Page 26 - Volume 12, Number 7

Air racing! Cessna monoplanes won their share of prize money in the high speed, ground-hugging competitions that were popular in the late 1920s. This photograph shows a Model AW rounding a pylon while flying about 15 feet above the ground in a
steep bank.
(ROBERT PICKETT COLLECTION/TEXTRON AVIATION)
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
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24 • KING AIR MAGAZINE