Mr. Behn Reports

For 17 days in a row, every time the New York Stock Exchange was open for business, the shares of International Telephone & Telegraph Corp. were among the ten most active stocks on the ticker. One day last week I.T. & T. hit 12 1/4, its high for the year and almost double the 1943 low. That was a few days after the company's annual report proved that the foresighted buyers, who got aboard when the stock was at 9, were right as rain.

Profit & Loss. I.T. & T.'s report showed consolidated net earnings for 1942 of $2,142,545 v. a $193,218 loss in 1941. The debt-ridden parent holding company still showed a net loss of $1,021,537 v. a $2,568,862 deficit the year before. After three years of a war which seemed to be conducted on the principle of overrunning I.T. & T. properties one by one, the 39-page report showed that just about every thing bad that could hit the company had already hit. The only way for I.T. & T. to go was up.

But the most significant thing about I.T. & T.'s income figures was what they did not include. First the profit-&-loss account omitted all income from American Cable & Radio, two-thirds owned since 1940 by I.T. & T. Yet in the first nine months of last year American earned $611,000 and this year should do better. With U.S. Government help, American has broken R.C.A.'s radiotelegraph monopoly in Russia, Algeria and the British Empire. Second, I.T. & T. listed no income that was not "received or available in U.S. dollars."

This blanket conservatism was proper enough. But it understated the long-term outlook for some of the company's juiciest properties. I.T. & T. has poured $62,000,000 into Compania Telefonica Nacional de Espania, famed in the Spanish Revolution for its indestructible Madrid office building.* Telefonica has been doing all right, although not for its parent. The state of I.T. & T.'s $40,000,000 investment in the European properties of International Standard Electric is more obscure: its manufacturing plants in Denmark, Norway, Holland, Belgium and France are now presumably working for Hitler. But the prospects when peace comes are all on I.T. & T.'s side of the ledger.

War & Peace. For such reasons Wall Streeters have touted I.T. & T. as a peace stock. But Sosthenes Behn, I.T. & T.'s almost legendary president, has good reason to regard it as a war baby too, since his two-year-old plant in New Jersey is 95% engaged on Government contracts. Urbane, hawk-nosed, 61-year-old Sosthenes, who got his name from the Greek word meaning "life strength," was born in the Virgin Islands, of French and Danish parents. Schooled in Corsica and Paris, at 19 he was an up-&-coming banker in Manhattan, grew a luxuriant beard to disguise his youth. While on a trip to Puerto Rico the local telephone company almost fell into his lap. He went into the telephone business, in 1924 got King Alphonso of Spain to contract for I.T. & T. telephone service in Spain. Last week cosmopolitan Mr. Behn reported that seme 61% of I.T. & T.'s assets are in the Americas (mainly Argentina, Chile, Mexico and Cuba).

Anyone who cared could add the facts up for himself: the war has left I.T. & T. already well in the black, and peace should mean high doings everywhere, from Hungary to Java, for Mr. Behn and his I.T. & T.

*As Madrid's only real skyscraper and as G.H.Q. for the Loyalists, the building was much battered by Franco, who has since restored it thoroughly.

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