By early 1928, Clyde V. Cessna was building and selling cabin monoplanes of his own design. Less than two years later the debacle on Wall Street would clip Cessna’s wings, just when financial success was within his grasp.
The year 1928 would prove to be an undreamed-of boon to the airplane manufacturers from coast to coast, including those in Wichita, Kansas. Charles A. Lindbergh’s solo flight to Paris from New York City in May of the previous year helped to ignite a nationwide interest in aviation. Flight schools, it seemed, were popping up everywhere, books on how to fly flew off the shelves and companies such as Wright Aeronautical, whose J-5 static, air-cooled radial powerplant had propelled Lindbergh across the vast North Atlantic Ocean, struggled to meet skyrocketing demand for their engines. In addition, more people were learning to fly and those wealthy enough kept fattening the order books at local manufacturers such as the Travel Air Company, the Cessna and Stearman factories, as well as the Swallow Airplane company and other aviation-related businesses located in the city.
Of these, Travel Air, led by Walter H. Beech and a forward-thinking board of directors, and the Swallow company were already well established, but Clyde Cessna and Lloyd Stearman’s companies were struggling with production problems that kept initial deliveries to a trickle. In Cessna’s case, as of January 1928 not one airplane had been delivered to a customer, and their patience was wearing thin. The principal reason deliveries were delayed was the acute shortage of Wright J-4 and J-5 radial engines that Clyde preferred and his customers demanded. An even more pressing issue was cashflow – Cessna needed to deliver airplanes as soon as possible before the coffers were empty.
There was an interim solution to his dilemma and Cessna quickly seized upon it: The factory workers would install obsolete 10-cylinder Anzani engines (Clyde had at least 60 on hand) but each one would require major internal modifications to ensure reliability. When the Wright engines eventually became available, the airplane would be flown back to the factory for installation of the appropriate Wright radial engine. To keep the production line moving along, Cessna enlisted the help of his friend Curtis Quick, a local engineer who was well-known for his expertise with the aging engines such as the Anzani.
To upgrade the powerplants, Quick installed aluminum alloy pistons and removed the automatic intake valves, replacing those parts with a camshaft-activated mechanism that permitted the engine to produce more horsepower. Internal lubrication was vastly improved, a new scavenge return system was developed along with a new crankcase ventilation tube, and modern, dual Scintilla magnetos were installed. These modifications not only increased the engine’s horsepower to 120 from 90 but made the Anzani a reliable powerplant. During the time it took Quick to develop tooling to modify the engines, Clyde bought a new Siemens-Halske SH-12 nine-cylinder radial from T. Claude Ryan, who acted as a distributor for the German engine. Cessna planned to install it on a prototype monoplane and conduct extensive flight tests before committing to a large order. Rated at 128 horsepower, the SH-12 did not appeal to many buyers who preferred the new Wright J-5 or Warner Scarab radial. When equipped with the SH-12, the Cessna monoplane was designated Model AS. Only four are known to have been built, with the first ship sold to Beacon Airways in Kansas City, Missouri.1
As soon as Curtis Quick completed one of the first modified engines, Cessna installed it on airframe serial No. 114 (the 14th Cessna monoplane), completed flight testing and declared the ship ready for delivery. On Feb. 28, 1928, the Cessna Aircraft Company delivered its first airplane to customers Edmund A. Link and Richard Bennett, who paid $6,500 for the cabin monoplane. The new Cessna, however, did feature an unusual option: a wind-driven siren mounted on the main landing gear strut. A few days after taking delivery, Mr. Link flew the Model AS home without incident.
Meanwhile, orders for the Wright-powered Cessna Model BW were piling up fast. Clyde pleaded with the Wright company to ship quantities of the J-5 engine to the Wichita factory, but Cessna was allotted only one radial per month. Clyde’s dilemma was shared by Walter Beech at Travel Air and Lloyd Stearman at his factory north of the city. Fortunately, other new, lightweight radial engines were coming on the market during the hot Kansas summer of 1928 and were quickly snapped up by Beech, Stearman and Cessna for flight testing. These included three seven-cylinder powerplants – the 110-horsepower Warner Scarab, the Floco (later renamed Axelson) rated at 115-150 horsepower, and the 130-150 horsepower Comet. Of these, the rugged and reliable Scarab proved to be the most popular with Cessna, chiefly because of its small frontal area, good fuel economy and ease of maintenance. In addition, the Warner company provided excellent support. As a result, the Scarab proved to be the ideal engine for Cessna’s best-selling monoplane, the Model AW.
