Due to the impact the Great Depression had on all of America in the 1930s, Cragmor owner and head physician Dr. Alexius M. Forster was forced to file for Bankruptcy. Cragmor has taken a huge financial hit and struggled to keep staff and the doors of Cragmor open. In addition to the financial hardship, a patient whom tripped and fell down the stairs was suing Cragmor, ending any chance they had to stay open. The boom of the 1920s was no longer the picture of Cragmor.
 

Mr. Robert Rhea, a prior patient of Cragmor Sanatorium and influential businessman, devised a plan that would relieve Forster of the debt and continue to keep Cragmor Sanatorium open. Rhea was able to bailout Cragmor and save it from foreclosure and an early grave, but he did so with new expectations of the facility. Cragmor no longer was allowed to only “cater to the wealthy”, but became a non-profit foundation in which patients of all backgrounds would be allowed in to seek treatment for Tuberculosis and other ailments.
 

In 1936, the process set in place by Robert Rhea was complete and the Cragmor Foundation created. Cragmor opened its doors again for patients as a restructured facility that caters to the general public, thus removing the legacy envisioned by Dr. Edwin Solly in the early 1900s of being a facility that caters to those with means and social standing. Dr. Forster was kept in charge and was still responsible for his duties, but now he answered to a board of directors.