Just as the American aviation industry started to grow in the wake of ground-breaking government legislation and Lindbergh's transatlantic flight, the stock market crash of October 1929 and the Great Depression threatened its continued existence. The newly formed Hamilton Standard Propeller Corporation, suffering from dwindling military and commercial contracts, scrambled for a new product to sustain itself. Chief engineer, Frank Caldwell, designed a hydraulic two-position, controllable-pitch, or hydro-controllable, propeller that promised to increase Hamilton Standard's place in the aviation marketplace. His new propeller used the engine's oil supply and centrifugal force exerted by counterweights to keep the blades at the desired pitch during flight. Eugene E. Wilson, the president of Hamilton Standard, knew instantly the propeller was an innovation the corporation desired and was looking for, which in his words, was “the answer to a maiden's prayer.” He enthusiastically supported the development of the two-position, controllable-counterweight design, which was an extreme financial undertaking during the Great Depression. The innovation was both an investment in the further improvement of the airplane and the financial fortunes of the company.

The creation of an industrial propeller community within the context of the emergence of the modern aviation corporation in the late 1920s made the variable-pitch propeller possible. Overall, from the end of World War I to the mid-1920s, the foundation of the American aviation industry changed from one that traced back to individual pioneers such as Wilbur and Orville Wright and Glenn Curtiss to one based on a mainstream American corporate model characterized by heavy Wall Street involvement. The modern variable-pitch propeller required the necessary managerial, financial, technical, and personnel infrastructure that only a corporate environment could provide, but that in turn meant the innovation had to have the potential for financial success. An understanding of that vital interrelationship is crucial to a broader understanding of the development of aeronautical technology in the 1920s and 1930s.

The momentum begun by government aviation legislation and the technical and symbolic success of Lindbergh's transatlantic flight contributed to the creation of modern aviation corporations in the United States in 1929. The struggling aviation industry, a collection of small businesses catering to a limited specialty market, underwent a period of rapid growth marked by consolidation into corporations with impressive financial, technical, and managerial resources.