Corporations: The Bell Is Ringing

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and TV pictures (most network TV programs are transmitted over A.T.&T.'s telephone lines), A.T.&T. is reconnoitering the frontiers of technology and expanding man's inventory of knowledge. It built Telstar in its labs, and will play a major role in the new Comsat Corp., which plans to ring the earth with communications satellites within two or three years. This fall it will start laying a fourth cable to Europe beneath the ocean, and last week it completed the first telephone cable to Japan. In typically prudent fashion, the telephone company is preparing for just about any eventuality: late this year it will finish a $200 million underground cable across the U.S. that will be able to carry important calls even if all above-ground wires are destroyed in a nuclear attack. It is also developing a wide array of new equipment, including pushbutton phones, which have just gone into use in 35 cities, and a new electronic switching system so swift that it will be able to handle 1,000,000 telephone calls between two ticks of the clock.

Two weeks ago A.T.&T. announced that it will soon cross yet another frontier in technology: it will put into public operation the world's first see-as-you-talk Picturephone service. Already on view at A.T. & T.'s pancake-shaped pavilion at the World's Fair, the Picturephone will go into service next month in public booths in New York, Chicago and Washington, offer service between those cities to people who are willing to pay rates that will range from $16 to $27 for three minutes. Whereas the regular phone uses only one circuit, Picturephone in its current stage needs the equivalent of 125 of them—for the 125 hair-fine lines on its tiny TV screen. With confidence that this problem will be solved, A.T.&T. sees a bright and profitable future for its latest device.

Even more exciting than the see-as-you-talk phone to the nation's businessmen and economists is the impact of A.T.&T.'s spend-as-you-grow plans. As proof of its faith in the economy, A.T.&T. in 1964 will undertake the largest program of expansion and modernization ever launched by any company in history. The $3.35 billion that the company will spend will account for 71% of all capital spending by U.S. business, create 180,000 new jobs in supplier companies and do much to keep the U.S. economy's greatest period of peacetime expansion going strong.

Blank Checks. To get more than a third of the money it needs, A.T.&T. went to its usual source of cash: that most democratized group of capitalists, its own stockholders. The company floated history's largest stock issue, 12,241,294 shares, and gave first crack at the issue to its shareholders on a 1-for-20 basis. Openly trying to make the stock even more attractive, Fred Kappel announced an increase in the yearly dividend from $3.60 to $4 and a 2-for-1 split that next month will raise the total to 512,000,000 shares. Stockholders gobbled up almost the entire issue, and thousands sent the company blank checks in an unprecedented show of confidence, asking A.T.&T. to fill in the cost of whatever they could buy.

More shareholders have placed their savings and hopes in A.T.&T. than in any other corporation. It is a haven for 2,350,000 investors, many of whom are untutored in the nuances of high finance but feel certain that the nation's