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 http://www.archive.org/details/cu31924000278808 
 
STATE OF NEW YORK 
 
 EXECUTIVE DEPARTMENT 
 
 In the Matter 
 of 
 
 The Investigation by GEORGE GORDON BATTLE, 
 Commissioner, into the Department of Farms 
 and Markets 
 
 FINAL REPORT 
 
 JOHN BURLINSON COLEMAN GEORGE GORDON BATTLE 
 
 Of Counsel Commissioner 
 
^UU 0f pewj f 0j;b, #xemfe giJpnrtm^nt. 
 
 In the Matter 
 
 OP 
 
 The Investigation into the Department of Farms I Fi„ai Report of 
 and Markets by George Gordon Battle, Com- / Commissioner. 
 miasioner appointed by Hon. Alfbed E. Sjniith^ [ 
 Governor of the State of New York, under Sec- | 
 tion 8 of the Executive Law, commonly referred 
 , to as the Moreland Act. 
 
 
 To Hon. Alfred E. Smith, 
 
 Governor of the State of New York : 
 
 Preliminary Statement. 
 
 On the 25th day of August, 1919, I was appointed by you under 
 Section 8 of the Executive Law, commonly referred to as the Moreland 
 Act, to investigate the Department of Farms and Markets, my com- 
 mission reading as follows: 
 
 "State of New York, 
 "Executive Chamber. 
 "To all to whom these presents shall come, greetings, know 
 ye, that, pursuant to Section 8 of the Executive Law, and in 
 accordance with the suggestion as contained in the report of the 
 Commissioners heretofore appointed by me for the purpose of 
 investigating the matter of the high cost of living, I hereby 
 appoint: George Gordon Battle, of the City of New York, as a 
 commissioner to examine and investigate all matters with ref- 
 ence to the management and affairs of the Council of Farms and 
 markets, and all related departments and bureaus. 
 
 "The said George Gordon Battle is hereby empowered to 
 fjubpoena and enforce the attention of witnesses, to administer 
 oaths, to examine witnesses under oath and to require the pro- 
 duction of any books or papers deemed relevant or material. 
 "And I hereby give and grant unto the said George Gordon 
 
Battle all and singular the powers and authorities which may 
 be given or granted unto a person appointed by me for such 
 purpose under the authority of the statute aforesaid. 
 
 "In witness whereof I have hereunto subscribed my name 
 to these presents and caused the privy seal of the State to be 
 affixed thereto, at the Capitol, in the City of Albany, the 25th 
 day of August, in the year of our Lord, One Thousand, Nine 
 Hundred and Nineteen. 
 
 Alfred E. Smith, 
 
 By the Governor. 
 
 George R. Van Namee, 
 [seal.] Secretary to the Governor." 
 
 I began the investigation immediately, having the good fortune to 
 secure the services as counsel of Mr. John Burlinson Coleman. We 
 employed as Chief Investigator, Major William T. Chantland, who was 
 for some years the chief investigator for the Federal Trade Commission. 
 We also secured the aid of several other investigators. As accountants 
 we employed Storck & Dengler, Incorporated, experienced public ac- 
 countants, Mr. Storck having been for many years employed by the 
 United States Government as an accountant and his firm having been 
 used by the Government as public accountants in several recent im- 
 portant investigations. 
 
 Mr. Coleman and I, with the aid of these investigators and account- 
 ants at once began a careful examination of the records and the 
 accounts of the Department. In addition we held a number of public 
 hearings in New York City and in Albany. We visited Washington 
 and interviewed the Federal Trade Commission in reference to the in- 
 vestigation made last year by that body into certain activities of the 
 Department of Farms and Markets which had special reference to the 
 relations of the great meat packing concerns of the country with the 
 Department. This investigation of the Federal Trade Commission was 
 a part of the examination by that body of the meat packing industry 
 of the United States and its methods. As a result of these investigations 
 on our part I have obtained an accurate and quite detailed knowledge 
 of the workings of the Department. Mr. Coleman and I have given our 
 best attention and thought to this matter, and we have reached the con- 
 clusions embodied in this report. I wish to take this occasion to extend 
 to Mr. Coleman my very sincere gratitude for his most zealous and in- 
 telligent work, which has been of incalculable benefit to the investigation. 
 
Scope of the Report. 
 
 It is our purpose to cover, as briefly as possible, in this report the 
 following points : 
 
 The genesis and constitution of the Department, its avowed pur- 
 poses, its actual operation and activities and the manner in which it 
 carries out those purposes, to which we will add our criticism of its con- 
 stitution, administration and operation, together with suggested changes, 
 either in the organic law or in the methods of internal administration, 
 to meet the criticisms. We will also submit general recommendations, 
 including a consideration of the question of State action looking toward 
 the maintenance of reasonable prices for food and especially milk, . 
 
 Constitution of Present Department. 
 
 After many years of ineffective attempts to control the food situa- 
 tion throughout the State through the operation of a separate Depart- 
 ment of Agriculture and a Department of Foods and Markets, together 
 with the statutory intervention of the State Board of Health in many 
 matters relating to food, a plan was evolved in 1917, by which it was 
 sought to amalgamate all these unco-ordinated powers and departments 
 under a single system of control, based to some extent upon the educa- 
 tional system of the State. 
 
 It was the express purpose of the law creating the Department to 
 bring under one administrative head all the Governmental activities of 
 the State relating to productioii and distribution of food. This would 
 include, of course, primarily, agriculture, the manufacture or manipula- 
 tion of farm products and other foods and finally, the distribution of the 
 food to the consuming public. It was stated by those who proposed the 
 measure that the real interests of the farmers, the manufacturers of 
 and dealers in food and the interest of the consuming public were in the 
 highest sense identical. Undoubtedly this is true in a more or less 
 abstract sense. It is clearly to the interests of every one that food 
 should be produced, packed, manufactured and distributed as efficiently 
 and economically as possible, but with a fair margin of profit to every 
 one engaged in the process. Of course, however, in the actual operation 
 of the plan, the selfish interests of the different agencies concerned will 
 obtrude themselves and cause conflict and difficulties. 
 
By this law a council was provided for, modeled after the fashion of 
 the Board of Regents, the members of which were chosen from the 
 various judicial districts of the State. The then Governor, Hon. Charles 
 S. Whitman, was given the power to make the first selection of members 
 of the council, and it was provided that thereafter vacancies should be 
 filled by the Legislatui'e. In addition to a member from each of the 
 judicial districts, it was provided that one member should represent the 
 State at large, and that the Commissioner of Public Markets of the City 
 of New York should be an ex-offirio member. It was further provided 
 that the Governor's nominations should be approved by the Senate, and 
 that the ten members thus approved should have separate terms of 
 one, two, three, four, five, six, seven, eight, nine and ten years respectively, 
 the Governor designating the particular term of each appointee. The 
 election of successors of retiring members, it was provided, should be 
 in the manner required by law for the election of the Regents of the 
 University of the State of New York. 
 
 The members of the Council so provided for can be removed only 
 by the Senate on the recommendation of the Governor for misconduct or 
 malversation in offlce, a majoi'ity of all members elected to the Senate 
 being necessary for removal action. 
 
 The Council, by section 10 of the Farms and Markets Law, is made 
 the head of a Department of Farms and Markets, which department con- 
 sists of two divisions, to wit, the Division of Agriculture and the Division 
 of Foods and Markets. The Department of Agriculture and the Depart- 
 ment of Foods and Markets, in existence when this law took effect, were 
 continued under the Council, as the Division of Agriculture and the 
 Division of Foods and Markets in the Department of Farms and Markets, 
 and the officers and employes of both the previous departments and of 
 the State Superintendent of Weights and Measures were transferred with- 
 out change of salary to the Department of Farms and Markets, to con- 
 tinue in office subject to the power of removal or the appointment of their 
 successors as provided in the Farms and Markets Law. 
 
 To the Council of Farms and Markets was given the power to appoint 
 a Commissioner of Agriculture and a Commissioner of Foods and Mar- 
 kets, both to be persons qualified by experience and training for the 
 duties of their offi.ces. 
 
 Each of these Commissioners holds office during the pleasure of the 
 Council, as provided for in section 22 of Article 2, of the Farms and 
 Markets Law, and there is nowhere any power granted to the Governor 
 
for the removal or discipline of such Commissioners. They owe respon- 
 sibility solely to the Council, and the actions of the Council or its failure 
 to act, are not reviewable by the Governor. He has no further power 
 than to recommend to the Senate the removal of the members of the 
 Council for misconduct or malversation in office, and the Senate is the 
 sole judge of any such charges. It is, in fact, specifically provided that 
 the proceedings for the removal of any member of the Council shall be 
 the same as those prescribed by law for the removal of elective State 
 officers. 
 
 Whatever may be said in favor of the organization of a Council of 
 Farms and Markets on the basis of the organization of the Board of 
 Eegents, in order, as it has been repeatedly affirmed, to take the Depart- 
 ment of Agriculture and the Department of Foods and Markets "out of 
 politics", it remains the fact that such purpose has not in any way been 
 achieved. A perusal of the transcript of the hearings before me will 
 show that politics play as great if not a greater part, in the management 
 of these Departments, or, as they are now termed, "divisions", as at any 
 previous time in their history. 
 
 Whatever the original plan and pui*poge of the law by which the 
 Department of Farms and Markets was created may have been, for some 
 reason a provision was inserted in the law which at the very beginning 
 nullified and destroyed any purpose that might have existed to keep the 
 Department out of partisan politics. Provision was made in the statute 
 that the then Governor should have the power to appoint all members of 
 the first Council, and further, on the same line and for the piirpo^e 
 apparently of giving the then Governor absolute control of the Depart- 
 ment, it was provided that the salaries of the Commissioners first 
 appointed in the Department must be approved by the Governor. The 
 Governor had power over the salaries of only the first appointed Com- 
 missioners. The Council has control of the salaries of all succeeding 
 Commissioners. 
 
 It does not appear reasonable in any event to expect that a system 
 of control, such as has proven meritorious and smoothly operating in 
 the matter of the educational problems of the State, could be applied with 
 similar results to problems which in the first and last analysis are purely 
 commercial. Whether we consider the problem of promoting the pro- 
 ductivity of the State in regard to apples or eggs or milk or any other 
 agricultural product, or the problem of the final distribution of such 
 products to the consumer, with its relations to price, quantity, et cetera, 
 
6 
 
 -it is nevertheless the outstanding fact that we are dealing with purely com- 
 mercial problems in which the co-related problems of labor, transporta- 
 tion, and so forth, play all-important parts. 
 
 The members of the Council are required by law to give their services 
 to the State without compensation, other than reimbursement of their 
 traveling expenses. It may be and in fact has, proven possible to find 
 men of broad vision and generous natures who will give freely of their 
 time and industry to the State in the solution of problems such as orig- 
 inate in the matter of public education. That it is possible to find such 
 men is a part of the human psychology. Where abstract questions enter 
 and the general welfare can be promoted by their solution, and again 
 where the large problems of public philanthropy enter, involving grave 
 questions of public policy, such as are involved in public education, men 
 can always be found who will give freely and without stint of their time 
 and thought to the work involved in the solution of these problems, seek- 
 ing no compensation or reward, and expecting none, save that which 
 marks a noble duty nobly done. 
 
 But where the spirit of commercialism enters into such problems, 
 and particularly where commerce plays the leading part and competition 
 and rivalry between men is a matter of dollars and cents, it is not to be 
 expected, and must in the long run prove impossible, to find a body of 
 men who will give their time, thought and energy to the proper solution 
 of such commercial problems, without receiving adequate compensation. 
 Those who would be best fitted to solve such problems are already 
 engaged in the very businesses which it is sought to control and fre- 
 quently are earning their living from them. Men who are not engaged 
 in such lines of business as come within the purview of the existing 
 Department of Farms and Markets, are not, unless in very exceptional 
 cases, at all fitted to have any part in the solution of the problems which 
 it is the object of such a department to solve. 
 
 Furthermore, in my judgment, it is fundamentally erroneous to 
 suppose that the State activities relating to the production and distri- 
 bution of food are analogous to or can be dealt with in the same manner 
 as the educational activities of the State. Education is very largely a 
 matter of fixed and settled practice. There is, of course, progress and 
 development in the methods of education, but there is far less change 
 and flux in educational conditions than in agricultural and market condi- 
 tions. To my mind, the analogy between the two subjects is faulty, and 
 the effort to deal with them in the same manner is based on erroneous 
 premises. 
 
That a body of the character of the present Council of Farms and 
 Markets might have some reason for existence as an advisory body, is 
 perhaps possible, but the remote possibilities thus presented are certainly 
 no justification for placing in the hands of such a practically irremovable 
 body of men the grave responsibilities attaching to the agricultural and 
 food problems of the State. 
 
 The helplessness of the Executive when confronted with such a body 
 as the present Council, cannot be better illustrated than by the Council's 
 recent refusal to act upon the suggestion of the Governor, based upon 
 my preliminary report of October 9th last. In that report I stated to 
 you that in my opinion the present Commissioner of the Division of 
 Foods and Markets, Eugene H. Porter, was unfitted, for various reasons, 
 to act as such Commissioner, and should be removed. Having duly 
 considered the evidence in support of my report, you recommended to 
 the Council of Farms and Markets that action looking to the removal 
 of Commissioner Porter should be taken. The Council has not removed 
 Commissioner Porter, who is still acting as Commissioner. 
 
 As stated before, members of the Council can only be removed by 
 the Senate on the Governor's recommendation, for "misconduct or mal- 
 versation in office." Under the law, the jurisdictional and discretionary 
 power of the Council as a body to remove Commissioner Porter is unques- 
 tionable. Their failure or refusal to do so, however, in the event of 
 charges being brought against a Commissioner, could be asserted only 
 with great difficulty and under veiy exceptional circumstances, to con- 
 stitute misconduct or malversation in office. Therefore, it is evident 
 that the Council in this, as in many other respects, is a practically 
 irresponsible body, over which the Executive'^ has no control whatever, 
 while the Legislature can only control it by the adoption of new legisla- 
 tion. Such a condition is certainly not conducive to the proper and just 
 solution of the commercial problems coming under the jurisdiction of 
 the Department of Farms and Markests. It is evident that under such 
 conditions the Council or its subordinate Commissioners, or all of them 
 may play fast and loose with the problems coming before them, and may 
 display all manner of favoritism towards certain interests without fear 
 or at least with only the most remote fear, of any interference from 
 constituted authority. 
 
 It may be observed that in this unwieldy council of ten unpaid men, 
 practically all are of one political faith, due to their original appoint- 
 
bent by a Governor of that political faith, and to the fillingof vacancies 
 by a Legislature of the same political faith, namely, Kepublican. The 
 two Commissioners of the Council are also Eepublicans and under the 
 system of organization of the Council, unless, by some extraordinary 
 cataclysm, the bulk of the members should die or vacancies otherwise 
 arise, and at the same time the complexion of the Legislature should 
 alter, this practically permanent and wholly irresponsible body, in abso- 
 lute control of the enormous agricultural and food interests of the State, 
 will continue to exist as an absolutely partisan political body. 
 
 In the past, the Department of Agriculture was known to be the 
 whipping-post of politics, and testimony taken before me leads to the 
 inevitable conclusion that the Council of Farms and Markets and the 
 Department under its control is in exactly the same condition. Appoint- 
 ments have been made to practically all the positions not covered by 
 Civil Service rules, that in the last analysis bear the distinct earmarks 
 of political selection. 
 
 It is not right that such a condition should be perpetuated. The 
 enormous interests involved in the agricultural and food problems of 
 the State must be handled in such a way that there shall be a direct 
 responsibility to the people of the State on the part of those who are 
 entrusted with the task of solving these problems. The welfare of the 
 public demands such direct responsibility at all times, but at present, 
 when hardly anything is discussed by the public more universally than 
 the high cost of food, it is imperative that the public should have the 
 immediate power to demand a strict accounting from all of its servants 
 who are in any way charged with the administration of laws and regula^ 
 tions designed to control the food and agricultural problems of the State. 
 
 The present Council of Farms and Markets holds four regular meet- 
 ings a year, and occasionally special meetings, possibly eight or ten 
 meetings in all during the year. The members are scattered all over the 
 State and never assemble for official action except at these meetings or 
 possibly where two or three of them may meet as members of a com- 
 mittee. It has been the practice of the Council to approve any and all 
 suggestions made by the two Commissioners of Agriculture and Foods 
 and Markets respectively, both as to appointments under these Commis- 
 sioners, and as to the enforcement of matters of policy or regulation in 
 the affairs of the Department. No member of the Council has exer- 
 cised anv supervisory authority over the affairs of the Department, except 
 through the medium of these regular or special meetings. The Secretary 
 
9 
 
 of the Department, who is permanently in the Albany office, and who, 
 it was expected when the Council was first created, would be the active 
 representative of the Council in the conduct of all the affairs of the 
 department, has been reduced to the status of a mere stenographer. 
 Outside of his stenographic duties, the present Secretary's most important 
 work appears to be that of obtaining hotel and railroad accommodation 
 for the members of the Council, who are apparently too busy with other 
 affairs even to attend to this matter themselves. 
 
 The members of the Council in fact, pay such comparatively small 
 attention to their departmental affairs that they do not file their expense 
 accounts regularly and, as the testimony shows, often let six and eight 
 months go by before filing expense vouchers. The total of the Council's 
 traveling expenses amounts to between Four and Five thousand Dollars 
 per annum, and so loosely have they handled even this part of their con- 
 nection with the Department that the President of the Council himself 
 by inadvertence filed two vouchers and received payment twice for the 
 same expense account for the month of Febnlary, 1919, amounting to 
 approximately |70. This mistake remained unrectified until attention 
 was called to it in this investigation. It might be added that the mem- 
 bers of the Council, with one or two exceptions, have displayed little 
 interest in the hearings before me, appearing only when individually 
 requested to do so. Few of the members seem to have any real con- 
 structive ideas concerning the work of the Department. Some of them, 
 it is true, offered some general though vague suggestions. And noiie 
 seemed to have any thorough acquaintance with the actual workings of 
 the machinery of the Department. 
 
 Section 30 of Article 2 of the Farms and Markets Law sets forth 
 under the heading "General Powers and Duties of Department", no less 
 than twenty-five subdivisions of powers and duties given to the Council 
 and its subordinate divisions. Section 31 of the same Article, subdivision 
 1, provides for the rules of the Council in the exercise of its powers and 
 the performance of. its duties. The interrogation of each of the members 
 of the Council at the hearings before me disclosed that scarcely any- df 
 them could tell, except in the most vague and unsatisfactory mannerj 
 what was the nature of the powers and duties thus conferred upon the 
 Council by Statute. Yet a perusal of the subdivisions of Section 30 
 shows that the Council has been armed with most elaborate and Mk 
 reaching powers in reference to the production, transportation, storage, 
 marketing and distributing of foods, reading as follows: :. . 
 
10 
 
 The promotion and development of the agricultural resources of the 
 State ; 
 
 The improvement of the conditions of rural life; 
 
 The improvement of the fertility and productiveness of farm lands; 
 
 The restoration to fertility and productiveness of unoccupied and 
 unproductive land ; 
 
 The settlement of farms and supply of farm labor; 
 
 The stocking of farms with meat-producing and dairy animals; 
 
 The promotion of the production of cereals, fruits and vegetables; 
 
 Co-operation with country farm bureaus and with agricultural, 
 dairying and horticultural associations or corporations and other agen- 
 cies of the State organized for such purposes; 
 
 The investigation of the cost of food production and marketing in 
 all its phases: the investigation of the food supply of the State, the pro- 
 duction, transportation, storage, marketing, and distribution of foods 
 sold, offered for sale, stored or held within the State; 
 
 The cost of transportation of the same to the leading centres of 
 population, and the cost of distribution to consumers ; 
 
 The collection and dissemination of accurate data and statistics as 
 to the food produced, stored or held within the State, the quantities 
 available from time to time and the location thereof, and the collection 
 of similar statistics from without the State; 
 
 The investigation and recommendation of useful methods of co-opera- 
 tive production, co-operative marketing and co-operative distribution of 
 foods within the State, and the recommendation of such remedial legis- 
 lation as may be required for the control of such co-operative associa- 
 tions; 
 
 The organization and operation of co-operative associations and 
 corporations among producers and consumers; 
 
 The dissemination of accurate information as to market prices of 
 food products in the markets of the State and other markets; 
 
 The dissemination of information concerning transportation for 
 food products and co-operation with the Public Service Commissions to 
 obtain economical and expeditious facilities for the shipment of food 
 and to prevent unfair discrimination and unreasonable delays; 
 
 The facilitation of the sale of food likely to spoil for lack of a ready 
 market through delays in transportation ; 
 
 The recommendation to the Legislature of remedial legislation to 
 prevent restraint of trade and unlawful combinations to fix prices; 
 
'11 
 
 . The investigation of all terminal, dock and other facilities for the 
 distribution of food at the centres of population, and the establishment 
 and opera,tion of co-operative or public abbatoirs; 
 
 Oo-operation with municipalities in establishing local markets 
 and warehouses for assembling^ grading, packing and storing food or 
 farm products; 
 
 The dissemination of information stating economic and efficient 
 methods for the producing, assembling, grading, packing, distributing 
 and selling of farm products; 
 
 The investigation of the milk supply of the State and the submission 
 to the Legislature of a plan to be established by law for the purpose of 
 securing an ample supply of milk in the centres of population upon an 
 economic basis of distribution, together with the giving of every asMst- 
 ance possible to the accomplishment of such purpose within the pro- 
 visions of existing law; 
 
 The publication of lists of producers, manufacturers, importers and 
 distributors of food, with the kind of food they so manufacture^ import 
 or distribute; 
 
 The stimulation of production of food and co-operation with public 
 and private agencies for that purpose; 
 
 The offer of the Council's services as a mediator or arbitrator in 
 any controversy arising between producers and distributors of food ; 
 
 The investigation of the conduct and methods of exchanges and 
 boards of trade existing within the State for the purchase and sale of 
 food, and recommendations to the Legislature in that connection ; 
 
 The collection and publication of data concerning the purity, whole- 
 sonleness, economic value and nutritious and hygienic properties of foods 
 produced or sold within the State, and the examination and analysis 
 of samples of such food ; 
 
 The investigation of all deceptions in quality, quantity or character 
 of foodsf produced, stored, soldj or offered for sale within the State, 
 including the use of dyes and coloring matter and the prosecution of 
 criminal acts connected therewith ; 
 
 Co-operation with local health departments and local departments 
 of markets in preventing the production, manufacture, sale or offering 
 for sale of fraudulent, deleterious or unwholesome food ; 
 ' The investigation and suppression of all unlawful practices in the 
 sale or distribution of food or fertilizers, feeding stuffs, materials, appajr- 
 atus and machinery, or other instruments used in the production, market- 
 ing or distribution of food. 
 
12 
 
 From the above it will be readily seen that the members of the 
 Council are charged with the enforcement of numerous regulations 
 affecting the food supply of the State, and with a great many othefr 
 duties that are intimately involved in the general welfare of the people. 
 Only by the closest attention to the task and the devotion of a great deal, 
 if not all, of its time and energy to seeing that the Department of Farms 
 and Markets was using its full powers and fulfilling its entire obligations 
 to the people of the State, could the Council as a body justify itself 
 before the people and be able to render a satisfactory accounting of the 
 trust imposed upon it by law. 
 
 A single instance of the failure of the Council as a body to realize 
 the importance of the duties and powers devolving upon it may be set 
 forth as typical of the loose manner in which the Council functions. 
 
 Under the administration of John J. Dillon, Commissioner of 
 Foods and Markets before the present Council was organized, a regu- 
 lation was passed compelling the stamping upon all cold storage eggs 
 of the words "cold storage" upon the individual egg. In November, 1918, 
 the Council suspended the enforcement of this regulation on the pretext 
 that such suspension would be in accordance with the regulations of 
 the Federal Food Administration, which merely required the marking 
 of the packages in which such cold storage eggs were sold. Very shortly 
 thereafter the Federal Food Administration passed out of existence, 
 and the alleged reason for the suspension of the regulation thereby dis- 
 appeared. The Council, however, did nothing to revive the regulation, 
 though it might be said that its suspension had automatically lapsed 
 under the ver-y wording of the suspension, and Commissioner Porter of 
 the Division of Foods and Markets, under whose jurisdiction the enforce- 
 ment of the regulations fell, remained equally quiescent. 
 
 When the fact that this regulation was not being enforced was 
 drawn to the attention of the members of the Council during their exam- 
 inations by Mr. Coleman at the hearings before me, they expressed sur- 
 prise a,t learning, first, that the suspension had not been lifted, and 
 secondly, that nothing was being done to enforce the regulation. But it 
 was not until a recent meeting of the Council, held long after the matter 
 had been brought at the hearings to the attention of both Doctor Porter 
 and the members of the Council, that anything was done. The Council 
 then, apparently on the recommendation of Doctor Porter, though 
 actually against his own expressed judgment, as shown in his testimony, 
 
13 
 
 set aside the suspension of the regulations. In his testimony concerning 
 this matter Doctor Porter took the position that many of the large egg 
 dealers were opposed to the regulation and that there might be a question 
 as to its legality. This notwithstanding the fact that a decision up- 
 holding the validity of the regulation was rendered in the Supreme 
 Court more than a year ago. It is a remarkable fact that the suspension 
 of the regulation and the decision of the Supreme Court upholding its 
 validity fell within a day or two of each other. 
 
 It is naturally to be expected that the large dealers in cold storage 
 eggs would be opposed to such a regulation, but the primary duty of the 
 Council and of the Commissioner lies, it seems to me, in the enforcement 
 of this salutary regulation, regardless of the opposition of the large 
 dealers in eggs. These large dealers in eggs, it may be pointed out, 
 include the "Big Five" packers, who, with other large operators, control 
 the cold storage egg market in this city. 
 
 The fact that the Council of Farms and Markets took no action in 
 relation to this suspended regulation until practically forced to do so 
 as a result of the publicity attaching to the hearings before me proves 
 how small and inactive an interest the members of the Council took in 
 the enforcement of a regulation designed for the protection of the public 
 against merchants who are willing to practice deception. 
 
 The I<aiv Covering the Department and its Varions 
 
 Activities. 
 
 The law covering the department and its various activities is a 
 piece of patch work. It is neither homeogenous nor complete. 
 
 First, we have the Farms and Markets Law, being Chapter 69 of the 
 Consolidated Laws. This law contains five articles, subdivided Into 
 sections from 1 to 104, and deals generally with the constitution of the 
 Department of Farms and Markets, its jurisdiction, general powers 
 and duties. 
 
 Second, the Agricultural Law, being Chapter 1 of the Consolidated 
 Laws, subdivided into 16 articles covering sections 1 to 361. This law 
 has to do with the powers and duties of the Department of Agriculture 
 before it was bodily taken over and made the Division of Agriculture 
 under the Council of Farms and Markets. 
 
 Third, Article 2 of the General Business Law, being Chapter *20 
 of the Consolidated Laws, sections 2 to 18a, which has to do with the 
 
14 
 
 regulation of weights and measures by the State Superintendent of 
 Weights and Measures before his Department was taken over and made 
 a bureau in the Division of Foods and Markets under the Council of 
 Farms and Markets. 
 
 Fourth, Article 2a of the General Business Law, sections 20 to 20i, 
 which provides for the establishment of the Department of Foods and 
 Markets before this Department was made a Division in the Council of 
 Farms and Markets. 
 
 Fifth, Article 13 of the General Business Law, sections 220 to 229, 
 which relates to flour and meal, their methods of packing, sale, trans- 
 portation and branding. 
 
 Sixth, Article 14 of the General Business Law, sections 240 to 242, 
 which relates to the barreling and packing of beef and pork. 
 
 Seventh, Article 15 of the General Business Law, sections 250 to 
 255, which relates to the marking, adulteration, weight, and so forth, of 
 hops and hay. 
 
 Eighth, Article 22 of the General Business Law, section 340, which 
 relates to contracts for monopoly, and provides that the provisions of 
 this article shall not apply to co-operative associations of farmers, 
 gardeners or dairymen. 
 
 Ninth, Article 25-a of the General Business Law, sections 383 to 
 389-0-, relating to the sale of coal, coke and charcoal. 
 
 Tenth, Article 26 of the General Business Law, sections 390 to 397, 
 1 elating to the marking of canned goods, repacking of fruit and farm 
 produce, marketing of ginseng, oyster kegs and cans, fees and charges for 
 elevators and warehouses and the sale of agricultural products on com- 
 mission. 
 
 Eleventh, Article 4 of the Public Health Law, being chapter 45 of 
 the Consolidated Laws, sections 40 to 50, relating to adulterations of 
 food. 
 
 Twelfth, Article 16-ft of the Public Health Law, sections 335 to 
 S39-d, having to do with the cold storage of food. 
 
 Thirteenth, Article IS-a of the Membership Corporations Law, being 
 Chapter 35 of the Consolidated Laws, section 198 to 209-i, having to do 
 with co-operative agricultural, diary or horticultural associations. 
 
 The Farms and Markets Law provides under section 10 for the 
 Department of Farms and Markets, which shall consist of two divisions, 
 the Division of Agriculture and the Division of Foods and Markets. 
 
15 
 
 In each division a number of bureaus have been organized. In the 
 Division of Agriculture there are the following bureaus : 
 
 Bureau of Accounts, 
 
 Legal Bureau, 
 
 Bureau of Animal Industry, 
 
 Bureau of Dairy Products, 
 
 Bureau of Plant Industry, 
 
 Bureau of Farm Settlement, 
 
 Bureau of State Institutions and Farms, 
 
 Bureau of Statistics. 
 
 Under the Division of Foods and Markets there are the following 
 bureaus : 
 
 Bureau of Licenses, 
 
 Bureau of Co-operative Associations, 
 
 Regulative Bureau, 
 
 Bureau of Markets and Storage, 
 
 Bureau of Weights and Measures, 
 
 Bureau of Food Standarization, 
 
 Bureau of Food Products, 
 
 Legal Bureau. 
 
 The Council provided that the director of each bureau should be 
 exempt from civil service and should be appointed and removed at the 
 will of the Council. Therefore, the appointment and removal of each 
 director became potentially a piece of political patronage. It became 
 a temptation to the Council to make these appointments for political 
 motives and also to increase the number of bureaus, so as to increase the 
 number of directorships. One of the abuses in the administration of 
 the Department has been the undue multiplication of bureaus and the 
 appointment of directors, not by way of promotion, but from outside the 
 Department, and, obviously, for political motives. 
 
 It is clear that this system providing for a Council and two Divi- 
 sions tends inevitably to divide responsibility. It permits, to an in- 
 tolerable extent, the abuse popularly known as "passing the buck". The 
 Council can shift responsibility to the Commissioners, and the Commis- 
 sioners shift responsibility to the Council. Quite frequently the Com- 
 missioners shift the responsibility to each other, and from one bureau 
 
16 
 
 to another. The whole organization is so poorly co-ordinated that even 
 with the best intentions in the woi'ld, it would be quite impossible for tb« 
 Department to do any genuine and effective work or produce satisfactory 
 results. 
 
 Commissioner Eugene H. Porter. 
 
 The first Council, in December, 1917, appointed Eugene H. Porter as 
 Commissioner of Foods and Markets. Dr. Porter had been a practicing 
 physician in New York, was for some years the State Commissioner of 
 Health and also operated a dairy farm in Broome County, and was 
 president of a bottled water concern known as the Berkshire Spring 
 Water Company. Subsequently the Council undertook to divide the 
 various bureaus of the old Department of Agriculture and of the Depart- 
 ment of Pood and Markets so as to give to Dr. Porter those which seemed 
 to relate essentially to markets and distribution and to leave with Com- 
 missioner Wilson the bureaus relating more or less exclusively to agricul- 
 ture. The office and work of the former Superintendent of Weights and 
 Measures was placed in a bureau under Dr. Porter. 
 
 Previous to this distribution the Commissioner of Agriculture had 
 control of the licensing and bonding of milk dealers. Under section 55 
 of Article 3 of the Agricultural Law the Department of Agriculture 
 under Commissioner Wilson and his predecessors since 1913, when the 
 law went into effect, had organized a system by which all persons, firms, 
 associations or corporations buying milk or cream within the State from 
 producers, for the purpose of shipping the same for consumption or for 
 manufacture, were duly licensed and bonded whenever in the discretion 
 of the Commissioner a bond was deemed necessary to protect the pro- 
 ducer in selling his milk to the licensee. 
 
 This organization and the entire bureau dealing with the licensing 
 and bonding of such milk dealers, was handed over bodily by the first 
 Council to Commissioner Porter and has remained under his jurisdiction 
 ever since. 
 
 At the time of the organization of the Council the Dairymen's League, 
 which had been more or less dormant for a number of years, had shown 
 signs of renewed activity and had entered upon a campaign which has 
 since been practically completed, to enroll among its membership all of 
 the milk producing farmers or dairymen of the State, under a plan by 
 which the milk producer acquires a certain stock interest in the Dairy- 
 
17 
 
 men's League, which is a New Jersey corporation, based upon the num- 
 ber of mUk-producing cows on his farm. 
 
 Dr. Porter at the time of his appointment as Commissioner of Foods 
 and Markets was and still is a member of the Dairymen's League and 
 President of the Broome County Branch of the League. In December, 
 1917, almost on the very day of his appointment by the Council, he was 
 elected as a director of the Dairymen's League corporation. 
 
 The Dairymen's League has constantly manifested a great interest 
 in the operations of the bureau having charge of the licensing and bond- 
 ing of mUk buyers. The Dairymen's League, in addition to enrolling 
 milk producers in its membership, has entered into negotiations with 
 practically all of the milk buyers and distributors, making contracts with 
 them by which they bind themselves to buy milk from members of the 
 Dairymen's League at a price fixed from time to time by the directors of 
 the Dairymen's League. These contracts require the milk buyer to sat- 
 isfy the Dairymen's League as to his financial responsibility by a bond or 
 mortgage secured by his real estate or personal property or otherwise. 
 The contracts also require the buyers to pay to the League out of the 
 compensation due to the milk producer a toll of one cent per hundred 
 pounds of milk purchased. This toll goes directly into the Dairymen's 
 League treasury and forms the basis of its financial operations. In the 
 course of the past two years this apparently negligible toll on the milk 
 producers of the State who are members of the League, has amounted to 
 several hundred thousand dollars. 
 
 The State requirement ofi a bond from milk buyers is that under Sec- 
 tion 55 of the Agricultural Law every licensee shall give a surety bond 
 of not less than $5,000 or the equivalent amount in money or securities. 
 The bond is conditioned for the faithful compliance by the licensee with 
 the law and for the payment of all amounts due to persons who have sold 
 milk or cream to such licensee during the period that the license is in 
 force, but the Commissioner of Agriculture may waive the requirement of 
 such bond or cash deposit whenever he is satisfied as to the financial 
 responsibility of the licensee. 
 
 Under the influence of the Dairymen's League it has become the 
 practice of the Bureau of Licenses during Dr. Porter's term of office, to 
 exempt from the requirement of a surety bond in not less than five thou- 
 sand dollars, any person or firm buying milk, that has already given a 
 bond to the Dairymen's League and a list is kept of such Dairymen's 
 League bonds so that comparisons may be made in the bureau in order to 
 
18 
 
 ascertain whicli licensees have and which have not given a bond to the 
 Dairymen's League. 
 
 It is evident that this is an improper proceeding, even though it 
 may be technically lawful under the discretionary poAvers of the Commis- 
 sioner. The State's requirement of a surety bond or cash is a very differ- 
 ent requirement from that of the Dairymen's League contract which often 
 amounts only to an individual bond and justifying affidavit. 
 
 In any event, since under the law creating the Council, that body was 
 given all the powers formerly vested in the Commissioner of Agriculture, 
 it is evident that the discretion vested in that official became vested solely 
 in the Council itself under the law creating the Department of Farms 
 and Markets. 
 
 The record of the minutes of the Council and all the testimony taken 
 before me are barren of any rule or action by the Council divesting them- 
 selves of such discretionary power and giving it to Dr. Porter. Several 
 of the members of the Council expressed amazement when informed on 
 the witness-stand that the legal requirement of a surety bond from a 
 milk buyer had been consistently waived when it appeared that the 
 licensee had given a personal bond to the Dairymen's League. 
 
 The record of the testimony taken before me in connection with the 
 operation of the Bureau of Licenses under Dr. Porter (see pp. 1309 to 
 1400) shows that of 422 persons or firms to whom milk buying licenses 
 were issued, only 96 were required to give bonds during the fiscal year 
 running from September 1,, 1918, to August 31, 1919. Of the 326 who 
 were exempted from the requirement of a bond, 139 obtained exemption 
 because they had given bonds to the Dairymen's League, and 161 were 
 exempted outright on their financial showing. In the remaining 26 
 cases the licensees produced waivers from all of the milk producers with 
 whom they dealt, which waivers appear to have satisfied the Council. 
 There is also testimony (see p. 1343, etc.) showing that surety bonds 
 given to the State by milk licensees have actually been released by the 
 Department on the licensee filing proof that he had given a bond to the 
 Dairymen's League. 
 
 The consequence has been that in numerous cases milk buying firms 
 and individuals who have been exempted from giving a surety bond as 
 required by the statute, went into bankruptcy, failing in some instances 
 for large amounts of money, to the great loss of the producers from whom 
 they had bought milk. The records of the Bureau of Licenses also show 
 that in numerous instances milk buyers have been permitted to carry on 
 their business in violation of the law, without even taking out a license, 
 
19 
 
 and it is a further ludicrous fact that prosecutions for such violations 
 have in many instances been begun only after the milk buying concern 
 had gone into bankruptcy and the defrauded milk farmers began to 
 complain. 
 
