Telephone Earnings

Nearly 700,000 stockholders were pleased last week by a letter they received from Walter Sherman Gifford. As president of their American Telephone & Telegraph Co. he was able to tell them that in 1936 their company had earned full dividends on its common stock for the first time in five years. Since 1930 this $5,000,000,000 enterprise has maintained its $9 annual dividend only by dipping freely into surplus. The number of Bell telephones in service dropped from a peak of 15,500,000 in 1930 to 12,700,000 in 1933, earnings from $12.57 per share in 1929 to a low of $6.52 in 1934.

Last year despite the Federal Communications Commission's investigation and resulting long distance rate reductions (TIME, June 8), A. T. & T. showed $9.35 per share. The Bell System as a whole took in $994,000,000 from operations, about two-thirds on local service, one-third on long distance. Other income amounted to $28,864,000, contributed largely by Western Electric Co., the equipment unit. Meantime the number of telephones had climbed back to within 740,000 of the all-time high. The year, wrote President Gifford, had been one of progress "in which the public, the employes and the stockholders all shared."

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