TELECOM Digest OnLine - Sorted: P.S. on Dial Conversion in the Depression

P.S. on Dial Conversion in the Depression
20 Aug 2006 18:51:13 -0700

I checked the book "Telephone" by John Brooks. It confirmed that dial
conversions indeed went on during the Great Depression. Indeed, it
was the only thing keeping Western Electric going, otherwise W/E
should have had to shut down -- there was simply no demand.

The Bell System lost half its traffic after 1931. (Initially traffic
was higher as people adjusted to the effects of the changing economy).
One controversy was that the Bell System kept up its full dividend
even though it had to come from past corporate earnings (surplus)
since no new money was being earned. If the dividend had been reduced
slightly the money could've been used to keep some of the operators on
who were laid off. Of course, there was no traffic for them to handle
and was that the Bell System's role -- to create "leaf raking" jobs?
Further, how would've the dividend cut affected public confidence and
critical future financing needs?

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