• U.S.

CORPORATIONS: Revolt in I.T. & T.

2 minute read
TIME

As founder and ironfisted boss of International Telephone & Telegraph Corp., Cosmopolite Colonel Sosthenes Behn built a $603 million communications empire that stretches from New Zealand to the Americas to Sweden. With 29 manufacturing companies scattered through 20 nations, Behn was still not satisfied. Since World War II he has put I.T. & T. in the consumer-goods business, now turns out such items as Capehart-Farnsworth radio & TV sets and Coolerator refrigerators, in addition to a broad range of microwave, switchboard and other communications equipment. But in Behn’s empire all was not well. Last week Behn discreetly announced that he was turning over the operating reins to Major General William H. Harrison, president since 1948, though Behn would remain as chairman.

The announcement did not tell the whole story. Behn, who owns only 17,000 shares, had apparently been squeezed out in the culmination of a fight for control of I.T. & T. that started in 1947. At that time Manhattan Millionaire Clendenin Ryan made a play for the throne, complaining against Behn’s one-man rule and the fact that the company had paid no dividends in 14 years. Ryan succeeded in getting seven directors on I.T. & T.’s 23-man board before he gave up the fight (TIME, Jan. 5, 1948). Last March these directors, plus others who have fought Behn, set up an executive committee, began to nibble away at Colonel Behn’s power. They thought that Behn was out of the country too much, and should not have gone into consumer goods in the first place. Chief power-nibblers among the old Ryan groups: Alleghany Corp. President Allan Kirby, financial partner of Robert R. Young (see above); New Mexico Publisher Robert McKinney, a cousin of Bob Young; ex-Governor Charles Edison of New Jersey; Chairman Arthur M. Hill of Greyhound Corp.’s executive committee; and Houston Oilman George Brown.

In Manhattan last week, these five and four others on I.T. & T.’s executive committee persuaded the board of directors to change the company’s bylaws, clipping Behn’s powers and putting top control in the hands of the executive committee. While General Harrison will be nominal boss, the executive committee will run the show. It will not try to expand I.T. & T.’s consumer-goods line, instead will concentrate on I.T. & T.’s transmission equipment and other industrial products, in hopes of cashing in further on the new electronics age.

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