 It is true that Dr. Porter is no longer a director of the Dairymen's 
 League but he is still a member and County President. His action there- 
 fore in permitting the exemption from the statutory bonding requirement 
 of milk buyers who have entered into a financial contract with the Dairy- 
 men's League and have satisfied that corporation with a personal bond, 
 partakes of a display of favoritism in the administration of the law that 
 amounts in the individual instances practically to a nullification of the 
 law and of the protection which the State seeks to give the producer of 
 milk. And, as has' been stated above, it is not anywhere clear from the 
 record how or when or why the Council of Farms and Markets, in which 
 body alone should lie the discretionary power formerly vested in the 
 Commissioner of Agriculture relating to the granting of any exemption 
 from the bonding requirement, divested itself of that discretion and em- 
 powered Commissioner Porter to exercise it. 
 
 The purposes of the Dairymen's League are purely commercial, for 
 the benefit of its members and inevitably must conflict at some points 
 with the interests of the general public. Such conflicts have repeatedly 
 arisen as a matter of fact, notably in the milk strikes which the Dairy- 
 men's League has ordered and encouraged and which have more than 
 once threatened to deprive the population of New York City of its daily 
 supply of milk. 
 
 It is not the purpose here to criticise the actions of the Dairymen's 
 League, in so far as they may be lawful and in furtherance of the interests 
 of the League members, who number about 79,000 milk producers. But 
 it is plain that a public official charged (as is fhe Commissioner of Foods 
 and Markets) with the protection of the ultimate consumer, should 
 not be closely affiliated with an organization whose primary aim 
 is the protection of the producer. Dr. Porter's activities in behalf 
 of the Dairymen's League since he has been holding his present office, 
 have been numerous and important. He has performed organization 
 work for the League, has made speeches in its behalf, has received pay 
 and expenses for his services in this connection and has given the influ- 
 ence and prestige of his position as Commissioner of Foods and Markets 
 to further a plan now being developed by the Dairymen's League for a 
 far more comprehensive combination of the milk producers of the State, 
 
20 
 
 in the form of co-operative milk producing associations, than has existed 
 heretofore. Again, without criticising the motives or objects of the 
 Dairymen's League and its members in thus endeavoring to acquire com- 
 plete control of the entire milk production of the State, it does not seem 
 proper that the Commissioner of Foods and Markets should be actively 
 interested in fostering or promoting such a plan. From the standpoint, 
 therefore, of his connection with and activities in behalf of the Dairy- 
 men's League, it would appear that Dr. Eugene H. Porter is not a fit or 
 proper person to hold the office of Commissioner of Foods and Markets. 
 It follows that if this be so, the Council of Farms and Markets is not 
 serving the best interests of the public by retaining Dr. Porter in office. 
 On account of the foregoing reasons, as well as those set forth in 
 my preliminary report to you (a copy of which is hereto annexed), I 
 am convinced that the interests of the People of the State would be best 
 served by the removal of Dr. Porter. Under his guidance, the Division 
 of Foods and Markets has shown little, if any, real achievement. The 
 activities of this branch of the Department have been largely "camou- 
 flage" and have been exerted more for the purpose of making a show- 
 ing for his division than for the benefit of either the producer or the 
 consumer. 
 
 Commissioner Charles S. Wilson. 
 
 Charles S. Wilson, the present incumbent of the office of the Commis- 
 sioner of Agriculture, under the Council of Farms and Markets, was 
 appointed in March, 1915, hj the then Governor, Charles S. Whitman, 
 as Commissioner of Agriculture before the creation of the Department 
 of Fai-ms and Markets. At the time of his appointment he was 
 employed in the New York State College of Agriculture as head pomol- 
 ogist. As he testified in his main examination, beginning page 1878, he 
 was born and raised on a farm in the western part of New York State 
 and took up the study of agriculture in a professional way. Previous 
 to his appointment as Commissioner he had been connected with the 
 New York State Fair Commission in charge of the fruit exhibits at the 
 State Fair. His salary, like that of Commissioner Porter, is |8,000 per 
 annum. 
 
 Commissioner Wilson testified that he had never received any official 
 notice from the Council of his appointment as Commissioner, and knew of 
 no reason for the Council's failure to make an official appointment in his 
 case as was done in the case of Commissioner Porter, but he has been 
 
21 
 
 recognized by the Council as Commissioner of Agriculture. When the 
 question of dividing the various bureaus of the Department of Farms and 
 Markets between the two divisions of Agriculture and Foods and Markets 
 came up, Commissioner Wilson was reluctant, as he stated in his testi- 
 mony, page 1881, to have all of the Bureau of Chemistry trans- 
 ferred to the Division of Foods and Markets as was done, but the 
 Council ruled that Dr. Porter should have full control over this bureau. 
 At this point it should be stated that for some time previous to the 
 creation of the Council there had been friction between the Commissioner 
 of Agriculture and Dr. E. J. Wheeler, head of the Bureau of Chemistry. 
 This arose, according to the testimony, through the failure of Dr. Wheeler, 
 in the opinion of Commissioner Wilson and his departmental counsel, 
 Mr. Flanders, to properly support the Department in the prosecution of 
 violations that had been reported to the Attorney General. The prin- 
 cipal dispute arose over Dr. Wheeler's professional attitude in handling 
 oleomargarine violations and vinegar violations, and culminated in the 
 Attorney General declining to proceed with the prosecution of numerous 
 violations of this character, so long as Dr. Wheeler was the chemist for 
 the State in such cases. 
 
 Charges, it appears, were preferred against Dr. Wheeler and investi- 
 gated by a Committee of the Council, but the matter was eventually 
 smoothed over by Dr. Porter taking over the Bureau of Chemistry and 
 retaining Dr. Wheeler, who is still the head of the Bureau of Chemistry, 
 under the title of director of the Bureau of Food Standardization. 
 
 This is a rather remarkable situation, as practically all of the alleged 
 violations, which involve analysis by the Bureau of Chemistry in order 
 to facilitate prosecution of the offenders, come within the jurisdiction of 
 the Division of Agriculture. Milk, oleomargarine, lard, feed and fer- 
 tilizer violations all fall within this category. The vinegar violations, 
 however, have been taken over by Dr. Porter's division for some reason 
 unexplained. The conflicting testimony of Dr. Wheeler, Mr. Flanders, 
 Mr. E. F. Burke, Assistant Director of the Dairy Products Bureau, and 
 former Deputy Attorney General Stern,. in regard to the disputes arising 
 between Dr. Wheeler and the Attorney General's office throw an 
 interesting sidelight on the lack of co-operation and efficiency permeat- 
 ing the administration of the Department. By the rearrangement of 
 Dr. Wheeler's services, under Commissioner Porter, Dr. Wheeler is now 
 known as the chief of the Bureau of Foods Standardization. His title 
 was formerly that of Chief Chemist, Department of Agriculture. His sal- 
 ary is. now 14,000 per annum. It was formerly $3,000. It appears from 
 
22 
 
 his own testimony, page 2004, that he could only recall of one case during 
 the present year in which he was called upon to send a chemist to court 
 in connection with a violation. This, it is understood from testimony of 
 other witnesses, is due to the disinclination of the Attorney General's 
 office to call upon Dr. Wheeler for testimony unless that becomes abso- 
 lutely necessary, owing to his failure, in the opinion of the Attorney 
 General's office, to make a proper presentation of several important test 
 cases, in which the State was defeated in its endeavors to prosecute 
 violators of the law. 
 
 Commissioner Wilson, page 1882, was unable to explain why the 
 Bureau of Milk Licenses, to which is entrusted the enforcement of sections 
 55 to 61 of the Agricultural Law, was taken from the Division of Agricul- 
 ture, where it had always been, and turned over by the Council to Dr'. 
 Porter's Division. 
 
 Commissioner Wilson was asked how he came to appoint Walter 
 S. Green as his secretary, when he was first made Commissioner of 
 Agriculture. He stated that he chose Mr. Green himself and sent for 
 him, but that he had no previousi acquaintance with Mr. Green except 
 that he had heard of him in connection with newspaper work. The 
 testimony of Mr. Green himself, beginning at page 1079, shows that he 
 has maintained during his incumbency in office very close relations with 
 Mr. George A. Glynn, Chairman of the Republican State Committee. 
 Mr. Green admitted on examination that when Mr. Glynn was executive 
 auditor under Governor Whitman, he frequently talked over matters 
 relating to appointments in the Department of Agriculture with Mr. 
 Glynn. During the last gubernatorial campaign it appears Mr. Green 
 spent his vacation time traveling through the State on the Whitman 
 campaign train. 
 
 Commissioner Wilson on his examination testified that he considered 
 his present organization in the Department "Very good," though he 
 was unable to conceal his discomfiture over the matter of the Gregory 
 Karakul sheep claims which were settled and paid without his knowl- 
 edge. This matter is more extensively dealt with in another part of 
 this report. 
 
 When asked by me, pages 1953, et seq., for any suggestions that 
 would improve the internal administration of the department under 
 him. Commissioner Wilson was unable to offer any concrete suggestion 
 except that he thought the agricultural law should be amended in 
 some respects. His only concrete suggestion related to a proposal to 
 enlarge the list of seeds that come within the jurisdiction of the De- 
 
23 
 
 partment in the Dairy Products Bureau. As he stated, page 1954, 
 "That is the only thing that I have in mind at the present time." 
 
 "The Commissioner: Enlarging the list of seeds that would come 
 under the jurisdiction or control of the Department? A. Yes sir." 
 
 Mr. Wilson stated, page 1935, that he believed that a larger appro- 
 priation could be used in the real interests of economy in the Depart- 
 ment. When he was asked if he did not think that something more 
 could be done to prosecute the manufacturers of food products, fer- 
 tilizers, etc., that come within the Department's jurisdiction, where 
 violations are found, instead of pursuing the retailer of such products, 
 Mr. Wilson replied, "In the case of the manufacturers that are out of 
 the State, of course all we can do is to state to them that this violation 
 has been found, and then ask them if they are willing to meet the fine. 
 We have, of course, no jurisdiction outside." 
 
 "Q. Do you think there ought to be any improvement in the present 
 method of administering the law in that respect? A. I do not see how 
 we can. 
 
 "Q. To trace it back to the original source? A. Everything possible 
 that I can see could be done has been done." 
 
 When asked whether he was ever consulted with reference to the 
 discontinuance of actions for penalties in his division, Mr. Wilson replied 
 that he was sometimes consulted, but that very few of the cases really 
 dame to his attention. 
 
 Taking all of the testimony relative to the administration of the 
 Division of Agriculture into consideration, it would appear that Com- 
 missioner Wilson is unfit for the important executive position which he 
 occupies. The heads of Bureaus in his Division, his subordinates, are 
 permitted to display an attitude of independence which cannot work 
 out for the best interests of the Department. Commissioner Wilson 
 appears to be lacking in initiative in many respects, and is too prone 
 to accept the conditions as he finds them without attempting to exer- 
 cise his powers to remedy them, and he has not apparently sought to 
 ensure for the Division of Agriculture the prominence in the Depart- 
 ment of Farms and Markets to which it is entitled. Illustrative of 
 this, it may be mentioned that among the employes of the Department 
 of Farms and Markets the Division of Agriculture is now commonly 
 referred to as "The Second Division." It would undoubtedly be better 
 for the agricultural interests of the State if the Commissioner of 
 
24 
 
 Agriculture were a man with more self-assertiveness and a larger sense 
 of his responsibilities. 
 
 Commissioner Wilson on examination was frankly unable to tell 
 the names and duties of certain of his subordinates and he testified that 
 it was his habit to accept in large measure the reports of his heads of 
 bureaus as to the manner in which these bureaus were functioning. As 
 an illustration of the loose methods that have grown up under Com- 
 missioner Wilson's administration, may be cited the Karakul sheep case. 
 
 Under what is known as the Dog Law now in existence, farmers 
 and others may recover from the State indemnities for the loss or injury 
 of any domestic animals that have been killed or worried by dogs at 
 large. For the year ending June 30, 1919, the total of such indemnities 
 paid by the State was over |179,000. 
 
 A corporation known as the American Karakul Fur Sheep Com- 
 pany filed with the Department a claim for damages alleged to have been 
 inflicted by unknown dogs on a number of valuable sheep belonging to 
 this corporation. The total of damages claimed was in excess of $16,000. 
 
 Under the law the Commissioner of Agriculture has a discretionary 
 power to approve, modify or reject the claim for damages after the 
 amount of damages has been fixed by the local assessors. It is the 
 duty of the Department to investigate all such claims and inspectors 
 are detailed for that purpose. 
 
 Commissioner Wilson declined to approve the claim for such large 
 damages filed by the American Karakul Company and after consultation 
 with the counsel of his division, Mr. Flanders, fixed the allowance for 
 the killed sheep at about |30 per head, whereas the company had 
 claimed as high as $1,000 per head on account of the valuable nature 
 of the sheep as fur bearing animals. Shortly before Commissioner 
 Wilson reached this decision another claim of a similar nature was 
 filed by one C. O. Gregory, who also raises Karakul fur bearing sheep. 
 Mr. Gregory is interested in a corporation which is afflliated with the 
 American Karakul Fur Sheep Company. 
 
 Mr. Gregory filed a claim for the loss and injury of some of his sheep 
 in which he demanded damages amounting to more than a thousand 
 dollars and computed at the rate of as much as $250 per sheep. The 
 Gregory sheep, it must be stated, were what is known as "grade" 
 Karakul sheep and therefore not of the highest quality or value. 
 
 The local assessors in Gregory's township/ one of them being also 
 named Gregory, approved the Gregory claim. When it came into the 
 
25 
 
 Division of Agriculture it was referred to the Bureau of Animal Industry 
 and the head of that bureau, Mr. Dorr W. McLaury, instructed an 
 inspector to make a report on the claim. The inspector, named Cameron, 
 saw neither the claimant Gregory nor any of the assessors, but reported 
 that the claim was a just and proper one. It was then approved by Mr. 
 McLaury and sent down to Commissioner Wilson's office where Deputy 
 Commissioner Shaver formally approved it by signing the Commis- 
 sioner's name to it, as he is authorized to do in certain cases. The full 
 amount of the Gregory claim was then paid. 
 
 Throughout all of these proceedings Commissioner Wilson was never 
 informed in any way of the existence of the Gregory claim nor of its pay- 
 ment, nor of the fact that Mr. McLaury and Mr. Shaver had approved 
 a claim for killed sheep under the Dog Law on a basis of |250 per sheep 
 of the "grade" Karakul breed. 
 
 Thereafter Commissioner Wilson, as has been stated, after elaborate 
 consultation with counsel, declined to take into consideration in making 
 allowance for the killed or worried sheep of the American Karakul Co., 
 the fact that they were fur-bearing animals of great value, but decided 
 that their value under the law should be considered only from the point 
 of view of their value as meat and wool producing animals. Mr. Flanders 
 advised him and it seems a reasonable theory, that the basis upon which 
 the law permitting indemnities to be paid by the State was passed was 
 that the State wished to encourage and facilitate the increased produc- 
 tion of meat and wool. The State, as Mr. Flanders held, is not so deeply 
 interested in the production of fur-bearing animals of great quality. In 
 this connection it may be pointed out that under the law granting indem- 
 nities for cattle condemned for tuberculosis, the law fixes an absolute 
 limit of $125 per head, even though the appraised value of the cattle may 
 be many times that amount, so that a |5,000 thoroughbred pedigreed bull 
 condemned for tuberculosis, would not bring any greater indemnity than 
 a good milk-producing cow valued at less than |200. 
 
 Counsel representing the American Karakul Fur Sheep Company 
 protested the action of Commissioner Wilson in reducing their claims, 
 aggregating some $16,000, to a few hundred dollars, and appealed to the 
 Council of Farms and Markets to review Commissioner Wilson's action. 
 It was not until then that Commissioner Wilson became informed of the 
 existence of the Gregory claim, which had already been paid in May, 
 1919, in full amount by the State. Counselfor the American Karakul 
 Company cited the Gregory case as a precedent in the Department and 
 
26 
 
 produced Commissioner Wilson's signed approval of the award to 
 Gregory in Justification of their protest against his reduction of their 
 claim. 
 
 It was not until then also, at this hearing before the Council of 
 Farms and Markets in September last, that the Council or Commissioner 
 Wilson became aware that the President of the American Karakul Com- 
 pany was an employe of the Department and actually an inspector under 
 the Dog Law in the Bureau of Animal Industry. This inspector's name 
 is Dawley and he is still connected with the Department. It further 
 developed that he had an interest in the Gregory claim owing to the fact 
 that Gregory and he have business relations in these Karakul sheep 
 transactions. 
 
 Commissioner Wilson described the whole matter as an "extraor- 
 dinary" one, and could offer no explanation as to why it was possible 
 for one of his subordinates to establish a precedent of this character and 
 practically commit the State to it without any consultation with him or 
 without his knowledge of any of the facts in the case. 
 
 It is further illustrative of the methods of the Council and of the 
 Department that so far as appears no action has been taken by the 
 Council or by Commissioner Wilson to call any one to account for this 
 extraordinary method of managing the affairs of the Department and 
 permitting the disbursement of State funds. 
 
 In the opinion, of Mr. Coleman and myself, Commissioner Wilson 
 has shoAvn himself exceedingly lax in the discharge of his duties. He 
 has been too easily satisfied with the work of his subordinates and has 
 trusted and confided too greatly in them and, in our opinion, the best 
 interests of the State would be served by the appointment of a commis- 
 sioner with more backbone and initiative. 
 
 Snreau. of Animal Industry. 
 
 The Bureau of Animal Industry performs some of the most important 
 functions of the Department under the Division of Agriculture. Enforce- 
 ment of the laws providing for the condemnation of diseased animals 
 such as tubercular cattle and glandered horses, comes within its juris- 
 diction. This Bureau also has supervision of the enforcement of the 
 Dog Law, providing for the licensing of all dogs of the State, of the acts 
 relating to outbreaks of rabies, the stallion enrollment law and in general 
 the promotion of the breeding of horses and cattle. All claims for indem- 
 
27 
 
 nities relating to condemned animals or for damages for the loss of 
 animals killed or worried by dogs, also come under the jurisdiction of this 
 Bureau. Mr. Dorr W. McLaury, a well known stock breeder, has been at 
 the head of the Bureau since January 1, 1918. 
 
 There has been much controversy as to whether or not the head of 
 this Bureau should be a licensed veterinarian of standing in his pro- 
 fession. Previous to the selection of Mr. McLaury by Mr. John Mitchell, 
 the late President of the Council, Dr. John G. Wills, now the chief 
 veterinarian of the Division of Agriculture, was the head of the Bureau 
 of Veterinary Service, the predecessor of the Bureau of Animal Industry. 
 The United States Bureau of Animal Industry is in charge of a veter- 
 inarian, and there is much to be said in favor of such a course, as the 
 great bulk of the employes of the Bureau are veterinarians and the 
 major portion of the work of the Bureau is of a veterinary character. 
 However, it has been argued that an experienced stock breeder and 
 raiser of horses and cattle can do more to foster and encourage the 
 animal industry throughout the State than a professional veterinarian, 
 provided he is assisted by a chief veterinarian in the Bureau. 
 
 Dr. Wills is now the chief veterinarian under Mr. McLaury and it 
 would be supposed that he would naturally have charge of the work of 
 the other veterinarians employed by the Bureau. Some of these are on 
 salary and some are retained and paid per diem. Dr. Wills testified, 
 however, in his examination before me, beginning at page 1227 of the 
 minutes, that he has had very little charge of the veterinarians since the 
 re-organization of the Bureau under Mr. McLaury, though prior to that 
 time he was in full control of their work. The condition that exists in 
 the Bureau today can be gathered from the following testimony of Dr. 
 Wills at page 1228 : 
 
 "Q. Your title is chief veterinarian? A. Yes, sir. 
 
 "Q. How many subordinates have you under you? A. Under the 
 present administration of the Bureau Mr. McLaury has charge as director 
 of all agents and veterinarians, as I understand it. 
 
 "Q. Have you anybody at all that is subordinate to you that takes 
 your orders? A. Dr. Linch, the first assistant and myself are really 
 working co-operatively in the work. In one sense of the term he is sub- 
 ordinate, although I do not give him very many orders under the present 
 arrangement. 
 
 "Q. Have you any charge of the veterinarians scattered throughout 
 
28 
 
 the State or direction over their work? A. Very little under the present 
 arrangement. 
 
 "Q. How long has this arrangement been in force? A. Since the 
 reorganization of the Bureau, January 1, 1918. 
 
 "Q. Prior to that time all the veterinarians were under you? A. 
 Yes, sir." 
 
 It seems anomalous that where the State is employing a high-class 
 veterinarian "with the title of chief veterinarian that he should not have 
 some measure of executive control over the other veterinarians of the 
 Department. The result has been that Dr. Wills' services, as chief 
 veterinarian, have been so subordinated that he acts merely as a veter- 
 inarian in charge of the Albany offlce. 
 
 In the course of the examination of Dr. Wills and others of the 
 Bureau of Animal Industry, including Mr. McLaury, a great deal of 
 testimony was taken in reference to the passing for food and sale for 
 food of cattle condemned for tuberculosis. It appears that prior to the 
 enactment of the existing law, which took effect June 1, 1919, it was the 
 practice of the Bureau, when a cow was reported as suffering from 
 tuberculosis, to send a veterinarian of the Department to inspect the 
 animal. If tuberculosis was indicated after test by the injectment of 
 tuberculin, the owner was given the option of having the animal 
 destroyed or segregated under the Bang system. In most cases the 
 owner preferred to have the cow destroyed, which was done under the 
 supervision of the veterinarian by a local butcher or at a convenient 
 slaughterhouse. The veterinarian then determined whether or not the 
 cow was suffering from localized tuberculosis or from a generalized tuber- 
 culosis. In some instances it was found that no lesions indicating tuber- 
 culosis existed at all. In the no lesion and localized cases, the veterinarian 
 then stamped the carcasses, after the hide has been removed, with a rub- 
 ber stamp reading: "Passed B. A. I. N. Y." This indicated that the 
 animal had been passed as fit for food and human consumption by the 
 Bureau of Animal Industry, New York. Where generalized tuberculosis 
 was disclosed by the post mortem examinations, the veterinarian was 
 required to mark the carcase with a rubber stamp reading : "Condemned", 
 and it was generally the practice also to mutilate or otherwise render the 
 carcase unfit for butcher use. The veterinarian was expected to make 
 sure that all such condemned animals were either buried forthwith or 
 sent to a rendering tank. 
 
29 
 
 Instances have been known, where animals condemned for gen< 
 eralized tuberculosis have, nevertheless, found their way to slaughter- 
 houses and butcher shops, indicating a loose system of supervision in 
 the disposal of such animals. Prior to June 3, 1919, the veterinarians, 
 acting as the agent of the State, and representing the Bureau of Animal 
 Industry, disposed of all such carcasses by sale to butchers and slaughter- 
 houses and the proceeds were turned into the State, including the pro- 
 ceeds of the sale of the hides of such animals. Under the present law 
 the owner of the animal disposes of it himself except that it is the duty 
 of the veterinarian to make sure that condemned carcasses are not sold 
 for food. 
 
 The laxness of the methods by which the Bureau was conducted 
 when the State sold the carcasses is shown by the fact that in many 
 instances the State had no other check upon the man to whom the car- 
 casses were sold than the simple report of the veterinarian who, in a 
 great many instances, collected the cash for the dead animals and turned 
 it in to the department in the shape of his own check. But as the system 
 by which the State derived a revenue from the sale of these carcasses has 
 now been abolished, it is, perhaps, unnecessary to go into details 
 concerning this phase of the administration of the Bureau of Animal 
 Industry. It should be pointed out, however, that the majority of these 
 carcasses were sold by the State veterinarians to large slaughterhouses 
 and butchers in New York, Albany, Buffalo, Utica and other cities, the 
 State paying the transportation of such animals: from the place of 
 condemnation to the slaughterhouses. 
 
 The question that arises is, whether or not the State should counte- 
 nance the sale for food of carcasses of animals that have been killed on 
 account of tubercular conditions. It appears that under the regulations 
 of the United States authorities, it is the practice to pass for food all such 
 carcasses where a condition of generalized tuberculosis is not disclosed 
 at the post mortem — that is, where only localized tuberculosis or "no 
 lesion" cases are shown; although it would appear that there are many 
 instances in which Federal and State veterinarians are unable to dis- 
 criminate as to just where localized tuberculosis ends and generalized 
 tuberculosis begins. The argument is that in localized cases the progress 
 of the disease has not reached such a point as to affect the use of the meat 
 for food purposes, though it may reach such a point in a few days. In 
 the "no lesion" cases, of course, the post mortem examination shows that 
 there was no actual tubercular condition presient. In cases of general- 
 
30 
 
 ized tuberculosis where the animal is condemned as unfit for food, the 
 tubercular condition has reached a point where at least three glands or 
 organs and sometimes the flesh itself have been affected. It is also argued 
 that not to permit the use of such carcasses for food would seriously 
 diminish the amount of meat available for food purposes throughout the 
 country and thereby tend to increase the cost of meat. In reply to this 
 it may be pointed out that in the fiscal year ending June 1, 1919, the 
 amount derived by the State of New York from the sale of all such car- 
 casses, sold for food purposes, was less than forty thousand dollars, 
 which amount could not be said to reduce by a serious percentage the 
 total value of the meat slaughtered or consumed in this State during the 
 same year. 
 
 How much the total value of all the cattle killed on account of local- 
 ized tuberculosis and passed for food throughout the United States would 
 amount to, it is impossible to say. The question of public health, how- 
 ever, seems to me to be paramount in this regard and certainly it cannot 
 be said that anything would justify the State in knowingly permitting the 
 exposure of its citizens to the contraction of tuberculosis through the con- , 
 sumption of cattle condemned because of this disease. As I have said, 
 there have been instances where condemned cattle with generalized tuber- 
 culosis in a very advanced stage have found their way to butcher shops 
 through somebody's negligence, and the testimony of Mr. Alfred W. 
 McOann, beginning at page 1526 will be found illuminating in this 
 respect. At page 1540 Mr. McOann tells of the slaughter for food pur- 
 poses of thousands of cows in Brooklyn slaughterhouses that were, to use 
 his words, "honeycombed with tuberculosis." The meat from such ani- 
 mals, Mr. McCann states, is often used in the manufacture of sausages 
 as it could not be otherwise exposed for sale owing to its condition. The 
 animals to which Mr. McOann makes reference, however, were not ani- 
 mals killed by State veterinarians as suffering from tuberculosis, but 
 were cows shipped in by the owners for slaughter when their condition 
 had become such that they could no longer be kept profitably on the farm. 
 
 Under the present law the owner of a cow killed by the State in addi- 
 tion to his claim for indemnity against the State is permitted to dispose 
 of the carcass, and it is the fact that these cattle are still being sold 
 as before to local butchers and slaughterhouses when they have been 
 passed for food by the veterinarians. 
 
 It seems to me that it might be advisable to prohibit the sale of any 
 such condemned cattle for food purposes. Dr. Wills, when questioned 
 
31 
 
 by me stated that lie would have no objection to eating meat from 
 tubercular cows that had been passed for food as localized cases, provided 
 it were properly cooked. But it must be remembered that many of our 
 citizens eat meat that is not cooked at all, and Dr. Wills admitted that 
 there might possibly be some danger from infection where raw meat from 
 a tubercular cow, even a localized case, was consumed. Dr. Linch, his 
 assistant, takes the same view of the matter, but both agree that every 
 precaution should be taken to see that no meat from generalized cases of 
 tuberculosis be allowed to reach the butcher shop and sold for human 
 consumption. It seems to me, therefore, that at the very least more 
 stringent precautions should be taken than are now taken to prevent 
 the possibility of meat from a generalized tubercular cow being sold for 
 food. Under the present system there is ample opportunity for conni- 
 vance between the veterinary and the owner of the condemned animal, 
 which should be obviated or rendered impossible. It would appear that 
 the German method of disposing of affected carcasses is through what 
 is known as the Freibank System, by which the diseased meat is sterilized 
 in a vat of live steam and afterwards sold at reduced prices under a label 
 plainly declaring its origin and character. This seems a sensible method 
 of disposing of such meat. 
 
 The suggestion was made to Dr. Wills that butchers handling such 
 meat should be compelled to advise their customers of the fact by placard 
 in the store, but he pointed out that such a plan might not prove prac- 
 tical in operation and would certainly result in discrimination between 
 the butcher exposing such a placard and the one who did not. At the same 
 time it must be borne in mind that the butchers of Albany, New York, 
 Buffalo, and other places, who purchase this meat from tubercular cattle 
 in large quantities do not pay anything like the market price for such 
 meat. When the State was disposing of this meat the average price 
 received from the butchers purchasing it was in the neighborhood of seven 
 or eight cents a pound as against the market price of from fourteen to 
 eighteen cents. There is no reason to believe that the butchers are now 
 paying the owners of such cattle any more for the meat than they paid 
 the State. Manifestly, however, the dealers in such meat are enjoying 
 an unfair advantage over other butchers who do not or would not handle 
 it, while the customer is left in entire ignorance of the fact that one man 
 deals in cheap meat from tuberculous cattle while the other does not. 
 
 The Council, as head of the Department of Farms and Markets, does 
 not appear from the minutes of these proceedings, to have taken the slight- 
 est interest in the matter of the condemnation and sale for food of tuber- 
 
32 
 
 culous cattle, though it does appear that at one of the sessions of the Coun- 
 cil some of the members showed themselves to be in favor of legislation 
 that would compel the State to allow much larger indemnities for such 
 cattle than the law now allows. 
 
 One of the matters developed during the course of my investigation 
 of the Department related to the activities, outside of his departmental 
 work of Dr. Richard H. Kingston, veterinarian in charge in New York 
 City. Dr. Kingston has been in charge of the New York office since 
 July, 1917, and has been connected with the Department of Agriculture 
 as a veterinarian since 1908. It developed in the course of his examina- 
 tion that in addition to his work as veterinarian in charge of the New 
 York Office, at a salary of |2,500 a year. Dr. Kingston is the Manager 
 of Stables of the American Railway Express Company, for which he is 
 paid a salary by that corporation of |4,000 per annum. Dr. Kingston 
 also has an arrangement with a corporation known as the Products 
 Manufacturing Company, which has an offal contract with the City of 
 New York, by which he purchases for this company in his own name at 
 the horse auctions of Fiss, Doerr & Carroll, in this city, what are known 
 as "skinners", or decrepit, useless and diseased horses. The Products 
 Manufacturing Company pays Dr. Kingston a sum from one dollar up, 
 per head, on all such horses which he buys in their behalf, and though 
 he was unable to state the total amount of money he earned in that way 
 in the course of the past year, there is no question that it was a sum 
 amounting to several hundred dollars. 
 
 It appears from his testimony, page 796, that Dr. Kingston was 
 veterinarian for the American Express Company until July 1, 1918, 
 when he became their Manager of Stables. He testified, that his arrange- 
 ment with the Express Company is such that it will not interfere with his 
 work in the Department of Agriculture. It appears also from Dr. 
 Kingston's testimony that he informed Commissioner Wilson and Mr. 
 McLaury, his superiors in the Division of Agriculture, that he held this 
 p6sition with the American Express Company, and that they both knew 
 of it and acquiesced in the arrangement. The excuse for permitting a 
 public official in a responsible position of this character to devote part 
 of his time to work for a private concern at a much larger salary than 
 the State is paying him is that the State salaries for veterinarians are 
 not enough to enable the State to acquire the exclusive services of com- 
 petent men. The same state of facts presumably applies to most of the 
 other thirty or more veterinarians employed by the Division of Agricul- 
 
33 
 
 ture. According to Dr. Kingston, it certainly applies to his two assistants, 
 Dr. Kohrer and Dr. Shaw, both in the New York Office, who, as Dr. 
 Kingston testified, have openly boasted that they make more money "on 
 the outside", than he does ( See p. 847) . 
 
 It is unquestionably true that a salary of 12^500 for a man of the 
 professional standing as a veterinarian of Dr. Kingston is entirely 
 inadequate. But this fact should not be used to justify his being 
 permitted to work for outside interests, some of which are bound, in the 
 nature of events, to conflict with the interests of the State. This phase 
 of the matter was brought to the attention of both Commissioner Wilson 
 and Mr. McLaury. 
 
 The manner in which the interests of the State and of the private 
 concerns for which Dr. Kingston works conflict is as follows: The 
 American Express Company formerly, and now the American Railway 
 Express Company, which is a combination of several express companies 
 under Federal supervision, use a large number of horses. Some of 
 these occasionally become affected with glanders, and have to be killed. 
 The company thereupon makes a claim against the State for an indemnity 
 on account of the loss of the horse. It is the official duty of Dr. Kingston, 
 as veterinarian in charge of the New York Office to look after all reports 
 of glandered horses and see that the proper action is taken either by 
 himself or one of his subordinates to determine whether the horse has 
 glanders and if so, to see that it is condemned and killed. It is generally 
 an incidental part of these duties for the veterinarian to appraise the 
 value of the condemned horse and to forward the claim of the owner 
 of the horse to the Albany office for adjustment. 
 
 As veterinarian and manager of stables for the American Railway 
 Express Company, and formerly for the American Express Company, it 
 was and is the duty of Dr. Kingston to deter-mine whether any of the 
 company's horses are suffering from glanders, and if so, to report it to 
 himself as a State official, and then to proceed to act in the dual capacity 
 of representative of the private concern owning the condemned horse and 
 making a claim for it, and as the representative of the Division of Agri- 
 culture of the State of New York, in condemning and killing the horse, 
 appraising it and forwarding the claim to Albany. 
 
 There is no suggestion advanced here that Dr. Kingston has not 
 acted thoroughly honestly in all his dealings with the State in this 
 matter, but it is perfectly evident to any unprejudiced person that this 
 is an intolerable situation. If the State needs and should have as its 
 
34 
 
 veterinarian in charge of the New York office a man of the earning 
 capacity of Dr. Kingston, the State should pay him a salary that would 
 make it unnecessary for him to seek compensation from private sources, 
 such as his present employment with the American Eailway Express 
 Company. It might, of course, be perfectly permissible and proper for 
 a State veterinarian to have a private practice incidental to his calling, so 
 long as such practice did not interfere with the necessary work of the 
 State, But it is when the interests of his private practice and the inter- 
 ests of the State become antagonistic, as must be the case when the 
 Express Company has a claim for damages against the State for the 
 condemnation of one of its horses, that the vicious condition arises. 
 
 The same situation but in another way arises in connection with Dr. 
 Kingston's work for the Products Manufacturing Company. This com- 
 pany, as has been stated, has an offal contract with the City of New 
 York, by which it is paid a stated sum for the removal of all dead animals 
 from the streets of the city. The Products Manufacturing Company is 
 a stock corporation of which 52 per cent, is controlled by interests repre- 
 senting the "Big Five" packers, that is. Armour & Company, Morris & 
 Company, Swift & Company, Cudahy & Company and Wilson & Com- 
 pany. This appears in evidence on page 1193 of the minutes, and is set 
 down here merely to show the great ramifications of the packing interests 
 in all the industries of the State and nation. 
 
 The Products Manufacturing Company pays nothing for a dead 
 horse that it removes from the street or the premises of the korse's 
 owner, nor does it pay anything for a decrepit horse that is brought to 
 it at the offal dock, foot of 39th Street, North River. It simply kills 
 such horses and removes their carcasses to Barren Island. By arrange- 
 ment between Dr. Kingston and the Products Manufacturing Company, 
 all cases of glandered horses in the territory covered by Dr. Kingston's 
 office are turned over to the Products Manufacturing Company. The 
 diseased horse is led to the dock and there killed, and a post mortem 
 held on it on the dock, to determine the extent of the malady in order 
 that the amount of indemnity may be calculated. The company then 
 takes possession of the dead horse and ships it to Barren Island, making 
 no payment to the State for the animal. 
 
 This company is in the market to purchase all the "plugs" and 
 "skinners", as old and decrepit horses are called, that it can. The hide, 
 hoofs, and other parts of such animals are valuable, and the flesh and 
 
35 
 
 bones are made into fertilizer. The value of a dead horse to this com- 
 pany ranges from f9 to $20, according to the condition of the animal. 
 Formerly, as appears from the testimony of Dr. Kingston, there was 
 strong competition among various fertilizer concerns to purchase all 
 such dead or useless horses. To oblige Dr. Kingston, as he testified, a 
 member of the firm of Fiss, Doerr & Carroll agreed to effect arrangements 
 with Dr. Kingston for the benefit of the Products Manufacturing Com- 
 pany by which all decrepit and useless horses and all horses which the 
 Society for the Prevention of Cruelty to Animals might condemn and 
 order killed or sold, should be knocked down in the horse auctions to Dr. 
 Kingston. For some reason it was deemed advisable to conceal the 
 identity of the bidder, and so Dr. Kingston's account is known as Account 
 No. 1 in the books of Fiss, Doerr & Carroll, and these horses are knocked 
 down to him under the title of that account. The average price for them 
 is |7.50, though under competition, as he testified, it has sometimes been 
 necessary to bid as high as |15 and |17.50 for them. The Products 
 Manufacturing Company in reimbursing Dr. Kingston, allows him a com- 
 mission of from one dollar to two dollars and a half per head over and 
 above the purchase price. A peculiarity of the arrangement is that Dr. 
 Kingston himself is never present at the auction, the auctioneer acting 
 for him. It thus happens that , Dr. Kingston's account is frequently 
 charged with the purchase of dozens of horses without his knowledge. 
 He effects a monthly settlement with his personal check when the amount 
 of his account is ascertained. Dr. Kingston testified that he did not 
 retain either his check stubs or his returned checks, so it was impossible 
 to ascertain the amount of his monthly payments. The horses, when 
 knocked down to Dr. Kingston's account, are led away to the offal dock 
 by employes of the Products Manufacturing Company, and there killed 
 and shipped to Barren Island. 
 
