  I said, “Mr. Davis, I gave my word I would not divulge my source.”  He said, “Very well, I’m boarding a company plane and heading for Chattanooga in a few minutes, I’ll be staying at the Read House and you can meet me at 3:15.” I gave my word I’d not tell anyone about what I’d learned. As they say in the business, this is "big stuff.”

Later in the afternoon I told Station Manager Bill Nash I had an important appointment downtown. I would be back as soon as possible and I left the station. 

Walking into the Read House at 3:12, I asked the desk clerk if he would please ring the room of Brandon Davis. “He’s expecting me.”  Mr. Davis immediately came to the hotel lobby.

He handed me a First Tennessee Bank news release with all the details.  Mr. Davis told me since I had cooperated with him,  I could release the information immediately.  Mr. Davis said there would be no recorded interviews but First Tennessee CEO Ronald Terry would join him in the morning for a news conference at the Read House and I could have the first interview. 

Davis said I had time to call my station and put it on the air first as he was walking over to the Chattanooga Times, a few blocks from the Read House and to give the newspaper a copy of the same news release. 

WDXB’s studio was in the Read House basement where WAPO radio was a decade earlier so I knew my way around.  I walked into the radio station and, if not mistaken, Garry Mac was on duty.  This was before cell phones so I asked him if I could use the telephone and if he had a copier.  Mac jokingly replied, “This is a radio station not a phone booth.”   

I called back to WDOD and we immediately went on the air (from WDXB) during the 3:30 news.  After giving my report, Garry looked at me expressing shock as he made a copy of the news release.  I told him to go ahead and air the story and thanked him for the use of his telephone.   

I was proud I had beaten the FDIC and The Associated Press by nearly a half hour by just cooperating with my various sources and not breaking their confidence. 

The new Chattanooga bank opened the next day for customers and it was business as usual.  I met Mr. Davis and Mr. Terry at the Read House and got the first comments from the top bank executive ahead of other media.

I later learned that Mr. Bush was a stockholder in Hamilton Bancshares, parent company of the Hamilton National Bank.  We never discussed his loss but I always thanked the deacon for the best news tip of my career.

The FDIC said Hamilton National Bank was in the top 200 U.S. banks with assets of just under half a billion dollars. 

Later on, WTVC News Director Gill Norwood Lusk became the bank's public information officer and he took me around the Chattanooga high rise.  It was interesting to see the changes because Gill’s office was on the mezzanine that once was the massive downtown WDOD Radio studio in the 40’s and 50’s. 

Two years ago while speaking to the East Hamilton County Kiwanis Club, I met retired bankruptcy trustee Kyle Weems who handled the Hamilton National Bank failure.  At that meeting the University of Tennessee Law School graduate and I had a good conversation. Weems said, “None of the customers lost any money.”  Kyle Weems died a short time later, June 19, 2019. 

Ask anyone today about Hamilton National Bank and chances are they don’t remember, but I do.  There were many trips to make deposits at the North Chattanooga branch of the Hamilton National Bank, then walk across North Market Street and eat at the Town and Country Restaurant.

This was my news story that just never seemed to end
Kyle Weems and Earl Freudenberg photo by
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