MILK: PURITY AND COST

Evening Post, Volume CIII, Issue 63, 17 March 1922, Page 6

MILK : PURITY AND COST

The milk control movement is primarily aimed at purity, but purity can be purchased at too high a price; therefore, when the City Council's Milk Committee recommends, and the City Council adopts, the expenditure of £21,600 in improving the milk supply, the average elector will, we think, be sympathetic, but he will naturally require to be convinced that the working cost of the new system, plus the interest on the new: capital expenditure required, will not make his milk too dear. The people, being now shareholders of, as well as customers of, the milk-distribut-ing business, are entitled to the fullest information ; and a more exhaustive analysis of the finances, if it proved satisfactory* would certainly bring to the Milk Committee and the Council a larger share of public confidence. If the Chairman of the Milk Committee, Councillor Norwood, were to utilise figures collected in the United States by the manager of the municipal undertaking, Mr. H. A. Ward, in order to show that the difference between the price of milk paid to the milk-supplier, and the price of milk paid by the ponsumer,- is much the same in the United States as. it is here, a good deal of existing criticism would be met. In dealing with this difference in the two prices (the milk-supplier's and the milk-user's) the Milk Committee is entitled to make reasonablejjse of the argument that it has been trying to accumulate funds in order to mfeet the projected new expenditure of £21,600 now sanctioned by, the City Council. But while, in' loanless years, a certain amount of diversion of revenue to capital expenditure is unavoidable, there is a limit to this process, especially in an undertaking which draws its revenue from a daily essential food. To make his position sound, Councillor Norwood should state clearly how much of the £21,600 he requires is capital expenditure, how much is a fair charge against re-^ venue; what proportion of the revenue funds, to be drawn on to meet the ■ expenditure, is realised profit, and what proportion is a temporary cash balance; what prospect there is of floating a loan so thlftt the capital expenditure may be transferred to its' proper account ; whether the revenue, when thus relieved, will permit of a further reduction in the price of milk to ■ the consumer, or whether the probable cost of administration, under the new system of glass-con-tainer delivery and payment by coupon, makes \ a reduction in the consumer's price unlikely.

It may be, of course, that the Chairman of the Milk Committee cannot answer tKese questions. It may be that he cannot see far enough ahead; possibly it may be -unreasonable to expect him^to Bee so far ahead. But, if so, it would be better for him to" say so, and take, to that extent, the,public into his confidence. On the present scanty information, there seem to be two* possiEllities: (1) a period of dear milk—this has been going on for years—enabling the Milk Committee to build up funds to finance the replacement of the vendors' contract with a purely municipal delivery using glass-containers and coupons, which delivery may be so succesßful and economical that jn a comparatively short period (three years, two years, or one) the Milk Committee may be able to reduce its price, and make everybody happy with a milk supply that is not only pure but cheap; (2) a period of dear milk indefinitely prolonged, in order to enable the Milk Committee to finance a new system of treatment and delivery which, while achieving purity, is not cheap. Now, the difference between these two results—a wholly good result, and a mixed result — is mainly a matter of business ability. In America, similar undertakings seem to succeed—we speak with reservation—without unduly oppressing the consumer ; those undertakings have the impetus of private brains, and the handicap of private profit. Does the Milk Committee, free from the element of private profii;, possess., enough busineon brain to balance the equation 1 We sincerely hope that results will return an answer in the affirmative ; but public confidence would e'er-

tainly be increased if the Committee, at the present critical stage, showed more business grip in its public communications. On the information arising from Mr. Ward's report and the discussion last night at the City Council, we are not prepared to say that the method of financing the new expenditure is sound, having regard to the proper use of revenue and the factor of price to the consumer. We hope it is; but the Committee's case, as publicly presented, is not complete. There seems to be a tendency on the Committee's side to plead that its hand is forced—that the failure of the existing vendors to tender for a new contract compels the Committee to itself take up the delivery plus the glass-con-tainers and the coupons. But to adroit that one's hand is forced is, in business, a confession of -weakness. Such a plea would be no excuse for entering hurriedly into an expedient should that expedient fail. The- responsibility is on the .Committee to see that the new'system does not fail—either in purity 'or cost—and to convince the public in that direction without loss of time. \