In autumn of 1928, Clyde realized that the growing number of air races being held across the United States provided an excellent opportunity to advertise the speed of his airplanes. It would, however, take a special event with a good chance of seeing a Cessna in the winner’s circle to convince Mr. Cessna to participate. That special event was the New York-Los Angeles Air Derby – one of four cross-country speed dashes planned as part of the National Air Races that year.
Clyde entered eight airplanes in the Derby: One Model AW, flown by local pilot Earl Rowland, six Model BW monoplanes, and Clyde and Curtis Quick would fly one Model AA powered by a modified Anzani engine. All the Cessna entrants arrived safely at Roosevelt Field near New York City. Ahead of them lay 3,000 miles of rough, tough competitive flying. Of the eight Cessna ships entered, Clyde was particularly confident that the Model AW flown by Rowland stood an excellent chance of taking top honors in the Class A Division. Compared to the biplanes and other monoplanes in that division, the Model AW had less aerodynamic drag, was capable of averaging more than 110 mph while achieving about 21 miles per gallon of fuel burned.
On Sept. 5, the field of 26 com-petitors took off in the pre-dawn darkness and headed west toward Los Angeles. Earl Rowland was the 13th pilot to depart, and Clyde knew he would “give his all” to win the Class A Division for the Cessna Aircraft Company. Earl was doing exactly that – the pilot who reached Mines Field in Los Angeles with the lowest cumulative en route times would be declared the winner. As the race progressed westward, Rowland had built up a nine-minute lead over his closest competitor, Robert Dake, who was flying an American Moth biplane. At Kansas City Earl’s lead increased further, and when he landed at the next designated stopover point, Travel Air Field in Wichita, Earl maintained a substantial lead over Dake.
At Fort Worth Earl had more than a 30-minute advantage over Dake. Soon after departing there, the Warner radial began to run rough. As the engine’s condition seemed to worsen, Rowland could land in the desert or throw caution to the wind and keep flying toward El Paso while nursing the Scarab onward. He chose the latter. It was difficult to hold altitude as convention currents tossed the monoplane around like a cork in an angry sea. Finally, Earl landed at El Paso, but he had lost eight precious minutes to Dake. A Warner mechanic soon diagnosed the issue as ignition problems. He quickly replaced the faulty components and declared the Warner ready for action. Having solved one problem, however, another suddenly appeared – the left main landing gear tire was hissing its last breath as it settled to the ground, flat as a pancake.
The next morning heralded the final leg of the race to Mines Field. As the Model AW charged westward, Earl was happy that he maintained nearly a one-hour lead over Dake, but nine hours of hard flying lay ahead. Passing Yuma, Arizona, Earl climbed the ship higher to find cooler air. He had no mercy on the Warner, shoving the throttle full forward and keeping it there, just as he had throughout the race.
On Sept. 10, Rowland and his Cessna roared across the finish line at Mines Field. He had beaten Dake and won the Class A Division, as well as the first prize of $5,000. After parking the monoplane and exiting the cockpit, he was glad to see his friends Arch Merriam, H.G. O’Dell, Roscoe Vaughn and Marcellus Murdock, all of whom were representing the National Aeronautic Association’s Wichita chapter at the races. The four men congratulated Earl for a great victory that was not only his and that of the Cessna Aircraft Company, but of Wichita, too.
Including cash prizes for the lowest elapsed times between certain control points that earned Earl another $1,910, he eventually corralled $10,910 in prize money. Rowland’s achievement in the Derby vindicated Clyde’s belief that his full-cantilever monoplanes were among the fastest lightweight airplanes in the world. In the wake of Earl’s victory, the Cessna factory was flooded with orders for the Model AW as a testimony to the airplane’s impact on the growing commercial market. Within three days 60 letters were received and more would arrive for many days afterward.
On Sept. 20, Rowland and the Model AW arrived safely in Wichita where he received a hero’s welcome by an admiring public. Gala celebrations were held, including a 550-seat banquet held at the Hotel Lassen and attended by both Walter Beech and Lloyd Stearman. A few days later Rowland and the Cessna had flown east to New York City where he and the airplane were feted yet again; he performed some demonstration flights and attended various airport dedications. Meanwhile, back in Wichita, Clyde Cessna was given a rousing dinner by company employees at the Green Parrot Inn.
