As the United States plunged deeper and deeper into economic depression during 1930, the Cessna Aircraft Company designed gliders and small, lightweight aircraft in a last-ditch effort to generate revenue.
America’s love affair with “Flying Fever” went into an inverted flat spin after the collapse of Wall Street that began in October 1929 and continued into 1930. Since 1927, in the wake of Charles A. Lindbergh’s solo transatlantic flight from New York to Paris, the nation’s commercial aircraft industry had experienced phenomenal growth.
Throughout 1928 and the first nine months of 1929, airframe and engine manufacturers were swamped with customer orders, and the aviation business in Wichita, Kansas, was no exception. The Stearman Aircraft Company had recently relocated from an old facility to a new, large factory and was busy building air mail ships as well as biplanes for the sportsman pilot and businessman.
Across town on East Central Avenue, Walter Beech was leading the Travel Air Company to new heights in terms of sales, and the 600-man workforce was operating two shifts and completing 25 airplanes per week but needed to build 50 per week to meet demand. The Swallow Airplane Company was rolling out biplanes for flight training at a feverish pace, and the Cessna Aircraft Company was hurrying to ramp up production in its new factory.
In addition, Wichita was home to five aeronautical investment organizations, three airport engineering companies and one export corporation. By late 1929, 16 airframe manufacturers and six engine manufacturers were doing business in the city and investors had poured more than $10 million into the town’s largest industry.
On a national scale, sales of new aircraft soared and the stock market found prospective buyers eager to loosen their wallets and invest in aeronautical ventures. Among those affecting Wichita directly were the giant Curtiss-Wright Corporation and the United Aircraft and Transport Corporation that in 1929 absorbed Travel Air and Stearman Aircraft, respectively, into their expanding portfolios.
Looking back on the industry’s health in 1929, the 1930 edition of the Aircraft Year Book reported that 96 aircraft manufacturers had built more than 6,000 commercial and military airplanes worth $44.5 million. Commercial production of aircraft had increased 51 percent compared with 1928. By contrast, at the end of 1930 the Aeronautical Chamber of Commerce of America reported that production of new aircraft had fallen by nearly 50 percent from 1930 levels to only 2,684 commercial and military ships. Total value of those aircraft fell to about $21.5 million.
During the early autumn of 1929 the Cessna company’s board of directors met to decide on a strategy that would help them cope with an increasingly weak and uncertain marketplace. One of the first actions taken by the board was to cancel a contract with the Curtiss Flying Service that had placed orders for hundreds of Cessna monoplanes. Those orders were quickly cancelled as Curtiss officials also agreed to sever their relationship with the Cessna Aircraft Company. As of November, Cessna had delivered more than 35 Model AW, four DC-6B and three DC-6A aircraft.
Without Curtiss as its largest customer, Clyde Cessna and his staff scrambled to reinforce its existing nationwide dealer and distributor network, and thanks to the hard work of general manager Harold Wehrle, eight new franchises were established. In the November 1929 issue of “Aviation” magazine, Cessna Aircraft Company printed a notice stating what Clyde Cessna considered to be the most important message of that year. Basically, the notice reassured readers that the company was financially strong and was led by men with significant experience in the aviation industry.
In addition, the company had created a new sales organization that was ready to do more business than ever before. Unfortunately, less than 30 days later Cessna Aircraft’s financial base was beginning to show signs of crumbling. For example, company stock that had sold for $100 per share in 1928 was selling for only $18, and there were fewer and fewer buyers.
To raise money the board of directors sold the old factory in Wichita for $50,000, and although new airplanes were rolling off the assembly line at the new facility, prices were reduced in hopes of attracting buyers. Back east on Wall Street, the stock market was riding a financial roller coaster during the next few weeks with prices rising and then suddenly falling to new lows.
Prices for new aircraft were falling almost as fast as the values of Cessna company stock. A few examples are in order here to illustrate the deteriorating situation faced by the board of directors:
- A factory-fresh Model AW normally retailed for $7,200 but despite slashing its price to a mere $3,400, there were no buyers.
- Another new Model AW with (ferry time only from Wichita to New York City) was offered for $3,700 under retail but sat on the ramp unsold.
