22 MILK SURVEY OF THE CITY OF ROCHESTER 



"We conclude that the producers as a class are losing money in their dairy 

 activities at the present time * * * that they have not as a class been making 

 an adequate return for the investment, risk, and work necessary to produce milk, 

 and that they are entitled to a better price than they are now receiving if production 

 and the dairy industry are properly encouraged ; 



That we find many of the producers unskilled in the proper handling of the 

 herd, using cows which have no place in the dairy herd, using unintelligent feeding 

 methods, quite a few without any knowledge of cost accounting; 



We conclude that the consumer has not a sufficiently full knowledge of the 

 value of milk as a food and its positive necessity especially for the younger genera- 

 tions * * * and that the price of milk has been increased less during the war 

 period than any other food product. 



We conclude that in the distribution of milk the distributer has made no more 

 than a modest profit, and we believe the distributers are not making any unusual 

 or improper profit in the spread between the price they pay to the producer and 

 the price at which they sell to the consumer. 



We find most of the large distributers with side lines of activity which we 

 believe are profitable, such as making ice cream and butter. 



If any relief is to be had, it must be through the concentration of agencies. 

 It occurs to us that the overhead cost of maintaining so many agencies is the 

 chief contributing cause of the cost to the ultimate consumer. 



It has been suggested that a municipal plant be installed * * * but we be- 

 lieve that this would not bring the results hoped for on account of the peculiar 

 nature of the business. 



Neither de we believe that any organization by the producers through which 

 they will market their milk direct will be successful. 



Some members of your Committee have believed that the situation could be 

 met by licensing by the city a monopoly in the hands of private capital * * * 

 retaining the power through the city commissioners of audit, and control of prices 

 and profits, as well as of methods and expenses. 



Should such a monopoly be desired by the public (which should be consulted 

 before any definite plan is adopted) we believe that in justice to all present vested 

 interests, those particular distributers who were forced to discontinue should not 

 suffer loss, but their properties should be paid for at a sound and solvent price, 

 either through the monopoly thus created, or by direct tax, as it would not seem 

 fair to confiscate their properties or their business without a reasonable payment. 

 * * * If the city reserves the licensing power; the absolute control of all milk 

 and of milk products sold in the city ; the control of a proper and fair profit which 

 the monopoly would be allowed to make ; requires frequent reports and also makes 

 frequent audits of accounting of such monopoly; we believe the very best results 

 could be obtained, for both the producers and the consumers, in economy and in 

 qualities. The prices could be changed as conditions changed. 



The monopoly distributer should be allowed to make a stipulated return on his 

 investment * * * and the consumer should in such case feel that he was getting 

 as much as his money should buy without any unusual or unfair middle-man's profit. 

 The objection to this plan which seems fatal is tjiat the public, in our judg- 

 ment, would not be willing to allow such a monopolistic distributer a fair profit 

 for his investment, energies and efforts, and would attempt to confine him to a rate 

 of 7% or, perhaps, 8% on his invested capital, with only modest salaries, and in 

 this way would destroy the initiative, as private capital does not ordinarily like to go 

 into a hazardous business where the possibilities of profit are so limited. 