 The vicious feature of all this arrangement lies in the fact that 
 the Products Manufacturing Company, like the American Express 
 Company, is also a large owner of horses, and has in the past collected 
 thousands of dollars from the State of New York in indemnities for 
 glandered horses. It is evident that there is ample opportunity here 
 for the perpetration of frauds upon the State in connection with claims 
 for glandered horses, as it is evident that some of the "plugs" and 
 "skinners" purchased by the Products Manufacturing Company through 
 Dr. Kingston, might turn out to have glanders. No charge is made here 
 that any such fraud has been perpetrated upon the State, but the con- 
 
36 
 
 nection between Dr. Kingston as a State official and Dr. Kingston as a 
 horse buyer for the Products Manufacturing Company is an arrange- 
 ment which is highly undesirable.- When I drew this matter to the 
 attention of several members of the Council, they expressed astonish- 
 ment and remarked that they did not think Dr. Kingston ought to be 
 doing work for other people than the State. Commissioner Wilson and 
 Mr. McLaury stated that they had no knowledge of Dr. Kingston's work 
 for the Products Manufacturing Company, but did not seem to look 
 upon the matter in a serious light. In any event, there does not seem 
 to be any desire on any one's part to take any step to alter the situation. 
 
 Dog Liatv Indemnities. 
 
 The amount paid by the State to claimants for damages under the 
 Dog Law between March 1, 1918, and March 1, 1919, was $179,295. In 
 addition $48,149 was expended for fees to local assessors and incidental 
 expenses of administering the law, and |4,336 was spent for license 
 tags for dogs, making a total of |231,780 as the cost to the State of this 
 Dog Law (see testimony, p. ,1900). As against this, according to the 
 reports of the Department, the sum of $378,591 was received for dog 
 licenses granted for the year beginning March 1, 1918. A balance in 
 favor of the State, therefore, of approximately $147,000 appears between 
 the receipts for licenses and the amounts paid out for damages and ad- 
 ministration. In this connection it is interesting to point out that there 
 is testimony to the effect that the inspectors of the Bureau of Animal 
 Industry charged with the duty of investigating claims made under the 
 Dog Law, take the position, in passing upon such claims, that the money 
 does not come out of the State, and that therefore, it is only fair to let 
 the claimants get as much damages as possible. This is an illuminating 
 side light on the entire atmosphere of the department. It does not seem 
 to occur to these inspectors that the license required of an owner of a 
 dog is just as much of a tax levied by the State as if it were called a tax 
 instead of a license. But this theory seems to have pervaded the depart- 
 ment, and claims under the Dog Law are passed with nothing but the 
 most nominal scrutiny. A claim filed by Irving Brokaw illustrates this 
 condition. Mr. Brokaw on his estate at Oyster Bay, Long Island, main- 
 tains a quantity of fancy water fowl. Early in 1918 he filed a claim 
 alleging that unknown dogs had killed two lambs and several of these 
 water fowl. The claim lingered in the office of the Bureau of Animal 
 
37 
 
 Industry while an inspector named Parkinson undertook to ascertain 
 the market value of three mute swans, one whistling swan, one cackling 
 goose, four ruddy-shelled drakes, two wood ducks and other fancy Water, 
 fowl which Mr. Brokaw alleged had been killed by these unknown aogs. 
 Mr. Parkinson finally concluded that mute swans were worth |30 each ; 
 whistling swans, |45 each; cackling geese, |20 each; ruddy-shelled 
 drakes, |15 each; w^ood ducks, flO each, and on the basis of these valu- 
 ations the claim of Mr. Brokaw was finally adjusted at |466.50, which 
 included damages for two lambs valued at $15 each. The claim was 
 then paid by the State. It has proved absolutely impossible to discover 
 who approved this claim and finally authorized its payment. Neither 
 Mr. McLaui-y nor Deputy Commissioner Shaver nor Commissioner 
 Wilson was able to throw any light upon the subject except that Mr. 
 Wilson testified that he thought he had consulted at some time with 
 Mr. Flanders, his counsel, in relation to the Brokaw claim, and had 
 concluded that it should be allowed. But among the records of the 
 Department it is impossible to discover anything that discloses officially 
 who approved the Brokaw claim. 
 
 Taken in conjunction with Commissioner Wilson's attitude on the 
 matter of the Karakul fur-bearing sheep discussed in another portion 
 of this report., in which Mr. Wilson and Mr. Flanders both held that 
 the State was not interested in the protection of fur-bearing sheep as 
 such, but that their value could only be considered from the point of 
 view of their worth as meat and wool producing animals, it is a serious 
 anomaly that Mr. Wilson and. Mr. Flanders found it perfectly justifiable 
 for the State to reimburse Mr. Irving Brokaw for the value of fancy 
 water-fowl which were maintained purely as an ornament upon his estate 
 at Oyster Bay. How dogs came to kill these fancy water-fowl is not 
 revealed in any of the records of the department. Certainly it cannot 
 be the purpose of the Legislature to reimburse any person for injury 
 to ornamental water-fowl. It was the admitted purpose of the Legis- 
 lature to reimburse owners of sheep and domestic fowl injured or 
 killed by stray dogs. It seems as if the Department, and particularly 
 the Council, should have some settled policy in regard to the adminis- 
 tration of this law and not decide one case one way and an identical 
 case in another way, apparently without any rhyme or reason. Further- 
 more, the records relating to all such claims are not nearly as complete 
 as they should be in view of the fact that they represent the only record 
 of why large sums of money are paid out under the authority of this 
 
38 
 
 de'partment. The testimony of Mr. Dengler, the accountant of the Com- 
 mission, shows that in practically none of the claims under the Dog Law 
 was any but the most perfunctory investigation made. He examined 
 over 3,500 such cases and found that out of all of these only 21 were 
 rejected. In the majority of cases, the sum claimed was allowed as filed 
 simply on the sworn statement of the claimant. 
 
 In the case of W. J. McCarthy of Johnsburg (see p. 1199), Mr. 
 McCarthy made a claim for 1887. Mr. Dengler found that the local 
 assessors allowed Mr. McCarthy |140 for the injuries to his sheep. When 
 the matter was investigated by Inspector Cameron of the Bureau of 
 Animal Industry, he made a report in August, 1918, allowing Mr. Mc- 
 Carthy |643, which was subsequently paid by the State. Mr. Dengler 
 Tyas asked (p. 1200) if there was any explanation why the original 
 appraisal of |140 by the local assessors was raised in the department 
 to $643; and his answer was that there was no explanation on record. 
 
 In another case, that of the claim of W. B. Kunner, the claim filed 
 was for |1,129. The local assessors at Plattsburg, Mr. Runner's township, 
 placed the damages at $268. A memorandum is attached to this claim, 
 signed by Mr. Flanders, counsel to the Division of Agriculture, holding 
 that the allowance made by the assessors was inadequate. Mr. Flanders 
 recommended that the allowance be increased to f 850, which was done, 
 and that amount paid to Mr. Runner. Mr. Dengler's testimony shows 
 that on various claims, without any apparent reason, the amounts allowed 
 to claimants for chased and worried sheep varied all the way from |2.00 
 to |25.00 per head. On page 1205, Mr. Dangler testified as follows : 
 
 "Q. Who is the agent in charge of the Department? A. W. O. Par- 
 kinson. 
 
 "Q. Did he make any statement to you in reference to the attitude of 
 the Department? A. Mr. Parkinson, the agent in charge, stated to me 
 that the law compelled the allowance and payment, and as to many of the 
 agents, their attitude is that inasmuch as the money conies in from dog 
 licenses for this purpose, each claimant should get as much of it as possi- 
 ble of that fund, as it costs the State nothing." 
 
 The great defect in the administration of the Dog Law seems to lie 
 in the fact that under the terms of the law it is merely necessary for the 
 claimant to make an affidavit that he believes the animals to have been 
 killed or worried or otherwise injured by unknown dogs. This, of course, 
 leaves the door open to all sorts of fraudulent claims, and the only way 
 to check such claims is by a strict investigation of them. The attitude 
 of the heads of the Division of Agricuture and of Mr. Flanders, the coun- 
 
39 
 
 sel, seems to be that they cannot go behind the affidavit of the claimant 
 in regard to the statement that the injuries were caused by dogs. It seems 
 to me that if this be a proper interpretation of the existing law, it 
 would be well to have the law so amended that the claimant would be 
 required to produce some concrete evidence that the injuries complained 
 of had been caused by dogs. The Department could then investigate and 
 report intelligently upon such claims. 
 
 It seems to me also that the law should be amended so as to fix a 
 limit upon the value of the animals alleged to have been killed or injured, 
 just as a limit is placed in the case of tubercular cattle or glandered 
 horses. Under the existing law, the payments for damages are made 
 out of the County treasury of the county in which the claimant resides, 
 and the function of the Department of Farms and Markets is to approve, 
 modify or reject such claims after they have been passed upon by the 
 local assessors. Nowhere is it suggested in the law as the province of the 
 department to increase the allowance made by the local assessors, except 
 in so far as this meaning may be found in the use of the word modify. 
 
 The whole theory of the law as set forth in sections 139-e^ 
 139-/ and 139-i^ of the Agricultural Law is that the owner of the 
 dog causing the damages shall, if possible, be held to account for the dam- 
 ages. To this end each claimant is required to make an assignment of his 
 claim to the County Treasurer, in order that this ofl&cial may seek to 
 obtain judgment against the owner of the dogs causing the injuries com- 
 plained of. Naturally these depredations by dogs mostly occur at night, 
 when the dogs cannot be seen, or even if seen, could scarcely be recognized 
 so that their ownership might be determined. Still it should be the pol- 
 icy of the Department of Farms and Markets, and therefore, of the Coun- 
 cil to exercise every possible check upon the claims in order that fraud 
 may be eliminated, and it certainly should not be the policy that because 
 the State or County officials receive money from dog licenses, therefore 
 the claimants should "get as much as possible out of that fund". 
 
 Eeferring again to the claims filed by the American Karakul Com- 
 pany and by O. O. Gregory for injuries to sheep caused by dogs, 
 I would say that I am convinced from the testimony in reference to these 
 two claims that Mr. Dorr W. McLaury, the Director of the Bureau of 
 Animal Industry, had some ulterior motive in approving the claim of 
 Gregory and sliding it through his bureau and having it approved by 
 Deputy Commissioner Shaver, without the knowledge of Commissioner 
 Wilson. I believe that this claim was handled by Mr. McLaury in this 
 manner for the purpose of having its allowance used as a precedent for 
 
40 
 
 the large claim for many thousands of dollars filed by the American 
 Karakul Company, the President of which company, Mr. Frank E. Daw- 
 ley, being an employe in Mr. McLaury's bureau. When this matter was 
 being examined into by my counsel, Mr. Coleman, at a hearing in Albany, 
 the file of the Gregory claim was sent for and handed to Mr. McLaury, 
 Mr. McLaury extracted one of the papers from the file and when asked to 
 hand it over to Mr. Coleman said that the paper had nothing whatever to 
 do with the case. When Mr. McLaury was forced to hand over the paper, 
 it was disclosed that the paper in question contained a complete history 
 of the case from its inception to its conclusion (see pp. 1683 and 1684 
 of the testimony). 
 
 Oleomargarine. 
 
 It appears from the testimony of Mr. Flanders and others that 
 under the existing laws of this ' State it is practically impossible to 
 prevent the fraudulent passing off of olemargarine for butter. It is 
 true that where olemargarine isi sold in retail or wholesale stores, 
 the law prescribes that it must be sold as such and in original packages 
 bearing a clear designation of the fact that the product sold is oleo- 
 margarine and not butter. But owing to the construction placed upon 
 the law as it now exists, hotels, restaurants, and other distributors 
 of food may place oleomargarine, disguised as butter, before their custom- 
 ers with practical immunity. This situation arises because the laws 
 relating to oleomargarine -appear to prohibit merely the use of "artifi- 
 cial coloring" to give the product the semblance of butter. 
 
 The manufacturers of olemargarine who are to a great extent 
 controlled by the great meat-packing firms known as the "Big 
 Five" have managed to evade the law by skilful use, in the manufacture 
 of the product, of kidney fat from animals where this fat, through the 
 age or nature of the animal, is of a yellow tinge. This results in the 
 olemargarine, which is basically a mixture of such fats with cotton- 
 seed oil, having instead of its natural dead white color, the appearance 
 of light yellow butter. In consistency, odor and appearance the oleo- 
 margarine thus presents to the consumer the aspect of a light creamery 
 butter, and is undoubtedly consumed in this State in large quantities by 
 persons who are paying for what they believe to be a high grade of 
 butter. Only an expert by making the necessary tests could detect 
 the difference. 
 
41 
 
 It is said in the dairy industry that the nutritive value of oleo- 
 margarine in no way compares with that of butter. The real dairy 
 product is said to contain elements essential to the human system which 
 are not present in olemargarlne. Of course, olemargarine is not 
 nearly as expensive to produce as good butter. 
 
 The insidious forms of fraud that grow out of this fact should be 
 corrected, and it appears as though that would be a simple matter to 
 do. The Courts have held, as Mr. Flanders explained, that, in view of 
 the fact that the manufacturer was not shown to have made a "con- 
 scious selection" of coloring materials in order to produce an imitation 
 of butter, but had used a material having a natural yellow tinge, 
 the law was not violated. Mr. Flanders related at some length the 
 history of the manner in which the present law came to be written as 
 it is (see his testimony at p. 2050, ct seq.). Without going into the 
 details of his testimony, it is substantially this: That some years ago 
 one Henry V'eeder, a Chicago attorney, said to represent the large pack- 
 ing interests of Armour, Swift & Company, Morris & Company, Wilson 
 & Company and Cudahy & Company — the fact of his being such counsel 
 is shown in the report of the Federal Trade Commission, Exhibit 59, — 
 was introduced to Mr. Flanders in the Legal Bureau of the Department 
 of Agriculture by the then Commissioner of Agriculture, Mr. Raymond 
 S. Pearson, at the instance of the then Speaker of the Assembly, Mr. 
 James W. Wadsworth, now a United States Senator for the State of 
 New York. Mr. Wadsworth, according to Mr. Flanders' testimony, 
 showed then, and has shown since, considerable interest in the affairs 
 of the Chicago meat packers. 
 
 Mr. Flanders testified that the law relating to the manufacture 
 and sale of olemargarine, as it now stands, was determined upon at a 
 consultation in his office between himself, Mr. Wadsworth, Mr. Veeder 
 and other persons. Mr. Wadsworth, according to Mr. Flanders, 
 expressed a desire to have the law so framed that it would not prohibit 
 the sale of oleomargarine as such in this State, and Mr. Flanders under- 
 took to prepare a law that would agree with Mr. Wadsworth's expressed 
 desires. 
 
 The result was a law, which, owing to its wording, permits the sale 
 of oleomargarine that is a perfect imitation of butter, and though the 
 lawfe ostensibly prevent its sale as butter, the result is that oleomar- 
 garine in the semblance of butter is freely sold throughout the State, 
 and, as stated before, can be found on the tables of restaurants, and 
 
42 
 
 hotels where it is accepted by the deluded consumer as a fine quality 
 of butter. 
 
 This oleomargarine situation is typical of the conditions that sur- 
 round the enforcement of many of our laws relating to food, and it is 
 the knowledge that such conditions can exist with the entire connivance 
 or helplessness of the officials charged with the enforcement of the pure 
 food laws that has brought the Department of Agriculture of this State, 
 and now the Department of Farms and Markets, into disrepute. It is 
 also typical of the lack of interest shown by the members of the Council 
 and the Commissioners under them who are specifically intrusted with 
 the duty of recommending legislation to correct the perpetuation of 
 such frauds upon the public that none of them has paid the slightest 
 attention to this matter. 
 
 Milk Licenses. 
 
 The testimony of Mr. Toole, beginning at page 1309, shows that 
 during the fiscal year ending August 31, 1919, the Bureau of Licenses 
 issued 422 licenses, permitting the licensees. to purchase milk from pro- 
 ducers under the terms of Section 55 of the Agricultural Law. 
 
 It is stated in Bulletin No. 118 of the Department of Farms & 
 Markets (which is in evidence as exhibit ISTo. 43, and is dated April 19, 
 1919), as set forth at page 3, that in the year 1918 there were "over 
 1,742 places or establishments where milk is manufactured or received 
 for shipment in the State". All of such places necessarily require a 
 license and though it is true that in some instances several such places 
 are operated by one person or firm, it remains the fact that a large 
 number of milk manufacturing or shipping stations were operated with- 
 out the license provided for in Section 55. In many instances this is 
 accounted for by the attitude taken by the Department, particularly 
 under the administration of Dr. Porter and his offlcial counsel, Mr. 
 Miller. They have interpreted the law, without any distinct ruling by 
 the courts on this subject, as exempting from the provisions of Section 
 55 all co-operative associations of producers of milk who undertook to 
 manufacture or ship and sell such milk through such association or sell- 
 ing agency. Every concern claiming to be operating such a co-operative 
 association has been uniformly exempted from the requirement of the 
 license and bond. As I pointed out in my preliminary report filed with 
 
43 
 
 you on October 9th, this attitude is taken notwithstanding the fact that 
 the courts have decided, and notably in the Israel case by the Appellate 
 Division, in January, 1919, that Section 55 of the Agricultural Law 
 should be liberally construed to accomplish the purpose intended by the 
 Legislature, which was to secure to those engaged in dairy pursuits pay- 
 ment for the milk and cream sold to a licensee to be consumed or manu- 
 factured in a distant city. While it is true that where a co-operative asso- 
 ciation would be dealing merely with its own members and might be 
 deemed a producer itself, as being an association of producers and, there- 
 fore, exempted from the bonding provision, it is nevertheless the fact that 
 a great many of these co-operative associations purchase and handle the 
 milk of non-members of the association and in the event of the failure 
 or default of such association to pay for the milk they have purchased, 
 such non-members are left without recourse under the bonding pro- 
 vision of the Statute owing to the policy adopted in this matter by Dr. 
 Porter. 
 
 The discretion formerly vested by law in the Commissioner of Agri- 
 culture, to determine who may be exempted from giving a bond under 
 Section 55, does not run to the matter of granting the license. The law 
 specifically sets forth that "no person, firm, association or corporation 
 shall buy milk or cream within the State from producers unless such 
 firm, person, association or corporation shall be duly licensed". It is 
 difficult to understand by what process of reasoning Dr. Porter or his 
 counsel, Mr. Miller, can justify, in view of the specific wording of the law, 
 the failure to require co-operative associations even to take out a license, 
 thus bringing themselves within the jurisdiction of the Department. 
 The discretionary power to grant any exemption is now vested in the 
 Council of Farms and Markets as head of the Department. of Farms and 
 Markets and the council may delegate these powers in this respect to 
 one of the commissioners. But the record fails to show that such dele- 
 gation was officially made. Nor do the minutes of the council indicate 
 that this important question of the policy of the council in enforcing the 
 law was ever directly passed upon by the council. It is important that 
 all producers and shippers of milk and cream within the jurisdiction of 
 the Department should be subject to the issuance of a license in order 
 that proper supervision may be had by the Department over the milk 
 supply of the State. 
 
 Under the general powers and duties of the Department, in section 
 30, of the Farms and Markets Law, it is provided that part of the dtities 
 
44 
 
 of the council is to insure an ample supply of milk in the centres of 
 population and "to aid in the accomplishment of such purpose within 
 the provisions of existing law". Nothing can be fundamentally achieved 
 in this direction where a policy is pursued which permits a large propor- 
 tion of the producers and shippers of milk to operate without any super- 
 vision or control by the Department, which is the condition existing 
 through the failure to require all such concerns whether co-operative 
 associations or not, to obtain a license. It is the license that brings such 
 concerns within the control of the Department and not the bond. The 
 bond is merely exacted as financial protection for the producers of milk 
 and may be waived where the financial condition of the licensee appears 
 satisfactory to the Department. As I pointed out also in my preliminary 
 report, the failure of the Bureau of Licenses under the administration of 
 Dr. Porter to require a surety bond from a large number of milk-buying- 
 concerns has brought the operation of that Bureau from the point of 
 view of affording protection to the milk producers, such as the law is 
 intended to afford, into a condition of comparative uselessness. This is 
 shown by the fact that in his first annual report for the year ending 
 January 31, 1918, Dr. Porter was obliged to admit that the total amount 
 collected from delinquent milk dealers on bonds filed with the Depart- 
 ment during that year, was only |77.67. This, notwithstanding the fact, 
 that during that year it was notorious that a number of persons and 
 corporations engaged in the purchase of milk in this city, went into bank- 
 ruptcy with liability to milk producers and farmers amounting to large 
 figures. One of these concerns, known as the Country Milk Company, 
 which had been exempted from giving a bond by Dr. Porter, on the 
 alleged ground that it was merely a co-operative association, whereas, 
 in fact, it was a stock corporation engaged in the retail sale of milk for 
 profit, went into the hands of a receiver in the fall of 1918 with liabili- 
 ties estimated around four hundred thousand dollars. The Department 
 of Farms & Markets, through the Bureau of Licenses, was in receipt of 
 a number of complaints from milk producers who had lost money through 
 the failure of Dr. Porter to require this corporation to give a bond. The 
 president of the Country Milk Company, Roswell D. Cooper, is also and 
 was then the president of the Dairymen's League, and close friend and 
 associate of Dr. Porter. Neither Dr. Porter nor Mr. Miller was able to 
 give me a satisfactory explanation of why this company was permitted to 
 operate without the requirement of a surety bond as required by law 
 which would, in part at least, have protected the milk producers from 
 whom the Country Milk Company purchased milk. 
 
45 
 
 Filing System in Department. 
 
 The inquiries which my investigators made into the management 
 of the Bureau of Licenses, disclosed that the filing system in that Bureau 
 is not only wholly inadequate and unbusinesslike, but practically use- 
 less. In the correspondence filed with reference to certain milk con- 
 cerns, references were found to many letters, neither the originals nor 
 the copies of which could be located in any way in the Bureau or else- 
 where in the Department. Some of this correspondence related to com- 
 plaints made by milk producers many of which were missing from the 
 files, though constant reference to them could be found in other corre- 
 spondence. 
 
 The same condition was found to exist in other branches of the 
 Department, both in the Division of Agriculture and of Foods and Mar- 
 kets. It appears from a report made in 1917 to Deputy State Comptroller 
 Reusswig, by J. H. Whitney, an accountant, that this condition was 
 found and reported then, but it is evident that nothing was done to remedy 
 the conditions shown by Mr. Whitney's report. Many of the copies of 
 alleged letters sent out from the Department cannot be found in the 
 files in some of the Bureaus. This is of such importance that it seems 
 that it would be wise to recommend that letter press copies be made of 
 all original correspondence sent out from the Department, so that in the 
 event of the loss of the loose carbon copy, reference can be had to 
 the permanent letter press copy. While on this subject, I deem it advis- 
 able to suggest that in order to conform with the requirements of the 
 Civil Service Eegulations, which prescribe that accurate records be kept 
 of the worktime of all employees, time clocks should be installed through- 
 out the Department both in the main office in Albany and in the branch 
 office in New York City and elsewhere. These time records are necessary 
 under the present Civil Service Regulations in order that employees may 
 be properly graded for merit. By the present system in the Depart- 
 ment, under both Commissioner Wilson and Commissioner Porter, the 
 heads of the Bureaus keep a sheet upon which the time record of each 
 employee is supposed to be noted. In very few instances, however, did 
 it appear that the coming and going of any employee was noted as to 
 time, and the sheet, when kept at all, merely indicated whether the 
 employee was "on time" or "tardy". The establishment of a time-clock 
 system would provide an accurate record of the actual time of all 
 
46 
 
 employees Avhile in the office of the Department. In view of the import- 
 ance of these records to the employees under the present Civil Service 
 Regulations, there seems to he no reason why the present slip-shod 
 methods of keeping such time records should not be discontinued. 
 
 Sureau of Accounts. 
 
 All of the accounts of the Department of Farms and Markets are 
 supposed to pass through and be checked up by what is known as the 
 Bureau of Accounts, of which Mr. Edward P. Kerwin is the director. 
 This bureau is also supposed to have charge of the purchases of su.pplies 
 for the Department, and in general to act as the comptroller of the depart- 
 ment. It appears, however, that some funds which come into the depart- 
 ment in the shape of cash and checks merely go through the Bureau of 
 Accounts as a matter of form and are not tabulated or in any way 
 checked up. For instance, where penalties are collected for violations 
 of the regulations of the Division of Agriculture, these are frequently 
 paid by the penalized person or firm into the office of Mr. Flanders, 
 counsel for the Division of Agriculture, either in cash or by check. Under 
 the law these penalties should be forwarded direct to the State Treasurer, 
 but for some reason many, if not all, of the penalties are collected by Mr. 
 Flanders directly. The cash or checks are then sent by Mr. Flanders 
 to Mr. Kerwin's office and as a matter of courtesy Mr. Kerwin obtains 
 certified checks payable to the State Treasurer for the corresponding 
 amounts, which he then hands over to Mr. Flanders. Mr. Kerwin 
 deposits the cash or checks thus received from Mr. Flanders in his own 
 bank and obtains cashier's checks against them. 
 
 No account is kept in the Bureau of Accounts of these transactions 
 except in so far as Mr. Kerwin keeps a personal memorandum to make 
 sure that the certified checks which he obtains correspond to the amounts 
 turned over to him by Mr. Flanders. Mr. Kerwin has no knowledge 
 of whether the amounts received from Mr. Flanders are correct or other- 
 wise, and is not advised of the nature or amount of the penalty or the 
 reason for its collection. In other words, he knows nothing of the trans- 
 action except that he does a favor for Mr. Flanders in obtaining these 
 certified or cashier's checks. 
 
 It is apparent that such a method of handling State money is 
 absolutely without justification, but though it has gone on for years, 
 Mr. Flanders has taken no steps to evolve a more businesslike method 
 
47 
 
 of handling the matter. It is perfectly plain that it would be a simple 
 thing to compel the person or lirm paying a penalty to make the pay- 
 ments direct to the State Treasurer as required by law. It does not 
 appear to be any part of the duty or province of Mr. Flanders as counsel 
 for the Division of Agriculture to actually handle the funds involved in 
 these penalties. 
 
 It also appears that the Bureau of Dairy Products receives moneys 
 which are paid to it in error by applicants for licenses. On page 1061 of 
 the minutes Mr. Kerwin testified that Mr. Flanders had informed him 
 that certain checks were sent into the Bureau of Dairy Products through 
 ei-ror which should go direct to the State Treasurer. Mr. Kerwin stated 
 that he understood it was the practice of Mr. Hogue as director of the 
 Biir-eau of Dairy Products to turn these moneys directly over to the 
 State Treasurer and these moneys in no way passed through the Bureau 
 of Accounts. It would seem that where any moneys are paid into the 
 department, whether through error or otherwise, they should be imme- 
 diately turned over bodily to the Bureau of Accounts by the Bureau 
 receiving them with a full statement of the circumstances surrounding 
 the payment. The Bureau of Accounts could then undertake the trans- 
 mission of such funds into the State treasury with a full and intelligent 
 knowledge of the transaction. This would serve as an additional check 
 upon the work of the various bureaus. 
 
 Mr. Kerwin testified, page 1052, that the Bureau of Accounts handles 
 all the supplies for the Division of Agriculture, but that the Division 
 of Foods and Markets handles its own supplies. This is a peculiar situa- 
 tion and one that demands explanation. The Bureau of Accounts existed 
 in the Department of Agriculture before the formation of the Depart- 
 ment of Farms and Markets, and was carried over under the law creating 
 the new department. It should have the handling of all the supplies 
 for the department, but for reasons best known to himself. Commissioner 
 Porter has not made use of the services of the Bureau of Accounts 
 in this connection but has established a system by which all the supplies 
 for his division are purchased without consultation with the Bureau of 
 Accounts. Testimony on this matter reads in part as follows (p. 1052, 
 etc. ) , Mr. Kerwin being the witness : 
 
 "Q. Who handles the supplies for the Division of Foods and 
 Markets? A. Mr. Brown, I think, is handling those downstairs. 
 
 "Q. Those are not handled through your bureau? A. T receive the 
 
48 
 
 bills when they are approved by bim and pay them, but I have nothing 
 to do with their supplies. 
 
 "Q. What is the reason for the difference in the handling of these? 
 
 A. I do not know. 
 
 "Q. Don't you consider that your department should handle the bills 
 for supplies of the Department of Foods and Markets just the same? 
 A. The bills are checked up by them and sent down to me, I do not 
 handle the supplies themselves, the purchasing. 
 
 "Q. Mr. Brown occupies what position? A. He is Deputy Commis- 
 sioner of Foods and Markets. 
 
 "Q. He buys the supplies they purchase in his department? A. Yes, 
 sir. 
 
 "Q. And distributes them? A. Yes, sir. 
 
 "Q. Don't you think that the purchase of supplies for the Depart- 
 ment of Foods and Markets should come under your supervision? 
 A. I think it would be the better way to do it." 
 
 Further on Mr. Kerwin testified (p. 1054) that when the Division 
 of Foods and Markets received its own appropriation for supplies, "They 
 said they were going to look after their own". 
 
 It is certainly ridiculous that a large and expensive bureau such as 
 that of the Bureau of Accounts, having all the machinery and experience 
 necessary for the proper purchase of supplies for the department, should 
 not be availed of by one division of the department. This is another 
 matter which the Council in its disregard or neglect of the operation of 
 the machinery of the department has utterly failed to correct. 
 
 Mr. Kerwin, page 1062, related the circumstances under which 
 Mr. Dana, Pi-esident of the Council, was twice paid for his expenses 
 during the month of February last owing to the general carelessness of 
 members of the CouncU in filing their vouchers for expenses. Mr. Kerwin 
 stated that he had urged the members of the Council frequently to file 
 their expense vouchers regularly, but had met with no response. It is 
 the practice of the members of the Council to wait until they can get 
 clerical assistance in the preparation of their expense vouchers. 
 
 Speaking of expense vouchers generally, Mr. Kerwin testified, page 
 1065, that in the Bureau of Accounts it was the practice merely to check 
 these vouchers for totals and to see that they agreed in form with the 
 regulations of the State Comptroller's oifice. No independent check of 
 these vouchers is made by the bureau and they are passed on and paid 
 
49 
 
 as approved by the directors of the various bureaus. In this connection 
 it should be stated that under section 28 of the Farms and Markets Laws, 
 providing for the payment of the reasonable and necessary traveling and 
 other expenses of the Commissioners, secretary, counsel and other officers 
 and employees of the department, it is provided that these expenses shall 
 be paid by the State Treasurer upon the audit of the Comptroller "upon 
 vouchers approved by the President of the Council or by a Commissioner 
 when authorized by the council". So far as Mr. Kerwin's testimony 
 discloses, and from other testimony taken, the approval of these vouchers 
 has been left entirely to the directors of the various bureaus, who also 
 approve their own expense vouchers. The total of traveling expenses of 
 the various bureaus, Mr. Kerwin testified, amounts to between eight and 
 nine thousand dollars a month, approximately one hundred thousand 
 dollars a year. Some more stringent method of checking up these 
 expenses should certainly be devised, and the Bureau of Accounts should 
 have better control of them. The Bureau of Accounts should also have 
 machinery to enable it to check up the salary accounts of the department. 
 If that were so, it would be impossible for a condition to arise such as 
 that testified to by Mr. C. E. Dyer (p. 1267), an agent employed in 
 the Dairy Products Bureau under Director Hogue. It appears that 
 Mr. Dyer in January, 1918, like a number of other employees of the 
 Department of Farms and Markets, received a form letter advising him 
 that the Council had decided to abolish his position beginning Febru- 
 ary 1st. These letters for the most part were subsequently cancelled by 
 another letter which reinstated the employes who received the first letter 
 and advised them to remain at work. Mr. Dyer, however, after Febru- 
 ary 1st stayed at his home and did not return to work in the Department 
 until July 1, 1918. In the meantime he continued to draw his salary 
 regularly, his pay check being sent to his home by the Department with 
 the authorization of Director Hogue. About July 1st Mr. Dyer hap- 
 pened into the department building and it was suggested by somebody 
 that he ought to go back to work, which he did. Mr. Dyer testified that 
 his pay checks came in "very handy". During a short part of this 
 vacation with pay, Mr. Dyer was ill, in February, but he did not advance 
 that as any reason for staying away from the department during the 
 subsequent months. He simply states that he decided to wait until 
 July 1st, the beginning of the new fiscal year, on the theory that if he 
 went back to work then he would be assured of his job for the comin<i- 
 year. 
 
50 
 
 The pay checks of the department pass through the Bureau of 
 Accounts and are mailed or given to the employes. A proper system 
 enabling the Bureau of Accounts to check up the working time of an 
 employe would certainly have resulted in Mr. Dyer either dispensing 
 with his pay checks or working in the department unless a proper and 
 valid excuse such as continued illness was advanced and approved by 
 the Commissioner of the division. 
 
 Cold Storage. 
 
 One of the most important duties entrusted to the Council and 
 Department of Farms and Markets is that which involves the proper 
 supervision of the marketing of cold storage products. It is a well 
 known economic necessity that in the seasons of the year when certain 
 articles of food are normally produced in the largest quantities in 
 excess of the natural demand for immediate consumption, the surplus 
 of Such products must be preserved and stored so as to be available for 
 the seasons when the normal production falls below the demand. To 
 accomplish this purpose and to meet this condition, cold storage ware- 
 houses have been constructed in all the large centers of population. In 
 these warehouses perishable goodsi such as eggs, butter, meat, fish, 
 vegetables, fruits, etc., are stored in immense quantities. Protracted 
 storage of any of these perishable products results in deterioration until 
 finally the article becomes unfit for human consumption. For the most 
 part it has been determined that from ten to twelve months is the 
 longest period for which any perishable food products can be safely 
 kept in cold storage. 
 
 There are both public and private storage warehouses. The public 
 warehouses, as the name implies, are managed by persons or firms 
 engaged in the business of renting space in their cold storage ware- 
 houses to any one who wishes to store food or other products in such 
 warehouses. 
 
 The private warehouse, as the name equally implies, is one that 
 is used solely for the preservation in cold storage of food and other 
 products belonging to the person or firm owning and operating the 
 warehouse. 
 
 Both the State and the Federal Governments have adopted stringent 
 regulations and enacted much legislation relating to the preservation 
 in cold storage of food products. The enforcement of the laws which 
 the State of New York has enacted in this respect is now within the 
 
51 
 
 sole control of the Department of Farms and Markets, and has been 
 delegated by the Council to the Division of Foods and Markets under 
 Commissioner Porter, and by him to the Bureau of Markets and Storage. 
 Previous to the creation of the Department of Farms and Markets the 
 supervision of cold storage warehouses lay within the jurisdiction of the 
 State Board of Health. 
 
 Commissioner Porter and his counsel, Mr. Seward L. Miller, ap- 
 parently with the approval of the Council of Farms and Markets, have 
 taken the position that the Department has no control over private 
 cold storage warehouses or the goods kept in them and that the laws 
 enacted by the State relate only to the control of public cold storage 
 warehouses and the food products stored therein. 
 
 The quantity of food products held in private warehouses in this 
 State is enormous. The monthly bulletin of the Division of Foods and 
 Markets for April, 1919, sets forth that on March 1, 1919, there 
 were in pHtmie cold storage warehouses in New York State the following 
 quantities of various food products: 
 
 Fresh meat 10,111,198 pounds 
 
 Cured meat 23,258,872 " 
 
 Poultry 1,475,476 " 
 
 Fish 1,047,800 " 
 
 Butter 1,116,920 " 
 
 Cheese 1,944,388 " 
 
 Eggs 34,936 cases 
 
 Lard 2,978,449 pounds 
 
 Oleomargerine 489,706 " 
 
 Vegetables 3,448,808 " 
 
 Apples 259,322 barrels and 
 
 105,400 boxes 
 
 ■'V 
 
 At this period of the year, March 1st, the quantities of all these 
 products in cold storage would naturally be at their very lowest, the 
 great demand for such goods arising during the fall and winter months, 
 but the figures set forth above show the important part which the private 
 cold storage warehouse plays in the economics of New York State. Sec- 
 tion 16-a of the Public Health Law, dealing with cold storage and the 
 enforcement of which is placed under the jurisdiction of the Depart- 
 ment of Farms and Markets, sets forth in sections 336 to S39-d the 
 manner in which cold storage warehouses used for the storage of food 
 
52 
 
 or food products shall be operated. Section 336 says : "It shall hereafter 
 be unlawful for any person or persons, corporation or corporations en- 
 gaged in the business of cold storage warehouseman or in the business 
 of refrigerating, to receive any kind of food unless the said food is in an 
 apparently pure and wholesome condition and the food or the package 
 containing the same is branded, stamped or marked, in some conspicuous 
 place with the day, month and year, when the same is received in storage 
 or refrigeration." The section further provides that any article of food 
 so stored shall not be removed from cold storage unless the date of re- 
 moval is similarly branded upon the goods or package, and also pro- 
 vides that no goods shall be offered for storage unless the same are in 
 a pure and wholesome condition. 
 