- A new Model DC-6A cabin monoplane (Cessna’s latest and best design to date) carried at price tag of $11,500 but could not attract a buyer despite a bargain price of $9,800.
Early in 1930 Clyde Cessna himself came under attack from stockholders who were furious at losing so much money in so little time. They filed a petition citing mismanagement by Mr. Cessna as the chief reason the company finished 1929 $100,000 in the red, despite having sold $750,000 worth of new airplanes and selling more than $300,000 worth of stock.
During the winter of 1930, sales of new Cessna aircraft continued its downward trend, and in February 1930 the price of one share of stock was only $10. That month a meeting of the board of directors was held and plans were made to completely reorganize the business model. At that time, two prominent Wichita businessmen, Charles Yankey and M.L. Arnold, arrived on the scene. They promised Clyde Cessna $50,000 to recapitalize the company. In return, Arnold was placed on the board as vice president and treasurer. Soon after the meeting Arnold informed the local press that “sweeping cuts” would be made to prices of the Model DC-6A to $9,750 from $11,000, but Clyde knew that what the company really needed was not more price cuts but aircraft designed to sell in what was rapidly becoming a severely depressed market.
Clyde’s son, Eldon, had been working on such an aircraft since late 1929, and by Christmas the first CG-1 (Cessna Glider-1) was completed and another was nearing completion. Since 1925 Eldon had been a student in mechanical engineering at the Kansas State Agricultural College. In 1928 his father called him back to Wichita to work at the Cessna factory. Clyde was an enthusiastic supporter of the glider program and had high hopes that a $398 price tag would result in sale of hundreds or even thousands of the rudimentary aircraft.
A production version was quickly developed and designated as the CG-2. Constructed primarily of wood, the aircraft featured a wingspan of 35 feet, an area of 157 square feet and a benign wing loading of only 1.82 pounds per square foot. Empty weight was 120 pounds. The CG-2 could be launched by a team of people, towed aloft and released, or launched using a shock cord. Flying speed was about 25 mph and landing speed was a gentle 15 mph.
Each glider was shipped in a crate and could be easily assembled without special tools and came with an instruction manual, shock cord, a seat belt and an automatic release mechanism for manual launching or aerial towing. Both Arnold and Clyde Cessna wanted to advertise the CG-2 to the world, and one was included in the company’s display at the aeronautical exposition held in St. Louis, Missouri, in March 1930. The humble CG-2 drew more attention at the show than the majestic DC-6A and DC-6B cabin monoplanes.
Unfortunately, other struggling airframe manu-facturers, among them Alexander Eaglerock in Colorado, WACO in Ohio, and the Detroit Aircraft Company, were excellent building gliders of their own design and depressed sales of the CG-2. According to Cessna company records, only 84 gliders can be verified as built and sold despite claims that 300 were completed. In addition to the CG-2, company engineers had been busy designing and building the CS-1 (Cessna Sailplane—1) that featured a glide ratio of one foot down for every 30 feet forward. Wingspan was a generous 47 feet and empty was only 150 pounds. As with the CG-2, the CS-1 could be launched by a team of men pulling on a rope or towed into the air by an automobile (the preferred method). During a series of test flights in the spring of 1930, the aircraft had remained aloft for up to three minutes. Although such a short duration of flight pales by comparison to modern sailplanes, the CS-1 could attain only a few hundred feet of altitude at best, leaving very little time to glide.
As 1930 progressed sales of new aircraft nationwide continued to decline. Production of the CG-2, however, was increased to more than one per work day. In May Eldon Cessna installed small floats on a CG-2 and conducted experimental flights of his “Hydro-Glider” on a man-made lake near the campus of the Braley Flying School. Ever the innovator, Eldon mounted a tiny, two-cylinder Cleone piston engine on the fuselage of another CG-2, added a five-quart fuel tank and bolted a welded steel tube landing gear to the airframe.
Eldon dubbed his creation the CPG-1 (Cessna Powered Glider – Model 1) and conducted many successful flights during May and June before the engine was relocated forward ahead of the pilot seat, which was shielded from the propeller blast by a curved piece of Pyrolin. The little ship soon became a common sight near the Cessna factory, buzzing through the sky at an estimated 25-30 mph.
