A. T.&T. Rings the Bell

On the New York Stock Exchange, American Telephone & Telegraph, which normally creeps up and down in fractions of points, last week jumped 7 3/8 points in a few hours to an alltime high of 103 1/2. So many buyers were after the stock that the Stock Exchange had to suspend trading for 15 minutes.

All this excitement was caused by an announcement from President Frederick R. Kappel that the company would raise the annual dividend to $3.60 a share, from $3.30, effective in July. It was the second increase in two years, after the company had gone for 37 years without touching its dividends. Furthermore, Kappel announced that in February each shareholder will be given the right to buy one share of stock for every 20 held. He did not say what the price would be; but judging from Telephone's past performance on such offerings, it will be at least $20 below the going market.

The cash will help pay for the near-record $2.5 billion A.T. & T. plans to spend on expansion next year, more evidence to Wall Streeters as to why A.T. & T. is now considered a growth stock. For almost four decades, even though the company expanded steadily, its stock was considered more like a bond, an investment for widows and orphans who needed steady, unspectacular income. When dividends were raised for the first time, investors took a second look, saw that the company was riding the crest of the population explosion, new automation techniques and space-age electronics.

A.T. & T. cannot help growing at a hurry-up pace. The number of Bell System phones in use has risen from 49 million in 1956 to 60.7 million in 1960. Nearly 3,000,000 were added in 1960 alone. Furthermore, A.T. &T. is ideally suited to benefit from automation. In four years, it cut labor costs from 45-c- out of each income dollar to 37-c-. Profits are expected to reach $5.50 per share for 1960, a healthy increase from $5.22 the previous year.

While phone use continues to-grow, automatic long-distance dialing is coming along to cut costs even further. In addition the company is developing new uses for its products, e.g., Data Phone, which enables business machines to exchange information over its regular phone circuits. And from Bell Telephone Laboratories, the most advanced research facility in the world, comes an outpouring of new ideas. Some of the latest: pocket radio-telephones that will connect with any place in the world; communication satellites to instantly relay messages around the globe.

This file is automatically generated by a robot program, so reader's discretion is required.