The Wright Aeronautical Co had its roots in an earlier company, The Wright-Martin Aircraft Corporation. This company was formed in 1916 to manufacture the French water-cooled Hispano-Suiza engine under licence, which it did with some success. In 1919, most of the assets of the company were disposed of to the manufacturer of Mack Trucks, but a portion amounting to $5.5 million was used for the formation of the Wright Aeronautical Corpn., although not all the $5.5 million was actually used as capital for the new company: $3 million was a contingency reserve against liability claims against Wright-Martin, and $0.5 million represented undistributed net assets of Wright-Martin, so the actual operating capital was about $2 million.
The new company continued with the Hispano-Suiza engine production, the 718 cu in 180hp 'E' model being in production at the time of the formation of the new company, and the larger 1127 cu in 300 hp 'H' type was ready for production.
In 1922, the Lawrance Corporation was in the happy position of having received a contract (in 1921) for its J engine, but had little in the way of facilities for series production.The Navy wanted to see more competition in this class of engine, but neither Curtiss nor Wright were interested in producing a competing engine in so small a size of engine (200hp) Wright was approached by Lawrance to manufacture the engine, and Richard F. Foyt, chairman of Wright advocated the purchase of the Lawrance Company outright. This view was opposed by F.B. Rentschler (president) who did not believe that Lawrance could produce sufficient engines to affect the market for the Hispano-Suiza 'E' engine, production of which was producing good profits for Wright. All of the current facilities at Wright were fully occupied with production of the 'E' engine and development of the new 'T' and 'R1' engines. In 1922, Wright therefore declined to produce the J1 engine for Lawrance, and also to develop a competing engine range for the Navy.
The Navy however had ideas of its own, and it increased the orders for the Lawrance J-1, while informing Wright that it would no longer buy the Hispano 'E' engine and the 'H' which had been developed from it. All Army fighters were to be powered by the Curtiss D-12, which meant that Wright were in a bit of a blind alley. At a stroke, this forced Rentschler into a move which was later to become part of the beginning of the break-up of the Wright company. In May 1923, Wright paid $500,000 for the Lawrance Corpn., and C.L. Lawrance became vice-president of Wright. Wright took over production of the J engines in its own plants. The subsequent engine which was to firmly establish Wright in the radial engine field was the J-4 or Whirlwind.
Rentschler had decided that he had had enough, and with backing from James K. Cullen, he formed a new company, Pratt & Whitney Aircraft Company, taking with him senior Wright Aeronautical staff.
Wright went on to merge with Curtiss in 1929, forming the Curtiss-Wright Corporation.