Encouraged by his success with the CPG-1, Eldon modified a CG-2 by covering the fuselage with fabric, adding a tiny door on the right side of the fuselage and a windshield in front of the pilot, thereby creating a semi-enclosed cockpit for the pilot. Next, he installed a Cleone engine (rated at 25 horsepower) and propeller to complete the CG-2’s transformation from glider to airplane.
Only one example was built and served as the prototype for the EC-1 monoplane, designed chiefly by Eldon and demonstrated successfully to the company board of directors. They approved further development and two additional EC-1 ships were built that summer but serial production never materialized. By March 1931, however, the EC-1 had evolved into the EC-2 – a two-place airplane powered by a two-cylinder, air-cooled Aeronca engine that developed 30 horsepower. Cessna records are unclear, but apparently only one EC-2 was built and was destroyed in a crash in 1933. Overall the little ship was a good design and lent itself well to production, but the company was essentially broke and the EC-2 became the final product of the original Cessna Aircraft Company.
In addition to the EC-1 and EC-2, the few company engineers remaining on the skinny payroll designed a two-place, high-wing monoplane powered by an inline, inverted Cirrus engine rated at 95 horsepower. Known as the FC-1, its cantilever wing spanned 33 feet and the fuselage length was 21 feet. Maximum gross weight was 1,458 pounds. It was sold to a private owner in June 1930.
Meanwhile, Clyde Cessna clung to his belief that the once lucrative aviation business would not recover for a long time (he was correct) and strongly advocated a conservative approach to preserving the company until better days arrived. Clyde and the board of directors took a hard look at the situation and had to accept the raw reality before them – the Cessna Aircraft Company was on the verge of bankruptcy. During a meeting of the board in October 1930, directors from the Fourth National Bank in Wichita told company officials they were calling in some of the debt owed. Unfortunately, there was no cash in the company coffers.
To pay those debts, it was proposed that vice president M.L. Arnold buy four unsold airplanes along with land still available at the old factory on First Street and Glenn Avenue. Arnold wrote a check for $22,000 and kept the wolves at bay for a little while longer. By January 1931 the company’s financial condition was destitute, and stockholders began to call for closure of the factory. What happened next took an emotional toll on Clyde Cessna. Not only was the aviation pioneer caught in the crosshairs of investors and bankers, but even some board members were prepared to call for his dismissal. As a result, Thad C. Carver, a banker from Pratt, Kansas, and a long-time supporter of Wichita’s aviation industry, was elected president relegating Clyde to the office of vice president.
The board, however, remained optimistic that the business climate would improve during 1931 and boldly announced that a new series of Cessna monoplanes would be introduced during the year. Plans called for the diminutive EC-2 to be equipped with a 50-horsepower Continental powerplant and offered under the name Baby Cessna but the market was already flooded with small, low-powered ships built by a number of companies struggling to survive.
The final nail in the coffin of the Cessna Aircraft Company was driven home in March 1931 when the board met to decide on a new course of action. After discussions they decided that because of almost non-existent sales and that no profit could hope to be made under the current economic conditions, and to avoid bankruptcy and receivership, the factory should be closed, locked and the remaining employees eliminated from the payroll, including Clyde Cessna. Not surprisingly, Clyde vehemently objected but the die was cast. The board also agreed that all inventory on hand would be sold.
Mr. Cessna was saddened by the turn of events that had so swiftly overtaken him. He had worked diligently to keep the doors open, but he had no choice but to accept the board’s decisions. Plagued by a deepening Great Depression, attacked by grumbling stockholders and outgunned by the board of directors, Clyde Cessna fought the good fight but lost because of conditions beyond his control. He could only reflect on the brief period of success he had achieved. During the company’s time in business beginning in September 1927, records indicate that about 240 airplanes were sold with the majority bought by the Curtiss Flying Service.
Perhaps lesser men would have succumbed to defeat, but not Clyde Cessna. He chose to retreat and regroup. In 1932 he and Eldon would team up to form the C.V. Cessna Aircraft Company and wage their own war against the tough economic times in aviation by creating custom-built monoplanes for air racing. For Clyde Cessna it was not the end but a new beginning.