Hail to the Chiefs

Every chief executive takes pleasure in delivering good news to his stockholders--and the opportunity has rarely been better. Last week, in the largest concentration of the year, more than 100 U.S. companies held their annual meetings. The reports were overwhelmingly bullish, and many corporate chiefs echoed the forecast of Du Pont Chairman Lammot du Pont Copeland: "Our sales for 1964 will reach a record."

"Strong Markets." In Washington, another chief executive watched all this and happily brought forth some statistics of his own. Looking like a prosperous chairman of the board, Lyndon Johnson began his first formal TV press conference by announcing that the gross national product had scored its highest year-to-year gain in two years, rising $8.5 billion during the first quarter to an annual rate of $608.5 billion. Progress was being made in cutting back unemployment, and labor had gained more than 4,000,000 jobs since early 1961. Johnson did not mention it, but the Federal Reserve just the day before had reported that industrial production in March set a record for the fifth straight month, rose from 127.7 to 128.2 for the sharpest gain since October.

The President tempered his good news with a warning to businessmen not to begin a new round of inflation. "With strong markets, with steady costs, with lower taxes, American business does not need higher price levels to assure continued growth and profits." Later in the week, he suggested that businessmen might even cut prices in some fields, "to give us," as he put it, "the best mousetrap at the lowest price." Chief Economic Adviser Walter Heller repeated the President's warning against price rises, urged labor leaders to avoid asking for excessive wage demands if they "do not want the blame for restarting a wage-price spiral." He also repeated his prediction that G.N.P. will hit $623 billion for all 1964, adding that most economists are "at least this optimistic."

Quickened Demand. So are the businessmen, even though a couple of other economic indicators--housing starts and orders for durable goods--have been declining. At the week's biggest annual meeting, where 4,411 of American Telephone and Telegraph's 2,350,000 shareholders met in a chilly Bronx armory, Chairman Frederick R. Kappel announced that A.T. & T. had installed 750,000 telephones in the first quarter and is experiencing a "quickened" demand. Kappel had better reason than most to be enjoying the business climate. To raise $1.2 billion of the $3.3 billion that it will spend this year to grow and modernize--an alltime high for any company--A.T. & T. recently gave its investors a chance to buy an additional 12,241,000 shares, at the same time increasing the yearly dividend on the present shares from $3.60 to $4 and declaring a two-for-one split effective in June. Stockholders responded with a remarkable show of faith in a company that speaks for so much of the U.S. economy. Three out of five of them bought the extra shares that they were entitled to, Kappel said, and the greatest offering in U.S. business history was almost fully sold out.

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