For Mr. Cessna, the sudden rush of fame was both a blessing and a curse – demand for airplanes, particularly the spunky Model AW, skyrocketed but the factory’s ability to meet that demand remained inadequate. The only solution was to refinance the Cessna Aircraft Company, build a new, much larger manufacturing complex and broaden the product line. The board of directors agreed, and by October 1928 plans were being drawn up to build a major facility on Franklin Road southeast of the city.
During October, scuttlebutt about the refinancing continued to fuel the rumor mill for weeks. Financiers from Chicago contacted Clyde and offered to capitalize the company with 2 million dollars if Cessna would move his factory to the Windy City. He refused but contact with various eastern financiers continued as 1929 approached. On Wall Street Cessna stock was trading at $150 per share. By comparison, before the Air Derby, stock was selling for a mere $10 per share. After months of uncertainty, January 1929 marked a fresh start for the Cessna Aircraft Company. Clyde announced plans for the new factory on Franklin Road and an agreement with The Shawmut Corporation of Boston and New York City. Shawmut officials had taken a long, hard look at Cessna’s enterprise and handed him a check for $300,000 to jump-start construction of the manufacturing campus.
The factory was sorely needed. Cessna dealers nationwide were experiencing a sales boom that was unheard of before 1929. Late in January they sent Clyde orders for 57 monoplanes, but the next month Curtiss Flying Service (CFS) of New York signed a contract for exclusive rights to sell Cessna ships in the United States and Canada. To sweeten the deal further, CFS placed orders for 39 monoplanes that swelled the total order backlog to 96 airplanes. There was, however, a catch: CFS stipulated that after orders from other Cessna dealerships were fulfilled, it would become the company’s sole distributor.
Groundbreaking ceremonies were held late in March for the factory. The complex would consist of six buildings totaling 55,000 square feet of floor space compared with only 18,000 square feet at the other facility, where 50 employees were working overtime in a vain attempt to meet delivery schedules. In addition to the new factory, Clyde Cessna unveiled the next generation of his cabin monoplane – the Model DC-6. It was a major improvement over the Model BW, which was no longer in production. Larger, with a spacious cabin and a redesigned cockpit, the DC-6 would have a maximum speed of 130 mph and cost $9,250. Unfortunately, the DC-6’s Achilles’ heel was its powerplant: Cessna’s agreement with CFS essentially obligated him to use the company’s six-cylinder Curtiss R-600 Challenger radial engine rated at only 170 horsepower.
As a result, the DC-6 was woefully underpowered and performance suffered accordingly. Only five were built and were delivered to CFS. Later, four were converted to 225-horsepower Wright J6-7 engines. Fortunately, Cessna engineers had already redesigned the DC-6 into the DC-6A Chief and DC-6B Scout powered by the 300-horsepower Wright J6-9 and the 225-horsepower J6-7, respectively, which increased performance significantly. The DC-6A had a maximum speed of 160 mph and a range of 600 statute miles, while the DC-6B cruised at 125 mph. Both versions were awarded an Approved Type Certificate in September 1929.2
In late summer 1929, a mass exodus of equipment and personnel was underway from the Glenn Avenue site to the new factory on Franklin Road. Production of the Model AW and a few DC-6-series ships had reached five airplanes per week, with 47 built during the past 90 days. When equipment was in place, Clyde Cessna expected production to ramp up quickly to at least two aircraft per day, increasing to four per day before accelerating to as much as 25 per week by the end of August. The stakes were very high, indeed, for CFS had placed orders for 545 monoplanes worth more than 5 million dollars, and deliveries were expected to be made on schedule. Although factory workers were turning out four monoplanes per day by August, Cessna estimated that six times that rate would be required to fulfill the massive order by the contract deadline of Oct. 1.