 Section 336-a- provides that "No person or persons, firm, corporation 
 or corporations * * * shall operate a cold storage or refrigerating 
 warehouse without a license to be issued by the State Department of 
 Health." Under the law creating the Department of Farms and Markets 
 such license must now be issued by this department. The provisions 
 for the issuance of the license and the renewal of the siame are then set 
 forth in the same section. Section 337 provides that "It shall hereafter 
 be unlawful for any person, corporation or cor-porations engaged in the 
 business of cold storage, warehouseman or refrigerating, or for any 
 person placing food in a cold storage warehouse, to keep in storage for 
 preservation or otherwise any kind of food or any article used for food 
 a longer period than twelve calendar months." This period was for- 
 merly ten months, but was amended by the Legislature in 1918 on the 
 recommendation of the Council of Farms and Markets so as to extend the 
 period to twelve months in agreement with the Federal Eegulations 
 controlling cold storage of foods. Section 338 reads: "The State Com- 
 missioner of Health is hereby vested with full power and authority to 
 inspect and supervise all places in this State now used or hereafter to 
 be used for cold storage or refrigerating purposes." This power under 
 the law creating the Department of Farms and Markets became vested 
 in that Department, and by action of the Council was presumably dele- 
 gated to Commissioner Porter as part of the powers and duties of the 
 Division of Foods and Markets. The section further provides that the 
 "duly authorized agents or employes of the Department shall be per- 
 . mitted access to such place or places and all parts thereof at all times 
 for the purpose of seeing that such places are kept and maintained in 
 a clean and sanitary manner and for the purpose of determining 
 
53 
 
 whether or not the provisions of this article or any other act relating 
 to food stuffs are being' complied with." Power is then given to subpcena 
 any records, books, papers, and documents relating to the operation of 
 any such warehouse for the purpose of investigating any alleged viola- 
 tion. Section 338 concludes : "The power of supervision hereby granted 
 Shall extend to enable the State Commissioner of Health to adopt such 
 reasonable rules and regulations as may be determined upon from time 
 to time as essential to the proper protection of the consumer of the 
 commodities kept and preserved in such place or places, and the State 
 Commissioner of Health may appoint and designate from time to time 
 such person or persons as he deems fit for the purpose of making such 
 inspections." This power now comes within the jurisdiction of the De- 
 partment of Farms and Markets. Section 338-ai provides that any 
 articles of food in cold storage warehouses which are found to be unfit 
 for use may be seized or condemned and such articles shall be destroyed. 
 Section 339 requires that "All persons or corporations engaged in the 
 business of cold storage warehouseman or in the business of refrigerating 
 shall submit reports * * * setting forth in itemized particulars the 
 quantity of each and every food stuff in storage or in the control of such 
 person or persons, coi'poration or corporations." Section 339-a prohibits 
 the transfer of any food from one cold storage or refrigerating ware- 
 house to another for the purpose of evading any provisions of the law. 
 Sub-section "h" prohibits the return of food to cold storage when once 
 released for the purpose of placing the same on the market for sale. 
 Sub-section "e'-' prohibits the sale of food kept in cold storage without 
 representing the said fact, and sub-section "d'' sets forth that "Any 
 person or persons, corporation or corporations, officer or officers thereof 
 violating any of the provisions of this article shall be guilty of a mis- 
 demeanor." 
 
 It is essential in considering this important question dealing with 
 the public health and having such a great bearing upon the food situa- 
 tion throughout the State and the present high cost of living, that all of 
 the sections and sub-sections shall be considered together, and that in 
 considering them the words used by the Legislature in creating the 
 Department of Farms and Markets and giving to this new department the 
 enforcement of the laws relating to cold storage Avarehouses, shall be given 
 their proper weight and meaning so that the full intent of the Legislature 
 may be arrived at and the proper protection assured which it was the 
 intention of the Legislature to give the people in enacting these laws. 
 
54 
 
 Article 1 of the Farms and Markets Law, section 3, reads as follows : 
 "The production, manufacturing, marketing, storing and distribution of 
 foods and of all the instrumentalities used in the production thereof 
 * * * are matters of public interest and proper subjects for investiga- 
 tion, encouragement, development and regulation by the State to secure 
 an abundant supply of pure and wholesome food, to protect the health of 
 the citizens of the State, to secure the exchange of such food and instru- 
 mentalities upon a fair basis and at market prices uncontrolled by specu- 
 lation, and to prevent frauds or other violations of the law in the traffic 
 therein, and so far as may be to eliminate waste and loss in distribution.'' 
 
 Section 20 of the Farms and Markets Law, among other things, pro- 
 vides that "Such of the property, recordsi, books, papers or documents of 
 the Department of Health as pertain to the powers and duties of such 
 department which are to be exercised and performed by the Department 
 of Farms and Markets under this chapter shall be delivered and belong to 
 the Department of Farms and Markets." 
 
 Section 30, subdivision 1, provides that the Department, through 
 the Ck)uncil and the appropriate division shall have power to execute and 
 carry into effect the laws of the State and the rules of the Council rela- 
 tive to agriculture, horticulture, farm and dairy products, and the pro- 
 duction, transportation, storage, marketing and distributing of food. 
 
 Subdivision 4, of Section 30 provides that the Department shall have 
 power to investigate the sources of food supply for the State, the produc- 
 tion, transportation, storage, marketing and distribution of food sold, 
 offered for sale, stored or held within the State. 
 
 Subsection 4 provides that statistics of the food stored or held within 
 the State shall be collected and disseminated. 
 
 Subdivision 8 provides that the Department shall co-operate with 
 producers of food in improving and maintaining economic and efficient 
 systems of storing the same. 
 
 Subsection 15 provides that the Department shall advise and co- 
 operate in the establishment of warehouses for storing food or farm 
 products whenever in the judgment of the Council the public interests 
 require such establishment. 
 
 Subsection 23 provides that the Department shall investigate decep- 
 tions and the quality, quantity or character of foods stored within the 
 State. 
 
 Section 38 provides that "the members of the Council, the Commis- 
 sioners, the directors. Council experts, chemists, agents, and other officers 
 
55 
 
 and employes of the Department shall have full access to all places of 
 business, factories, farms, buildings, carriages, cars, and vessels used in 
 the production, manufacture, storage^ sale or transportation within the 
 State of any dairy product or any imitation thereof or of any article of 
 produce with respect of which any authority is conferred on the Depart- 
 ment. They may examine and open any package or container of any kind 
 containing, or believed to contain, any article or product which may be 
 manufactured, sold or exposed for sale in violation of the provisions of 
 this chapter or of the rules of the Council, and may inspect the contents 
 therein and take therefrom samples for analysis." 
 
 Commissioner Porter and his counsel, Mr. Miller, have taken the posi- 
 tive attitude that nowhere is the Department given supervisory power 
 over private cold storage warehouses or the food products therein. They 
 base their argument on the use of the words "the business of cold stor- 
 age", used in some of the sections of Article 16-a. of the Public Health 
 law, and Mr. Miller, on his examination before me, offered to produce 
 authorities to support this argument. When questioned, his authority 
 seemed to be a decision of a court in the State of Georgia defining the 
 word "business". 
 
 The principal private cold storage warehouses in this State are 
 owned or controlled through subsidiary corporations by the great pack- 
 ing houses. Armour, Swift, Morris, Wilson and Cudahy. Proof of this 
 is shown in the report of the Federal Trade Commission on the meat- 
 packing industry. Exhibit 59. These packing houses maintain these 
 private storage warehouses as a necessary element of their business. 
 Similarly every other owner of a private cold storage warehouse operates 
 that warehouse as a part of his business, and though he does not rent out 
 space in it to outsiders, needing all the space available for his own use, he 
 does purchase goods frequently from other persons or corporations and 
 store those goods in his own cold storage warehouse. The operator of 
 a private cold storage warehouse incidental to his regular business is as 
 much engaged in the business of refrigerating or cold storage warehous- 
 ing as the public cold storage warehouse man who, merely owns or rents 
 and operates a building and refrigerating plant without any interest in 
 the goods stored therein beyond his fees and charges for storage. 
 
 It would be indeed an extraordinary thing if the people of the State 
 of New York were to be understood as permitting the operators of private 
 cold storage warehouses wilfully and openly to violate the laws which 
 control the operations of their competitors who, for financial or other 
 
6B 
 
 i^ea^bns, cannot own cold storage warehouses of their own but must rent 
 space in public warehouses. If this be the attitude of the Legislature and 
 of the people of the State, then it may be well said that the people have 
 only themselves to blame for the existence of any monopoly or trust in 
 food products, since, if that be the proper interpretation of the law, the 
 people have granted special privileges to packers and dealers in food 
 products who are financially able to maintain their own supremacy in the 
 trade through the operation of their own cold storage warehouses. But I 
 do not believe that this was either the intention of the Legislature or of 
 the people. I believe that the Legislature in passing these laws had in 
 mind solely the protection of the public health by preventing the cold 
 storage and preservation of unwholesome foods or the marketing of such 
 unwholesome foods from any cold storage warehouse or refrigerating 
 plant. If the attitude of Dr. Porter and Mr. Miller be a correct interpre- 
 tation of the law, then the owner of a private storage warehouse can 
 hoard meat, eggs, butter, fish, or other food products in such warehouse 
 for as long a period as he pleases, and market it thereafter without 
 making public the fact that it has been kept in cold storage. He may, if 
 he needs the room in his private warehouse, remove goods that he has 
 hoarded in cold storage there for a year or more and place such goods 
 then in a public warehouse, where, under Dr. Porter's and Mr. Miller's 
 interpretation of the law he would be entitled to withhold them from 
 consumption for still another twelve months. Then, having the room 
 available in his warehouse he could shift them back to his private ware- 
 house and keep them there indefinitely, change the now marked and dated 
 packages or containers in which the goods were publicly stored and 
 market them eventually as though they had never been in cold storage, 
 but were presumably fresh goods. Throughout the entire process he 
 would incur not the slightest risk of detection. The only check on such 
 practices would be the eventual complete deterioration of the product so 
 that it could not be marketed at all. In these days, unfortunately we 
 have been taught that where there is no legal restraint and proper 
 inspection, goods in unwholesome condition can be marketed by unscru- 
 pulous dealers with impunity. 
 
 Dr. Porter's and Mr. Miller's interpretation of the law would put 
 a premium upon unscrupulous practices by private storage warehouse- 
 men, and must in the long run prove the ruin of the smaller independent 
 dealers who are compelled to use the public cold storage warehouse and 
 thus bring themselves within the restrictions of the law. The words at 
 
57 
 
 tlie close of Section 338 of Article IQ-a of the Public Health Law to 
 my mind set forth absolutely what the intention of the Legislature and 
 of the people of the State of New York is in regard to the qold storage 
 of food products, and I herewith repeat it : "The power of supervision 
 hereby granted shall extend to enable the State Commissioners of Health 
 to adopt such reasonable rules and regulations as may be determined 
 upon from time to time as essential to the proper protection of the con- 
 sumer of the commodities kept and preserved in such place or places". 
 Section 339-a forbidding the "transfer from one cold storage or 
 refrigerating warehouse to another of any food for the purpose of evad- 
 ing any provisions of the law", indicates conclusively that in passing 
 these regulatory statutes it was the intention to prevent the possibility 
 of any dealer in foods evading the law by transferring food from one 
 cold storage plant to another, such as under the interpretation placed 
 by Dr. Porter and Mr. Miller upon this law would be not only possible 
 but lawful where the transfer was made from a public to a private 
 storage warehouse or vice versa. Mr. Miller (p. 1286) attempted to 
 justify his legal attitude in the matter by stating that he had consulted 
 with the counsel of the Commissioner of Health and had been informed 
 that that department did not think the law applied to private ware- 
 houses. Mr. Miller admitted that he had not obtained a ruling from 
 the Attorney General on the matter to justify his attitude. Under the 
 law the Attorney General is the proper person to consult where any 
 such question arises. It is true that Dr. Porter, through the Bureau of 
 Markets and Storage has made an "inspection" of some ''of the private 
 warehouses throughout the State, but no effort has been made to require 
 such warehouses to take out a license, no supervision is made to pre- 
 vent violations of the law, no such violations have been reported against 
 private storage warehouses, and no attempt is made to compel the owners 
 of food products in private storage warehouses to stamp or brand foods 
 or their containers with the date of entry and subsequently with the date 
 of removal. It can be seen at once that this latter provision is really the 
 only protection afforded the consumer so as to prevent unscruplous 
 dealers from selling as fresh goods what are really cold storage goods. 
 Mr. Miller agreed in his testimony that the law should apply to private 
 cold storage warehouses and that all goods in such warehouses should 
 be stamped with the date of their entry and exit, but he has taken no 
 steps to test the law and determine whether the courts would agree with 
 his interpretation of it, or whether they would hold that persons engaged 
 in the manufacture and sale of food products who maintained private 
 
58 
 
 cold storage warehouses for the preseiTation of these products were not 
 in the category of persons engaged in the business of maintaining cold 
 storage warehouses. On page 1296 the following occurs : 
 
 "Q. Do you know, Mr. Miller, that there is a large amount of food 
 stored in this State in private cold storage warehouses? A. I cannot 
 say as to that. I know there is quite considerable, yes. 
 
 "Q. Don't you know that Armour and Swift and the rest of the 
 packers maintain large cold storage warehouses in this State? A. Yes, 
 sir. 
 
 "Q. Are they licensed? A. No, sir. 
 
 "Q. Is there any provision of the law that prevents Armour and 
 Swift and the rest of these concerns that have very large private cold 
 storage warehouses from keeping foods in their warehouses exceeding 
 twelve months? A. I don't know of any, no, sir. 
 
 "Q. So that under the present method of administering the law, 
 there is nothing to prevent Annour or these other packers having food in 
 their cold storage warehouses for two years instead of twelve months? 
 A. Not in their private plants. Wherever they have put them in the 
 public plants, we have supervised them and made it the same as any other 
 concern. 
 
 "Q. But where they have them in their private plants — they have 
 very large plants in this State, very large private plants in this State — 
 there is no check on the time during which they can keep those products 
 in the private plants? A. No, sir". 
 
 "Q. If the private plants were placed on the same footing as the 
 public plants, then you would be enabled to check up all the foods kept 
 in these large private plants of Armour and the other packers, would 
 you not? A. Yes, sir." 
 
 On page 1304 it will be found that in order to attempt to justify 
 his own and Dr. Porter's attitude in regard to the failure to license and 
 control private storage warehouses, Mr. Miller went so far as to raise 
 the question as to whether Article 16-a. of the Public Health Law, relating 
 to cold storage, was actually transferred to the Department of Farms 
 and Markets. Nevertheless, when directly questioned by Mr. Coleman, 
 Mr. Miller said that he was "inclined to think" the powers of 16-c were 
 transferred to the Depai'tment of Farms and Markets. Mr. Miller 
 referred to a bill which the Department had fathered, intended to give 
 the Department the power to regulate and supervise all places where 
 
59 
 
 food products were stored. This bill was vetoed by you as Governor at 
 the urgent request of the State Commissioner of Health and the New 
 York City Commissioner of Health on the ground that it would have 
 interfered unnecessarily with the hmctions of the Department of Health 
 because of its wording, and also at the request of the Industrial Commis- 
 sion, who felt that it would have given the Department of Farms and 
 Markets unnecessary jurisdiction over factories. This bill did not specifi- 
 cally refer to cold storage warehouses but to all places where food might 
 be stored, and could have been interpreted to include every loft, cellar, 
 and shop throughout the State where any articles of food were stored. 
 On page 1305, Mr. Miller was asked : 
 
 "Q. Practically you have got all the power under the present law 
 that that bill would have given you as far as the cold storage proposition 
 is concerned? A. I do not think there is very much difference. I will 
 say I said that before the Legislative Committees, but I did feel that this 
 should be passed to obviate any question as to whether those powers were 
 transferred or not transferred. 
 
 "Q. Why didn't you draAV that bill so that it specifically covered pri- 
 vate cold storage warehouses? A. Because we intended to take care of 
 that in a further bill and we were very doubtful about the passage by 
 the Legislature last winter when the food regulations, the Federal Eegu- 
 lations, were in effect, of such a bill. I am going to say this : That we 
 found the cold storage men would oppose it very strongly. 
 
 "Q. Did you take care of it in any further bill? A. We didn't last 
 winter, no, sir." 
 
 In reference to the veto of the bill fathered by Mr. Miller and Dr. 
 Porter, proposing to give them sweeping powers over all places where 
 any nianner of food might be permanently or temporarily stored, the fol- 
 lowing testimony was taken : 
 
 "Q. Can you state on what grounds the refusal (of the Governor to 
 sign the bill) was made? A. I am not posiitive, but I think mainly on 
 these grounds : One of the grounds of the opposition was that the Indus- 
 trial Commission had full power to supervise all factories, and the claim 
 was made that we might conflict with the Industrial Commission. The 
 Governor, I think, on the hearing expressed himself very strongly : With 
 this you gave a duplication of power, and the Industrial Commission were 
 already exercising practically these identical powers — almost identical 
 
60 
 
 powers in regard to factories. He did not think there should be dupli- 
 cate powers. 
 
 "Q. In your opinion didn't you have practically all this power that 
 you required in reference to cold storage under the present Act? A. We 
 did if the Section 338 was transferred to us. 
 
 "Q. You hold that it was? A. I am inclined to think that it is, 
 although I do think that there is considerable question about it. 
 
 "Q. No one has ever raised that question? A. It was raised, yes. 
 
 "Q. In a case? A. Not in a case, no, sir." 
 
 The subsequent testimony disclosed that in the April bulletin of the 
 Division of Foods and Markets the agents of the Division had insipected 
 471 privately owned and 57 public cold storages in the State of New 
 York. Mr. Miller's examination at this time concluded with the follow- 
 ing statement by him : "This matter was discussed before the Council and 
 by Commissioner Porter and myself, and I did say to them that I thought, 
 although the powers of the Council to regulate private plants^that the 
 Council did not have the power — nevertheless the Council had the power 
 to go in and inspect or determine, had power to go in and inspect under 
 the general provisions of the Farms and Markets Law. There is this 
 further proposition: Granted that we had some supervision over them, 
 the rules as regard the marking of these eggs in cold storage applied only 
 to public places. We couldn't compel a private warehouse to mark. It 
 is no good for us to go in and attempt to order out foods unless we know 
 by some stamp on there whether that food has just been in one month or a 
 year or two years. The whole proposition hangs upon the power to com- 
 pel them to mark that food when it arrives in cold storage. 
 
 "By the Commissioner: 
 
 "Q. Do you hold that the power to compel them to mark this food 
 in cold storage applied only to public storage warehouses? A. Only did. 
 
 "Q. Under your interpretation of this law? A. Yes, sir." 
 
 There is other testimony in connection with the management of the 
 Bureau of Markets and Storage under the Division of Foods and Markets 
 to show that the Department's powers to enforce obedience to the laws 
 regulating the cold storage of food have not been properly enforced under 
 Commissioner Porter even in regard to public storage warehouses. 
 
 The minutes of the Council show that on one occasion Swift & Com- 
 pany applied to the Council for leave to erase from certain food products 
 (hams), which it was desired to ship abroad, the marks indicating that 
 
61 
 
 the goods had been in cold storage. The Council took no action, bnt 
 referred the matter to Dr. Porter. 
 
 Subsequently the Council was asked by a committee representing 
 some large fish dealers in New York City who had an enormous quantity 
 of fish in cold storage to permit these dealers to maintain this fish in cold 
 storage beyond the statutory twelve months. This also was referred to 
 Dr. Porter. These matters are mentioned merely to show that the Coun- 
 cil relieved itself entirely of the burden of dealing with any phases of 
 the cold storage situation so vital to the public welfare by leaving such 
 matters entirely to Dr. Porter's judgment or discretion. 
 
 There are reports on file in the Bureau of Markets and Storage from 
 Inspectors of the Department showing that subsequent to the appearance 
 of this fish dealers' committee before the Council agents of the department 
 found large quantities of unwholesome fish on storage in warehouses in 
 the city, fish that had been in storage for considerably more than the 
 statutory twelve months. As I construe the law, the duty of the 
 Department in such cases is to see that such unwholesome foods are 
 destroyed, so that they cannot in any way be placed upon the market. It 
 does not appear that such action was taken in connection with these goods, 
 nor does it appear that the number of violations which Mr. Miller had 
 forwarded to the Attorney General for prosecution in relation to the 
 enforcement of the cold storage law is even a fair percentage of the num- 
 ber, of violations which were found by agents of the Department. 
 
 Altogether it is my inevitable conclusion that the policy of the Coun- 
 cil of Farms and Markets as expressed through the activities of Dr. Por- 
 ter in relation to the enforcement of the Cold Storage Laws has not been 
 calculated to react to the best interest of the public, and is not based upon 
 any broad, policy of public welfare. On the contrary, in this important 
 subject, as in many others, the policy of the Council as interpreted 
 through the actions of this Commissioner, has been to hide behind techni- 
 calities, to evade responsibilities and in every way possible to avoid 
 carrying out in a broad-minded and public way the laws by which the 
 people of the State of New York have sought to protect themselves against 
 unscrupulous and fraudulent merchants. It is a strange condition when 
 counsel for the department, rather than endeavor to interpret the laws 
 so as to afford the general public the utmost possible protection, will 
 deliberately question the jurisdiction of the department as an excuse for 
 failing tO enforce the statutes that define the powers of the department. 
 Where such a state of affairs exists, it is useless to expect proper and 
 efficient public service. 
 
62 
 
 Department Counsel. 
 
 Under tlie law creating the Department of Fanns and Markets it 
 is provided by Section 23 that there shall be a counsel of the Department, 
 and by Section 34, "That such counsel shall represent and appear for 
 the Department in all actions and proceedings within the jurisdiction of 
 the Department, and shall also act as counsel for the Council or any com- 
 mittee thereof or any officer of the Department, and shall advise the 
 Council or any Commissioner or officer of the Department in regard to 
 all matters in connection with their powers and duties." Mr. Seward 
 L. Miller was appointed to that position when the Council was" first 
 organized. 
 
 Apart from his duties as counsel for the Council, however, it would 
 appear that Mr. Miller has aligned himself almost entirely as the counsel 
 for the Division of Foods and Markets, and is not in any way con- 
 nected as counsel for Commissioner Wilson or in the Division of Agri- 
 culture or any bureau thereof. 
 
 Mr. George L. Flanders came over into the Department of Farms 
 and Markets as a part of the Depai-tment of Agriculture in which he 
 Avas counsel to the Commissioner of Agriculture, and he has remained 
 as such counsel. The salary of Mr. Miller is |6,000 and Mr. Flanders 
 receives |4,000 a year. There appears to be little or no co-operation 
 between Mr. Flanders and Mr. Miller, each confining himself strictly 
 to the affairs of the respective Divisions. Mr. Flanders has an assistant 
 and a staff of stenographers and clerks, but it would appear that Mr. 
 Miller depends almost entirely upon the assistance of the Secretary of 
 the Council for any clerical work which he has to do. 
 
 The principal work of the counsel of the Department, in addition 
 to his duties as adviser to the Council, appears to be the collection of 
 the penalties for violation of the milk license and bonding laws, the 
 cold storage laws, and other violations that come within the jurisdic- 
 tions of the Division of Foods and Markets. The general practice of the 
 Department in both Divisions is that where a violation is reported, 
 counsel notifies the alleged violator and invites him to pay a penalty 
 without prosecution. In the event of the failure of the alleged violator 
 to accept this invitation, it is the province of the counsel to forward the 
 cases to the Attorney General's office for prosecution. 
 
 For practical pur-poses it may be said that Mr. Miller devotes his 
 
63 
 
 activities practically entirely to violations of the milk license laws and 
 of the Told Storage Regulations. These alleged violations aggregate 
 less than 200 cases a year that are forwarded to the Attorney General's 
 office by Mr. Miller for prosecution. 
 
 In the legal bureau of Mr. Flanders^ however, thousands of cases 
 of alleged violations originate yearly. In fact, under the Dog Law 
 alone, as. Mr. Flanders testified, more than 5,000 cases were reported 
 to the Bureau of owners of dogs failing to take out the necessary license 
 for the animals, and thereby incurring a ten dollar penalty for each vio- 
 lation. Violations of various other descriptions relating to food 
 adulterations, impure milk, feeds, fertilizers, etc., have accumulated 
 in Mr. Flanders' office by the thousands. 
 
 Previous to January 1, 1919, Mr. Charles M. Stern had been desig- 
 nated in the Attorney General's office for a number of years under suc- 
 cessive Attorneys General to have charge of the handling of all cases of 
 violations reported by the Department of Agriculture, and later by the 
 Department of Farms and Markets. Mr. Stern resigned at the close of 
 last year, and Deputy Attorney General T. P. McGannon has since had 
 charge of this work. 
 
 Where the Attorney General's office fails to collect a penalty with- 
 out prosecution, and prosecution of the alleged offender is finally decided 
 upon, it is almost the universal practice of the Attorney General to desig- 
 nate local attorneys, in the counties where the violations have occuri'ed, 
 to try the cases. These attorneys are paid, where conviction is obtained 
 and a fine imposed by the courts, a fee averaging perhaps |25 for services 
 rendered. Mr. McGannon testified that the yearly amount of such fees 
 ran from |5,000 to $7,500. It thus appears that the State is at consid- 
 erable expense for salaries and fees in connection with the Depart- 
 ment. The annual payroll of Mr. Flanders' office is about |10,000, and 
 to this must be added the |1 0,000 paid to Mr. Miller and Mr. Flanders, 
 the salary of the Deputy Attorney General, the fees of the local attorneys, 
 and the proportionate cost of administration in the Department of the 
 Attorney General. 
 
 For many reasons a great many cases of violation are never brought 
 to trial. These reasons include, first, political influences brought to 
 bear occasionally by the persons accused of the violation upon the 
 Department or its counsel, resulting in discontinuances. 
 
 Frequently the cases ai*e allowed to die through the operation of 
 the Statute of Limitations, the law prescribing that actions based on 
 violations must be begun within two years of the date of the alleged 
 
64 
 
 offense. Friction between the Attorney General's office and the Depart- 
 ment of Agriculture arising out of the Bureau of Chemistry's attitude 
 has also resulted in the failure to prosecute many violations. In other 
 cases the papers referring to the violation are simply pigeon-holed either 
 in the Department or in the Attorney General's office, and never heard 
 of again. In the case of the five thousand Dog Law violations for the last 
 fiscal year, the Attorney General, according to Mr. Flanders, simply 
 refused to prosecute these violations on the ground that he had no 
 appropriation for the purpose and that no moneys in the Department 
 were available for the work. To collect the ten-dollar penalty, the 
 Attorney General stated, would involve the payment of a fee of |20 or 
 |25 to the local attorney, and the results would not justify the expense. 
 Therefore, these violations have simply been allowed to lie quiescent, 
 and in this respect the Dog Law is not enforced at all. Yet there exisits 
 a large surplus from the Dog License fund which might be profitably 
 spent perhaps in this direction, thus bringing about a proper enforce- 
 ment of the Dog Law. 
 
 Lack of proper co-operation between the Department and the At- 
 torney General's office is characteristic of practically all the legal work 
 of the Department, and if the laws prescribing penalties for food viola- 
 tions are to be enforced in such a way as to deter violators, some way 
 must be found to remedy the conditions existing in the administration 
 of the legal work of the Department. 
 
 Based upon his many years of experience in connection with this 
 work, former Deputy Attorney General Stern was of the opinion that 
 better results could be achieved if a Deputy Attorney General and an 
 Assistant Deputy were detailed to talce entire charge of the violations 
 within the Department itself, and working with the machinery of the 
 legal bureau of the Division of Agriculture. This would result in the 
 abolition of the anomaly of two separate counsel within the Depart- 
 ment of Farms and Markets, such as now exists. Eeports of violations 
 would then come directly under the control of the Attorney General, as 
 the responsibility for the prosecution of all such violations would lie 
 absolutely with the Attorney General. 
 
 It has been suggested also that the District Attorneys of the 
 various counties should be required to prosecute the actions based on 
 alleged violations. This would probably be possible in some cases, but 
 in many instances the large amount of work naturally devolving upon 
 the various District Attorneys in connection with the routine duties of 
 their office might make it impossible for them to handle this work as 
 
65 
 
 efficiently as a local attorney designated to represent the Attorney 
 General. 
 
 On the other hand, it is admitted that some of these local attorneys 
 use the fact of their designation by the Attorney General to enhance 
 their political standing in the community in which they practice, and 
 it is a simple matter for them to permit the statute of limitations to 
 run so as to make prosecution impossible. 
 
 It appears from the testimony of Mr. Stern that former Attorney 
 General Lewis, for the purpose of economy, discontinued the practice of 
 publishing annually in the Attorney General's report the names of 
 all violators of the Food Laws and the fines imposed upon them. Mr. 
 Stern is of the opinion that such publication is valuable because of its 
 deterrent effect, and I agree with him in that respect. I strongly urge, 
 however, that the deterrent effect of publicity should be used to^ greater 
 advantage and that the bulletins of the Divisions in which the violations 
 arise should contain from time to time lists of the violators with their 
 addresses and the nature of the offenses. These bulletins naturally have 
 a much larger circulation than the annual report of the Attorney 
 General, which rarely can be found outside of libraries and lawyers' 
 offices. 
 
 Nor does it seem that the Commissioner in whose Division the 
 alleged violations originate should have the broad discretionary power 
 which he now possesses, to determine whether or not prosecutions 
 should be instituted. While it is true that there might be mitigating 
 circumstances in some cases in which this discretion could be exer- 
 cised, the same circumstances being brought to the attention of the 
 Deputy Attorney General in charge of all such violations should deter- 
 mine whether or not the case was one in which there was a reasonable 
 likelihood of conviction. i 
 
 While on this subject it is advisable to discuss the practice, if not 
 the policy, of the Department in prosecuting the retailer of impure or 
 adulterated food products instead of the manufacturer. Mr. Flanders 
 explained at great length in his testimony that it had been found difficult 
 to enforce the law against the manufacturer of such products. The 
 policy of the Department has been to notify the manufacturer of such 
 goods and give him the opportunity to pay the fine if he wishes to do 
 so, and thus permit the retailer to escape Scot free. In the case of manu- 
 facturers who operate outside of New York State, possibly this is the 
 only way to proceed as the law now stands, but in the case of a manu- 
 facturer who has an office or place of business in the State, it seems 
 
66 
 
 as though more stringent methods might be adopted to punish the manu- 
 facturer. 
 
 Some method also, it seems to me, could be readily devised by which 
 many of these manufacturers could be reached by the cancellation or 
 refusal to renew their licenses where such manufacturers were the 
 holders of licenses issued by the State. Certainly the People should 
 have the power in some way to punish any manufacturer of food prod- 
 ucts who openly and flagrantly disregards the laws of the State relat- 
 ing to the sale of such products, relying upon the fact that he cannot 
 be reached because his factory or place of business is outside of the 
 State. Failing this, the punishment for violations should be made of 
 such a character either by heavy fines or imprisonment, at any rate for 
 second offenders, that the retail dealers of the State would refuse to 
 handle the goods of a manufacturer unless his goods conformed to the 
 laws of the State. This might seem harsh or cruel in some hypothetical 
 case, but it is my opinion that in such a situation the retail dealers of 
 the State would speedily compel the manufacturer to obey the Statp 
 Laws. Some co-operation between the Department and the retail dealers 
 might be found necessary to effect this end, and I would further suggest 
 that in connection with publicity of violations the name of the manu- 
 facturer, with his address, and the trade name, if any, of the product 
 involved in the violation should be published in the bulletins of the De- 
 partment. This, of course, refers to cases where the retailer sells goods 
 in the original condition as received by him from the manufacturer. 
 
 Speaking broadly, I am firmly convinced that the legal biisiness 
 of the Department of Farms and Markets could be best attended to by 
 the Attorney General of the State. He is, under the Constitution of 
 the State, the logical legal adviser of all the Departments and 
 officers of the State and, in my opinion, there is no reason why this 
 Department should have two special counsel assigned to it. The work 
 could be handled more economically and expeditiously directly under 
 the Attorney General. He could place one of his deputies directly in 
 charge of the work with as many assistants as necessary. This Deputy 
 could, for convenience, have his office directly in the Department so 
 that he could keep in intimate touch with all the legal questions that 
 are daily arising in the Department. In this way, the Attorney General 
 of the State would be made directly responsible for the proper enforce- 
 ment of all the laws relating to the Department, and another oppor- 
 tunity for "passing the buck" would be done away with. 
 
67 
 
 Of course, in the prosecution of the various violations arising in all 
 parts of the State, the Attorney General would, of necessity, have to 
 rely on local representatives. As I have stated before, it has been sug- 
 gested that the local District Attorneys be charged with the duty of 
 prosecuting the civil suits brought for the collection of penalties, on 
 account of violations in somewhat the same manner that the District 
 Attorneys of the various counties are now charged with the prosecution 
 of certain proceedings provided to be brought for the collection of the 
 transfer tax. I have some doubt whether this plan could be made work- 
 able and effective. If, however, all violations of the laws relating to the 
 Department were prosecuted as misdemeanors, instead of by civil actions 
 for the collection of a penalty, the District Attoni.eys of the various couu; 
 ties would naturally be charged with the prosecution of all these viola- 
 tions when brought to their attention by the Attorney General. If 
 this method of procedure were adopted I think that the plan would be 
 both workable and effective and would do away with much of the 
 present abuse that exists under the plan of having the Attorney Gen- 
 eral dependent almost entirely upon special counsel for the prosecution' 
 of violations. 
 
 Violations. 
 
 In the laws relating to the Department, penalties are provided for 
 the violations of the various provisions of these laws and the same viola- 
 tions are also punishable as misdemeanors. These penalties are 
 collected by means of the civil action brought against the offender 
 for the amount of the penalty by the Attorney General or by a local 
 representative of the Attorney General for the collection of the penalty. 
 The whole system of attempting to enforce the laws relating to the De- 
 partment by the collection of a penalty is, in my opinion, faulty. The 
 penalties provided for under the statutes are of small amounts and the 
 collections of such penalties, especially from wealthy violators, does not 
 act, to any great extent, as a deterrent. 
 
 The proper enforcement of the Agricultural and Food Laws of this 
 State is of such vital importance to the people of the State that any 
 violation of these laws should, in my opinion, be prosecuted as a mis- 
 demeanor, and punished by a fine or imprisonment, or both. If all 
 violations were prosecuted criminally, it would be left to the local 
 District Attorney and the local Judge to insist on prison sentences in 
 the case of wealthy and persistent violators who would not be greatly 
 
68 
 
 affected by the imposition of a penalty alone. Unscrupulous food pro- 
 ducers and manufacturers are at present willing to take a chance in 
 violating the law where the only thing that they have to fear is the pay- 
 ment of a small penalty ; but if these same people had a prison sentence 
 staring them in the face as a result of violating the law, their transgres- 
 sions would not be so frequent. 
 
 The prosecution of these violations as misdemeanors would not bear 
 heavily on those who transgress the law not wilfully but through ignor- 
 ance, for in this way it would be left to the discretion of the local court 
 either to suspend sentence or to impose a nominal fine for ignorant or 
 first offenders. 
 
 Milk. 
 
 Perhaps the most important matter entrusted to the Council of 
 Farms and Markets by the Legislature was that it should "investigate 
 and report to the Legislature what plan, in the judgment of the Council, 
 should be established by law for the purpose of securing an ample supply 
 of milk in centers of population upon an economic basis of distribution 
 and to aid in the accomplishment of such purpose within the provisions 
 of existing law". 
 
 The Council has entirely failed to accomplish anything, practically, 
 in this direction. The excuse of the members of the Council has been 
 that they were unable, with the funds at their disposal, to conduct such 
 an inquiry into the cost of distribution and into the facts surrounding 
 the production of milk as would enable them to work out and report jI 
 plan. 
 
 It appears that they concluded that it would take an appropriation 
 of at least |25,000 to make a proper investigation and that they failed 
 to obtain such an appropriation. It seems, however, that they could, 
 with the extensive resources at the disposal of the Council in both 
 Divisions of the Department, have attempted something. The inevitable 
 conclusion is that they were not particularly anxious to do so and 
 the close relations existing between Dr. Porter and the Dairymen's 
 League would emphasize this conclusion. It is not denied that the 
 Council has ample powers to make such an inquiry and that the only 
 matter that apparently prevented them was the question of expense. 
 
 It has been impossible and it was not the province of the investi- 
 gation under my direction to make such an inquiry, but certain facts 
 
69 
 
 are available that should be brought in concrete form to the attention 
 of the Legislature and I deem it my duty to make certain recommenda- 
 tions based upon them. 
 
 The enormous importance of regulations and legislation that will 
 insure to the people of New York State as a whole and particularly to 
 the large centres of population an adequate milk supply need not be 
 gone into here. The subject of the milk supply of New York State and 
 of New York City has been investigated and reinvestigated numberless 
 times during the past ten years. 
 
 The price of fluid milk delivered to the consumer in bottled form 
 in New York City today is more than double the price for the same 
 product ten years ago when Mr. Coleman, my counsel in this investiga- 
 tion, conducted as a special deputy attorney-gfeneral an investigation 
 into the charges that a conspiracy existed then, in 1909 and 1910, among 
 the distributors oif milk in New York City, having for its purpose the 
 maintenance of an unfair and exorbitant price for bottled milk. The 
 expenses and costs in every direction have, of course, increased tremen- 
 dously during these ten years and it cannot be expected that the price 
 of milk would not show a corresponding increase. 
 
 But there are certain basic facts at the bottom of the milk industry 
 which must be appreciated in any consideration of the matter. Whether 
 or not any milk trust or combination of distributors exists today for 
 the purpose of maintaining an unwarrantedly high price for milk to the 
 consumer, it is impossible for nie to state. But it is the fact that the 
 milk producers, or the great majority of them, are now associated, 
 through the Dairyioaen's League and in other ways, to establish a uniform 
 price for milk at the source. 
 
 This form of association would formerly have been in violation of 
 law, but by special amendment to the Donnelly Act, passed in 1918, it 
 is provided by section 340 of the General Business Law that the pro- 
 visions of article 22, which make unlawful every contract, agreement, 
 arrangement or combination, whereby a monopoly in the manufacture, 
 production or sale, in this state, of any article or commodity of common 
 use, is or may be created, established or maintained, shall not apply to 
 cooperative associations, corporate or otherwise, of farmers, gardeners 
 or dairymen, including livestock farmers and fruit growers, nor to 
 contracts, agreements or arrangements made by such associations. 
 
 The cooperation , of milk producers, therefore, for the purpose of 
 obtaining a fixed uniform price for their milk is not unlawful/ If a 
 
70 
 
 similar organization for a similar purpose exists among the distributors 
 of milk, however, that would evidently be unlawful. 
 
 It is the fact that the great bulk of the distributors of milk are 
 now operating together under similar contracts made by each of them 
 with the Dairymen's League by which they agree to pay the prices for 
 milk set from time to time by the Dairymen's League and to collect and 
 remit to the Dairymen's League out of the moneys which they pay to 
 the producers of milk a percentage figured on the basis of one cent per 
 hundred pounds of milk. This percentage goes into the treasury of 
 the Dairymen's League and forms practically the sole revenue of that 
 corporation. It has amounted during the past year to a sum in the 
 neighborhood of |275,000, which, though nominally a tax on the pro- 
 ducer, is and must be actually a tax upon the consumer of milk. 
 
