The daily morning journal and courier., 1907-06-01
MELLEN HITS OUT Increased Wages for Dr. ganized Labor Brings Constantly Decreased
 Efficiency. So TELLS HIS STOCKHOLDERS One of the Two Uncertain and Unhappy Elements to be Met by Man
 agement.
CAR DEMURRAGE THE OTHER
Despite Added Expense of $1,6OO, 900 Eight Per Cent. Dividend Can be
 Maintained.

President Charles S. Mellen of the New York. New Haven and Hartford railroad. in an address to stockholders who had voted to merge this company with the Consolidated Railway com pany yesterday afternoon said:
 'aThe only uncertain, unhappy ele- ments with which the management has to contend are the demands of organiz- ed labor. which are very tremendous, and which will cost us this year in the vicinity of $sOOOOO for increases in wages; and the unfortunate situation we are in with regard to the freight car demurrage, which is doubled by the American Railway association begin ming July 1, which will make another $800,000 increase in our expenses. There fore I have to slook in the face from July 1, 1907, an increase in the expenses of this company of $16O0,000 from these two items alone, and I regret to say, sso far as the organized labor item is concerned that am meeting constant y a decreased efficiency with every in- crease in wages"
 The above Is a part of MT. Mellen's reply to request of Clarence Deming Of this city, one of the stockholders. who asked the chief executive to give an idea of the conditions. prospects, earnings and earning power of the New Haven road The address follows:
 So far as the earnings of the com pany up to June 30, 1906, are concerned, you all of you have seen, I presume. which was made up by expert account ants-Price. Waterhouse & Co.,, who are well known both here and abroad. The net result of the operation for the year ending June 30, 1906, was the best, I think, in the history of the company. The surplus over and above all fixed charges, including dividends, was in the vicinity of SS.S00,000, of which $S,000,000 was applied to improvements, and cer- tain other sums applied to the insur- ance and casualty funds
 We have completed approximately ten months of the present fiscal year and I think fair estimate of the re- suits for the year ending June 30th, 1907, can be made. I approximate the surplus over and above all fixed charges including dividends, this year to be between two and three quarters and three millions in excess of the di- vidend requirements The amount of money that has been expended-and regarding which there has been ex- pressed to me at times more or less apprehension, doubt, uncertainty, as to the wisdom of the policy of the con1- pany-has been large and approxima- tes from July 1st, 1903, to May Fist, 1907, the enormous sum of one hun dred and fifty-seven millions of dol- lars. That was for a period beginning four months before the advent of my administration. Out of the one hum dred and fifty-seven million dollars that have been raised, ninety-seven million an three-quarters have gone for investments in securities of other com panies, which are paying the interest upon the cost of their investment. Out of the balance, thirty-seven million dollars has been spent for real estate, new equipment, second, third and fourth tracks, and the identification of the NGW 1OTh ulNiSlOlly anu IilGIC WttS no possible way that l can conceive of by which any administration could have avoided these expenditures. There is left to be accounted for in the na- ture of actual improvements, side- tracks, yards, station facilities, new bridges, less than ten millions of dol lars in the four years expended; and those expenditures have every one of them been for the actual essentials of doing an economical business, and they are far and away less than nearly every other corporation of similar magnitude in this country has expend- ed upon similar facilities during the same period. The balance of the one hundred and ffty-seven millions other than I have read to you, is in the in- creased stock of materials on hand, available for future construction, the advances to leased lines, which are to be repaid from time to time by the issue of the securities of those con- panies, like the Old Colony and roads like that, and the funds of the com pany,-the insurance fund and the casualty fund; and invested in the current business operations of the company, like amounts in suspense, due from other companies and indi- viduals and current cash.