T. & T. News

American Telephone & Telegraph Co. and the Bell System last week proudly announced the greatest twelve-month profits in their 65-year history. The system's total: $339.5 million ($12.44 a share on A.T. & T.'s common stock), an increase of 52% over the previous twelve months. Four days later, the Federal Communications Commission, which had been looking over A.T. & T.'s records, was not so pleased, said A.T. & T.'s subsidiaries might be making too much money. FCC said that on long-distance and overseas calls, on which it controls the rates, Bell had earned 6.08% in 1949 and was earning at the rate of 7.32% in 1950 on invested capital--and the trend was still up. FCC ordered an investigation of Bell's rates on long-distance and overseas calls, to begin in April. If Bell can't prove before then that its long-distance rates are not "unjust and unreasonable," FCC will cut rates pending the outcome of the investigation.

A.T. & T. was amazed at FCC's order. Said Vice President H. T. Killingsworth, in charge of long lines: "It's difficult to believe the commission has taken such action in the face of ... [increased defense demands] for communication service." As if to illustrate what he meant, A.T. & T. last week put on sale $415 million in bonds to pay for a new expansion program.

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