The Cessna Aircraft Company was not the only airframe manufacturer in Wichita being hard-pressed to deliver airplanes to impatient customers. As of June 1929, the Travel Air Company was struggling to build 50 biplanes and cabin monoplanes per week, and Lloyd Stearman’s company was building ships for airmail contracts at a feverish pace, not to mention Swallow, which was turning out biplanes for flight training as fast as possible. In addition, there were five aeronautical investment firms operating in the city as well as three airport engineering companies and one export business. By the summer of 1929, Wichita was home to 16 airframe and six engine manufacturers that were designing, building and selling their products to an aviation-hungry public. Investors had poured more than $10 million into the city’s aeronautic industry and the future looked incredibly bright.
At the root of all that success was the national economy. The “Roarin’ Twenties” had produced more than its share of millionaires, and Wall Street was abuzz daily with the reckless buying and selling of stocks. Even the average American could dabble in the risky business of investing, and millions of people did just that. As the summer of 1929 slowly gave way to autumn, there were growing signs of potential trouble ahead. The trading stocks slowly began to waver. Investors and speculators quickly lost their nerve to stay in the market, fearing irrecoverable losses. On Thursday, Oct. 24, an unprecedented selling spree occurred that led to a steep nosedive in stock values. The next week another wave of panic selling precipitated a colossal collapse in prices – the stock market had finally crashed.
As the days and weeks passed without any sign of a genuine recovery, every business in the nation began to feel the deleterious effects of America’s postwar love affair with financial irresponsibility. Aviation was among the first victims of the debacle on Wall Street. By November, the factory had delivered about 45 airplanes, and the bleak outlook for selling new monoplanes forced both Cessna and CFS to terminate their contract as of January 1930. Cessna stock plummeted to a mere $18 per share from more than $100 a year earlier, and in December fell to $12 with no buyers.
Wichita’s Christmas holiday of 1929 was anything but cheerful. The town’s big four airframe manufacturers – Travel Air, Cessna, Stearman and Swallow – were still recoiling from the disastrous financial events of October. Airplane sales continued their slow, downward spiral, but Walter Beech, Clyde Cessna and Lloyd Stearman continued to exhort their salesmen to sell, sell, sell! By the end of the year Beech was forced to lay off hundreds of employees, as did Cessna and Stearman, and Swallow cut its workforce by half. In addition, prices of new aircraft were falling almost as fast as the value of company stock.
Clyde knew that unless he could generate profits, the end of his dream was fast approaching. In January 1930 the company’s board of directors filed a petition in Wichita District Court asking that a receiver be appointed to handle the affairs of the nearly defunct Cessna Aircraft Company. Certain members of the board charged that Mr. Cessna was at fault, having mismanaged the business. In their opinion, he had inflicted a loss of $100,000 on stockholders despite having sold $750,000 worth of airplanes and more than $300,000 worth of stock.
In February Clyde received more bad news, although he was not surprised – The Shawmut Corporation withdrew its involvement with Cessna’s company amid its own desperate struggle to survive. In March 1931, the board of directors decided that because there were no profits to be made under the existing economic conditions, the factory would be closed and locked. Worse yet, any remaining employees, including Cessna himself, were eliminated from the company’s meager payroll. Only a watchman would be paid to patrol the facility day and night.
Clyde was stunned by the sudden turn of events. He had worked so hard to keep the doors open, but he was at the mercy of the stockholders who had to put an end to the torrent of red ink that was flooding the company’s books. In its short existence of less than three years, the Cessna Aircraft Company built and sold only 240 airplanes. His friends Walter Beech and Lloyd Stearman also suffered losses. The Travel Air factory was locked up tight, and Beech was relegated to a desk job with the Curtiss-Wright Corporation in New York City. Stearman would be forced out of his own company in 1932 and return to California to become president of the resurrected Lockheed Aircraft Company.
Just when all seemed lost, in 1933 Dwane Wallace and his brother Dwight, with help from their uncle Clyde, would wrest control of the Cessna Aircraft Company from the stockholders and design a new, much improved version of the venerable Model AW that would put new wings on Wichita.
Notes:
- During the 1928 Republican National Convention held in Kansas City during August, the Model AS was put to work transporting daily newsreel footage to St. Louis for distribution by the Pathe’ News agency.
- Only 22 DC-6A and 22 DC-6B were built before production ended in 1930. It is interesting to note that when Walter and Olive Ann Beech leased part of the defunct Cessna factory in 1932 to build the first Beechcraft, unused, welded fuselages for the Model AW, DC-6A and DC-6B were stored in the overhead rafters.
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