CORPORATIONS: 100-Ton Mailbag

Even for American Telephone & Telegraph Co.. second biggest U.S. corporation, it was a staggering job. Last week, to raise cash for expansion, A.T. & T. offered its 1,380,000 stockholders the opportunity to buy $637 million in convertible debentures, the largest private financing ever undertaken. To handle the job, A.T. & T. had to set up a special division, bigger than many U.S. corporations. To every stockholder went a warrant,* a letter from the president, a 32-page prospectus and a stamped return envelope. The mailing weighed 100 tons, cost $120,000 in postage alone.

To handle the mailing and sale A.T.&T. leased one of Wanamaker’s block-square vacant buildings in Manhattan, hired 1,240 temporary employees, set up a line of special desks and files a block long to handle the biggest “stock book” in history. It also set up a telephone room with 20 operators to handle 800 inquiries a day, opened information counters in Boston, Chicago, San Francisco and New York to serve stockholders. Total cost of the operation: $3,000,000.

*As a bonus, every stockholder got a warrant giving him a “right” for each share of stock held. Eight rights allow the holder to buy a $100 debenture. He can hold it and get 3⅞% interest, or turn it in, after Dec. 13, with $48 in cash, for one share of common stock. This makes it possible for the debenture holder to buy a share of stock at $148, or $31 less than the current selling price. Thus a right was worth about $3.20 at last week’s price of A.T. & T. stock.