Downfall and Death
His downfall lay in his failure to cut production and costs quickly in response to the slump of 1929 and 1930, which led to an insurmountable cashflow crisis. In 1930, he had declared a dividend of $7,800,000 which was five times the actual net profits of that year. In 1931, he paid a dividend of $3,500,000—also out of capital—a ruinous procedure which he unsuccessfully sought to correct through a merger with White Motor Company. Working capital had fallen from $26 million in 1926 to $3.5 million in 1932 and the banks were owed $6 million, for which they demanded payment. Studebaker defaulted and went into receivership.
Suffering from heart trouble and diabetes, ousted from his position at Studebaker, himself $350,000 in debt and his Studebaker stock now all but worthless, Erskine committed suicide on June 30, 1933 by shooting himself in the heart in his home on the south side of South Bend. He is interred at the Maple Hill Cemetery in Huntsville. Hendry added: "According to one account, the insurance companies duly and promptly paid all his debts and provided for his dependants".
Read more about this topic: Albert Russel Erskine
Famous quotes containing the words downfall and/or death:
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