 It is, therefore, a legal question in my mind whether or not by this 
 act alone the distributors of milk have not entered into some form of 
 combination in violation of the anti-monopoly laws of the state. 
 
 It is the undoubted fact that, as the outcome of this arrangement 
 between the distributors and the Dairymen's League, a uniform price 
 for milk to the consumer has been established and is being maintained 
 by the distributors in New York City ; and it is the further fact that the 
 two largest distributors of milk, who control probably seventy per cent., 
 if not more, of the entire milk supply of New York City, known as the 
 Borden Farm Products Company and the Shefiield Farms Company, have 
 maintained the same prices and have increased their prices simul- 
 taneously or practically so at all times. 
 
 The smaller distributors have followed the example of these two 
 large concerns and whether there is actually an unlawful combination or 
 monopoly or not in the distribution of milk to the consumers in the 
 metropolitan district, it remains certain that the consumer is in the 
 grip of some form of agreement among the distributors that does away 
 with price competition. 
 
 In order to enforce their control over the distributors of milk, the 
 producers, acting through the Dairymen's League, have from time to time 
 threatened and actually carried out what are known as milk strikes. This 
 in itself is a deplorable condition, that it should be possible for a body 
 of men to combine together and threaten, unless their demands are 
 granted, to shut off the milk supply of the six million people in the 
 metropolitan district. 
 
 It is not conceivable that the Legislature or the people of the State 
 
71 
 
 of New York had in mind, when the amendment to the anti-monopoly law 
 was passed, that such an amendment would enable the milk producers 
 to make or carry out such a terrible threat. To combine to obtain a fair 
 price for one's product is one thing; to combine to plunge or threaten 
 to plunge a million families into a milk famine is quite another thing. 
 I do not believe it can be seriously questioned that a combination to 
 make or carry out such a threat is unlawful and against public policy, 
 and that the distributors of milk should be compelled to furnish, through 
 the percentage mentioned above, the machinery and funds to enable such 
 a threat to be carried out by combination must be equally unlawful. 
 
 But the distributor, who purchases milk from the producers who 
 are members of the Dairymen's League, and they now number more than 
 seventy-eight thousand in the State of New York, who will not agree 
 to collect and pay over this percentage to the Dairymen's League, thus 
 furnishing the League with the sinews of war to conduct its strike cam- 
 paigns, finds himself unable to purchase the necessary amount of milk 
 to carry on his distributing process, and thus it has come about that both 
 the Borden and the Sheffield Farms Company and the majority, if not 
 practically all, of the lesser distributors are now under contract with the 
 Dairymen's League. 
 
 Many broad-minded farmers and milk producers, members of the 
 Dairymen's League, are strongly opposed to these threats of milk strikes, 
 but their calm counsels cut but a small figure in the management of the 
 League itself. To disobey the League's injunctions and orders will entail 
 a great deal of trouble upon the producer of milk and he may find him- 
 self suddenly deprived of a market. The League has grown to such an 
 extent through the lavish expenditure of hundreds of thousands of dol- 
 lars collected in this way that those who are members of it and do not 
 approve of its actions are fearful of letting this become known lest the 
 vengeance of the League be taken upon them. 
 
 The League is now in the process of aggrandizing itself through an 
 extraordinary plan that is being fostered and encouraged by Dr. Porter, 
 the Department of Farms and Markets and the Council of Farms and 
 Markets. It is the plan to form throughout the state hundreds of smaller 
 leagues under the guise of co-operative associations, all of them part 
 and parcel of the Dairymen's League organization. 
 
 It is the plan for the Dairymen's League through this greater organ- 
 ization to acquire control, by means of these co-operative associations, of 
 all the milk shipping stations throughout the state and to actually bring 
 
72 
 
 about a condition whereby the League will eliminate the New York City 
 distributor of milk from all operation in the state beyond the confines 
 of the metropolitan area. By this plan the League itself proposes to 
 have control of all the fluid milk necessary for New York City's consump- 
 tion right up to the boundaries of the city, where they will then turn it 
 over to the distributors. 
 
 These matters are all common knowledge among those interested in 
 the business, though, unfortunately, the attention of the great consuming 
 public has not been brought to the fact. Journals such as the Rural New 
 Yorker and the American Agriculturist and the Dairymen's League's own 
 publication have been filled with the intimate details of this enormous 
 plan, the total cost of which it has been estimated will run into millions 
 of dollars. Ii \ 
 
 This plan is the outcome of one which attracted the attention of 
 the Council of Farms and Markets through the activities of Dr. Porter 
 in its behalf last year. It was then the plan of the men dominating the 
 Dairymen's League to acquire outright by purchase at an appraised value 
 all the shipping stations of the Borden Farm Products Company and 
 of the Sheffield Farms Company. 
 
 Lack of funds apparently made this scheme impossible at the time, 
 for it must be stated that notwithstanding its enormous revenues from 
 its milk percentage commissions, the Dairymen's League treasury is not 
 in a satisfactory condition, as disclosed by its last annual and semi-annual 
 financial statement printed in the League's own paper (see Exhibits 5 
 and 7 of Dec. 1, 1917). All of these hundreds of thousands of dollars 
 collected by the percentage plan are being spent as rapidly as they come 
 in to furnish the men who dominate the League with large salaries and 
 to pay the expenses of the extensive campaigns for expanding the mem- 
 bership of the League. The annual expenses of the League today are 
 far in excess of the receipts and the cash fund accumulated in the treasury 
 in the early part of its activities is rapidly being depleted. The financial 
 statement of the Treasurer of the Dairymen's League for the six months 
 ending May 31st, 1919 (Exhibit No. 5, Dec. 1, 1919), shows a total 
 income for that period of |106,948.89 with expenditures of |195,7«8.68, 
 a deficit of |88,819.79 in six months. Of the total income of |106,948.89 
 the sum of |100,800.38 was derived solely from the milk commission of 
 one cent per hundred pounds. 
 
 The plan which the League is now working out is perhaps a good 
 one for the producer, but it is very questionable what its effect will be 
 
V3 
 
 on the consumer. The vicious part of the plan lies in the tremendous 
 centralization of power over the milk supply of the state. Through the 
 ramifications of this plan, carried out to its last analysis, a few men, the 
 Executive Committee of the Dairymen's League, will hold in their hands 
 absolutely the milk supply of Greater New York. 
 
 This is not all. The plan includes control of all the surplus milk 
 not used for fluid consumption, and it is the intention of the men domi- 
 nating the League to control equally the butter, cheese, condensed milk 
 and other by-products of the surplus milk of the state and to sell these 
 products at both wholesale and retail at prices to be determined or fixed 
 in the same way that the price of milk is now fixed that the distributor 
 must pay the producer. 
 
 Granting that there may be, and I believe there are, sound economic 
 reasons for centralizing control over the milk supply of the state, that 
 control must not be left in the hands of a few men who are by law ex- 
 pressly exempted from prosecution for any acts they may do in the 
 furtherance of this monopoly. 
 
 I believe that the intention of the Legislature and of the people of 
 New York, including the farmers themselves, when the law was amended 
 so as to exempt co-operative associations from the penal clauses of the 
 anti-monopoly statute, was not to create a monopoly, but only to secure 
 the right of a localized body of producers to co-operate and agree among 
 themselves how they should market their product. 
 
 In other words, it could not have been and cannot now be the desire 
 of the people to foster and encourage the institution of a private 
 monopoly in the most important element of the food supply of the state. 
 Co-operative combinations? Yes. A number of such combinations? 
 Yes. But an actual monopoly created by the centralization of all such 
 combinations? No! Most emphatically. No! When matters have 
 arrived at such a pass as the milk situation in New York City and State 
 has now arrived at, that a gigantic monopoly in this product is forming, 
 if not already formed, it becomes the duty of the people for the preserva- 
 tion of their own health and welfare to intervene and take control of this 
 monopoly themselves. If it is better that the production of milk 
 throughout the state of New York should be the subject of a monopoly 
 and dominated by a central power, that power must be the state itself 
 and that monopoly must be the people's own monopoly ! 
 
 It need only be pointed out, that part of the plan as set forth in the 
 organ of the Dairymen's League contemplates that the Executive Com- 
 
74 
 
 mittee of the Dairymen's League shall determine how mucli — and that 
 necessarily means hotc little — fluid milk they deem necessary for the 
 metropolitan supply and that through the operations of the machinery 
 of the League under this aggrandized plan they will be in a position to 
 restrict the flow of milk at any and all times to New York City to the 
 amount which they deem necessary for the city's consumption purposes — 
 it is only necessary, I repeat, to point this out and bring it to the realiza- 
 tion of the people of the state to make them aware of the tremendous 
 and far-reaching possibilities of the plan and how absolutely the families 
 of New York City will be in the grasp of the Dairymen's League if such 
 a plan is to be allowed to mature without any goyemmental supervision 
 and control whatever. 
 
 I have said that under the plan the Dairymen's League Executive 
 Committee would determine how little fluid milk New York City could 
 get along with, and that needs emphasis. For it is not the intention of 
 the Dairymen's League to make anything but a percentage profit out of 
 the sale of such fluid milk to the distributors in New York City under 
 this plan; but it is their intention and hope to make enormous profits 
 out of the sale of condensed milk, cheese, butter and other products 
 manufactured from the surplus milk that is not necessary for the fluid 
 iconsumption of the community. 
 
 These men in their publications and reports have visualized the 
 profits from these sources in enormous figures and are holding out the 
 glittering prospect of such profits to all producers so as to indu.ce 
 them to become stockholders or acquire certificates of indebtedness or 
 in other ways share the profits of the plan. It is being pointed out daily 
 to the producers of milk that the enormous profits which the Borden 
 Company and the Sheffield Farms Company and the "milk trust" gen- 
 erally has made out of the sale of milk have not been by the sale of fiuid 
 milk, but by the manufacture of the surplus milk into these other 
 immensely profitable products. 
 
 Human nature is unchanging when it deals with the elements of 
 commerce. It is as certain as the fact that water runs down hill, that 
 if the people of the state of New York permit this private monopoly to 
 be foisted upon them under the guise of law, the commercial spirits domi- 
 nating the Dairymen's League — and no one has ever ventured to say that 
 they were philanthropists — will use the milk of the state for its most 
 profitable purposes, and there will therefore be a continual tendency to 
 
-75 
 
 keep down the amount of fluid milk consumed in order tO' keep up its 
 price and increase the amount of manufactured products. 
 
 The promoters of the plan may disclaim any such intention, but 
 how can they assure the people of New York that they will not take 
 natural advantage of the commercial possibilities of the scheme? The 
 yery genesis of the scheme itself is commercial in the desire to reap out 
 of the milk production of New York Sta;te the greater profits that can 
 be made through the sale of manufactured milk products. 
 
 It seems unnecessary to me to push this argument further. The 
 ■consensus of opinion among all men who have given the subject thought 
 and who are interested from public and economic motives in endeavoring 
 |to assure New York City of a constant, ample and reasonably priced 
 milk supply that the time has come when the State must intervene 
 between the people and a commercial milk monopoly. 
 
 Dr. Porter, when questioned concerning some features of this plan 
 of the Dairymen's League, admitted in his testimony that it might bring 
 about a situation where the Dairymen's League could make the price of 
 fluid milk in New York City twenty-five cents or even twenty-five dollars 
 a bottle. That, of course, is not an argument for or against the plan, as 
 such a price would react against the League itself, but it is elemental that 
 where there is monopoly in a product of vital necessity tO' the public 
 health or where there threatens to be a monopoly of such a character, the 
 State must protect itself and, if no other course is available, take over 
 the control of such monopoly itself. 
 
 The consideration of some figures which are matters of record will 
 throw further light upon the subject. Exhibit No. 43 in the proceedings 
 before me is Bulletin No. 118, entitled "Statistics relative to the Dairy 
 Industry in New York State", published by the Department of Farms 
 and Markets, Division of Agriculture, in April, 1919. It is there set 
 forth that in the year 1918 the milk consumed in the state of New York 
 in liquid form amounted to 2,341,401,288 pounds of milk, or the equiva- 
 lent of 1,089,023,855 quarts of milk. In the same year there were 
 2,095,531,125 additional pounds of milk produced in the State of New 
 York and made into manufactured products. This latter is what is 
 known as the surplus milk and it will be seen that the amount of the 
 surplus milk was almost, though not quite, as great as that of the fiuid 
 milk consumed. 
 
 Of the enormous total of more than a billion quarts of fluid milk con- 
 sumed, the metropolitan district, which includes Greater New York, 
 Nassau, Suffolk and Westchester counties, consumed (see p. 29) 
 
76 
 
 752,273,030 quarts during the year, or practically three-quarters of the 
 entire fluid milk consumed in the state of New York. 
 
 Of the approximately billion quarts of surplus milk manufactured 
 during the same year, almost one-half, or about 920,000,000 pounds, was 
 manufactured into condensed, evaporated or powdered milk in various 
 forms. About thirteen per cent, of the surplus milk went into creamery 
 butter, somewhat less than five per cent, into ice cream, and all of the 
 balance into cheese. 
 
 The total value of these manufactured dairy products made from 
 the surplus milk of the state for the year 1918 at the factory "wholesale" 
 prices is given in this bulletin as 1109,715,736.43. It is a safe estimate 
 that the cost of these products to the consumer was approximately 
 $200,000,000. The actual return to the producers of this surplus milk 
 is given at f54,183,809.25. 
 
 The value of the fluid milk consumed, based on the returns to pro- 
 ducers, was §70,242,038.64. Figured at an average retail price to the 
 consumer of fourteen cents per quart, which is probably less than the 
 average throughout the state, the fluid milk consumed during the year 
 1918 throughout the state cost the consumer |152,463,339.70, at least 
 three-quai'ters of which, or approximately |115,000,000, represented the 
 price paid by consumers in the metropolitan district for their milk dur- 
 ing the year. 
 
 I draw attention to these figures partly for the purpose of 
 emphasizing the enormous amounts of money involved. Taking the 
 retail value of both the fluid milk and the manufactured products, we 
 have a total in excess of §350,000,000. 
 
 It will be noted that butter plays a rather small part in the total 
 amount of the manufactured milk products. This is because of the tre- 
 mendous inroads made into the butter industry by the. great members 
 of the packing industry and because New York State cannot compete 
 with the lower costs of butter production in Wisconsin, Minnesota, Iowa, 
 and other mid-Western States, and the same is true of cheese to some 
 extent, though New York State still manufactures almost one-quarter of 
 all the cheese manufactured in the United States. 
 
 Consideration of the quantities given in the above figures of both the 
 fluid milk and the surplus milk makes it plain that there never should 
 be a time when there would not be far more than enough milk produced 
 in New York State to supply the population with all of the fluid milk 
 it needs. But the enormous increase in the manufacture of milk products 
 
77 
 
 is graduaJIy revolutionizing the industry of milk production. The 
 faimer does not receive or expect to receive as much for his surplus milk 
 as he does for the milk he ships for fluid consumption and the difference 
 amounts to almost a cent a quart. On the other hand, the farmer can 
 dispose of more milk and more readily to the condensery or milk manu- 
 facturer and the milk does not necessarily have to be produced under the 
 stringent regulations affecting fluid milk. 
 
 With these figures in mind, it is now possible to throw another light 
 upon the plan which the Dairymen's League is now in process of perfect- 
 ing. It is a part of that plan that the producer, as a member of the 
 League, turning all of his milk over to the Dairymen's League for dis- 
 tribution as it pleases, either for fluid consumption or for manufacture, 
 is to be paid by the Dairymen's Leagnie after it has sold the products to 
 the fluid milk distributer or to the manufacturer, an average price based 
 upon the pooling together of all the milk controlled by the League, 
 whether sold for fluid milk or used for manxifacturing purposes. 
 
 In other words, the producer whose milk is all used for fluid con- 
 sumption will receive the same return for it as the producer whose milk 
 is diverted to manufacturing purposes; and, as the League proposes 
 itself to go into the manufacturing end, there will be further and greater 
 proflts from that quarter, according to the glittering promises by which 
 the plan is supported. 
 
 There is another thing to be taken into consideration: Assuming 
 that this plan were perfected and in operation, assuming that it did not 
 work disadvantageously to the consumer of fluid milk, and that is a 
 difficult assumption, there remains the danger, and a great one, that the 
 machinery will break down and that after a grand beginning there will 
 be a disastrous end. Such a culmination would throw the milk industry 
 of the state into chaos and would undoubtedly result in the bankruptcy 
 of numberless producers. It may be stated that it is not fair to make 
 such an assumption or to look forward to such a possibility, but if the 
 financial transactions in which some of the gentlemen who today control 
 the Dairymen's League have already engaged are taken into consider- 
 ation dnd if we are to judge the future by the past, there is a grave pos- 
 sibility — some might say a probability — that such a disaster would be 
 the inevitable outcome of the scheme. 
 
 The Dairymen's League as at present constituted is not run on a 
 proper financial basis and it has been shown that its expenditures today 
 are far in excess of its revenues and that it is using up its cash surplus 
 out of the treasury with great rapidity. Prominent members of the 
 
Dairymen's League Executive Committee, including the president of the 
 League, went through an experience in connection with the organiza- 
 tion of the Co-operative Milk Producers Association and the Country Milk 
 Company which resulted in nothing but bahkruptcy barely a year ago, 
 to the great financial loss of a number of producers. 
 
 When it is considered that if this monopoly were to be permitted 
 to extend to the point that its proponents desire, they would be in con- 
 trol of industries the output of which, as shown by the above figures, 
 would amount to hundreds of millions of dollars per annum, it is evi- 
 dent that such a business, call it a monopoly or not, could not be carried 
 out successfully without the most perfect organization and without the 
 guidance and control of highly trained and experienced men of business. 
 
 Were the plan to deal with the manufacture and merchandising 
 of some essential industrial product such as steel, coal or lumber, the 
 mere statement of the fact that it was the intention of any body of men 
 to establish a monopoly in the output of such a product throughout the 
 state would be sufficient to raise an alarm and, if it were to be carried 
 out under the guise of law by virtue of an exemption from the monopoly 
 act, there would be from all quarters an insistent demand that at least 
 the men who would father such a plan must be men of recognized stand- 
 ing in the business world. Otherwise, even the boy in school would say 
 that it was foredoomed to disaster. 
 
 But where such a plan contemplates the creation of a monopoly 
 in the most essential and vital food product of the people of the state, 
 not only these but much more important considerations must enter, and 
 the outcome of such considerations can only be that if such a monopoly 
 is inherently good or necessary for the public welfare, it must be a state 
 monopoly under such control by the state as to divest it of its monopo- 
 listic elements and its promises of immense profits, which inevitably 
 must come from the pockets of the consumer. 
 
 State Milk Commission. 
 
 For more than ten years it has been suggested and advocated that 
 the milk supply of the state should be under control by a milk commis- 
 sion based somewhat on the lines of the public service commissions. 
 In April, 1910, Mr. Coleman, my counsel, as special deputy attorney 
 general under Attorney General Edward E. O'Malley, as the result of 
 his investigation into New York milk conditions, prepared a report for 
 the Legislature which is as true today as it was then. 
 
79 
 
 The following quotations from his report are so pertinent to present 
 conditions that attention should be drawn to them now. Mr. Coleman 
 then said: 
 
 "The plain duty of the State, acting for the people, is to 
 regulate the milk traffic so that the consumer and producer will 
 not be at the mercy of the middleman. The highest duty which 
 the State has to perform is to protect the public from imposition 
 and wrongdoing. Public service corporations may be limited in 
 the rates they charge. The price of gas and grain elevator charges 
 have been fixed by law. The reason for this is to protect the 
 public from extortion. Public service corporations enjoy special 
 franchises from the State which may become a monopoly, but, as 
 we have seen, a monopoly can be created as effectually through a 
 'gentlemen's agreement' as by the granting of a special franchise. 
 This being so, governmental regulation would seem the only rem- 
 edy to protect the people from this sort of monopoly. The State 
 might regulate the maximum prices for milk which can be sold 
 to the consumer, see that an adequate supply of milk is available 
 for the State's inhabitants, and that reasonable prices are paid 
 to the producer for milk. 
 
 "By legislative enactment, it might be declared that certain 
 articles, such as milk, flour, coal, ice and meat, are articles of 
 common necessity. A commission could be provided for, to be 
 appointed by the Governor, the members of which, if practicable, 
 to be suggested by members of boards of trades in cities and the 
 State Grange. No member of such commission should be per- 
 mitted to be engaged or interested in the business of trafficking 
 or dealing in the articles enumerated as common necessities. The 
 act should further provide that any corporation intending to deal 
 or traffic in these common necessities of life should procure a 
 license to carry on such business. The commission should be given 
 plenary power to inquire into all the affairs of those engaged in 
 the business, with power to subpoena, and be vested with the right 
 to obtain full information upon all subjects pertaining to the 
 business, so as to enable the commission to perform its duties. 
 This commission should have the power to fix the prices or profits 
 which may be charged or made, over and above the price paid 
 to the producer, with the power to regulate the producer's price 
 also. If the dealer is confined to a certain profit, the incentive to 
 fix an unreasonable price upon the producer is largely, if not 
 wholly, removed. 
 
 "Effective organization or community of effort can produce 
 and distribute any article of common necessity cheaper than the 
 individual. Therefore, organization, in and of itself, by reason 
 of the fact of the cheapening of articles of common consumption, 
 is not the primary evil, but it is the abuses of organization, such 
 
80 
 
 as raising prices after competition has been stifled, with which 
 the State must deal. 
 
 "The old legal maxim, 'there is no wrong without a remedy', 
 is still in force. Concededly, this investigation discloses that a 
 positive wrong exists, and the paramount duty for the State is 
 to find a remedy for that wrong. 
 
 "The congestion of population in our cities has given rise 
 to new conditions in our industrial and economic life. Articles 
 of common consumption, such as milk, flour, coal, ice and meat, 
 that formerly, under the law of supply and demand, reached the 
 consumer at a fair price, have become the subject of monopoly, 
 through organization and combination between middlemen. Deal- 
 ing in these articles of common necessity might be regulated by 
 the government and if such regulation shall be found to be im- 
 practicable, it will furnish a new and powerful argument for 
 municipal ownership, and municipalities will ask for legislative 
 authority to undertake the distribution of these common neces- 
 sities of life among their citizens. It will not do to argue that 
 there is no remedy. Such a contention would be a confession 
 that our form of government is a failure, and the people in these 
 great centers of population will become the victims of the greedy 
 and rapacious, who are able under present conditions to prey 
 upon the producer and consumer with impunity." 
 
 At that time Mr. Coleman prepared a bill, and wrote a memorandum 
 of law in reference to the establishment of a state milk commission. 
 In February, 1911, the present Surrogate-elect, Mr. James A. Foley, 
 introduced in the Assembly an act to establish in cities a milk commis- 
 sion and prescribing its powers and duties and to provide for the 
 regulation and control of dealers in milk. This bill, of course, never 
 became law, but in view of the condition to which the milk industry has 
 come to-day it can only be regretted that this or some similar experiment 
 was not tried so that in the course of the years that have since elapsed 
 a more perfect and smoothly working machinery of this character would 
 now be in operation. 
 
 The first consideration in regard to a milk commission should be its 
 membership. I believe that a membership of three would be sufficient, 
 all to be appointed by the Governor for a fixed term of years, preferably 
 five, and to be paid a reasonable salary and removable only for cause. 
 The duties of such a milk commission broadly stated would be to deter- 
 mine and fix a reasonable price that milk producers should receive for 
 their product and also a reasonable price that the dealer should charge 
 
81 
 
 to the consumer based upon the conditions existing in different localities. 
 These prices would vary at different times and in different localities. 
 
 To enable such a milk commission to arrive at these determinations, 
 it should be given power to supervise the entire milk industry of New 
 York State, both in the fluid and in the manufactured condition, from 
 the cow to the consumer. All control and supervision over milk and 
 milk products now given to the Department of Farms and Markets, in 
 the Division of Agriculture or in the Division of Foods and Markets, 
 should be given to this milk commission; but the existing laws giving 
 the State Health Department and the various health officers of the 
 municipalities throughout the state the power to supervise the quality 
 of milk and the conditions under which it is produced and sold should 
 not be disturbed. 
 
 The vital function of the milk commission should be to ensure an 
 ample supply of fluid milk for all consumers throughout the state at a 
 reasonable profit to the producer, a reasonable profit to the dealer and 
 a reasonable price to the consumer. The milk commission must, there- 
 fore, have control of all the milk produced in order that it may exercise 
 its powers to see that the supply of fluid milk may at no time be jeopar- 
 dized by the demands of the manufacturing industries. 
 
 To this end, all producers of milk for sale should be registered and 
 licensed by the milk commission and all shipping stations and milk 
 dealers and milk distributors should be similarly registered and licensed. 
 The producer should be required to report to the commission at stated 
 periods the disposition he has made of the milk he has produced for 
 sale, setting forth the name and address of the station he has delivered 
 it to, the quantity delivered and the price obtained therefor, and whether 
 such milk was sold for fluid or manufacturing purposes. 
 
 The milk station, operating similarly under a license, should be 
 required to report at least every week to the commission the amount of 
 the milk it has received, the prices paid therefor, the names of the 
 producers and the eventual disposition of the milk, together with such 
 other infor-mation as the milk commission may deem advisable. 
 
 Every condensery, butter factory, cheese factory, or other plant 
 engaged in the manufacture of milk products, should be similarly regis- 
 tered and licensed and flle similar reports. Every distributor or dealer 
 in fluid milk should also be registered and licensed and be required to 
 file with the commission a daily statement of the amount of milk received, 
 where received from and the disposition of the milk, so as to make plain 
 
82 
 
 how much of the milk was distributed in the shape of loose milk to 
 retail stores, and how much in bottled milk in the various grades. 
 
 The commission should also require all distributors to file with it, 
 in cities of the first class at least, on forms prepared for the purpose, a 
 map of the routes covered by its wagons in the distribution of milk, so 
 that thereby the commission may be enabled, without undue injustice 
 to any distributor, gradually to weed out duplications of routes, which 
 form one of the most important features of economic waste in the distri- 
 bution of milk in large cities. 
 
 The milk commission should have the power, whenever deemed 
 advisable, to divert from shipping stations where milk is collected for 
 manufacturing purposes any or all of the receipts of such stations where 
 fluid milk is collected, or take whatever other steps may be necessary at 
 any time to ensure a full supply of fluid milk for the large centres of 
 population. 
 
 The milk commission should have the power in certain emergencies to 
 commandeer or confiscate milk at any shipping station Avhenever the 
 public welfare would warrant such action. Possibly it might be advisable 
 in this connection to require that such action by the commission should 
 have the approval of the Governor or the State Commissioner of Health, 
 or both. In this connection it might be considered advisable to make 
 the State Commissioner of Health and the Commissioner of Health of 
 New York City ew-officio members of the milk commission. 
 
 The commission should have power to inquire into all of the ele- 
 ments of cost entering into the production, collection, transportation 
 and distribution of milk and to fix prices for the producer, the distributor 
 and the consumer, based upon such costs and a reasonable return upon 
 the investment with due consideration for the elements of hazard enter- 
 ing into the business. 
 
 The milk commission should have power to enforce all its regula- 
 tions, with power to revoke or suspend the license of any producer, ship- 
 ping station, manufacturer or distributor, who fails or refuses to obey 
 such regulations. In issuing its licenses the commission should have 
 power to ascertain that the applicant for the license is actually the per- 
 son, firm, association or corporation, engaged in the business for which 
 an application for the license is made and to refuse to issue any license 
 where it appears that the applicant is not in fact the actual operator of 
 the business. 
 
83 
 
 Such licenses sliould not be transferable nor should the issuance of 
 them be contingent upon more than a nominal sum in the case of pro- 
 ducers. In the case of shipping stations, manufacturers and distributors, 
 the fee attaching to the license should be based to some extent upon the 
 annual amount of business done by the licensee. The utmost care in the 
 wording of such licenses should be taken to ensure that they run only 
 during the good conduct of the licensee in regard to his obedience to the 
 regulations of the commission. 
 
 Two former Commissioners of Agriculture, Calvin J. Huson and 
 Charles A. Wieting, on examination testified that they believed that a 
 State Milk Commission enjoying in reference to milk, approximately 
 the same powers as the Public Service Commission does to traction, tele- 
 phone and other matters that come within its jurisdiction, would afford, 
 in their opinion, the only possible solution of the milk problem in this 
 State, provided, however, that such a commission would have the abso- 
 lute right to determine and fix reasonable prices for both the producer 
 and the consumer, together with the necessary machinery and power to 
 enforce such determinations. 
 
 Dr. W. H. Jordan of the Geneva Experiment Station, who dur- 
 ing the war was Chairman of the Federal Milk Commission, is of the 
 same opinion, according to his testimony, and it is plain that the ten- 
 dency of all minds that have given much thought to this question and 
 considered it from a non-partisan viewpoint is toward the same con- 
 clusion. It is not my purpose and possibly not my province, at this 
 time, to enter into a detailed discussion of or map out a plan for the 
 organization of such a commission, but some of the conditions which it 
 could relieve may be set down here. 
 
 In the first place by having power to supervise and control the out- 
 put of milk used in the manufacturing processes and whenever neces- 
 sary or advisable to divert any part of such milk to offset a shortage in 
 the supply of fluid milk, this Commission could at all times insure an 
 unfailing and ample supply of fluid milk for New York City and the 
 other great centres of population throughout the state. Secondly, by 
 the exercise of the saihe powers it could regulate the price of milk when- 
 ever through an alleged shortage in fluid milk the consumer Avas threat- 
 ened with an unwarranted increase in price. Thirdly, by proper investi- 
 gation it could determine from time to time the basis upon which the 
 reasonable cost of producing fluid milk should be estimated. Previous 
 to the present year the Dairymen's League in the determination of the 
 
84 
 
 price that the producer should obtain for his milk based their conclu- 
 sions upon what is known as the Warren formula, which takes into 
 account the farmer's investment, the cost of feed, transportation, etc. 
 Recently, however, the Dairymen's League, which is now practically the 
 sole determining factor in the price of milk at the source, has abandoned 
 the Warren formula and bases its price upon the market price of butter, 
 cheese and similar by-products. This practically amounts to determin- 
 ing the value of fluid milk by the value of milk used for manufacturing 
 purposes, and is not, to my mind, a proper basis upon which to calculate 
 the cost of milk, but only one of the factors in arriving at such a deter- 
 mination. There are several reasons for this, but possibly the most 
 cogent one is that the market price of butter and cheese to-day is largely 
 dependent upon the cold storage situation in these articles and that, in 
 turn, is determined, to a great extent, by the operations of the members 
 of the great packing industry, who have entered deeply into the butter 
 and cheese market. 
 
 The report of the Federal Trade Commission shows that Swift & 
 Company of Chicago are to-day by far the largest individual handlers 
 of butter in the United States, and this is undoubtedly due to their 
 enormous cold storage facilities. Most of this butter is manufactured 
 in the West and its market value bears a close relation to the market 
 value of butter substitutes. It is not fair to the people of New York 
 State that the price which they have to pay for fluid milk should be thus 
 dependent, to a considerable extent, upon the dairy products manufactur- 
 ing operations of Swift & Company and other packers in the great farms 
 of the Western part of the United States. To judge the value of milk 
 by the value of butter is reasoning in the wrong direction and putting 
 the cart before the horse, since there can be no butter without milk and, 
 therefore, the value of butter should be determined intrinsically by the 
 value of milk. The object of the Dairymen's League in basing its calcula- 
 tions of the price that the producer should obtain for his milk on this 
 basis can be understood when it is borne in mind that the Dairymen's 
 League is now planning to enter largely into the manufacture and sale 
 of butter in this State. Butter is a commodity more easily handled than 
 milk and it can be stored in surplus seasons so as to take advantage of 
 the prices for butter in the winter season. It can be argued, of course, 
 that the farmer is entitled to a price for milk for fluid consumption some- 
 what in excess of, but based essentially upon the price which he can 
 obtain for Ms mUk for manufacture Into butter or cheese, but after all, 
 
85 
 
 that is a roundabout reasoniug. When we are dealing with a vital 
 necessity and propose to make its price the subject of Government con- 
 trol, we must determine that price solely by the cost of production based 
 upon all the elements entering into such production, plus a reasonable 
 profit. Similiarly, when we deal with the cost to the consumer of the 
 same article, we must determine the cost of collection and transportation 
 and then arrive at some method of determining the cost of distribution 
 under the different conditions existing in the various localities and arrive 
 at the fair price to the consumer by adding a reasonable profit to all of 
 these costs. If a person or firm or association undertakes to distribute 
 milk by a system that is plainly extravagant and wasteful, or if such 
 person, firm or association contends that it has a much larger investment 
 at stake than seems to be needed in or justified by the business it is 
 doing, such concern should not be allowed to calculate into its cost of 
 distribution all these wasteful items, but should be limited in the cal- 
 culation of the reasonable profit to which it is entitled to a return upon 
 only that portion of its investment and costs that, in the opinion of the 
 commission, are necessary and legitimate. If such a determination by 
 the Commission should result in the concern complaining that it is 
 forced to operate at a loss, it has two remedies open : One is to cut away 
 its wasteful methods and operate upon a business-like and economical 
 basds and the other is to turn its attention to some other line of business 
 than that of milk. The City consumer who cannot live without milk 
 and cannot produce it for his own consumption should not be compelled 
 to bear the burden of unnecessary or wasteful or extravagant methods 
 in the service of the milk to him any more than he should be required 
 to pay an exorbitant or unjustifiable price for this necessity of life. 
 No doubt, objection will be made to the establishment of this Milk Com- 
 mission, with power to fix a price for milk as contrary to the State and 
 Federal Constitutions. In my opinion, this objection is not well founded. 
 Milk might be termed "the necessity of life"; for the reason that 
 people, if forced to, can do without every other so-called necessity of 
 life. But with milk, it is absolutely necessary that a large and whole- 
 some supply of it be furnished to the people. Under modern conditions, 
 where so few mothers find it either expedient or possible to nurse their 
 children, it is absolutely essential for the upbringing of the child to 
 have an adequate supply of pure milk. Whatever tends in any way 
 either to lessen the supply or to raise the price of this necessity of life 
 is a matter of vital import to the State. Any circumstances, or set 
 
86 
 
 of circumstances, that in any way tend to place an adequate supply 
 of pure and wholesome milk beyond the reach of the poor and needy 
 strike at the very root of the Government. Any situation that would 
 tend to increase the infant mortality is a matter of greatest concern to 
 the State. It is the present insistent duty of the State, therefore, to see 
 to it that an adequate supply of wholesome milk is furnished to its 
 inhabitants at a reasonable price. 
 
 The objection that the opponents of such legislation make is that 
 a man has an absolute right guaranteed him by the Constitution to 
 purchase any article as cheaply as he can buy it and to sell it for the 
 highest price he can obtain, and if he cannot obtain the price that he 
 sets upon the article, he can refuse to sell. My answer to this objection 
 is that no man has a vested inherent right to make a practice of buying 
 a necessity of life, frequently at less than its cost of production, and to 
 keep and hold the same for an inordinate profit. Granted, if you will, 
 that the middleman has a right to a reasonable return upon the capital 
 outlaid and upon the energy he expends ; but the traffic in a necessity of 
 life, such as milk, is of such public concern and is so fraught with 
 importance to the State, that the State has the right to impose such 
 conditions upon such traffic within its borders as it deems advisable for 
 the common weal and public good. 
 
 Of course, it is elementary that the State has the right to limit a 
 person or corporation that receives a special franchise from the State 
 to a reasonable return upon the money invested. While I know that 
 those engaged in the milk traffic obtain no special franchise from the 
 State, I hold that the traffic in milk, the necessity of life, is such a public 
 business and such a matter of public concern that the State has the 
 right to prescribe the conditions under which it shall be carried on 
 within its borders. The State cannot compel a citizen or a corporation 
 to embark in this business, but if the citizen or the corporation elects 
 to r-isk its capital and expend its energy in the business of trafficking in 
 such a necessity of life, the State has the absolute right to prescribe 
 that such persons or corporations shall only be entitled to make a 
 reasonable profit on the actual capital invested and the labor expended. 
 
 Inasmuch as the question of the constitutionality of the Legislation 
 which I recommend is such an important one, I have hereto annexed a 
 memorandum of law on the cases which I think support my contention. 
 
87 
 
 Miscellaneous Recommendations. 
 
 The enforcement of Sections 40, 41, 42, 43, 46, 47, 48, 49 and 50 of 
 Article 4 of the Public Health Law should be referred back to the State 
 Department of Health and taken out of the jurisdiction of the Depart- 
 ment of Farms and Markets. These sections will be found included in 
 Bulletin No. 120 issued by the Department, dated June, 1919, and en- 
 titled, "Manual of Laws pertaining to the Department of Farms and 
 Markets", pages 255 to 260 inclusive. 
 
 These sections relate to drug, confectionery and beverage adultera- 
 tions, and the administration of them falls properly within the jurisdic- 
 tion of the State Department of Health. It is the common complaint of 
 officers' of the Department of Farms and Markets, and particularly of 
 Dr. Porter as Commissioner of the Division of Foods and Markets, 
 that there are too many rules and regulations and laws falling within 
 the jurisdiction of the Department. These sections of Article 4 of the 
 Public Health Law, as will be seen, deal almost entirely with poisonous 
 drugs, whether sold as such or used in the adulteration of foods and con- 
 fectionery, and with the adulteration of spirituous, fermented or malt 
 liquors and of wines. 
 
 Wherever any such drug is fraudulently used in the adulteration of 
 any food, the Department already has ample authority in other sections 
 of the Agricultural Law to enforce penalties for violations. The Depart- 
 ment of Farms and Markets has not the machinery, nor is it properly 
 its province, to deal with the improper or unlawful use of drugs or the 
 improper or unlawful manufacture of liquors or wines. Section 393 
 of the General Business Law, found on page 251 of the same manual, 
 relating to the marketing of ginseng, might also be well incorporated in 
 the Public Health Law and eliminated from the control of the Depart- 
 ment of Farms and Markets. Paragraph 396 of the General Business 
 Law, relating to fees and charges for elevators and warehouses, also 
 found at page 251 of the manual, does not seem to fall properly within 
 the jurisdiction of this Department. If any special department should 
 be charged with the enforcement of this law, it would seem as though the 
 Public Service Commission might well be required to see that it is carried 
 out and to enforce penalties for violations. Section 397 of the General 
 Business Law, relating to the sale of agricultural products on commis- 
 sion, Should properly fall within Article 12-a. of the Agricultural Law, 
 where it belongs. 
 
