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The dirigible "Toledo III" was constructed at Los Angeles during the winter of 1905-06. This type of dirigible, with elevator controls, was found to be one of the most successful types, as absolute control was possible without leaving the seat in the framework. The first flight, lasting 20 minutes, was made within the enclosure of a base-ball park. Another flight was made to the foot of Mount Wilson, a distance of 24 miles. It was a spectacular flight in those early days of aviation.

In 1906, Knabenshue returned to Toledo and flew the "Toledo III" at the Ohio State Fair. After circling the racetrack three times, the dirigible was able to return to its starting point at its hangar tent near the Agriculture Building on the fairgrounds. During this Fair, Knabenshue also flew from the fairgrounds over downtown Columbus. Passing over the Neil House, he landed on the Capitol grounds, a distance of over 3 1/2 miles. Knabenshue made a call on Governor Harris, after which he made a safe ascent from the grounds and returned to the Fair. His longest flight at the Fair was one of 1 hour 32 minutes duration and the dirigible was able to return to its starting place. Knabenshue also flew in the Brockton Fair and in the Brighton Fair that year.

Even with his success with dirigibles, Knabenshue  became increasingly interested in the possibilities of using airplanes in exhibition work. Because of his curiosity about everything pertaining to aeronautics, he subscribed to a press-clipping bureau which sent him anything found about aviation. In this way, he read an item or two about the Wrights, who it claimed had  flown

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