ANNUAL REPORT, 1935 7 



4. Enforcement problems which are not involved in present utilities. 



5. Cost determinations more unsatisfactory than in the case of present 

 utilities. 



In view of these difficulties, the first step in the prosecution of the study was 

 to learn as much as possible about the few existing cases in which some measure 

 of public utility operation has been undertaken. Perhaps the most outstanding 

 instance of municipal control of the milk supply is found in the city of Welling- 

 ton, New Zealand. Legislative authority for taking control of the milk business 

 was obtained as early as the year 1910, but it was not until the time of the 

 World War, when the milk situation became extremely acute, that the corpor- 

 ation of the city of Wellington resolved to enter upon a comprehensive scheme 

 to distribute milk in Wellington and its suburbs. After several preliminary 

 attempts the city commenced to purchase milk from farmers and process and 

 distribute it in January 1919. At the present time the municipality owns all 

 of the physical equipment necessary for purchasing, processing, and distributing 

 the major portion of the milk supply to the residents of the city. There is not 

 a complete monopoly on the part of the municipal organization since local 

 producers and distributors are permitted to continue in business under strict 

 regulation, and in the course of time their numbers and the volume of milk so 

 handled have increased to some extent. Nevertheless the municipality controls 

 the bulk of the milk supply and has apparently been extremely successful in 

 handling the situation. 



in the United States there are a few isolated instances of close municipal 

 control and ownership of physical facilities. One small town in North Carolina 

 has a complete monopoly of milk distribution. The two former independent 

 distributors, who happened to be also the mayor and the chief of police, finding 

 themselves in financial difficulties arranged to sell out to the city, and the 

 business is now being conducted as a municipal enterprise with apparent success. 



In another instance, a few years ago several adjoining towns in New Jersey 

 purchased pasteurization equipment in common. They control the situation 

 by means of a system under which the town purchases all milk from the farmers, 

 processes and bottles it, and then sells to distributors who handle their business 

 in other respects in the same ways as formerly. 



In a few fairly large markets in the United States there is a limited number of 

 distributing agencies in the business. It is possible that a close study of the 

 situations in which one or a very few distributors handle most of the business 

 will aid in leading to conclusions about the possible savings which can be made 

 under municipal control, it is highly probable that the economies which can 

 be realized by eliminating some of the most apparent inefficiencies of multiple 

 distribution are not as great as people think. 



The study up to date has been confined to an analysis of what has happened 

 in these existing situations. Later it is proposed to select a single secondary 

 market in Massachusetts as a case for detailed study to determine the advan- 

 tages and disadvantages of municipal control, operation, or ownership of all or 

 part of the milk distribution facilities under the conditions peculiar to that 

 market. 



A Study of Adjustments in Farming by Regions and Type-of-Farm- 

 ing Areas, from the Standpoint of Agricultural Adjustment and 

 Planning, Including Soil Conservation. (Jointly with the Department of 

 Economics. David Rozman and R. L. Mighell. ) The results of this project 

 are reported in full elsewhere (see report of the Department of Economics. ) 

 The study is being further refined and continued primarily by the Extension 



