American Telephone and Telegraph AT&T October 1929 Stock Market Crash
AT&T’s roots stretch back to 1875, with founder Alexander Graham Bell’s invention of the telephone.The American Telephone and Telegraph Company was incorporated on March 3, 1885 as a wholly owned subsidiary of American Bell, chartered to build and operate the original long distance telephone network.
Until Bell’s second patent expired in 1894, only Bell Telephone and its licensees could legally operate telephone systems in the United States. Between 1894 and 1904, over six thousand independent telephone companies went into business in the United States, and the number of telephones boomed from 285,000 to 3,317,000.
On December 30, 1899, “AT&T” acquired the assets of American Bell, and became the parent company of the Bell System and by 1925, AT&T established Bell Telephone Laboratories Inc. as its research and development subsidiary.
At the time of the Stock Market top in 1929, “American Telephone and Telegraph” reached a high of $310.25 per share on the New York Stock Exchange, fell to $232.00 (down $34.00 on Black Monday — October 28, 1929) then proceeded to close at $204.00 per share (down $28.00 on Black Tuesday — October 29, 1929) to closely reach a bottom of $87.00 per share on July 28, 1932.
The telephone industry benefited from the “Crash of 29” and from the Depression, as phone calls between stockholders and brokers as well as those resulting from a sudden loss of jobs shot up. By December 1930 there were more than fifteen million Bell telephones in service, translating into comfortable earnings for AT&T shareholders.
The following year, however, the number of lines began to fall as more businesses closed. Within another year another 10 percent of the phone services would be cut. The worst off within the Bell system was Western Electric, which eventually laid off almost 80 percent of its workforce.
In 1933 business started picking up again; eighty-five thousand new lines were installed in the last quarter of the year, and within four years service stood at the same levels as in 1930.
Tags: Alexander Graham Bell, American Bell, American Telephone and Telegraph, AT&T, Bell Telephone, Bell Telephone Laboratorie, Black Monday, Black Tuesday, Brokers, Crash of 29, Depression, July 28 1932, New York Stock Exchange, NYSE, October 28 1929, October 29 1929, Shareholders, Stockholders, Telephone Companies, Western Electric