Telephone Boom

American Telephone & Telegraph consolidated earnings for the first quarter (ending Feb. 28) jumped to $63,165,413—22% over 1940. This was $3.38 a share, but stockholders (whose dividend stays $9 in good times and bad) were cautioned that costs may soon overtake rising profits.

Main reasons for peak earnings: booming business has brought a 25% increase in toll calls and so many new subscribers that the year's gains may reach 1,500,000 phones—up 50% over the previous record year's rise. To handle all this added business, President Gifford announced plans to spend $400,000,000 (up almost 40% over 1940) for new equipment this...

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