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Almost alone among U.S. companies of its size, American Express is still an unincorporated association (though all foreign operations are handled by a wholly owned incorporated subsidiary). Since stockholders are thus technically liable for its debts, the company has always handled its investments with spinsterish conservatism: all but 6% of the millions in its kitty (Jan. 1, 1955 total: $460 million) is invested in gilt-edged securities and bonds. American Express earned only .16% on its $3.4 billion worth of banking and travel business in 1955. But investment income hiked the net to $5,400,000. Dividends have risen steadily, from 51¢ a share in 1950 to $1.15.
Jet Age Weekend. To boost company revenues, as well as to speed travel, Reed cultivates most of the top businessmen and Government officials in the U.S. and abroad. One postwar venture for the company was suggested by President Eisenhower, with whom Reed occasionally plays golf. Europe-bound on the Queen Mary in 1946, Reed was called in by Fellow Passenger Ike, who suggested that American Express could set up recreation, banking and sightseeing services for U.S. occupation troops. As a result, American Express now operates 115 overseas offices and 54 mobile units for G.I.s, has 30 agents to handle sailors' tours ashore.
While more Americans than ever are going abroad and spending more, Reed constantly badgers U.S. and foreign governments to increase the bonanza by cutting passport and customs red tape. "Visas and other certificates and fees cost as much as $147," says he, "or 10% of the cost of the transportation for a trip to eleven countries." Reed points out that the 0.5% of disposable income spent by U.S. tourists on foreign travel has decreased from the 0.8% peak in 1929. But as travel becomes faster and cheaper, he predicts, foreign countries will lure more than 2,500,000 U.S. tourists a year by 1960, an increase of 50%. Says Reed: "American Express is already planning the jet age weekend in Europe."