Escape Artist

In Argentina's Government House, bigwigs crowded around a table in the glittering Salon Blanco. The Argentine Cabinet was there, along with U.S. Ambassador George Messersmith and President Juan Domingo Peron. But the star of the show was a private U.S. citizen with an outlandish name, Sosthenes Behn, razor-sharp president of International Telephone & Telegraph Corp. For the third time in five years, he was giving U.S. businessmen a lesson on how to liquidate foreign investments at a profit.

When the paper signing was over last week, Argentina owned the United River Plate Telephone Co., Ltd., I.T. & T.'s largest operating subsidiary. And Behn had been paid his price of $95 million in U.S. money (I.T. & T.'s original investment: some $85 million). I.T. & T. also got a ten-year contract to furnish technical advisors, and exclusive rights to supply its former subsidiary with equipment.

Argentine newspapers approved the deal, but one grumbled that the price was "exorbitant." Foreign investors, who had seen the Peron Government seize one British-owned utility and threaten to expropriate the rest, breathed easier.

A Jump in Time. It was not the first time that quick-moving Sosthenes Behn had been one jump ahead of expropriation. In January 1941 I.T. & T. had sold its Rumanian subsidiary to the Rumanian Government for nearly $14 million in American dollars, a profit of nearly $2 million. Only a few days later, Germany had control of Rumania.

In Spain, I.T. & T. weathered the Spanish civil war chiefly because Sosthenes Behn lived in the much-bombed I.T. & T. building all through the siege of Madrid. When the Loyalists announced that they were going to blow up the building before evacuating the city, Behn calmly informed them that he and his staff, including 6 U.S. citizens, would be meeting in the building at the time set for the blast. Rather than antagonize the U.S., the Loyalists spared the building. Last year, Behn disposed of the company to the Franco Government for $88.1 million in Spanish Government bonds and cash.

Despite these profitable sellouts, I.T. & T. is not abandoning the telephone field abroad. It still has telephone operating subsidiaries in eight countries (including a small company in Argentina) and manufacturing companies in 15. Says I.T. & T.: the company "is following a realistic policy of bowing to nationalistic tendencies . . . and is finding friendly across-the-table solutions rather than prolonged expropriation fights."

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