The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1911-05-16
PRES. MELLEN EXPLAINS
Tells Why Boston and Maine Dividend
Was Necessary

was necessary
Boston. May 1.-THE adoption by
the House of Representatives OF the
Massachusetts legislature Of the or
der instructing the railroad commits
sioners to investigate the lowering of
the dividend rate of the Boston and
Maine railroad, lends additional in
terest to the following statement by
President Charles S. Mellen of the
New York, New Haven and Hartford
railroad, given out at Boston, concern
ing the dividend cut, and plans and
prospects OF his roads having bear
ing on the subject of so much con
Germ to New England. The statement
is as follows
so many statements and specula-
tions regarding the reduction In the
dividend rate of the Boston and Maine
railroad have appeared, and so many
deductions have been drawn as to the
reasons therefor, and the effects there
of, il seems wise statement should
be made from an official standpoint.
Boston and Maine just before the be-
ginning of the present fiscal year, July
l, 1910 increased the wages of its EN-
ployes by about $2,700,00O This is
the equivalent of more than six per
cent upon the increased capital stock
about $40,000,000. The reduction of
any maintenance expenses was impos-
sible because of the condition of the
property. There. therefore. remain
ed the possibility OF reduction in the
cost of conducting transportation and
reduction there to an extent to ma
terially Offset the increase in wages
was practically impossible without
such serious cut In the train SER
vice that the public could not have &C
cepted the same.
THE increased receipts were not
forthcoming. ANY reduction in ex-
penses by cutting train service was
bound to be more than Offset by the
increased maintenance expenses nee
essary and the result of nine months
operation has shown practically no
dividend earned, and the directors
would have been justified in discon-
tinuing all dividends for the immedi
ate future had they not been impress.
ed with the hardship that would have
resulted to many OF the smaller stock
holders and their firm belief that up
on the rehabilitation of the property
the earnings would be sufficiently in
excess of dividend requirements to re
place such amount as would be disbur
sed in dividends while that rehabilita
ton was in progress,
The company has a profit and los.
account, the accumulation of surplu!
earnings of previous years, sufficient
probably, to warrant continuance o
a per cent dividend rate. until bus
mess revives in the territory served
by the road. and the improved condit
ion of the property will result in
more efficient and economical servic'
which will be rejected in the ne
earnings of the company.
"Allusion has been made to the eli
feet of this reduction in the Boston
and Maine dividend rate upon tn
New Haven, which is the guarantee
of the preferred shares of the Bostol
railroad holding company and in tina
, connection reflections have been mad
upon the purchase of Rutland railroa
stock, which involves carryin
charge to the New Haven of abou
100000 per annum. The half cor
troll of the Rutland railroad enable
! the Boston and Maine by connectin
its line between Swanton VT, and A
burgh VT, to establish a line TO
through service of freight and passer
gers into northern Vermont, Ne,
Hampshire and Maine, which 1t is e!
, timated will mean a material increas
in gross and net revenue to the Bot
ton and Maine system. A further COZ
nection between Montpelier and Blu
: lington, VT, which is contemplated
will give another connection with tn
Rutland, which will mean additions
gross and net revenue to the Bosto
and Maine system. Both of thes
connections will be made it Is belize
ed, by amicable arrangements wit
the Central Vermont
The New Haven has arranged fC
trackage over that portion of tn
Boston and Albany between Pittsfel
and North Adams, making a come
, ton with the Rutland railroad 9
White Greek, which enables a throug
= service, passenger and freight to b
established between all parts of tn
New Haven system, and all parts {
the Rutland, which it is believed wi
mean an increase in gross and ne
revenue to the New Haven road. TIL
! belief is well founded that the thre
connections with the Rutland railroa
system will give to the New Have
and Boston and Maine net revenu
much in excess Of the carrying charg
of the Rutland stock.
THE arrangement between the NeN
York Central and the New Haven II
garding the Boston and Albany ha
been greatly misunderstood 1t ha
been assumed that any business give
to the Boston and Albany and New