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KNOXVILLE BANK CLOSED THURSDAY East Tennessee National in Hands of Comptroller. Knoxville, Jan. 20.—(Special.)—Some surprise has been expressed here over the decision Thursday night of the directors of the East Tennessee National bank not to open for business Friday morning, for it is currently reported that the Reconstruction Finance corporation had brought to Knoxville and had offered to the East Tennessee National an additional $2,000,000 of cash, and that the East Tennessee had declined to accept it. According to the report, the R. F. C. had indicated its willingness to loan this additional $2,000,000 cash without any increase in the collateral pledged with it by the East Tennessee National. Inasmuch as the East Tennessee had in its vaults at the time of closing approximately $1,000,000 of cash on hand and due from banks, the added Reconstruction cash would have given it a total of $3,000,000 cash, or a cash reserve of a third of its outstanding deposits of $9,000,000. When this report became current, Knoxville observers concluded that the closing of the bank probably was more the result of the bankers' disappointment over the slow drainage of deposits as it was over any immediate condition of its banking situation, or inability to maintain a liquid position to meet current withdrawal demands. A second financing operation is reported under way in Knoxville for the Reconstruction Finance is reported about to advance the Fidelity Trust company $4,000,000 cash on real estate mortgages. According to the report, when the loan is completed, the Fidelity will pay its participating certificates holders 50 per cent of the face of their certificates in cash, and will issue new certificates for the full amount of the remainder. If this operation is consummated, it will release to participation certificate holders $4,000,000 in cash, which would very materially cushion the effect of the East Tennessee closing its doors. Officials at Knoxville's Hamilton National bank were kept busy throughout the banking hours opening new accounts for depositors. There has been comparatively little excitement in Knoxville financial circles. The City bank of Fountain City, a suburb of Knoxville, was closed today by order of the directors, but Richard Hale, cashier, said the bank would reopen within a few days. "We believe it best for the interest of depositors to close the bank for a short time," he said. The bank has deposits of $86,000. Sevierville Bank Closes. Sevierville, Jan. 20.—(A. P.—The Bank of Sevierville, capitalized at $50,000 and having deposits of $167,222.71, closed today for fifteen days.