"8i 
 
 From the above it will be seen that a codification of all laws relating 
 to the production, marketing and sale of foods is very desirable. Such 
 a codification would prevent unnecessary duplication and simplify the 
 distribution of the labors of the employes of the Department of Farms 
 and Markets or its successor or successors. 
 
 It does not seem desirable that the supervision of Weights and 
 Measures throughout the State should fall within the jurisdiction of the 
 Department of Farms and Markets. Until the creation of this Depart- 
 ment, the Superintendent of Weights and Measures was at the head of 
 a distinct department, and I believe that the work of supervising the 
 weights and measures throughout the State can be best controlled in 
 that way. There are many reasons for this, but it would seem suffteient 
 to point out that it hardly falls within the province of the Department of 
 Farms and Markets, which is essentially intended to control foods and 
 agricultural products and manufactures throughout the State, to be 
 charged with the enforcement of Article 25-a of the General Business 
 Law (See p. 247 of the manual) relating to the sale of coal, coke 
 and charcoal by weight. Furthermore, various municipalities have 
 superintendents of weights and measures of their own who cannot be 
 expected in any way to co-operate generally with a State Department 
 of Farms and Markets, but who would co-operate with a separate State 
 office of weights and measures. The supervision of weights and measures 
 in any event involves regulations affecting so many products that cannot 
 in any way be classed as food or agrigultural products that the separa- 
 tion of this office from the Department of Farms and Markets is highly 
 desirable. 
 
 The separation of the Bureau of Weights and Measures from the 
 Department of Farms and Markets would eliminate from the jurisdiction 
 of the latter and give to the former the enforcement of sections 250, 252, 
 253 and 255 of the General Business Law, relating to hops and hay and 
 leave with the Department of Farms and Markets only sections 251 and 
 254, relating to adulteration of hay. All of sections 240, ,241 and 242, 
 relating to packing and contents of beef and pork containers, should fall 
 within the jurisdiction of a Superintendent of Weights and Measures 
 and not of the Department of Farms and Markets. Similarly, sections 
 220, 221, 222 and 226 of Article 13 of the General Business Law, relating 
 to flour and meal, should be administered by the Superintendent of 
 Weights and Measures, the remaining sections which deal with the 
 
8^ 
 
 quality of flour and meal offered for sale falling properly within the 
 jurisdiction of the Department of Farms and Markets. 
 
 The separation of the Bureau of Weights and Measures from the 
 Department of Farms and Markets would necessarily also remove from 
 the jurisdiction of this Department all of Article 2 of the (general Busi- 
 ness Law, referring to Weights and Measures and the rules and regula- 
 tions referring to the same, as found on pages 215 to 234 of the Manual 
 of Laws. The above suggestions would materially reduce the number 
 and nature of the laws, rules and regulations which the Department of 
 Farms and Markets is required to enforce and tends considerably to the 
 simplification of its work. 
 
 Dr. Wills, Chief Veterinarian of the Bureau of Animal Industry, 
 has for several years recommended as the result of his experience and 
 observation in the Department several measures which I believe should 
 be formulated into laws. The first deals with the organization of a 
 system by which an intra-state inspection of all meats sold or offered 
 for sale to the public should be had. This and the other recommenda- 
 tions of Dr. Wills will probably require an increase in the veterinary 
 force of the Department, and such an increase would seem desirable from 
 several points of view. Dr. Wills favors a division of the State into a 
 number of sections, each under the head of a district veterinarian with 
 one or more assistants. All such district veterinarians would be 
 responsible to and under the direction of the chief veterinarian at 
 Albany, in whose office would centre the general direction of the work. 
 In this way there is no question but that many abuses that are existing 
 uncontrolled in relation to the sale of meats for human consumption 
 could be checked or corrected. Whether or not the head of the Bureau 
 of Animal Industry should be a veterinarian is a difficult question to 
 answer offhand, and probably experience alone will determine the better 
 course. However, there can be no question but that the chief veterinarian 
 should have immediate control over all of the veterinary work so that he 
 would be responsible for the proper performance of their duties by these 
 professional men. Under the present system, as Dr. Wills testified, the 
 title of Chief Veterinarian is purely an empty one, as the head of the 
 Bureau of Animal Industry, Mr. McLaury, has taken over direct super- 
 vision of all the veterinary work himself. Dr. Wills further recom- 
 mends, and there can be no question that he is correct, that the State 
 should control the use of tuberculin in the same way as other prepara- 
 tions of this character are controlled. Veterinarians in private practice 
 
90 
 
 desiring to administer tuberculin should be required to obtain it from 
 the Bureau of Animal Industry under restrictions that would compel 
 them to report what disposition was made of it and the results of the 
 administration of it. Under section 108 of the Agricultural Law, such 
 reports are required, but the veterinarian may obtain the tuberculin 
 from private manufacturers. Under Dr. Wills's plan it would be impos- 
 sible to sell or offer for sale tuberculin or any substitute therefor, aud 
 every veterinarian would be required to obtain his supply of this product 
 from the Bureau of Animal Industry or other appropriate State 
 authority. 
 
 It may be argued that the veterinarians could purchase tuberculin 
 outside of the State and import it. That could be taken care of by a 
 provision making it a misdemeanor for any veterinarian practicing in 
 New York State to use any tuberculin except that authorized and issued 
 by the State. 
 
 The same or similar regulations would apply to the use, sale and 
 distribution of mallein, which is used for testing horses suspected of 
 glanders. 
 
 Such a provision would operate to reduce, if not eliminate, the 
 commerce in what are known as "plugged cattle". It appears that where 
 a cow suspected of tuberculosis is tested with tuberculin, fraudulent 
 and unscrupulous dealers in such cattle often, through the aid of 
 veterinarians, are able in many cases to control the reaction of the 
 diseased animal to the tuberculin by secretly "plugging" the animal 
 with a dose of tuberculin before the official test is made. The animal 
 then often fails to reveal by reaction the symptoms of the disease. 
 In other words, by the dose of tuberculin thus surreptitiously admin- 
 istered, the animal is temporarily immunized and may be tested again 
 and fail to react, thus hiding the fact that tuberculosis is actually 
 present in the animal's system. The extent or prevalence of this practice 
 is somewhat in dispute, but that it is done and that the term "plugged 
 cattle" has become a byword among cattle dealers is undisputed. State 
 control of tuberculin would tend greatly to abolish this fraudulent 
 practice, and thereby promote the public health by reducing the number 
 of tuberculous cows producing milk. Dr. Wills also favors the adoption 
 of a system of physical examination of all dairy cattle producing milk 
 with the object of detecting and eliminating animals undesirable for the 
 production of wholesome milk — this to be used as a supplement to the 
 tuberculin test and not as a substitute for it. This could be carried 
 
91 
 
 out gradually if the Division of veterinary service into districts as also 
 recommended by Dr. Wills, were made. 
 
 Other recommendations have been made by Dr. Wills from time to 
 time and are contained in the yearly reports of the Commissioner of 
 Agriculture prior to the creation of the Department of Farms and 
 Markets, and some, if not all of them, are entitled to serious considera- 
 tion. 
 
 Some method should be devised by which the regulations requiring 
 every dealer handling food products that have been in cold storage to 
 exhibit a sign announcing that fact shall be more strictly enforced. It 
 is. notorious to-day that but a small percentage of such signs are exhib- 
 ited in the places where they should be, and owing to this fact the 
 general public is not advised that it is or may be purchasing cold storage 
 goods. 
 
 With the limited force at the disposal of the Department it is 
 manifestly impossible for the inspectors to visit constantly every store 
 where cold storage food products are sold or offered for sale, and as is 
 justly pointed out, if the inspector making a visit finds the sign improp- 
 erly exhibited, it is quite likely that the sign is removed as soon as the 
 inspector departs, by the unscrupulous merchant. Dr. Porter men- 
 tioned this practice in his testimony. The suggestion is offered that every 
 person, firm or corporation offering for sale articles of food that have 
 been kept in cold storage or refrigeration be required in addition to the 
 exhibition of the sign, to have a license issued by the Department or the 
 Division having charge of cold storage, and that such licenses be of a 
 thoroughly conspicuous character and prominently displayed in his store. 
 For instance, it might be devised so that the words "cold storage" boldly 
 printed in red or some other color appear across the face of the license. 
 The license might also be so devised that it would disclose at a glance the 
 general description Of the cold storage products which the licensee 
 handled, under general headings, such as meat, eggs, butter, etc. The 
 advantage of such a license would be two-fold. First it would give the 
 Department a complete list of all persons handling cold storage products 
 and enable them to prosecute persons who undertook to sell such prod- 
 ucts without having a license; and secondly, the exhibition of the license 
 in a conspicuous place would inform the public of the fact that the dealer 
 did handle cold storage products. Furthermore, the fact that the dealer 
 was operating under such a license and required to exhibit the license 
 at all times would discourage the tendency to fail to exhibit the large 
 sign required under the present regulations. 
 
92 
 
 In the maintenance of public cold storage warehouses it is recom- 
 mended that regulations be made by which it would be unlawful for the 
 owner of any such warehouse to permit food products to be stored there 
 for a period longer than one year in accordance with section 337 of the 
 Public Health Law, and requiring the owner or lessee of such ware- 
 house to cause such goods to be removed from the cold storage warehouse 
 at the expiration of the twelve months. In order to facilitate this, the 
 owner or lessee of the warehouse should be required to notify the owner 
 of such goods in storage within ten days before the expiration of the 
 twelve months period to remove such goods, and on the failure of the 
 owner of the goods to do so, the owner or lessee of the cold storage ware- 
 house should be authorized and required to remove such goods from the 
 warehouse within forty -eight hours of the expiration of the twelve months 
 period and to make such disposition of them as may be directed by the 
 Department having supervision over cold storage warehouses. Failure 
 to remove such goods in accordance with these regulations should be 
 punishable by a penalty of twenty-five dollars per day for each package 
 of goods thus unlawfully kept in storage. beyond the statutory period, 
 such penalty to run against the owner or lessee operating such storage 
 warehouse. 
 
 The object of these provisions is first to make the operator of a public 
 cold storage warehouse directly responsible for the enforcement of section 
 337 of the Public Health Law, and also to insure that the space that 
 would be otherwise occupied by goods unlawfully kept beyond the statu- 
 tory periods would be available in all such cases for the storage of fresh 
 food products. The continuous failure or neglect by the owner or lessee 
 of a cold storage warehouse to obey these regulations should be further 
 punished by revocation of the license under which such warehouse is 
 operated. In view of the continued failure to enforce any of the Cold 
 Storage laws now on the statute books as against the owners or operators 
 of so-called "private" cold storage plants, it is recommended that it be 
 explicitly stated in the law that all of the provisions are applicable with 
 the same force and effect to these so-called private warehouses as to 
 those referred to here as public warehouses. 
 
 It is the contention of the Department as at present constituted, 
 as shown by the testimony of Mr. Jones, Director of the New York office 
 of the Division of Foods and Markets (p. 1611) and other testimony to 
 the same effect that the Department is not empowered to condemn food 
 that is found unfit for human consumption and that such power lies 
 only in the Department of Health. I questioned Mr. Jones as follows : 
 
93 
 
 '^Q. Was there anything done either by the Division of Agriculture or the 
 Division of Foods and Markets here (meaning New York City) for 
 prosecuting men who have food that is unfit for human consumption by 
 reason of decay or anything of that sort? A. I think they have nothing 
 to do with that. As far as our Division is concerned we do not deal with 
 that matter at all. It is left to the New York City Health Department. 
 It has authority to condemn stuff ; we do not have authority to condemn 
 stuff." Subsequently Mr. Jones testified that the practice in the depart- 
 ment was to report such unfit food to the Health Department. 
 
 The fact is that under Section 338-a of the Public Health Law which 
 was transferred into the jurisdiction of the Department of Farms and 
 Markets power is given to seize and condemn any articles of food, in cold 
 storage warehouses which are found to be unfit for use and such articles 
 of food shall be destroyed or otherwise disposed of. 
 
 I would recommend that the provisions relating to the condemnation 
 of food unfit for human consumption wherever found be broadened so as 
 to make it mandatory upon the Department to condemn and supervise the 
 condemnation and destruction of such unfit food. 
 
 The testimony of Mr. Jones in this respect is but aliother evidence 
 of the practice found throughout the whole Department of Farms and 
 Markets as at present constituted of evading responsibility. Wherever 
 the divisions within the department itself overlap or wherever it is pos- 
 sible for the of&cials in charge of the various bureaus to pass on the 
 responsibility to some other branch of government, state or municipal, 
 this practice is found. It can only be abolished in one way and that is 
 by pinning the responsibility directly upon the department concerned 
 and relieving all other officials from such responsibility. The codifica- 
 tion of the laws relating to agriculture and food products would tend 
 greatly to eliminate this practice. 
 
 In the prosecution of violations of the food laws the Attorney; 
 General has complained from time to time of the serious delays inci- 
 dental to the preparing of cases for prosecution due to the failure of 
 the department to promptly furnish the Attorney-General with the 
 reports of chemical analyses necessary in the preparation of such cases. 
 Commissioner Wilson, Mr. Flanders, Mr. Stern, Mr. Burke and Doctor 
 Wheeler testified concerning these delays and the causes of them. In 
 relation to analyses of feeds and fertilizers which are made at the Geneva 
 Experimental Station, it appears that Doctor Jordan, in charge of this 
 station (p. 2087), has complained that he has not enough appropriation 
 to maintain the necessary trained men at the station. The salaries paid 
 
94 
 
 these men, according to Doctor Jordan, are such that they leave the 
 state employment at the earliest possible opportunity. In consequence 
 the perishable goods sent for analysis such as seed products, feeds, fer- 
 tilizers, etc., deteriorate before it is possible for the station to make 
 the necessary experiments and analyses to test the quality of the goods 
 and determine the nature, if any, of the violation. The result is many 
 of such violations can never be prosecuted. 
 
 Similarly in regard to the chemical analysis of food products such 
 as milk, vinegar, lard, etc., the condition is such that the work is not 
 properly performed. Doctor Wheeler maintains the state laboratory as 
 part and parcel of his own private office in Albany, and does other and 
 private work than the state work in that office, this, notwithstanding 
 the fact that Doctor Wheeler is now paid |4,000 per annum as Chief of 
 the Bureau of Food Standardization, which is the new name that Doctor 
 Porter adopted for the Bureau of Chemistry when he took over that 
 bureau and Doctor Wheeler into his own division. 
 
 ■ It has been suggested that there should be a central laboratory 
 devoted exclusively to state uses, where all of the analyses could be 
 made, except that owing to the impracticability of preventing rapid 
 deterioration milk analyses probably would be better made in the branch 
 offices at New York City, Kochester, Buffalo, etc. There is a great deal 
 to be said in favor of a central State laboratory, as it is certain that 
 many of the delays which frequently involve the discontinuance of prose- 
 cutions owing to the statute of limitations would be thus obviated. 
 
 Whether such a central laboratory should be so organized as to take 
 in all of the chemical work of the various State departments is debatable, 
 as the nature of the work in the various departments such as Health, 
 Highways, Farms and Markets, and so forth, differs so widely and covers 
 such a large field that it would possibly result in a lack of proper co-ordi- 
 nation, but there can be no question that the chemical work needed for 
 the proper enforcement of the laws relating to Agriculture and Food 
 Products should be performed in a thoroughly equipped laboratory, 
 where nothing but departmental work of this character would be attended 
 to. Personally, I would be in favor of a large Central State laboratory, 
 operated under such regulations that all of the chemical work incidental 
 to every phase of the State Governmental activities would be performed 
 there. Such a laboratory should have its own building, housing the 
 different chemical divisions of the various departments and be under 
 the supervision and direction of a State chemist. 
 
 The analytical and experimental work relating to violations of food 
 
95 
 
 products, feeds, fertilizers, et cetera, now done at the Geneva experi- 
 mental station probably can be best done there, but a sufficient appro- 
 priation should be made for the work so that the undue delays resulting 
 in failure to prosecute violations of the law would be unnecessary. 
 
 The testimony of Mr. Flanders (p. 1965) shows that manufacturers 
 of feeds and fertilizers selling these goods under license from the Depart- 
 ment have been permitted when it was found that the goods they were 
 offering for sale did not conform to the certificate filed with the Depart- 
 ment setting forth the supposed ingredients of such feeds or fertilizers 
 to alter their certificates so as to conform with the actual nature of the 
 ingredients as reported by the inspectors of the Department. This 
 practice appears to have been permitted under the excuse of war time 
 emergency on the complaint of the manufacturers of these goods that 
 they were unable to obtain the necessary ingredients in sufficient quan- 
 tity to conform with their registered certificate, but it is the fact that 
 this practice existed also prior to the war time emergency and is still 
 being continued. Instead of being prosecuted for failure of the goods to 
 conform with the certificate on file with the Department or penalized by 
 the revocation of the license issued upon such certificate the manufac- 
 turers have simply filed a new certificate and gone ahead selling the 
 goods, and this of course only when they were caught by the inspectors 
 selling an inferior product. 
 
 Every license based upon such a certificate involves the payment of 
 a fee of f20 or $25 into the treasury of the State; and it seems that the 
 least the Department or Division of Agriculture under Commissioner 
 Wilson should have compelled the violator to do, would be to require him 
 to take out a new license and pay a new fee. More than two thousand 
 such licenses are issued by the Department annually, each covering a 
 separate quality or brand of feed or fertilizer. Many firms hold a large 
 number of such license certificates, one for each of their various brands. 
 The materials sold must conform to the analysis reported in the certifi- 
 cate filed with the application for a license but it does not appear that 
 there is any penalty specifically provided for failure of the goods to con- 
 for-m with the certificate. However, it is forbidden to sell any such con- 
 centrated feed or fertilizer unless a certificate of the ingredients is filed 
 with the Department and a license based on such certificate is obtained. 
 Furthermore, Section 52 of the Agricultural Law prescribes stated 
 penalties for the violation of any of the provisions of the law. This 
 matter of permitting manufacturers of feeds and fertilizers to alter their 
 certificates without taking out a new license and paying a new fee is 
 
96 
 
 another instance of the laxity with which the laws of the Depairtment 
 have been enforced. 
 
 The testimony of Dr. Joi'dan, of the Geneva Experiment Station, 
 and of other witnesses, shows that one of the difficulties with which the 
 farmer has to contend is the adulteration of the commercial feed com- 
 pounds which enter so largely into the cost of cattle raising and the 
 production of milk. Dr. Jordan hesitated in using the the word "adul- 
 terated", because, as he said, it was a question with him, whether in view 
 of the fact that the manufacturers of these feeds are required to and 
 do set forth on a tag attached to each package of such feed, the exact 
 constituents of the feed, the feed could be said to be "adulterated" be- 
 cause of the presence in the compound of constituents which have no or 
 practically no feeding value. 
 
 There can be no question, to my mind, that this does constitute 
 adulteration. The Standard Dictionary's definition of the word, "adul- 
 teration" is "the act of adulterating or corrupting by the admixture of 
 foreign and bmer elements, especially for fraudulent purposes", and to 
 adulterate is to make impure by "the admixture of other or baser in- 
 gredients". 
 
 Dr. Jordan testified that sometimes such elements as sand have been 
 found in these compound feeds, but in those cases the presence of this 
 ingredient was not noted upon the manufacturer's tag of analysis. The 
 ingredients that are admittedly mixed with these feeds and set forth upon 
 the tag include peanut hulls, fioor sweepings, com husks and a number 
 of other articles of no food value whatever. It cannot be questioned but 
 that these ingredients fall within the definition of base and impure mat- 
 ters entering into the compounds and as such naturally their result and 
 originally their object is that of adulteration. The word "feed", both in 
 its technical and in its commercial sense, implies that the product thus 
 offered for sale is essentially and wholly of food value, and the presence 
 of such a compound of any admixture having no food value whatever, 
 can only have its origin in the desire of the manufacturer to adulterate 
 the compound and to defraud the purchaser of it by lowering the average 
 food value of the material. 
 
 Dr. Jordan says that the farmer buys these feeds "with his eyes 
 open". That would be true but for two things : First, it assumes that 
 the farmer is invariably a man able to determine from a reading of the 
 analysis tag on the bags of feed which he purchases that there are con- 
 stituents present which have no food value and are mere adulterations 
 put in as ballast and for which he is paying the full price of good com- 
 
97 
 
 mercial feed of high nutritive value. The second thing is that the farmer 
 deems himself, and is fairly entitled to do so, protected by law in the 
 purchase of these feeds by the fact that the Legislature has enacted that 
 no such feed can be sold except under a license issued by the Commis- 
 sioner of Agriculture and based upon a registration with the commis- 
 sioner of a certified analysis of the feed. The farmer is probably unaware 
 and will be somewhat shocked to learn that by section 165 of Article 7 of 
 the Agricultural Law, the State specifically permits the adulteration of 
 such feeds and merely demands that where such adulteration exists, that 
 "the true composition, mixture or adulteration is plainly marked or indi- 
 cated upon the package containing the same or in which it is offered 
 for sale". This significance of this fact assumes greater importance by 
 reason of the friendly relations existing between officials and former 
 officials of the department on the one hand and the American Peed 
 Manufacturers' Association on the other. 
 
 The farmer to-day complains bitterly of the high cost of feed and 
 to, some extent, the high cost of milk is predicated upon this fact. The 
 supply of milk is naturally dependent upon an ample supply of cattle 
 feed of high value. But where the State specifically permits the adulter- 
 ation of such feeds, merely requiring that the package indicate the 
 nature of the adulteration, it is not to be wondered at that the farmer, 
 in complaining at the high cost of feed at the same time complains of 
 its low food value in many cases. The farmer presumes that any feed 
 which he buys under State license has a recognized food value and he 
 knows that there exists machinery in the State paid for out of taxes 
 to which he contributes, for the examination and analysis of these feeds. 
 It is unreasonable to ask him to make the necessary experiments to 
 determine for himself the food value of peanut hulls and other such 
 rubbish. He is entitled to rely upon the Legislature and upon the De- 
 partment of Agriculture to protect him against such frauds. 
 
 My recommendation is, therefore, that the laws relating to the 
 feeds and the sale of them in addition to the matter of licenses which I 
 have already touched upon, should be amended so as either (1) to forbid 
 the adulteration of feed compounds by the admixture of products having 
 less than a specific food value to be named in the law, or (2) to require 
 that every package of feed sold under license in this State and contain- 
 ing any percentage of such impure products having no food value shall 
 bear upon its face or upon the tag setting forth the analysis of the com- 
 pound not only a full statement of the constituents of the feed but also 
 in prominent print the words "This feed is adulterated". The 
 
98 
 
 average food value of the entire mixture should also be noted on 
 the tag. 
 
 Dr. Jordan favors some such legislation and points out that if any 
 question were raised as to the constitutionality of such a law, which 
 seems to me unlikely, he would be a hardy manufacturer who would 
 go into court on the proposition that he proposed to sell floor sweepings, 
 peanut hulls, etc., as cattle feed. 
 
 In any event, it seems to me that the State should not countenance, 
 as it does, by Section 165, the open adulteration of feed and no license 
 should be issued for any feed containing any such adulterations. 
 
 Identically the same conditions exist, according to the testimony 
 taken before me, in relation to fertilizers. Tannery sweepings, and all 
 manner of other adulteration exist in the manufacture of these ferti- 
 lizers which the farmer buys, knowing them to have been licensed by 
 the Commissioner of Agriculture, knowing that an analysis of the ma- 
 terial is on file with the department and depending upon the watchful- 
 ness of that department to protect him against fraud. The only pro- 
 tection which he has is that of Section 223, which sets forth that 
 whenever any inert nitrogenous material forms a constitutent part of 
 any fertilizer offered for sale "an explicit statement of the fact shall 
 be aflS.xed to the package in a conspicuous place on the outside thereof 
 and shall accompany every parcel or lot which may be sold, offered or 
 exposed for sale in bulk". It seems to me that the presence of such inert 
 and valueless material in a fertilizer should be forbidden beyond possibly 
 some very small percentage which may be chemically necessary in the 
 manufacture of some of these fertilizers and if not forbidden, then where 
 a license is issued for the sale of such material, there should appear 
 across the face of the package in which the goods are sold or on every 
 bill of lading relating to such goods where they are sold in bulk and 
 it is impossible to mark the container, the statement that "This ferti- 
 lizer IS adulterated". This at least would result in the purchaser, 
 provided he could read English, and knew the meaning of the word, 
 buying the adulterated material "with his eyes open", but it does not 
 appear to me as being either necessary or justifiable for any reason what- 
 soever that the State should undertake to authorize and license the sale 
 of adulterated feeds or adulterated fertilizers or adulterated foods. The 
 duty and province of the State, on the contrary, is to forbid and prevent 
 the sale of all euch fraudulent articles and public health and public 
 
99 
 
 economy both require that frauds of this character should be not merely 
 limited but absolutely prevented. 
 
 Elsewhere in this report I refer at some length to the former prac- 
 tice of the State in selling for its own benefit the meat of tubercular cattle 
 condemned by the State and the present practice under which the owner 
 of the cattle so condemned may dispose of the meat himself. Testimony 
 taken also shows that meat from the carcaisses of animals killed because 
 they were suffering from apthous fever, better known as the foot and 
 mouth disease, was and is sold to butchers and by the butchers to the 
 consumers. 
 
 The idea of meat from such animals entering into human consump- 
 tion and particularly as it does without any knowledge of that fact on 
 the part of the consumer is a repugnant one to the normal and non-pro- 
 fessional mind. Veterinarians, however, seem to be of the opinion that 
 except where the disease has advanced to such a stage that the animal 
 may be said to suffer from a generalized case of tuberculosis, when many 
 of the internal organs are affected, the meat from such carcasses if 
 properly cooked, is not dangerous for human consumption and may be 
 safely eaten. The attitude of the United States food inspectors, I under- 
 stand is the same as that of our State veterinarians in this respect, but 
 there is testimony to the effect that carcasses of generalized cases of 
 tuberculosis sometimes come upon the markets in the form of butcher 
 meat. It seems difficult to make a recommendation that would deal 'with 
 this situation and not undertake to still further reduce the constantly 
 dwindling amount of cattle available for the food supply of the State. 
 
 Certainly some steps should be taken to prevent the meat from 
 these cattle entering into the manufacture of raw meat sausages or 
 chopped raw meat. T>t. Wills, the State chief veterinarian, was quite 
 emphatic in his assertion that the meat should be properly cooked before 
 consumption and it seems to me that boiling would be the only sure 
 method of destroying any tubercular germs. The use of the Freibank 
 system, by which the meat is sterlized and sold as such, seems to have 
 many supporters. Possibly a similar system could be brought into 
 effective use here. ( Supra, page 31 . ) 
 
 Under the law, it is the duty of the Commissioner of Agriculture and 
 now of the Department of Farms and Markets to make necessary rules 
 and regulations for the proper disposal of the hides and carcasses of all 
 animals destroyed because of communicable diseases. It does not appear 
 that any such rules have been established beyond verbal instructions to 
 
100 
 
 the veterinarians carrying out the work of examining the condemned 
 animals. I would suggest that some rule might be established by which it 
 would be the duty of the veterinarian personally to see that the carcass 
 of any animal condemned and found to be suffering from generalized 
 tuberculosis be rendered unfit for food by the injection into the carcass 
 of a solution that would effect this purpose. 
 
 I would further recommend that the present law permitting the 
 owner of the killed animal to dispose of the carcass be repealed and that 
 the carcass revert to the State for disposition in the same manner as 
 existed previous to May 31st of this year when the amended law took 
 effect. Granting that, under proper supervision, there be little or no danger 
 in the sale of such meat for human consumption, it seems to me that the 
 State having once taken charge of the animal and having condemned it 
 and caused it to be killed and then undertaking to reimburse the owner, 
 should have full control of the disposition of the carcass. The amount 
 involved in the value of these carcasses is not enormous. It probably 
 would not exceed, judging from the past, f40,000 per annum and if the 
 State achieves any measure of success in the suppression of the spread of 
 tuberculosis among cattle, this amount should be constantly diminishing. 
 It would be better to take some step by which the owner of the cattle 
 should receive a somewhat larger return from the state on account of the 
 animal than that the State should permit the disposal of such carcasses 
 to be carried out without any supervision or control of its own. 
 
 Final Recommendations. 
 
 My investigation of the workings of the Department of Tarms and 
 Markets as at present constituted under the Council of Farms and 
 Markets has convinced me that this is not a workable plan for the 
 enforcement of the Agricultural and Food Laws that have been brought 
 together under the jurisdiction of the Department and that only the most 
 meagre results in behalf of both the agricultural and non-agricultural 
 interests of the state can be accomplished or expected under such a plan. 
 
 The Department of Farms and Markets since it was created has 
 failed to function properly iand the Council as the head of this Depart- 
 ment has proved more of a retarding than an accelerating force. 
 
 The amalgamation of the Department of Agriculture, the Depart- 
 ment of Foods and Markets, the ofBce of the Superintendent of Weights 
 and Measures and certain branches Of the Health Department into this 
 
101 
 
 one Department of Farms and Markets has resulted in a division and 
 subdivision of responsibility without a co-ordinated head to bring 
 together in one executive all such responsibility. 
 
 The members of the Ooi^ncil, unpaid and disinterested except in 
 so far as their personal predilections or private interests may impel them, 
 take only the smallest possible part, in the operations of the Department. 
 The Council meets infrequently aud when it does meet often deals largely 
 Avith unimportant and inconsequential matters. The Council accepts 
 uniformly and practically Avithout discussion or deliberation any and all 
 recommendations made by .Commissioner Porter or the counsel, Mr. 
 Miller, or by Commissioner Wilson. Appointments of heads of 
 important bureaus are approved without any investigation or inquiry on 
 the mere nomination of the proposed appointee by the Commissioners. 
 
 The members of the Council take no steps individually or as a body 
 to check up the actions, of the Commissioners under them or to ascertain 
 how any Bureau or Division of the Department generally is progressing. 
 Everything is left by the Council in the hands of the Commissioners 
 and nothing is given seripus consideration by the Council unless direc1;ly 
 brought to its attention by the Commissioners or Mr. Miller. Not the 
 slightest attempt has, been made by the Council as a body or by any of 
 the individual members to take the initiative in formulating policies for 
 the administration of the Department. And though the law prescribes 
 that it shall be the duty of the Commissioners to carry out the policies 
 laid out by the Council fop the administration of the Department, the 
 fact is that the Commissioners have used the Council itself to carry out 
 or further the policies which they have determined upon. The political 
 complexion of the Council is reflected throughout the Department and 
 will doubtless continue to be so reflected throughout the life of the 
 Council. Appointments have been, made to Ijoth important and subordi- 
 nate positions in ,vhich it is difficult to see what recommendation the 
 appointee brought with him, except that of political influence. 
 
 The members of the Council are irremovable, except in the manner 
 provided for elective officers of the state, and their actions, decisions or 
 policies cannot be revieAved by any one, not even the chief executive of 
 the state. If the Council chooses to retain in office an incompetent com- 
 missioner that action by the Council is conclusive- 
 
 The members of the Council hold office for fixed terms and when a 
 racancy arises it can only, be filled by the legislature. The members of 
 the Council as it is at present constituted are not persons fitted either 
 
102 
 
 by training Or experience for the most part to handle any of the 
 multitudinous problems that come within the jurisdiction of the Depart- 
 ment. The Commissioners under them to all intents and purposes act 
 in complete independence both of each other and of the Council. The 
 line of demarcation has been drawn so rigidly between the Division of 
 Agriculture and the Division of Foods and Markets as a personal 
 equation that there is not the slightest community of interest between 
 them, and for all intents and purposes there are two distinct depart- 
 ments to-day in the Department of Farms and Markets. So pronounced 
 is this condition that the counsel for the department, Mr. Miller, holds 
 himself entirely aloof from the Division of Agriculture. 
 
 In combining the for-mer Department of Agriculture and the 
 Department of Foods and Markets into one Department of Farms and 
 Markets it was presumably the intention of the legislature that these 
 two great bodies should work together and harmoniously in the public 
 interest and it must have been the belief of the legislature that the two 
 departments were so correlated that they should be united. If that was 
 the intention and belief of the legislature the event has proved otherwise. 
 It is doubtful whether there is as much co-operation to-day between the 
 two Divisions of Agriculture and Foods and Markets as there formerly 
 was when they were distinct departments in the state government. 
 Where the functions of the two divisions might be considered to overlap 
 care has been taken to cut away the overlapping from one division or 
 the other, generally from that of Agriculture. In fact, the distinct 
 tendency has been to foster the division under Commissioner Porter at 
 the expense of the division under Commissioner Wilson. This was not 
 because of any leaning of the majority of the Council towards the inter- 
 ests of the consumer rather than to those of the farmer; on the contrary, 
 Doctor Porter ha& operated his division, it may be said, with a view to 
 the promotion of the agricultural interests rather than of the interests 
 of the consumer. The cause of the condition by which the division under 
 Doctor Porter has been favored as against the division under Comis- 
 sioner Wilson has been the fact that the Council was dominated by 
 Commissioner Porter and Mr. Miller. And this again has undoubtedly 
 had its genesis in a political situation. 
 
 The whole scheme of the Council of Farms and Markets as the head 
 of the Department of Farms and Markets controlling what were formerly 
 the separate Departments of Agriculture and Foods and Markets has 
 fallen to the ground in so far as its success can be measured by efficiency 
 
103 
 
 and results. The Council cannot point to-day after two years of 
 existence to a single concrete accomplishment of importance to the 
 public, whether the farmer or the consumer. Outside influences such 
 as that of the Dairymen's League have been allowed to run rampant 
 through Doctor Porter's division and the Council has approved and 
 encouraged this. The lack of cohesion throughout the Departments, 
 the scattering of responsibility, the complete independence regardless of 
 the intention of the law of the two divisions have all resulted in a con- 
 dition that needs prompt and immediate application of the surgeon's 
 knife, unless the cancer of inefficiency and irresponsibility is to result 
 in total deterioration of both the Division of Agriculture and the 
 Division of Foods and Markets. 
 
 Under the present circumstances when the people of the state of 
 New York are suffering from the destructive results of the world war 
 and from the enormously increased cost of living that affects them in 
 every direction, it is clear that the most imperative duty devolving upon 
 the elected representatives of the people is promptly to take all necessary 
 measures to remedy any conditions that tend to increase this cost of 
 living. The first step in this direction should be the encouragement in 
 every way, possible of the production of an ample supply of every kind 
 of wholesome food, the transportation of such food and its distribution 
 to the consumer at the lowest possible price consistent with the main- 
 tenance of a standard quality. 
 
 Nothing can be done, nothing can be expected to be done along these 
 lines for the public welfare if the administration and enforcement of 
 the laws relating to the production and distribution of food products is 
 entrusted to offlcials presumably working in one department and in one 
 direction who are actually and continuously pulling in opposite direc- 
 tions. The internal politics that have arisen since the amalgamation 
 of the two departments into one and the superimposition of an unrelated 
 body as the head of such department have grown to such an extent and 
 have taken such possession of the functioning of the entire Department 
 of Farms and Markets that the public value and the efflciency of the 
 department have been relegated into a secondaiy place. 
 
 The initial and vitally necessary step to remedy this condition is the 
 abolition of the Council and the re-segregation of the two divisions 
 each into a separate department, one of Agriculture and the other of 
 Foods and Markets. The creation of the Council has been an interest- 
 ing and costly experiment. There is no use of crying over spilt milk 
 
104 
 
 but at least there is no necessity for continuing to spill the milk. As 
 an experiment the Council has proved itself a wholly useless failure 
 and there is no justification for continuing its existence. My first recom- 
 mendation therefore is that the Council of Farms and Markets and the 
 Department of Farms and Markets as now established by law be abol- 
 ished and that there be created once more a Department of Agricultui'e 
 and another and separate Department of Foods and Markets. Names do 
 not signify much sometimes but I believe the title of the latter Depart- 
 ment might perhaps better be that of the Department of Markets and 
 Storage. 
 
 Fundamentally these tAVO departments must be absolutely distinct 
 and independent and yet in practice it should be to their common interest 
 to work together. The experiment of attempting to compel them to work 
 together under a conglomerate head has shown how futile it is to inter- 
 fere with the natural conditions surrounding each of these branches of 
 the State Government. 
 
 The Department of Agriculture has for its basic purpose the pro- 
 motion of both the quality and the quantity of production of all food 
 products. The object of a department of Markets and Storage, how- 
 ever, is to provide the consumer with an ample supply of food ready 
 for consumption. There is a hiatus here bridged over by the necessity 
 of transporting the agricultural product through the middleman or 
 manufacturer to the consumer. Without the farmer the consumer can 
 get no food; without the consumer it is useless for the farmer to raise 
 more than he needs for his own immediate purposes. Therefore, it 
 may be said that they are absolutely necessary to each other but on the 
 other hand each of them recognizes that his personal interests are de- 
 tached. One wishes to sell at the best possible price; the other to buy 
 the same product as cheaply as possible, and each must have his separate 
 and distinct representative in the court of public opinion to argue his 
 case for him and to insist upon his rights and privileges. Friends they 
 ought to be and undoubtedly are, but they are more friendly at a distance 
 from each other and their friendship cannot be improved by locking 
 them up in one room together. 
 
 Each of these Departments of Agriculture and of Markets and 
 Storage should be governed by a Commissioner appointed by the 
 Governor and removable by him and he should have under him two 
 Deputy Commissioners, one to be charged with the supervision of the 
 administrative and office work of the Department and the other with 
 
105 
 
 the field or outside work. The various bureaus within the Department 
 should fall under the jurisdiction of the Deputy Commissioner accord- 
 ing as its principal work relates to the internal or administrative func- 
 tions of the Department or the field and outside functions. 
 
