War Victim

Since 1920, with a nudge or two from its bankers, J. P. Morgan & Co., and the friendly encouragement of well-wishers like American Telephone & Telegraph Co. and ex-King Alfonso of Spain, International Telephone & Telegraph Co. has installed nearly 1,000,000 telephones in ten countries. Assets on its books tot up to $537,000,000 and once in 1929 its common stock sold for $149.25 a share, 49 times earnings. Last week it sold for $6.75 a share, six times 1938 earnings, and in his annual report I. T. & T.'s amiable President Sosthenes Behn described the hardships of international capitalism.

In 1937 I. T. & T. netted $10,236,000. Last year, although its gross business rose some $4,000,000, its net fell to $7,039,000. Reason: I. T. & T. took a $3,561,479 loss on foreign exchange, for many good sound I. T. & T. earnings in foreign currency turned out to be pin money when translated into dollars.

I. T. & T. has $67,000,000, about one-eighth of its assets, invested in Spain. In 1935 they earned a tidy $2,600,000. But for the last two years President Behn has had to leave Spain out of his income account. Last week, he laconically reported: "The extent of damage to the properties has not yet been ascertained, but reports received indicate that a high percentage of the 346,000 telephones in service at the beginning of the civil war still remain in service."

Though I. T. & T.'s Madrid headquarters was a favorite target for two years of bombardment, this is not an unlikely estimate. In any war, army engineers have good reason for taking care of the telephone system, and once hostilities are over, business can quickly revive. Last week, Mr. Behn pointed out that I. T. & T. has not only recovered its net loss of 10,525 telephones during the fighting at Shanghai in 1937, but gained 7,335 more.

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