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Ketchum, Paul M. (ed.) / The Wisconsin engineer
Volume 42, Number 5 (February 1938)

Alumni notes,   pp. 92-95

Page [93]

In 1882 the Bell System became convinced that the best way to assure uniformity
of equipment necessary for universal telephone service was to control its
facture through one organization. To this end it acquired
Company, which operates under this three-fold policy:
the Western Electric
1. To make telephone appa-
ratus of high quality.
This in itself is not unusual. What is
unusual is that every item of equip-
ment in the vast network of the Bell
System must coordinate so perfectly that
from any Bell telephone you can talk
clearly with any one of the millions of
others. Can you think of any other
product which must meet such an ex-
traordinary test?
2. To work for efficiency and
lower costs.
Whether it be in purchasing materials
- or in manufacturing the 43,000 items
of telephone apparatus-or in distrib-
uting all this equipment to the Bell
companies, Western Electric is always
seeking the better way. As a result it
has a progressive record of methods
developed, products improved, econo-
mies effected, and costs lowered.
3. To keep prices at the lowest
possible level consistent with
financial safety.
Western Electric firnishes most of the
telephone equipment used by the opera-
ting companies of the System. By com-
bining their requirements it is able to
manufacture more economically; and it
eliminates selling expenses and credit
losses. The resulting savings it passes
along to its telephone customers in the
form of lower prices.
  On these sales the policy of the
Company is to set the lowest prices
which will enable it to pay fair wages
to its employees, to earn a fair return
on the money invested in the business,
and to maintain the Company's finan-
cial stability.
  This policy of voluntarily limiting
profits is reflected in the Company's
financial record. In recent years it has
earned on its investment a rate of re-
turn only about half as large as that of
a representative group of comparable
manufacturers, and over a period of
twenty years this rate has averaged
less than 7%.
This set-up within the Bell System re-
sults in low costs to your Telephone
Company, and thus Western Electric
contributes its part in making Bell Tele-
phone service dependable and eco-
Weslteru Electric
I think many people have only a vague idea of how our company functions
within the Bell System, and how a unique business philosophy is operating
make your telephone service increasingly dependable and economical. This
tisement is the briefest possible statement of the philosophy that guides
Western Electric Company.
                                                                  PR E S

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