 All of the laws, rules and regulations now under the jurisdiction of 
 the Department of Farms and Markets relating to the production, trans- 
 portation, storage, distribution and Siale of milk and of all milk products 
 and manufactures such as butter, cheesie, condensed milk, et cetera, should 
 be taken out of the jurisdiction of both the Depfartment of Agriculture 
 and the Department of Markets and Storage and be placed under the 
 sole control of a new branch of the State government to be known as 
 the State Milk Commission. Neither the Department of Agriculture nor 
 the Department of Markets and Storage as recognized should be given 
 any control or jurisdiction over matters falling within the province of 
 the Milk Commission and the matter of the production of milk, its ship- 
 ment, distribution and manufacture should be entirely divorced from 
 either of these departments. 
 
 TJtider a Commissioner of Agriculture at the head of a separate 
 Department of Agriculture, two deputies having charge respectively, one 
 of the internal workings of the Department, and the other of the field 
 or outside work, there should be established several bureaus or divisions, 
 each with a director at its head, who would be directly responsible to the 
 DepiTty Commissioner having charge of such bureau or division. Each 
 Deputy Commissioner in turn would be responsible to the Commissioner 
 for the work of the bureaus or divisions assigned to his jurisdiction. In 
 the event of the illness or incapacity of either of the deputies, the other 
 deputy would have charge of all the bureaus or divisions under the juris- 
 diction of the Commissioner. The Commissioner should have the sole 
 poAver and responsibility of selecting the deputies, the heads of divisions 
 or bureaus, and all other employes not falling under Civil Service 
 Regulations. 
 
 Th'ere should be a Division of Animal Industry similar to that now 
 existing, the functions of which should be patterned after the plan of the 
 tJnited States Department of Agr^iculture. The head of this Division 
 should be a man intimately acquainted by training, experience and study 
 with the problems of stock raising, farming and breeding. In this divi- 
 sion and as a part of it there should be a Bureau of Veterinary Service, 
 the head of which should be the Chief State Veterinarian. All 
 veterinarians employed by the State in the Department of Agriculture 
 
106 
 
 should be directly responsible to the Chief Veterinarian, who should 
 have two deputies, one in charge of the Albany offtce and one to have 
 charge of a branch office in New York City. Both deputies would be 
 directly responsible for the operation of their branches to the Chief 
 Veterinarian whose office would be in Albany. The Albany office would 
 have charge of all veterinarian matters arising anywhere in the State 
 outside of the Metropolitan district, which would include the same area 
 as the New York office now controls. The Chief Veterinarian should be 
 responsible to the Director of the Division of Animal Industry for the 
 general operation of the Bureau of Veterinarian Service, but the assign- 
 ment of veterinar-ians and the supervision of all the work of the State 
 veterinarians should be under the control of the Chief Veterinarian. He 
 also should have the power to recommend veterinarians for appointment 
 in the bureau, such recommendations to come directly before the Com- 
 missioner of Agriculture for his approval or otherwise. The Chief 
 Veterinarian should have the power also to report directly to the Com- 
 missioner of Agriculture any charges or complaints relating to the work 
 of any of the veterinarians. 
 
 It is impossible to separate the Division of Animal Industry and the 
 Bureau of Veterinary Service into two distinct entities because their 
 work is so closely related, but it seems to me that where a number of 
 trained professional men are employed by the State they should be under 
 the direction of a member of the same profession and responsible to him 
 for the performance of their professional work and he should be equally 
 responsible for the selection of the proper men for the class of work. 
 
 It should be the duty of the director of the division of Animal 
 Industry, in addition to exercising a general supervision over the Bureau 
 of Veterinary Service, to have charge of the enforcement of the stallion 
 eni^oUment law, the law covering the licensing of dogs and the protection 
 of domestic animals therefrom, the laws relating to the protection of the 
 breeding of pure bred stock, the laws relating to rabies, and in general 
 the enforcement of all laws that now come within the jurisdiction of the 
 Bureau of Animal Industry. 
 
 No person employed by the Bureau of Veterinary Service, or by the 
 division of Animal Industry, or by any other branch of the Department 
 of Agriculture, should be permitted to engage in private business except 
 with the written authorization of the Commissioner of Agriculture. Such 
 authorization, or a copy thereof, should be on file in the Department, 
 and should set forth, specifically, the nature of the private business in 
 
107 
 
 which the State employee proposes to engage. In the case of 
 veterinarians employed on a per diem basis, they would, of course, be 
 at liberty to engage in private practice, during the times when they were 
 not rendering service to the State. The Commissioner's discretion in 
 granting such authorizations should be limited to instances where it is 
 clear that the employee's private work will not interfere or conflict with 
 the interests of the State, either as to the time which he gives to such 
 private work or as to the nature of it. 
 
 This matter is mentioned here, because instances where State 
 employees were rendering services to private persons and firms similar 
 to those for which the State has emplpyed them, and in the State's own 
 time, were developed most markedly in this branch of my investigation. 
 
 The Division of Animal Industry, through the Veterinary Bureau, 
 should have charge of the inspection of slaughter houses, and in general 
 of all meat offered for sale within the State. To this end, and also for 
 the purpose of enforcing the regulations relating to tubercular cattle, 
 it would probably be well to establish within the Bureau of Veterinary 
 Service, a number of districts covering all of the State, outside of the 
 Metropolitan and Albany districts. A State veterinarian should have 
 charge of each district, and should reside therein. He should be hield 
 responsible for the carrying out of all the work relating to the Bureau 
 or Division falling within his district. 
 
 There should be a division of plant industry similar to that now in 
 existence, which should work in co-operation with the Farm Bureau 
 Agents of the State. 
 
 What is now known as the Dairy Products Bureau should be known 
 as the Division of Food Products, and should have supervision of the 
 enforcement of all laws relating to the adulteration of foods, cattle feeds 
 and fertilizer; and also, as now, of turpentine, linseed and flaxseed oils. 
 This bureau should have supervision of the laws relating to the adultera- 
 tion of butter, cheese, condensed milk, et cetera^ and the sale of oleo- 
 margarine and all similar products ; but should not be charged with the 
 enforcement of any laws relating to either the sale of adulterated 
 milk or cream, or the licensing of milk dealers or shippers. All of this 
 work now done in the Dairy Products Bureau should fall within the 
 jurisdiction of the milk commission. 
 
 I would recommend the establishment of a division to be known as 
 the Bureau of Farm Economics, which should have charge of the work 
 now done by the State Institution Farms Bureau and the bureau of 
 farm settlement, and of the formation among farmers, gardeners, live- 
 
108 
 
 stock farmers, fruit growers and dairymen, of co-operative associations, 
 except that in so far as any such co-operative association undertook to 
 produce, ship, buy or sell milk (or milk products), it would come within 
 the jurisdiction of the milk commission. 
 
 In this division there should be a bureau of home economics, com- 
 prising the services of men and women competent to travel throughout 
 the State and to give instruction to farmers and housewives in the 
 matters generally considered as falling within the class of home eco- 
 nomics, such as dehydration of fruit and vegetables, instruction in 
 dietetics, and the constituency of food products, and in general the 
 avoidance of waste, often incidental to country housekeeping. 
 
 Women in the cities can study these matters freely, through the 
 efforts of the Board of Education and other public bodies in this respect, 
 but very little has been done to help the women on the farms and in the 
 villages of the State. All of the Western and many of the Eastern 
 States are far ahead of New York in this matter. At the present time 
 nothing of this kind is being attempted by the Department of Farms 
 and Markets, in either of its divisions. 
 
 The legal work of the Department of Agriculture should be taken 
 care of by a Deputy Attorney General, specifically assigned to this 
 Department, and he should have under him the machinery of the present 
 legal bureau of the Division of Agriculture, except that the position of 
 counsel to the Department would be abolished. The Attorney General 
 : should designate the deputy to have charge of this work, but such deputy 
 should be acceptable to the Comnlissioner of Agriculture. He would 
 have full charge of the prosecution of all violations reported by any of 
 the bureaus, and the examination of such reported violations and the 
 preparation of the cases should fall within the duties of this Deputy 
 
 • Attorney General. The salary of such deputy should be the same as 
 
 • that now paid to the counsel of the Department. This office should be 
 known as the legal division of the Department of Agriculture. 
 
 There should be a division of accounts similar to the present Bureau 
 of Accounts, which should be strictly charged with the supervision of 
 all funds passing through the Department, in any of the divisions. All 
 such funds arising from any source should be paid by the division into 
 which it comes, immediately, over to the Division of Accounts, with a 
 full statement of the nature of such accounts. The Division of Accounts 
 should then make the proper disposition of such funds according to 
 . law. The Division of Accounts should also have charge of the furnishing 
 of all supplies to the various divisions and bureaus. 
 
109 
 
 Department of Markets and Storage. 
 
 The Department of Markets and Storage should be headed by a Com- 
 missioner intimately acquainted by training and experience with the 
 problems relating to the cold storage of food, and the gathering and dis- 
 tribution of food to the consumer in the large centers of population. The 
 province of tl^is Commissioner would be that of looking after the interests 
 of the consumer, whereas that of the Commissioner of Agriculture would 
 be to look after the interests of the producer. 
 
 There should be two Deputy Commissioners, one in charge of the 
 Albany office and one in charge of the New York office of the Departmeit. 
 
 There should be a division of cold storage, headed by a director 
 selected for his training and experience, in connection with such estab- 
 lishments. This division should have regulatory and supervisory control 
 oyer all cold storage warehouses, where any food or food products are 
 stored, within the State, whether operated as public warehouses or as 
 private warehouses, or by individuals or corporations, for their own 
 use, or for renting out to other persons or concerns. The licensing of such 
 warehouses should fall within the jurisdiction of this division. The en- 
 forcement of all laws relating to the cold storage of food should devolve 
 upon this division. 
 
 There should also be a Division of Markets which would have super- 
 vision of the enforcement of the laws relating to the sale of food and 
 food products, in all places other than cold storage warehouses*, except 
 that the powers and duties of this division should not conflict with the 
 powers and duties of the State and Municipal Health authorities. The 
 principal duty of this division should be to ensure an ample and con- 
 stant supply of food products other than milk to the consumer. 
 
 The work now done by the Bureau of Food Products, in the Division 
 of Foods and Markets, should fall within the jurisdiction of the Division 
 of Markets. 
 
 There should be a Division of Food Adulterations, to which should 
 be reported all cases of adulteration observed by or coming within the 
 knowledge of any other branches of the Department. It should be the 
 duty of this Division to inspect and analyze all manner of food products, 
 with a view to determining whether or not they have been manufactured 
 according to law, a,nd constitute pure and wholesome food products. The 
 work now done by the Bureau of Food Standardization should fall within 
 the jurisdiction of this division, except in regard to milk, and for that 
 purpose the division should be equipped with a suitable laboratory, at 
 Albany, or be provided with access to a central laboratory of the State, 
 
110 
 
 should it be deemed advisable to create such a laboratory as I propose 
 to recommend. 
 
 There should also be a Division of Co-operation, the object of which 
 would be to foster and promote the establishment of co-operative associ- 
 ations amongst consumers, for the purchase of food products, in quantity, 
 and the distribution of them among the members of the association. The 
 promotion of co-operative associations among farmers is well under way, 
 and in so far as it needs further looking after, can be taken care of as 
 provided for in the recommendation relating to the establishment in the 
 Department of Agriculture of a Division of Farm Economics. But the 
 consumers, unlike the farmers, are practically unaware of the powers 
 which they could exercise through the organization of co-operative associ- 
 ations. It is probable that there should be some change in the law so 
 as to insure to such co-operative associations of consumers the same pro- 
 tection which the present amendment to the Anti-monopoly Act gives to 
 farmers, gardeners, dairymen, live stock farmers, fruit growers, etc., so 
 that such associations of consumers could purchase goods and retail 
 them among themselves or to non-members, and make contracts, agree- 
 ments, etc., which could not by any chance be brought within the penal 
 clauses of the Anti-monopoly Act. It should be the duty of this Division 
 of Co-operation to arrange for lectures in Public Schools and other public 
 buildings where consumers could be brought together, and have the ad- 
 vantages of co-operative buying explained to them. 
 
 The present work of the Bureau of Licenses, in so far as it relates 
 to milk, should fall within the control of the State Milk Commission. 
 
 In the matter of commission merchants' licenses, the issuance of 
 these should fall within the jurisdiction of the Division of Markets, 
 under a special bureau, to be known as the Commission Merchants' 
 License Bureau. The present law requires every commission merchant to 
 take out a license, and to give a surety bond in |3,000, for the protection 
 of the owners of the fruit, vegetable and other products sent to him for 
 sale on commission. Except in some individual instances the amount of 
 this surety bond is undoubtedly far too small. It has been suggested 
 that as most of these commission merchants have branch houses in various 
 cities, they should be required to give a surety bond in the same amount 
 for each of these branches. It has also been suggested that any recovery 
 under the surety bond by the creditors of a defaulting or bankrupt com- 
 mission merchant, should be limited to the creditors who are residents 
 of New York State. Many of these commission merchants handle, in great 
 part, goods coming from far distant States, and often from foreign lands. 
 
Ill 
 
 It hardly seems equitable that with such a small surety bond, the resi- 
 dent of New York State should enjoy no greater protection than the 
 foreign shipper or creditor. Perhaps the law might be changed so that 
 residents of New York State would have a prior claim on the proceeds 
 of such surety bonds, by requiring the commission merchant to so stipu- 
 late in his bond, or perhaps the difficulty could be solved by requiring 
 the commission merchant to give a specific bond for the protection of 
 New York State residents, and another bond for non-resident shippers. 
 
 In any event, it seems to me that the amount of the bond should be 
 based and determined upon the extent of the commission merchant's 
 business, in the same way that the bonds required of milk shippers are 
 now determined. In the milk license law a minimum of |5,000 and a 
 maximum of $125,000 are provided for, and the amount is determined 
 by the commissioner authorizing the license, under the provision of law 
 which limits the maximum license required to an amount not exceeding 
 by more than 25 per cent, the amount paid out by such licensee to sellers 
 of milk in any one month. The same system could be adopted in regard 
 to commission merchants, with the provision that there should be no dis- 
 cretion vested in the Commissioner, but that all commission merchants 
 should be required to give a surety bond in not less than |5,000 and not 
 exceeding 125 per cent, of the average value of the monthly consignments 
 made by all shippers to such commission merchants. 
 
 I recommend that the legal work attaching to the proposed Depart- 
 ment of Markets and Storage to be taken care of by a legal division 
 under the charge of a Deputy Attorney General in the same manner as 
 suggested for the Department of Agriculture. 
 
 The work done by the present Bureau of Weights and Measures, in 
 the Division of Foods and Markets, should be restored to the former 
 office of State Superintendent of Weights and Measures, which was 
 abolished at the time of the creation of the Department of Farms and 
 Markets. I believe that the functions of this important State office can 
 be best carried out as an independent entity of the Government, and 
 not as a mere bureau of a Department, and I so recommend. 
 
 I believe that the establishment of a State Laboratory, under a 
 State Chemist, with a suitable organization, would be for the best 
 interests of the public and of all the Departments that need the services 
 of one or more chemists. Such a laboratory could be readily made 
 accessible to all departm:ents and divisions, of departments in the State 
 Government, for the purpose of making analyses and for experimenta- 
 tion. It should be large enough and comprehensive enough to take care 
 
112 
 
 of the work arising in any branch of the State Government, from high- 
 ways to foods, and it could operate intelligently in conjunction with the 
 Geneva Experiment Station, for the analysis of foods and fertilizers. 
 
 The Department of Agriculture, the Department of Markets and 
 Storage and the State Milk Commission, as I have outlined them in this 
 report, should each have a chemist and assistant chemist, with an office 
 for the preseiTation of records, and possibly a small laboratory for 
 immediate and unimportant work, but such chemists would perform 
 their chief analytical and professional work in the State Laborator-y, 
 which could be so arranged so that every facility would be afforded at 
 all times to such chemists to perform their work. This would do away 
 with many branch laboratories, . scattered through the State, some of 
 which are not at all equipped for the work which is entrusted to them, 
 and would also put an end to the existing system by which private 
 chemists are doing State work as a side line of their private branches. 
 It follows also that in a properly equipped laboratory of this character, 
 far better and quicker results could be obtained and much delay obvi- 
 ated, because of the nature and extent of the available equipment. I 
 would therefore recommend that legislation be enacted, looking to the 
 establishment of such a State laboratory under the administration of a 
 State Chemist, with a suitable staff of chemists to assist him. Just as 
 the Attorney General's office now takes care of the legal affairs of the 
 various departments and designates deputies to supervise the legal work 
 of separate departments, so the State Chemist could designate his 
 assistants to the various departments as required. 
 
 I suggest that the foregoing recommendations and others that will 
 undoubtedly be made by those interested in the matter be drafted in 
 legal form and codified by a Commission of agricultural, marketing and 
 legal experts to be appointed by you so that the results of their work 
 can be presented to the Legislature for enactment into law in the most 
 comprehensive manner and at the earliest possible moment. 
 
 All of which is respectfully submitted. 
 
 Dated, New York, Dec. 11, 1919. 
 
 Geo. Gokdon Battle, 
 
 Commissioner. 
 
 John Burlinson Coleman, 
 
 Of Counsel. 
 
113 
 
 APPENDIX A. 
 
 Memorandum of law in reference to the constitutionality 
 of legislation providing for the establishment of a 
 milk commission ivith poiver and authority to fix a 
 reasonable price to be paid to the producers of milk 
 by the distributors and to be charged by the dis- 
 tributors to the consumers. 
 
 In the case of Miinn vs. Illinois, 94 U. S. 113, which was a case in 
 which the Supreme Court of the United States upheld the constitution- 
 ality of a statute of Illinois regulating the maximum charges which ware- 
 housemen could charge for the storage of grain. Justice Waite, in the 
 opinion in that case, says : 
 
 "When one becomes a member of society, he necessarily parts 
 with some rights or privileges which, as an individual not affected 
 by his relations to others, he might retain. 'A body politic', as 
 aptly defined in the preamble of the Constitution of Massachu- 
 setts, 'is a social compact by which the whole people covenants 
 with each citizen, and each citizen with the whole people, that all 
 shall be governed by certain laws for the common good'. This 
 does not confer power upon the whole people to control rights 
 which are purely and exclusively private. Thorpe vs. E. & B. 
 Eailroad Co., 27 Vt. 143 ; but it does authorize the establishment 
 of laws requiring each citizen to so conduct himself, and so use 
 his property, as not unnecessarily to injure another. This is the 
 very essence of government, and has found expression in the 
 maxim sic. wtere tuo ut alienum non lacdas. From this source 
 come the police powers, which, as was said by Mr. Chief Justice 
 Taney in the License Cases, 6 How. 583, 'are nothing more or less 
 than the powers of government inherent in every sovereignty, that 
 is to say, the power to govern men and things'. Under these 
 powers the government regulates the conduct of its citizens one 
 towards another, and the manner in which each shall use his own 
 property, when such regulation becomes necessary for the public 
 good. In their exercise it has been customary in England from 
 time immemorial, and in this country from its first colonization, 
 to regulate ferries, common carriers, hackmen, bakers, millers, 
 wharfingers, innkeepers, &c., and in so doing to fix a maximum of 
 charge to be made for services rendered, accommodations 
 furnished, and articles sold. To this day, statutes are to be found 
 
114 
 
 in many of the States upon some or all of these subjects; and we 
 think it has never yet been successfully contended that such legis- 
 lation came within any of the constitutional prohibitions against 
 interference with private property." 
 
 And, further along on page 125, Justice Waite continues: 
 
 "This brings us to inquire as to the principles upon which 
 this power of regulation rests, in order that we may determine 
 what is within and what without its operative effect. Looking, 
 then to the common law, from whence came the right which the 
 Constitution protects, we find that when private property is 
 'affected with a public interest, it ceases to be juris privati only'. 
 This was said by Lord Chief Justice Hale more than two hundred 
 years ago, in his treatise De Portihus Maris, 1 Harg. Law Tracts, 
 78, and has been accepted without objection as an essential ele- 
 ment in the law of property ever since. Property does become 
 clothed with a public interest when used in a manner to make it 
 of public consequence, and affect the community at large. When, 
 therefore, one devotes his property to a use in which the public 
 has an interest, he, in effect, grants to the public an interest in 
 that use, and must submit to be controlled by the public for the 
 common good, to the extent of the interest he has thus created. 
 He may withdraw his grant by discontinuing the use ; but, so long 
 as he maintains the use, he must submit to the control." 
 
 Justice Waite then goes on, at page 129, to cite with approval the 
 case of Mobile vs. Yuille, 3 Alabama, S. S. 140, which case I will refer 
 to more particularly later on, it being sufficient to state here that in such 
 case the Supreme Court of Alabama upheld the constitutionality of a law 
 regulating the weight and price of loaves of bread sold in the City of 
 Mobile. Then, at page 133, Justice Waite further says : 
 
 "Neither is it a matter of any moment that no precedent can 
 be found for a statute precisely like this. It is conceded that the 
 business is one of recent origin, that its growth has been rapid, 
 and that it is already of great importance. And it must also be 
 conceded that it is a business in which the whole public has a 
 direct and positive interest. It presents, therefore, a case for the 
 application of a long-known and well-established principle in 
 social science, and this statute simply extends the law so as to 
 meet this new development of commercial progress. There is no 
 attempt to compel these owners to grant the public an interest 
 in their property, but to declare their obligations, if they use it 
 in this particular manner. 
 
115 
 
 "It matters not in this case that these plaintiffs in error had 
 built their warehouses and established their business before the 
 regulations complained of were adopted. What they did was from 
 the beginning subject to the power of the body politic to require 
 them to conform to such regulations as might be established by 
 the proper authorities for the common good. They entered upon 
 their business and provided themselves with the means to carry 
 it on subject to this condition. If they did not wish to submit 
 themselves to such interference, they should not have clothed the 
 public with an interest in their concerns. The same principle 
 applies to them that does to the proprietor of a hackney-carriage, 
 and as to him it has never been supposed that he was exempt from 
 regulating statutes or ordinances because he had purchased his 
 horses and carriage and established his business before the statute 
 or the ordinance was adopted. 
 
 "It is insisted, however, that the owner of property is entitled 
 to a reasonable compensation for its use, even though it be clothed 
 with a public interest, and that what is reasonable is a judicial 
 and not a legislative question. 
 
 "As has already been shown, the practice has been otherwise. 
 In countries where the common law prevails, it has been customary 
 from time immemorial for the legislature to declare what shall 
 be a reasonable compensation under such circumstances, or, per- 
 haps more properly speaking, to fix a maximum beyond which 
 any charge made would be unreasonable. Undoubtedly, in more 
 private contracts, relating to matters in which the public has no 
 interest, what is reasonable must be ascertained judicially. But 
 this is because the legislature has no control over such a contract. 
 So, too, in matters which do affect the public interest, and as to 
 which legislative control may be exercised, if there are no statu- 
 tory regulations upon the subject, the courts must detei'mine what 
 is reasonable. The controlling fact is the power to regulate at all. 
 If that exists, the right to establish the maximum of charge, as 
 one of the means of regulation, is implied. In fact, the common- 
 law rule, which requires the charge to be reasonable, is itself a 
 regulation as to price. Without it the owner could make his rates 
 at will, and compel the public to yield to his terms, or forego 
 the use. 
 
 "But a mere common-law regulation of trade or business may 
 be changed by statute. A person has no property, no vested inter- 
 est, in any rule of the common-law. That is only one of the forms 
 of municipal law, and is no more sacred than any other. Rights of 
 property which have been created by the common law cannot be 
 taken away without due process; but the law itself, as a rule of 
 conduct, may be changed at the will, or even at the whim, of the 
 legislature, unless prevented by constitutional limitations. In- 
 
116 
 
 deed, the great office of statutes is to remedy defects in the com- 
 mon law as they are developed, and to adopt it to the changes of 
 time and circumstances. To limit the rate of charge for services 
 rendered in a public employment, or for the use of property in 
 which the public has an interest, is only changing a regulation 
 which existed before. It establishes no new principle in the law, 
 but only gives a new effect to an old one." 
 
 The foregoing case was one in which it was not contended that the 
 warehousemen had any special franchise from the State, but the Court 
 nevertheless held that the business of warehousemen was of such public 
 interest that any one devoting his- property to such business must of 
 necessity submit to the regulation of the charges fixed by the Legislature 
 of the State in such business. If this is true in relation to the business 
 of storing grain, it is equally true in reference to the traffic in milk. 
 Consequently I contend that if any one within the State of New York 
 devotes his property to the business of traffic in milk, he thereby is 
 compelled to submit to the regulation of the Legislature of such business 
 and to a provision that he shall not buy from the producer at a less 
 amount than that fixed by the Milk Commission or sell to the consumer 
 at a greater amount than that fixed by the same Commission, and that 
 he should be limited to such profit in such business as the Legislature, 
 acting through its Commission, shall deem reasonable. As I have 
 stated before, it is to the interest of the State that all of the people of 
 the State be furnished with an adequate supply of milk at a reasonable 
 price. And it is the duty of the State to so regulate the purchase of 
 such milk from the producers that the middlemen will not be able to 
 compel such producers to sell their milk at less than the cost of the 
 production. It is to the interest of the State to see that the producer 
 is encouraged in the production of this necessity of life, and, to that end, 
 to so regulate the conduct of the middleman so that he will not be able 
 to compel the producer to sell to him at a smaller amount than the cost 
 of production, plus a reasonable profit for the producer, and it is like- 
 wise to the interest of the State and within its power to so regulate the 
 conduct of the middleman that he shall sell such milk to the consumer 
 at a price which will yield him a reasonable return on the capital 
 invested but not an inordinate or unreasonable one. 
 
 Lewis, in the recent third edition work on Eminent Domain, at pagQ 
 480, says: 
 
 "The existence of a right or power in the State to regulate 
 or fix the charges which may be lawfully demanded for certain 
 
117 
 
 services or commodities, is evidenced by an almost immemorial 
 exercise of such right in England and America and is established 
 in this country by a long line of decisions by the Supreme Court 
 of the United States, beginning with Munn vs. Illinois, in 1876, 
 and coming down to the present time. The right to exercise this 
 power in the case of common carriers, telegraph and telephone 
 companies, water, gas, light and irrigation companies, hackmen, 
 draymen, turnpikes, bridges, ferries, and all persons or corpora- 
 tions exercising any franchise or privilege emanating from the 
 Government, may be regarded as settled beyond question. The 
 right to regulate the charges of grain elevators is also well settled, 
 although those engaged in the business do not hold any franchise 
 or privilege from the State. So of the stock yards. The general 
 rule has been laid down that whenever a property or business is 
 affected with a public interest or devoted to a public use, it is 
 subject to public regulation." 
 
 In this connection the distinguished author cites with approval the 
 case of Katcliff vs. Stockyards, 71 Kansas, 1, decided by the Supreme 
 Court of Kansas in January, 1906. In that case. Chief Justice Johnston, 
 writing for a unanimous Court, says, at page 6 : 
 
 "Many kinds of business carried on without special franchises 
 or privileges are treated as public in character and have there- 
 fore been subjected to legislative regulation and control. The 
 nature and extent of the business, the fact that it closely touches 
 a great many people, and that it may afford opportunities for 
 imposition and oppression, as in the case of monopoly and the 
 like, are circumstances affecting property with a public interest." 
 
 Now, coming to the question of the right of the State to regulate 
 the price at which a necessity of life shall be sold, I refer to the following 
 precedents : 
 
 The case of the Mayor and Aldermen of Mobile m. Yuille, 3 Ala- 
 bama, 137, was decided by the Supreme Court of Alabama in June, 1841. 
 As noted before, this case was cited with approval by Justice Waite of 
 the Supreme Court of the United States in the case of Munn v. Illinois, 
 94 U. S. 113. In this case the Legislature of Alabama passed an Act 
 granting to the corporation of the City of Mobile power to license bakers 
 and regulate the weight and price of bread and prohibit the baking of 
 bread for sale except by those licensed. In holding the law constitu- 
 tional, Judge Ormond, at page 141, says: 
 
 "Where a great number of persons are collected together in 
 a town or city, a regular supply of wholesome bread is a matter 
 
118 
 
 of the utmost importance; and whatever doubts may have been 
 thrown over the question by the theories of political economists, 
 It would seem that experience has shown that this great end is 
 better secured by licensing a sufficient number of bakers and by 
 an assize of bread than by leaving it to the voluntary acts of indi- 
 viduals. By this means a constant supply is maintained without 
 that fluctuation in quantity, which would be the inevitable result 
 of throwing the trade entirely open and the consequence rise in 
 price when, from accident or design, a sufficient supply was not 
 produced. The interest of the city in always having an' abundant 
 supply will be a sufficient guaranty against any abuse of the 
 right to regulate the weight, the consequence of which would be 
 to drive the baker from the trade." 
 
 Beach, in his excellent work on Monopolies and Industrial Trusts, 
 Edition of 1898, Section 144, at page 451, cites the foregoing case with 
 approval and says: 
 
 "It is well settled that the State has power to regulate the 
 manufacture of bread. It may require all persons engaged in the 
 baking business to take out a license authorizing them to engage 
 in this work, and it may fix the weight and price of the baker's 
 loaf, and the power which a Legislature may exercise directly it 
 may grant to a municipal corporation." 
 
 The foregoing case was also cited with approval by the Supreme 
 Court of Alabama, in the case of Yongblood v. Birmingham Trust & 
 Savings Co., 95 Alabama, 521, at page 526. 
 
 The statutes of Louisiana, of 1807 and 1815, in regard to butcher's 
 meat and to the bakers of bread expressly conferred the power to regu- 
 late the price upon the Mayor and Council of the City of New Orleans. 
 The case of Guillotte v. The City of New Orleans, 12 Louisiana, Annual 
 Eeports, 432, decided in June, 1857, upheld the constitutionality of these 
 laws. In considering this question, at page 435, Chief Justice Merrick 
 of the Louisiana Supreme Court, says: 
 
 "Now, when the law giver says to the baker "You shall not 
 make and sell bread within certain boundaries unless you limit 
 your profits to a certain sum for each barrel of flour which you 
 imake into bread, and unless you conform to certain regulations 
 as to the size of the loaves, the place and time of the sale' the 
 obligation of no contract has been impaired, for none has been 
 entered into; no vested right has been taken away, for no man 
 has a vested right (unless the same be expressly granted by a 
 
119 
 
 special Act of the Legislature) to furnish a certain portion of the 
 population with bread, and no tax has been levied upon the baker, 
 for no part of the price of the bread goes into the public treasury, 
 and it is entirely optional with him whether he will sell his flour 
 or make it into bread or pursue some other vocation." 
 
 Dillon, in his work on Municipal Corporations, 4th Edition, Section 
 392, at page 464, commenting on the foregoing case with approval, says : 
 
 "Power, however, to a State to regulate everything which 
 relates to bakers does authorize an ordinance regulating the 
 weight, size and, it seems, the price of bread, and the forfeiture 
 of bread illegally baked, and such an ordinance, it has been held, 
 is in no violation of any provision of the Constitution of 
 Louisiana." 
 
 Coming now directly to our own City of New York, we find that, in 
 Colonial times, the prices of bread, milk, meat and other necessaries of 
 life were regulated by the common council of the City of New York as a 
 matter of course. 
 
 In the Minutes of the Common Council of the City of New York, 
 1675-1776, published under the authority of the City of New York in 1905, 
 we find that every few months the Board of Aldermen fixed the prices 
 at which the necessaries of life could be sold within the City of New York. 
 
 A sample of the form which these resolutions took is found in that 
 passed at a meeting of the Common Council held on Friday the 23rd of 
 December, 1763, which is reported in the 6th volume of the minutes of 
 the Common Council of the City of New York, 1675-1776, published under 
 the authority of the City of New York, at page 362, and reads as follows : 
 
 "Ordered by this Board that the following ordinance for 
 altering and repealing the assize of victuals be published and the 
 same is published accordingly and is in the words following: 
 Be it ordained by the Mayor, Aldermen and Commonalty of the 
 City of New York in Common Council convened, and it is hereby 
 ordained by the authority of the same that a certain law or 
 ordinance of the said Mayor, Aldermen and Commonalty entitled 
 a Law for Eepealing a Law, entitled a Law for Assizing all kinds 
 of Victuals to be set to sale in the public markets of this City and 
 ■ for establishing a new assize for that purpose as far forth as the 
 same assizes fixes and regulates the prices of provisions or victuals 
 to be sold in this City or the markets thereof be, and the same so 
 far forth as aforesaid is hereby repealed and made absolutely null 
 and void, anything in the (221) same, contained to the contrary 
 thereof in anywise notwithstanding and Be It Further Ordained 
 
120 
 
 By the Authority Aforesaid That the prices of victuals and pro- 
 visions to be sold in the said City and the markets thereof be as 
 follows, to wit, the price of beef at and after the rate of four pence 
 half penny by the pound weight, the price of pork at and after the 
 rate of five pence half penny by the pound weight, the price of veal 
 for the hind quarter at and after the rate of six pence by the pound 
 weight and for the fore quarter at and after the rate of four pence 
 half penny by the pound weight, the price of mutton at and after 
 the rate of four pence half penny by the pound weight; the price 
 of butter at and after the rate of fifteen pence by the pound 
 weight, and the price of milk at and after the rate of six coppers 
 by the quart; and be it further ordained by the authority afore- 
 said, that every offender or offenders against this law, shall be 
 subject to the like pain, penalties and forfeitures, as are ordained 
 and established in and by the aforesaid law or ordinance, which is 
 hereby declared to remain in full force and virtue as to every 
 article, matter and thing, contained except so far forth as the same 
 did assize, fix and rate the prices of victuals and provisions any- 
 thing herein contained to the contrary thereof in anywise not- 
 withstanding." 
 
 Thus we see that it has always been within the power of the State 
 to regulate both the price and the manner of the sale of the necessities 
 of life. And why should it not be so? If the State has the power and 
 the authority to enact usury laws, which make it a crime for any one to 
 loan money at a greater rate of interest than that prescribed by the 
 State, surely it also has the power to regulate the price at which the 
 necessities of life will be sold and to prescribe that no one engaged in 
 the business of selling the necessities of life shall reap an extraordinary 
 profit on such sale. A citizen has just as much right to say at what rate 
 he shall loan his money out at interest to any one who is willing to pay 
 him the rate that he exacts as he has to say at what price he will sell the 
 necessities of life which he has. If it has been found to the interest of 
 the whole people of the State to prescribe a rate of interest beyond which 
 money cannot be loaned, it is surely as much to the interest of the State 
 to prescribe a price beyond which a necessity of life cannot be sold so 
 that it might realize to its owner an extraordinary and unreasonable 
 profit on the amount of actual capital invested. 
 
 If the Legislature of the State of New York has the power to enact 
 a Game Law, such as has been enacted in this State, in order to preserve 
 a food supply to the people of the State, surely it has an equal power to 
 enact a law which shall preserve to the people of the State a food supply 
 
121 
 
 that is a real food supply and not one that is enjoyed by only one out 
 of every thousand of its inhabitants. Look at the case of The People 
 ex rel. Silz v. Hesterberg, 184 New York, 126. In that case a grouse was 
 bought by a citizen of the State of New, York from a dealer in London, 
 England. This grouse had been lawfully captured and killed upon a 
 game preserve in Eussia during the open season for such birds there. 
 And it was lawfully imported into the United States and into the State 
 of New York, through the Custom House in New York City, during the 
 open season for such birds in New York State. By the mere lapse of 
 time and by the coming around of the close season, the possessor of such 
 bird in New York State was made a criminal and was found guilty of 
 a misdemeanor because he continued to possess the bird. Although it 
 was admitted that the law in question constituted a taking of private 
 property without due process of law, it was upheld on the ground that 
 it came within the police power of the State to enact such a law, in order 
 to preserve to the people of the State a food supply; and in order to 
 prevent evasion, fraud and perjury in the enforcement of such game law, 
 it was necessary to provide that this grouse, imported as aforesaid, 
 which was property in every sense of the word, should be taken from 
 the owner. The opinion of the Court of Appeals of the State of New 
 York in this case was afterwards confirmed by the Supreme Court of 
 the United States, in the case of Silz v. Hesterberg, 211 U. S. 31. 
 
 If the State deemed it its duty, within its police powers, to pass a 
 law which would preserve the game of this State for the benefit of a few 
 sportsmen, rather than for the great mass of its people, how much more 
 is it the duty of the State, in the exercise of its police powers, to pass a 
 law that will regulate the milk traffic in this State so as to preserve to 
 the whole body of its people an adequate supply of pure and wholesome 
 milk at a reasonable price. 
 
 In a time of famine, war or pestilence it has always been held to be 
 within the power of the State, in the exercise of its eminent domain, to 
 take from private individuals the necessities of life and to pay such 
 individuals, not the price which they would attempt to exact, but th« 
 reasonable value of such commodities taken. And the reason for this 
 power being lodged in the State is for the purpose of giving the State 
 ample power to preserve to the great body of its people an adequate 
 supply, even though it might incidentally deprive an individual of his 
 profit, at a price at which he was unwilling to part with the Commodity. 
 The State possesses this great power at all times and it is the duty of 
 
122 
 
 the State to exercise the power it has to preserve the supply of the neces« 
 sity of life, so that there shall not be a famine or scarcity in that necM 
 sity. ™ 
 
 The right of the State to fix prices of any service or commodity rests 
 upon the police power. Where this right exists, it can be exercised with- 
 out regard to the incidental effect upon interstate commerce. In every 
 instance in which the right has been exercised and upheld, it has been 
 limited by the principle that the service or commodity must be affected 
 with a public interest. In the earlier cases the test of what is a public 
 interest has depended upon such limited considerations as a monopoly 
 in fact, an obligation to serve all who apply, or the use of public streets. 
 More recently the tendency has been to rest the question of public in- 
 terest upon broader considerations, and to determine that such public 
 interest exists where in fact the matter is of such general concern as to 
 justify public control. 
 
