Studies in securities

Bibliographic data

Monograph

Identifikator:: 1757542078

URN:: urn:nbn:de:zbw-retromon-134903

Document type:: Monograph

Title:: Studies in securities

Edition:: Revised

Place of publication:: New York

Publisher:: Jas. J. Oliphant & Co.

Year of publication:: 1927

Scope:: 81 S.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: American Telephone & Telegraph Co.

Collection:: Economics Books

STUDIES IN SECURITIES 7% or 8%, the basis for Telephone’s rates and dividend looks to be solid. Explanation of the difference in earnings rate on the property and on the stock of course lies in a system capital structure of $921,523, - 000 funded debt, 81% of which bears 5% or lower interest, $1,263,- 703,000 stock, $109,660,000 of which being preferred receives fixed dividends, and $839,982,000 surplus and reserves, bulk of which represents earning assets additional to the par value of the stock. Totals include $385,190,000 bonds, $1,064,328,000 stock, and $291,- 095,000 surplus, reserves, and stock premium realized, of American Telephone itself. As center of the system, American Telephone owns over 90% of the equity in the twenty-four regional Associated Companies, which be- ginning 1927 owned and operated 12,816,000 telephones and con- nected with 4,758,000 more, such as in rural lines, and which the parent company co-ordinates and finances; also, it owns over 98% of Western Electric Co. stock, the business of this company being 90% the supply of Bell equipment to the system, and jointly the two companies conduct the great research laboratories; further, American Telephone itself operates the long distance lines, includ- ing the new transatlantic radiophone and picture transmission in this country. Besides dividends from subsidiaries and interest on loans, Ameri- can Telephone receives a fee for services including the supply of telephone instruments which, as included in operating expense by different companies, has occasionally proved a political target in rate discussions. This charge beginning 1926 was reduced from 415% to 4% of gross revenues and total amount of $29,850,000 in the year is estimated to have just covered actual cost. Likewise during 1926 an adjustment of long distance tolls voluntarily re- duced revenues $3,000,000 annually. All in all the rate situation of the Bell properties is satisfactory and some reductions are prob- able where new operating economies warrant. A dollar received for telephone service has been divided for actual traffic expenses and for dividends and surplus, these being the principal varying items, roughly as follows, for the Bell system: Cents per Revenue Dollar Traffic Expense Net Income 24 L926. 1925. . 1924... 1923..%.% [922.5% LOZ ives visa a mre A 1920... EE 101" ~ ‘ ? A i | 1 7 121

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