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Philadelphia was founded in the early 1820s by William Knox and Jacob Pearson. The town initially grew quickly and prospered as a center of business in the Sweetwater Valley. By the mid-19th century, Philadelphia had two general stores, a tanning yard, a stillhouse, and a hotel. On October 20, 1863, during the Civil War, two Confederate cavalry regiments attacked and routed a Union brigade at Philadelphia while conducting maneuvers following the Battle of Chickamauga. The Confederates captured 700 soldiers, 6 cannon, and 50 supply wagons.