A. T. & T.

This week some 332,000 employes of the American Telephone & Telegraph Co. (the Bell System) were celebrating the 50th anniversary of the invention of the telephone./-

Last week they had heard their new President (quiet, deft Walter Sherman Gifford) announce with pleasure that 57,000 employes* (with an average of 10 shares each) would share with the 362,179 shareholders of the company in the $107,405,046 net profits of 1925. This amounts to $11.79 a share on the $911,181,400 average stock outstanding, against the $11.31 on the $805,145,900 of 1924. The company's business has been prospering steadily. Gross income in 1925 was $180,458,912 against $154,082,836 the previous year. Dividends at 9% just declared total $81,044,426, against $70,918,227 in 1924. Six million dollars was set aside for contingencies, and into surplus went $20,360,620 ($17,128,094 in 1924)./-/-

These figures are for the American Telephone & Telegraph Co., a corporation which owns all or a majority of the stock of some score and a half of subsidiary and affiliated concerns: New England T. & T., Southern New England Tel., New York Tel., Bell Telephone of Pa., Chesapeake & Potomac Tel. (N. Y.), Chesapeake & Potomac Tel. of Baltimore, Chesapeake & Potomac Tel. of Va., Chesapeake & Potomac of W. Va., Cumberland T. & T., Ohio Bell, Cincinnati & Suburban Bell (29%) Michigan Bell, Indiana Bell, Wisconsin Tel., Illinois Bell, Northwestern Bell, Southwestern Bell, Mountain States T. & T., Pacific T. & T., Bell Tel. Laboratories, Bell Tel. Securities, Bell Tel. of Canada, Central Union Tel., Cuban-American T. & T., Western Electric (almost exclusive manufacturing agent), 195 Broadway Corp., 205 Broadway Corp. Portions of their individual earnings go to the profit of the parent corporation.

A. T. & T. stock holdings in these companies now aggregate $1,027,448,629 ($991,834,103 in 1924). Total assets on the parent company's books show $1,645,565,373 ($1,478,147,221 in 1924). Over this vast system presides a comparatively young man--Walter Sherman Gifford. When he was graduated from Harvard in 1905 he became Assistant Secretary and Treasurer of the Western Electric Co. at Chicago. The Bell System for years has been encouraging alert college graduates to enter its organization. Thorough courses in telephonic practices are at the disposal of everyone. Students advance as their abilities mature. No cliques of office politics hamper promotion. So after three years Mr. Gifford became Chief Statistician for the parent corporation, the job he held until 1916, when he went into War work. He became Supervising Director of the Committee on Industrial Preparedness of the National Consulting Board, Director of the U. S. Council of National Defense and Advisory Commission, Secretary of the U. S. Representation on the Inter-Allied Munitions Council. After the War he returned to his A. T. & T. statistical work, soon became a Vice President. In 1919 venerable Theodore N. Vail,** once working superintendent of the Railway Mail Service, his presidency to Harry Bates Thayer, then a Vice President and Director. Last year Mr. Thayer was made Chairman of the Board, and Mr. Gifford, at 40, was made President.

In his report Mr. Gifford noted that the Bell system now has 12,720,000 telephones installed. This figure mounts to 16,720,000 when counting the installations of independent companies that connect with the Bell service. Use of automatic telephones increased 50% during 1925, from 969,000 in 1924 to 1,496,000. The automatic seems the only relief for telephone congestion in the great cities. Subscribers dial their wanted numbers. Automatically connection is made, if the called number is also an automatic. Otherwise the caller dials for a "manual" operator who plugs in on her switchboard. Changing over from "manual" to automatic service involves millions of intricacies, intricacies whch the Bell field forces handle with scarcely a pause or inconvenience to users.

The institution of telephone usage was a difficult, slow affair. Alexander Graham Bell had been jiggling with a contraption he was determined he would make carry the human voice when his assistant Thomas A. Watson suddenly, clearly heard: "Mr. Watson, please come here. I want you." To this phrase there was no dignity as that attached to "What God hath wrought!" the first intelligible phrase carried over Samuel F. B. Morse's first telegraph. But the two young men were so jubilant in their cheap Boston lodging house that their landlady threatened to oust them. For money to install his new invention and to give it proper publicity Bell was obliged to go lecturing. In Manhattan he got Charles A. Cheever and Hilborne L. Roosevelt to sink $18,000 there. The Western Union fought them, blocked them from going into hotels and railroad stations, where quick communication has always been wanted, profitable. (This early hostility has long given way to present comity.) The telegraph company got Thomas A. Edison to work out a rival means of telephoning. The two Manhattan men were glad to sell out to the parent Bell company. Young Theodore N. Vail came in as General Manager, got supporting money from his friends, fought to vast success.

In 1877 the company had only one paying subscriber in Manhattan. In 1878 a single card sufficed for a directory, which carried not numbers, but names, of which there were only 252. Last year there were about 1,500,000 telephones in New York City alone. Subscribers make 6,784,844 calls daily through 151 exchanges with 19,000 operators. This is more than in all England.

Patent monopoly of the Bell telephone endured for 17 years. Then independent companies immediately sprang up. The Bell system fought them ruthlessly for years. But local support kept them going, expanding. They formed national organizations, gave a tolerable toll service, far inferior to that of the Bell. Competition stimulated the use of phones. All companies that were fairly efficient made money. In 1912 a sort of peace was worked out between the rivals. The Bell began to give long distance service to Independents. When an Independent was bought out facilities. At present there are 8,200 Independent exchanges still existing in the U. S. They form the U. S. Telephone Assn., with F. B. McKinnon as President.

/- Alexander Graham Bell developed the telephone into a practicality in 1876.

*Stock was sold them at $121 and under. At $125 a share 160,000 others are buying A. T. & T. stock on partial payments. This accords with the company's policy of radiating its public support.

/-/-Contingency and surplus funds equal 1 1/3 on investment, less than one cent a day for each telephone served.

**Died 1920.