New-York tribune., 1921-03-06
Am. Telephone
Earned Sl1.7O
Share lin 1920
Net Income Included Gov.
ernment Rental for Seven
Months; Gross Revenues
W ere S440. .442.l15I
Assets Far Exceed Capital
Radio Telephone and Trans
mitting Stations Erected
ON the Atlantic Coast

The Bell telephone system is sin
gle nationwide system, and the Ameri-
can Telephone and Telegraph Company
is the parent company. The associated
companies are the successors of the
original licensees. The American Tele-
phone and Telegraph Company has the
widest distribution of stock ownership
of any corporation in America. having
13S, AIS stockholders at the end of 1920
The companies property was returned
to private operation in 1919, and in
1920 total operating revenues of the
combined companies amounted to $449.-
f42, ,115. Operating expenses and main
tcnance costs reached .617, and
.hc net balance after paying interest
charges, taxes, etc, available for divi-
dends was $47.7S5,065.
Detailed comparisons between 1919
and 1920 are not possible, because for
the first seven months of 1919 the
American Telephone and Telegraph
Company and subsidiaries were oper-
ated by the government, and the cor
porations' revenue consisted OF a fixed
rental. Keeping this in mind. net in
come available for dividends for the
entire calendar year 1919 amounted to
s51, ,957,565. Taking the American Tele-
phone and Telegraph Company alone,
however, there was S11.70 share avail
able for dividends in 1920. contrasted
with $10.10 q share in 1919,
The balance sheet of the American
Telephone & Telegraph Company, when
combined without duplication with the
subsidiary companies, shows the tinan-
cial condition of the Bell system. This
system has outstanding S511 ,493,407
capital stock. S213,571,750 mortgage
bonds, $164,396,100 collateral trust
bonds, roughly sS0,0o0,O00 convertible
bonds, $4,000 900 dcbentures and &c.,
100000 three and five year notes.
Against this it has a telephone plant
valued at 1858, ,826.327. In this con-
nection President Thayer says: "The
assets of the associated companies so
far exceed their capital securities out
standing) that per cent on their in
vcstment as a whole would produce
enough Ito pay 10 per cent dividends
with fair margin; no one of the asso-
ciated companies pays more than per
cent dividends"
Maintenance of the integrity of this
huge investment would appear to de-
pend, first, on fair treatment of the
company by the public authorities with
power to regulate its rates; second,
ability to keep within the system new
inventions and to develop old ,inven-
tions and methods, so that the Amer
lean Telephone & Telegraph Company
can always keep in the lead in the
science Of the transportation of verbal
or written messages; third, on the
maintenance of the vast human organ
ization required to operate the plan,
and. lastly, on the physical upkeep of
the plant, which is valued at $780,
100000.
The first OF these requirements is in
tangible, but students of the relations
between the public authorities and pub
&c utilities are fairly generally agreed
that the most important element in OBJ
tanning fair treatment rom public au-
thorities is to render satisfactory serv-
ice to the public. President Thayer
Says: "llardly a day has passed since
the organization OF the Bell system
which did not record somewhere in the
system some act that strikingly illus
trated spirit of loyalty to public serv-
zee. This thought of Service first is
more than devotion to an organization
inspiring as that may be. 1t comes
rom a sense of individual responsible
tv in the public service. This
type of loyalty is one of the finest ira
Gitions of the Bell system"
These remarks of President Thayer
are made in connection with comments
on the establishment of the Theodore
\. Vail memorial fund, the income
from which is to provide medals to be
awarded from time to time to en-
ployees for unusual acts of service
The problem of keeping in the van
as regards inventions has been one
to which the American Telephone e.
Telegraph Co. has given money and
time. The department of development
and research, including the labora-
tories of the Western Electric Com
pany employ about $500 people, of
which 100 are engineers, chemists,
physicists and other scientists. The
Western Electric Company is the sgb
sidiary which manufactures apparaNls,
etc, for the Bell system, and 90 per
cent of its stock is owned by the
American Telephone & Telegraph
Co. AS an illustration of what
the research department is doing: Two
experimental radio telephone trans
mitting and receiving stations have
been erected on the Atlantic Coast
and two ships running from -.oston to
Southern ports have been equipped
with apparatus. so that communication
tions on shore.
ProgresS has been made toward de-
vising a method whereby radio tele-
phone messages can be rendered secret.
and conversations have actually been
carried on by the American Telephone
and Telegraph Company's engineers
where ordinary receiving stations could
hear nothing but unintelligible sounds
while those stations equipped with spe-
cial apparatus and operation informa-
ton could hear and understand spoken
words.
What has been said about the estab-
lishment of the Vail Memorial Fund
illustrates what the company is at
tempting to do in the way of keeping
its human organization up to a high
standard. Another illustration is the
employees benefit fund established in
1918 and which has paid out s17,22S .aos
since the beginning of 1918 to en-
ployees. There were 455 employees on
the pension rolls at the end Of 1920. and
from this benefit fund are paid not
only. pensions but sickness allowance.
accident benefits and death benefits.
In 1920 the combined system spent
%69,665,0s0 for current maintenance of
plant and charged $65, ,07l for de-
probation. W.