 An act of a State Legislature is within the police power, in general, 
 if it secures the public health, the peace, or general welfare. An Act 
 which fixes the rates for service or commodities is held to be in further- 
 ance of the general welfare, and for this reason the test was made that 
 it should be a service or commodity affected with a public interest. There 
 is in addition a class of cases where rates have been fixed with a view 
 to preventing imposition upon the public, by taking advantage of their 
 needs. Of such class is the case of laws fixing rates of interest upon 
 money loans, fees to be charged by employment bureaus or auctioneers, 
 and more recently by ticket speculators. At common law it seems to 
 have been the case that the charges of the miller and the baker could be 
 fixed by law. 
 
 Furthermore, an Act to fix the price of milk can be supported upon 
 the ground that the regulation is essential to the health of the community. 
 If this is its real purpose, and if it can be said by the courts that it has 
 some reasonable tendency to attain this object, then it is no answer that 
 the Act does something which would otherwise be prohibited. That is to 
 say, the essential objection to an Act which fixes the price of milk is that 
 it takes the property of the vendor without due process of law, but in 
 every case this consideration, the right of a person to retain his own 
 property, gives way to a legitimate exercise of the police power. So 
 with the freedom of a contract. That freedom is limited by the police 
 power of the State. If such an Act is to be sustained as an exercise of 
 
123 
 
 the police power to secure the public health, the question whether com- 
 merce in milk is affected with a public interest is of no consequence. 
 
 It has been held by the Supreme Court of the United States that 
 the business of fire insurance was so affected with a public interest, so 
 as to justify fixing of rates by State legislation, and the essential con- 
 siderations in that case which determine the decision of the court would 
 seem to be equally applicable in the case of commerce in milk. The 
 Supreme Court in the insurance case was impressed by the fact that 
 there was a universal use and demand for fire insurance,, that fire threat- 
 ened public calamity, and that this was in part averted by insurance 
 against loss from fire, that the business of insurance was not closely 
 responsive to the economic law of supply and demand, that persons 
 desiring insurance had either to take it at the rates prescribed by insur- 
 ance companies or have no insurance, so that they were dependent for 
 a necessity upon those in a position to take advantage of them. It is 
 true that in the case of insurance it has been the progressive policy of 
 the law more and more to regulate the relations between insurer and 
 assutedj to the extent that policy forms are prescribed by law, fixed 
 reserves are required, expenditures are limited, and the business confined 
 to corporations. But it is equally true of commerce in milk. From the 
 time that the cow is milked until the milk is delivered to the consumer, 
 the product is under the constant supervision of the law. Dealers are 
 licensed. Annually the public incurs great expense in its effort to secure 
 the public health against impure milk. There is a greater universality 
 in the use of milk than in the use of insurance. The public calamity 
 that is threatened by a milk famine is far greater than that of loss from 
 fire; and milk placed beyond the reach of the poor by reason of a price 
 not reasonably justified is calculated to produce a milk famine quite as 
 much as if there was an actual shortage of milk. There is another con- 
 sideration that places the great part of the public at the mercy of the 
 dealer in milk, that is, the existence of large cities which make it im- 
 possible for the great masses of the people to provide their own milk. 
 By the very essence of things, they are at the mercy of the limited class 
 who are in a position to bring fresh milk from the farm to the city. There 
 is this and many other reasons that weaken the usual argument that 
 the price should be left to be fixed by the ordinary operation of economic 
 laws. In the case of every other product, even necessaries of life, such 
 as flour, meat, eggs, vegetables, the market is open to competition from 
 all over the United States, and competition not alone dependent upon 
 
124 
 
 the product of day to day, but of product of weeks and months before. 
 Under the peculiar conditions in the State of New York, and more par- 
 ticularly in the City of New York, this great commerce is virtually a 
 monopoly. The field of supply is probably more limited than for any 
 other necessary of life. It is a daily crop that must be, in great part, 
 daily consumed. For these reasons it is peculiarly susceptible to arti- 
 ficial price fixing, and the people are peculiarly .helpless to resist de- 
 mands, or in any manner whatsoever to make any provision against an 
 exorbitant price. One may anticipate a rise in price of any other article 
 and lay in a supply ; or an unjustified price in the case of any other article 
 at once attracts a flow from other sections of the country, or even of the 
 world. In the case of other necessaries, one may, for a time at least, 
 resort to substitutes. But in the case of milk, the alleged scientific 
 operation of economic laws does not really operate, or if it does, it is too 
 late, for the need of this article cannot be postponed, and the public 
 calamity befalls long before the artificial economic condition is corrected. 
 In such case where it leaves the public helpless to provide against the 
 constantly recurring situation when for a time the price of milk is raised, 
 the public exploited, the children of the poor deprived of their milk, has 
 not the State the right to coi-rect this condition by fixing a reasonable 
 price for milk? Or is the answer that the price is fixed by economic law, 
 and that the milk dealers are free to raise the price and the remedy must 
 be sought in the competition that naturally follows where unreasonable 
 profits are forced, by the attraction of new supplies and new dealers into 
 the field. 
 
 In the case of German Alliance Insurance Co. v. Kansas, 233 U. S. 
 389, an Act of the State of Kansas required insurance companies to file 
 schedules showing rates of fire insurance, and authorized the Superin- 
 tendent of Insurance to determine whether the rate is excessive or inade- 
 quate and to require compliance with his determination. The insurer 
 was authorized to bring an action for review in the court. 
 
 It was held that a public interest can exist in a business, such as 
 insurance, without the public having any interest in the property 
 employed in such business, and that where the business is affected by a 
 public use, regulation of the business is justified ; and if this involves a 
 taking of property, the taking of the property is merely incidental to 
 the authorized regulation of the business. The business is the funda- 
 mental thing and the property is but the instrament of such business. 
 
125 
 
 Relation of Act to Interstate Commerce. 
 
 Where the State is authorized to regulate price in the exercise of its 
 police power, it is no answer that the exercise of the power incidentally 
 affects interstate commerce. Where the eifect of the Act is to prevent 
 commerce, it is of course a direct burden upon interstate commerce and 
 is not justified even as an exercise of the police power. If, for instance, 
 the price fixing was so unreasonable as to deprive the vendor of a reason- 
 able profit, so that he is thereby kept out of the State, it would doubtless 
 be held to be a direct burden on interstate commerce, and therefore 
 invalid. Where the police power and the power of Congress to regulate 
 commerce between the States directly conflict, the police power must 
 yield. 
 
 Pennsylvania Gas Company v. Public Service Com., 225 N. Y. 397. 
 In this very interesting case, complaint was made to the Public Service 
 Commission that the rate charged by the plaintiff was excessive. The 
 action of the Commission was sought to be restrained by a writ of pro- 
 hibition, on the ground that regulation of price was an interference with 
 interstate commerce. The plaintiff conveyed gas from its gas fields and 
 wells in Pennsylvania to the City of Jamestown in New York, through 
 the streets of that city, direct to consumers. It was held that the business 
 was interstate commerce, that the transmission was continuous from 
 Pennsylvania to the consumer, and that an attempt to fix the price to the 
 consumer was an attempt to fix the price of an article while still in inter- 
 state commerce and before it had become a part of the property in the 
 State. But it was held that the right nevertheless existed to regulate the 
 rate to be charged. 
 
 Purity Extract Company v. Lynch, 226 U. S. 192. The question was 
 whether liquor shipped from one State into another was a shipment in 
 interstate commerce. Held^ where a large number of bottles, each in a 
 separate box, are all contained in one case, each bottle is not to be 
 regarded as a separate original package and protected from interference 
 by state statute under the commerce clause of the Constitution. 
 
 Hall V. Geiger-Jone Company, 242 U. S. 539. This case involved the 
 constitutionality of the Blue-Sky Law of Ohio. Dealers in securities 
 were required to be licensed, and until licensed were forbidden to sell 
 
126 
 
 securities within the State. It was held that this was a proper prohibi- 
 tion, and only incidentally affected interstate commerce. 
 
 Schmidinger v. City of Chicago, 226 U. S. 578. An ordinance of the 
 City of Chicago fixing the standard size of bread loaves was held to be 
 constitutional. 
 
 Armour v. North Dakota, 240 U. S. 510. A statute fixing the size 
 of containers of lard was held to be constitutional. 
 
 Central Lumber Company v. South Daltota, 226 U. S. 157. A statute 
 which forbade dealers haying more than one place of business within the 
 State selling articles at different prices, making a proper allowance for 
 cost of transportation, etc., was held to be constitutional. 
 
 In urging the Legislature to pass legislation regulating the sale of 
 milk by the individuals and great corporations acting as middlemen, I 
 am not unmindful of the great benefits derived from the economical oper- 
 ation of the business of milk dealers by" great corporations having large 
 capital. The savings resulting from the operation of the milk business 
 under such conditions should ultimately benefit the consumer, by his 
 obtaining the advantage of the savings of the corporations under such 
 conditions ; and probably the ideal condition would be for one great cor- 
 poration to have the sale and distribution of milk within the City of New 
 York. The amount of the saving in operating and distributing expenses 
 of such a corporation would be enormous. Instead of one milk delivery 
 wagon serving, as it does now, a maximum of from two to three hundred 
 quarts a day, it could serve double the amount, as the customers on each 
 route would be so near together that one wagon could cover double the 
 amount it does today, distributed as they are over a great area. And 
 this saving in the handling and distribution of the mUk would, if those 
 in control of such a corporation were satisfied with a reasonable profit, 
 result in the consumer of New York City getting his milk very much 
 cheaper than he does today. But it has been the history of such corpora- 
 tions, where they obtain a practical monopoly of a certain line of busi- 
 ness, not to be satisfied with a reasonable profit on the actual capital in- 
 vested; but as soon as they were in a position to squeeze the consumer, 
 human nature and self interest asserted themselves to such an extent that 
 such corporations were only satisfied with the utmost profit they could 
 wring from the consumer. 
 
127 
 
 APPENDIX B. 
 
 STATE OF NEW YOEK 
 
 ExEOUTiVB Department 
 
 In the Matter of the Investigation by George Gordon Battle, Com- 
 missioner, INTO THE Department of Farms and Markets 
 
 PKELIMINAEY EEPOET 
 
 John Btjrlinson Coleman George Gordon Battle 
 
 Of Counsel Commissioner 
 
 October 9. 1919 
 
 Preliminary Report of Commissioner Battle 
 
 In the Matter of the Investigation by 
 George Gordon Battle, Commis- 
 sioner, into the Department of 
 Farms and Markets. 
 
 His Excellency, the Governor, State Capitol, Albany, N. Y.: 
 
 Pursuant to the instructions contained in your commission, dated 
 August 25, 1919, appointing me as a commissioner to examine and inves- 
 tigate all matters with reference to the management and affairs of the 
 Council of Farms and Markets and all related departments and bureaus, 
 I beg to submit herewith what may be termed a preliminary report, 
 based upon the evidence already taken by me at public hearings in New 
 York city and in Albany. 
 
 Matters have been developed in the course of these hearings which 
 
128 
 
 I deem it necessary to bring to your immediate attention, so that you 
 may take whatever action may he considered advisable in the premises 
 Without awaiting the conclusion of the hearings and of my investigation 
 of the management and affairs of the Council of Farms and Markets and 
 all related departments and bureaus. It is my intention immediately 
 to resume the taking of evidence at public hearings in New York city 
 and elsewhere, and to submit at a later iiate a final and complete report 
 dealing with all the matters that now have been, or will then have been 
 under consideration. Eight hearings have been held so far in New York 
 city and three in Albany. The first hearing was on August 28th, in New 
 York city, and the last on October 3d in the city of Albany. Immediately 
 upon receipt of your commission, dated August 25, 1919, I retained Mr. 
 John Burlinson Coleman, of No. 60 Wall street. New York city, as coun- 
 sel for the commissioner, and alsa-proeeeded to organize a staff of inves- 
 tigators, at the head of whom was Mr. William T. Chantland, formerly 
 chief investigator of the Federal Trade Commission, Mr. Coleman has 
 attended all the hearings and examined the witnesses. 
 
 In order to determine what Tecommendation I should make as to 
 your action in the premises, it is necessary to ascertain what power you 
 have over the Department of Farms and Markets. The law creating this 
 department is known as the Farms" and Markets Law, and constitutes 
 chapter 69 of the Consolidated Laws, taking effect June 9, 1917. It pro- 
 vides for a Department of Farms and Markets "which shall consist of 
 two divisions: The Division of Agriculture and the Division of Foods 
 and Markets. The head of such department shall be the Council of 
 Farms and Markets" (section 10). " This Council consists of one member 
 from the State at large, the Commissioner of Public Markets of the city 
 of New York, if any, and one member from each of the judicial districts 
 of the State. There are now nine such districts, so that there are eleven 
 members of the Council. 
 
 The then Governor of the State, Honorable Charles S. Whitman, 
 had the power under the law to appoint the first members of the Council 
 (except the Commissioner of Public Markets for the city of New York, 
 who was ex-officio a member of the Council). The law provides that the 
 succeeding members are to be appointed by the Legislature in joint 
 session for terms of ten years each (section 11). The members of the 
 Council may be removed only by the Senate, on the recommendation of 
 the Governor, for misconduct or malversation in office, if a majority of 
 the members elected to the Senate shall concur therein ; and the proceed- 
 
129 
 
 ings for such removal shall be the same as those prescribed by law for 
 the removal of elective State officers (section 12). The Council has the 
 right to appoint a Commissioner of Agriculture and a Commissioner of 
 Foods and Markets, also a counsel and a secretary of the department,, 
 each of all these officers to hold office during the pleasure of the Council 
 (sections 22 and 23). The Council is empowered to create bureaus in 
 each division and to appoint directors of each bureau and officers and 
 employees in each division on the recommendation or nomination of the 
 commissioner in charge of such division or bureau. The Council can 
 transfer officers or employees, or can abolish or consolidate positions. 
 Each commissioner can, with the approval of the Council, remove from 
 office any officer or employee in his division (section 27). 
 
 The salaries of the commissioner, of the counsel and of the secretary, 
 first appointed, were fixed under the law by the Council, subject to the 
 approval of the Governor. But this limitation was removed as to the 
 salaries of the succeeding commissioners, counsel and secretary, which 
 are fixed by the Council without any assistance or supervision by the 
 Governor. The salaries of all other officers and employees of the depart- 
 ment are likewise fixed by the Council, the Governor taking no part. 
 The law gives to the Governor no authority whatever over the adminis- 
 tration of the department. 
 
 Governor Whitman appointed the present members of the Council 
 and the Legislature will have the power to appoint their successors 
 without reference to you. 
 
 It will be seen, therefore, that under the law you have no power : 
 
 1. To appoint or remove the members of the Council ; or 
 
 2. To appoint or remove either commissioner, or the counsel, or the 
 secretary, or any officer or employee of the department; or 
 
 3. To create any bureau or office or position in the department; or 
 
 4. To fix or modify the salary paid to any commissioner or other 
 officer or employee; or 
 
 5. To control in any way the administration of the department. 
 The only power that the law gives jou is to recommend to the 
 
 Senate the removal of any Council member for misconduct or malversa- 
 tion in office. 
 
 But, although you have no legal authority in the premises, I assume 
 that you will feel justified in calling to the attention of the Council any 
 facts which in your judgment require or justify the removal by the 
 
130 
 
 Council of either commissioner, or of any officer or employee, to the end 
 that the Council may take appropriate action. 
 
 I shall, therefore, briefly recite certain evidence relating to the 
 manner in which the present Commissioner of Foods and Markets has 
 discharged the duties of his office. 
 
 The first witness called was Dr. Eugene H. Porter, Commissioner of 
 the Division of Foods and Markets in the Department of Farms and 
 Markets. Dr. Porter was appointed to this position by the original 
 Council of Farms and Markets on December 17, 1917. This preliminary 
 report is mainly concerned with the evidence that has been adduced 
 before me in relation to the manner in which Dr. Porter has conducted 
 the affairs of his division as such Commissioner of Foods and Markets. 
 
 The Division of Foods and Markets has been charged by the 
 Council of Farms and Markets since May, 19l8, with the management of 
 the Bureau of Licenses. Prior to May, 1918, this bureau was under the 
 control of the Commissioner of Agriculture. In the mechanical parti- 
 tion of the various bureaus assembled by law under the Council's juris- 
 diction, it appears that about May, 1918, the Council, at the suggestion 
 or request of Dr. Porter, transferred to him as Commissioner of Foods 
 and Markets the management of the Bureau of Licenses in so far as it 
 was concerned with the enforcement of sections 55 to 61, inclusive, of 
 the Agricultural Law. These sections provide for the licensing and 
 bonding of purchasers and shippers of mUk. These sections are not con- 
 cerned with the enforcement of the health regulations or butter fat tests 
 relating to milk, the enforcement of which still remains with the Depart- 
 ment of Health or the Commissioner of Agriculture, as the case may be. 
 
 Sections 55 to 61 of the Agricultural Law are designed to protect 
 the producer of milk, that is, the farmer engaged in the business of pro- 
 ducing milk for sale. Under these sections it is provided that "No per- 
 son, firm, association or corporation shall buy milk or cream within the 
 State from producers for the purpose of shipping the same to any city 
 for consumption, or for manufacture, unless such business be regularly 
 transacted at an office or station within the State, and unless such per- 
 son, firm, association or corporation be duly licensed." The law pro- 
 vides that every such person, firm, association or corporation, before 
 engaging or continuing in the business of buying milk or cream for said 
 purpose shall each year file an application for a license, paying ten 
 dollars for the same, entitling the applicant to conduct the business of 
 buying milk and cream from producers. It is further provided that no 
 
131 
 
 license shall be issued to any applicant against whom a complaint shall 
 hiave been filed during the preceding year from any producer and seller 
 of milk or cream, and that no license shall be issued unless the applicant 
 shall file a good and sufficient surety bond executed by a surety company 
 in a sum of not less than $5,000. The applicant may deposit money or 
 approved securities in lieu of said bond. Such bond is to be applied in 
 the event that the licensee shall fail to pay to the producers from whom 
 he buys milk the proper amounts due them, and it is the duty of the 
 department to apply such bond in such event to the reimbursement of 
 such producers. The amount of the bond is to be based, in the discretion 
 of the commissioner, upon the extent of the business of the licensee, but 
 shall not exceed |100,000. 
 
 Discretion is given the commissioner to exempt any' person or 
 domestic corporation from the requirement of giving such bond if he is 
 satisfied that such person or domestic corporation is solvent and 
 possessed of sufficient assets to reasonably assure compensation to prob- 
 able creditors. The commissioner is also given power to revoke a license 
 where a money judgment has been secured by any milk producer against 
 such licensee and remains unsatisfied, or where there has been a failure 
 to make prompt settlements to such producers with intent to defraud, 
 or where there have been "combinations to fix prices", and in certain 
 other specific cases. Any violation of section 55 or of section 59, which 
 provides that every proprietor of a milk gathering station shall keep 
 proper records in such form as the commissioner may prescribe, is 
 deemed to be a misdemeanor under section 61. 
 
 There has existed for several years, though its activities have been 
 more pronounced since 1916, a New Jersey stock corporation called "The 
 Dair-ymen's League". This corporation is ostensibly an association of 
 milk producers, but it is actually operating, and has been since 1916, as 
 a middleman between the producers of milk and the distributors or 
 dealers, both wholesale and retail, who eventually dispose of the milk 
 and its by-products, such as butter, cheese, condensed milk, etc., to the 
 consumer. 
 
 A system has been devised by agreements between the producers of 
 milk and the distributors, working in co-operation, through the Dairy- 
 men's League, by which, in order to provide funds for the expensive 
 operations of the Dairymen's League, the distributor deducts from the 
 bill which he owes the producer a charge or commission of one cent per 
 hundred pounds of milk supplied by such producer. This commission is 
 
132 
 
 turned over by the distributor to the Dairymen's League corporation, 
 and it may be instructive to point out that the total of such commis- 
 sions collected by the Dairymen's League corporation as such middle- 
 man between producer and distributor amounted during the past year 
 to approximately |200,000, all of which, of course, had to come even- 
 tually out of the pockets of the consumer. ' 
 
 In 1917 several officers of the Dairymen's League were indicted by 
 the district attorney of New York county on a charge of conspiracy to 
 fix prices for milk in restraint of trade and in violation of what is known 
 as the Donnelly Act. 
 
 Previous to the appointment of Dr. Eugene H. Porter on December 
 17, 1917, by the then Council of Farms and Markets, as Commissioner of 
 the Division of Foods and Markets, at a salary of f8,000 a year, Dr. 
 Porter was a member of the Dairj'^men's League and a stockholder in the 
 corporation. He was also the president of the Dairymen's League 
 branch for Broome county, in which county he resides. Shortly before 
 his appointment, that is to say, about December 5, 1917, Dr. Porter was 
 elected a director of the Dairymen's League corporation at a special 
 meeting held in Utica, afterwards ratified at a regular meeting in New 
 Jersey. His appointment as Commissioner of the Division of Foods and 
 Markets by the Council of Farms and Markets followed on December 
 10th, but not to take effect until December 17, 1917. From that time 
 forward until the annual meeting of stockholders of the Dairymen's 
 League in December, 1918, Dr. Porter continued to be a director of said 
 corporation and to take an active part in its affairs and management as 
 such director. He was not re-elected a director for 1919, but still con- 
 tinues to be president of the Broome county branch of the League and a 
 member and stockholder of the corporation. 
 
 The evidence taken before me shows that Dr. Porter has been cease- 
 less in his efforts to promote and further the well-being of the Dairymen's 
 League corporation and has not permitted the fact that he held a public 
 office as Commissioner of Foods and Markets, particularly designed to 
 protect the interests of the consumer, to interfere with his activities in 
 behalf of the Dairymen's League. 
 
 Prior to his appointment as Commissioner of Foods and Markets, 
 and while he was merely the president of Broome county branch in the 
 League, Dr. Porter was frequently employed by the League as a public 
 speaker in its behalf at the rate of four dollars per day and expenses, 
 which money he acknowledges having received. Subsequent to his 
 
133 
 
 appointment as commissioner and his election as a director of the League 
 he continued to perform services for the League as such director, receiv- 
 ing therefor ten dollars per day and expenses at the same time that he 
 was drawing pay from the State treasury at the rate of eight thousand 
 dollars per annum. In this way he received from the Dairymen's 
 League, according to his own admission (p. 121), sums amounting to six 
 or seven hundred dollars while he was acting as commissioner. 
 
 When the Dairymen's League corporation, in 1918, had on foot a 
 plan to purchase all the milk gathering stations of the Borden Farm 
 Products Company, Dr. Porter openly exercised his activities in behalf 
 of this scheme and endeavored to interest the Council of Farms and 
 Markets in befriending the plan, as appears from the minutes of the 
 Council. The plan, as explained by Dr. Porter on the witness stand, 
 involved an option given by the Borden company to the Dairymen's 
 League corporation by which the plants would be sold to the League at 
 an appraised value. Dr. Porter testified that it was also part of the 
 plan of the League similarly to acquire the milk gathering stations of the 
 other large distributors of milk, thereby giving the Dairymen's League 
 corporation a practical monopoly of the shipment of milk into the New 
 York city district, so that the League would be able in such event to fix 
 any price for milk at the city limit, or when turned over to the distribu- 
 tors, that its directors chose. Twenty-five cents or even twenty-five 
 dollars for a bottle of milk might be a conceivable price under such a 
 plan, Dr. Porter testified. The Borden option expired without having 
 been taken up, Dr. Porter explained, but the Dairymen's League cor- 
 poration is now working out a plan to effect the same results in another 
 and a larger way, so as absolutely to control, through a large number 
 of subsidiary branches of the L«ague, the entire output of fluid milk in 
 New York State, whether to be iised for shipping as fluid milk to the 
 cities or to be manufactured into cheese, condensed milk, and so forth. 
 Dr. Porter, as stated before, is still a member of the Dairymen's League 
 and president of the Broome county branch, and as such is presumably 
 furthering this proposed plan, to control the milk market of New York 
 State. As Commissioner of Poods and Markets, he has given his aid 
 and assistance to the plan by helping, through the Bureau of Cooperative 
 Associations under him, the establishment of numerous branches of the 
 League that will be necessary to carry out the scheme. It would seem 
 that such a plan would run counter to the laws prohibiting combinations 
 or conspiracies in restraint of trade, or to fix prices. In this connection 
 
134 
 
 the record discloses that Dr. Porter, not only as a director of the Dairy- 
 men's League, but as Commissioner of Foods and Markets, gave his aid 
 and encouragement in every way possible to the enactment of an amend- 
 ment to the Donnelly Act (chapter 490, Laws of 1918), which exempts 
 from the restrictions of such act all cooperative associations, corporate 
 or otherwise, of farmers, gardeners or dairymen, and all contracts, agree- 
 ments or arrangements made by such association. 
 
 This amendment has been interpreted by counsel for the Dairymen's 
 League and others, though no court has ever passed upon the question 
 in this State, as exempting from the provisions of the Donnelly Act this 
 New Jersey corporation known as the Dairymen's League. Dr. Porter 
 urged the Council of Farms and Markets, at the very time when the 
 officers of the Dairymen's League were under indictment for violating 
 the Donnelly Act by fixing the price of milk, to place itself on record as 
 in favor of such amendment, which the Council of Farms and Markets 
 did. In consequence the indicted officers of the Dairymen's League were 
 not tried, their indictment being dismissed with the consent of the Dis- 
 trict Attorney of New York County, who apparently was advised that 
 such amendment had a retroactive effect. 
 
 Dr. Porter expressed himself unqualifiedly on the witness stand as 
 in favor of such amendment. It appears from the testimony that E. D. 
 Cooper, President of the Dairymen's League, one of the indicted men, 
 had requested Commissioner Porter to help the indicted officers of the 
 League and their counsel in procuring a change of venue for the trial 
 of their indictments, and Dr. Porter in a letter to Mr. Cooper, dated Jan- 
 ■uary 30, 1918, wrote as follows (p. 183) : 
 
 "In regard to securing affidavits for change of venue, I am 
 sorry to report that I was unable, by reason of the shortness of my 
 stay in New York, to obtain any. I shall be in to see you Thurs- 
 day." 
 
 Dr. Porter declared that he considered such attitude on his part, 
 though a public official charged with the administration of the law, as 
 "emphatically a proper thing to do". (Page 186.) 
 
 It further appears that in April, 1918, Dr. Porter was requested by 
 the Dairymen's League to use his influence to induce the Binghamton 
 Ice Cream Company, an independent milk concern, to sigh up a contract 
 with the Dairymen's League, and the testimony shows that Dr. Porter 
 Hctually did, by correspondence and otherwise, bring to bear some of the 
 
135 
 
 influence of his position as Commissioner of Foods and Markets, upon 
 the Binghamton Ice Cream Company in that connection. The testimony 
 relating to this matter is set forth on pages 189 et seq. 
 
 Dr. Porter does not seem to have differentiated between his posi- 
 tion as a director of the Dairymen's League and Commissioner of Foods 
 and Markets in this matter, as he wrote on the letterhead of The Depart- 
 ment, signing his name as Commissioner, on May 17th, 1918, "I will do 
 whatever I can", referring to the Binghamton Ice Cream Company's 
 refusal to make a contract with the Dairymen's League. 
 
 On page 186 of the minutes it appears that Dr. Porter sent a tele- 
 gram to President Cooper of the Dairymen's League during a milk strike 
 in 1918, reading as follows : 
 
 "Milk situation bad at Eochester. Advise sending special 
 agent to look after League interests and help settle matters. 
 Would lose no time. Eugene H. Porter." 
 
 Dr. Porter in his attitude toward the matter of licensing and bond- 
 ing milk shippers under the sections 55 to 61 of the Agricultural Law 
 mentioned above, has shown a distinct inclination to favor shippers con- 
 nected by contract or otherwise, with the Dairymen's League, as against 
 what are known as the Independent Shippers or distributors who have 
 not submitted to the terms laid down by the Dairymen's League. 
 
 Dr. Porter in his management of the affairs of the Bureau of 
 Licenses since May, 1918, has encouraged and developed a system by 
 which where the shipper or distributor of milk has given a bond to the 
 Dairvmen's League for the execution of his contract with them, such 
 shipper or distributer or purchaser from the producers is exempted by 
 Commissioner Porter from the necessity of giving a bond to the State, 
 as required by law. It is true that this matter falls within his discre- 
 tion under the law, but in view of his dual capacity as a member of the 
 Dairymen's League and a public official charged with the enforcement of 
 laws relating to dairymen, it does not seem proper, that such a policy 
 shoiild have been developed in favor of the League. 
 
 Dr. Porter has also taken the attitude strongly that cooperative 
 associations or producers of milk who undertake to ship and sellsuch 
 milk through such association or selling agency do not fall within the 
 provisions of the licensing and the bonding acts and he has uniformly 
 exempted all such associations from giving any bonds. This attitude is 
 taken notwithstanding the fact that the courts have decided, notably 
 
136 
 
 in the Israel case in the Appellate Division, First Department, in JsM^ 
 uary, 1919, that the section 55 of the Agricultural Law should be 
 liberally construed to accomplish the purpose intended by the Legisla- 
 ture, which was to secure to those engaged in dairy pursuits payment 
 for the milk and cream sold to a licensee to be consumed or manufac- 
 tured in a distant city. 
 
 While it is true that where a cooperative association would be deal- 
 ing merely with its own members, it might be deemed a producer itself 
 as being an association of producers, and therefore exempt from the 
 bonding provision, it is nevertheless the fact, and well known to Dr. 
 Porter, that a great many of these cooperative associations purchased 
 and handled the milk of non-members of the association, and in the event 
 of the failure or default of such association to pay for the milk they have 
 purchased, such non-members are left without recourse under the bond- 
 ing provisions of the statute, owing to the policy adopted in this matter 
 by Dr. Porter. 
 
 The result of this policy was peculiarly illustrated in the case of 
 two concerns, one as the Cooperative Milk Producers Marketing Asso- 
 ciation, and the other as the Country Milk Company, a New York stock 
 corporation. In both of these associations the principal offices of the 
 Dairymen's League were vitally interested, financially and otherwise, 
 Mr. Cooper being President of the Country Milk Company as well as 
 President of the Dairymen's League. 
 
 The Cooperative Association was an amalgamation of a number of 
 cooperative milk stations, previously in existence, scattered throughout 
 the State, and in two instances outside the State. The Country Milk 
 Company was organized to take over this milk from the Cooperative 
 Association and as a distributor to market the milk in New York City 
 in retail stores. In the summer of 1918, complaints began to "pour in", 
 to use the words — of the testimony, to Dr. Porter, concerning the failure 
 of the Country Milk Company to pay its bills for milk. The testimony 
 shows that Dr. Porter wrote, through his official counsel, Mr. Miller, to 
 President Cooper of the Dairymen's League and of the Country Milk 
 Company, stating that Dr. Porter felt himself "forced" to consider the 
 matter. Correspondence that ensued shows clearly that in addition to 
 its operations with the Cooperative Association, the Country Milk Com- 
 pany actually was, or had been, purchasing directly from other pro- 
 ducers at several milk stations. Notwithstanding the clear admission 
 of this fact by officers of the corporation in the correspondence, Dr. 
 
137 
 
 Porter and Mr. Miller decided not to prosecute the Country Milk Com- 
 pany. Shortly thereafter the Country Milk Oompajiy went into the 
 hands of a receiver and its liabilities were set forth as in the neighbor- 
 hood of 1400,000. A considerable amount of this money was owing to 
 milk farmers who had relied upon the financial integrity of the corpora- 
 tion and found themselves, when it defaulted in payments to them, with- 
 out recourse under the bonding laws of the State, as it had given no 
 bond. A specific complaint involving 60 farmers who had lost money 
 through this failure is set forth on page 1026 of the minutes. The 
 records of the Bureau qf Licenses at Albany are replete with instances 
 of corporations that have been exempted from giving bonds because they 
 had filed a bond with the Dairymen's League. Lists, procured from the 
 League during the administration of Dr. Porter, are kept in the Bureau, 
 of the milk dealers who have given such bonds and of the distributors 
 who are affiliated with the Dairymen's League and those who are inde- 
 pendent and an examination of the records of the bureau would tend to 
 show that it was more an appendix of the Dairyinen's League than a 
 branch of a highly important State Department. 
 
 The condition of comparative uselessness into which the bonding 
 division of the Bureau of Licenses has fallen under the administration 
 of Dr. Porter may be gathered from the fact that in his first annual 
 report for the year ending December 31, 1918, it is set forth that the 
 total amount collected from delinquent milk dealers on bonds filed with 
 the Department was only |77.67. The number of milk dealers, coopera- 
 tive associations, persons and corporations engaged in the purchase 
 of milk who failed during the year 1918 is not readily ascertainable, but 
 it is a matter of record that there were several such failures in this State, 
 that their liabilities to producers and farmers ran into a high figure. 
 When the cost of enforcing or failing to enforce the statutes requiring 
 the bonding of all such milk shippers is compared with the trivial 
 amount which the Department was able to recover for the defrauded 
 farmers, the result is startling. 
 
 It appears from the minutes of the Council that in November, 1918, 
 Dr. Porter recommended the suspension, during the continuance of the 
 Federal Food Administration's activities, of the regulations of the 
 department requiring the individual stamping of all cold storage eggs. 
 The Council assented, but provided that at the expiration of the war, 
 or on the lapse of the Federal Food Administration's control, the regula- 
 tion as it previously existed should once more come into force. 
 
138 
 
 The Federal Food Administration ceased to operate in February 
 of this year, but not until this investigation had been begun and the 
 failure of Dr. Porter's division to do anything toward enforcing the 
 regulations was brought to the attention of the Council and Dr. Porter 
 by Mr. Coleman in the course of his questioning of them, was anything 
 done by the department. Finally at the last session of the Council, two 
 weeks ago, a formal resolution was made and passed rescinding the 
 former resolution suspending the regulation. Nevertheless Dr. Porter, 
 both before the Council and in his testimony, raised every objection he 
 could think of to the enforcement of the regulation requiring the indi- 
 vidual stamping of all cold storage eggs. This regulation has been 
 described by Mr. Justice Delahanty of the Supreme Court, in a proceed- 
 ing brought against the packers. Swift and Company, as a most salutary 
 and excellent regulation to prevent the consumer or purchaser of eggs 
 from being defrauded ; but Dr. Porter spoke before the Council of Farms 
 and Markets, and in his testimony before me, of the possibilities of 
 injunctions being obtained, of the difficulty of enforcing the law, of the 
 likelihood of appeals being made by dealers to the courts, of the opposi- 
 tion of the dealers to the enforcement of the regulation, and finally of 
 the possibility that the enforcement of the regulation would tend to a 
 considerable increase in the price of eggs. However, the Council has 
 ignored his objections and restored the regulation in full force, and it is 
 now Dr. Porter's indicated duty to see that it is enforced. Previously, 
 according to his testimony, he had exercised his own discretion in the 
 matter of enforcing it, and had decided against enforcement. 
 
 In the matter of enforcing the provisions of the law against cold 
 storage warehouses, Dr. Porter, after consultation with his counsel, Mr. 
 Seward A. Miller, had adopted and enforced the policy that the inhibi- 
 tions of the law do not run against private cold storage warehouses, but 
 only against public warehouses. 
 
 No opinion of the Attorney-General has been obtained by Dr. 
 Porter to this effect and he is apparently failing to compel the licensing 
 of private cold storage warehouses on the mere assumption that if he 
 did attempt it some one of the packers, or all of them, who maintain 
 these large private warehouses, might begin an action to restrain him 
 from compelling them to take out a license and bring themselves within 
 the jurisdiction of the laws relating to cold storage foods. It would seem 
 that a Commissioner of Foods and Markets who had the interests of the 
 consumer more nearly at heart, would prefer to make the attempt to 
 
139 
 
 enforce the law and let he courts decide whether or not the licensing 
 clause of the Public Health Law relating to cold storage warehouses and 
 foods applies only to public warehouses and not at all to private ware- 
 houses. It should be pointed out in this connection that the operation 
 of large private cold storage warehouses is a part of the business of firms 
 engaged in the wholesale selling of food and that such private ware- 
 houses are generally filled with foods purchased from other firms and 
 not actually manufactured by the owners of the warehouses themselves. 
 
 It is a fact, admitted by Dr. Porter and his counsel, Mr. Miller, that 
 under their interpretation of the operation of the law, there is nothing 
 to prevent food being maintained in cold storage in private warehouses 
 for a period far in excess of the twelve months limitation established by 
 laws of this State. It is also possible for such concerns to withdraw such 
 food from their warehouses and place them on the market without their 
 having come in any way under, the supervision of the Division of Foods 
 and Markets, so that the consumer is left entirely ignorant of whether 
 such foods have been in cold storage or not. 
 
 Referring back to the matter of bonding milk dealers and exemp- 
 tions from such bond, it appears on page 358 of the minutes that accord- 
 ing to a letter dated July 17, 1918, Dr. Porter had spoken at a directors' 
 meeting of the Dairymen's • League concerning the regulations which 
 were going to be sent out by the Department of Farms and Markets in 
 the matter of bonds and exemptions for milk gatherers. This letter 
 appears on page 351 and is a communication from the Dairymen's 
 League to Dr. Porter complaining that copies of the proposed new regula- 
 tions had not yet been received. In reply to my questionsi. Dr. Porter 
 admitted that he had informed the directors of the Dairymen's League 
 of what his proposed attitude would be in regard to such bonds and 
 exemptions, so that "Some line of concentrated action between the 
 League and my Division" might be arrangt'J. In other words, the 
 directors of the Dairymen's League obtained advance information con- 
 cerning tlie policy of the department and its new regulations, which, to 
 say the least, was a questionable proceeding. 
 
 The members of the Council, or such of them as it was possible to 
 examine were questioned by Mr. Colemar concerning their attitude 
 towards Dr. Porter's activities as set forth above. Mr. Dana, president 
 of the Council, stated (page 420) : that he believed that Dr. Porter's 
 activity in connection with the Dairymen's League and the Borden option 
 
140 
 
 was a proper one, and that he believed it would be one of the biggest 
 "steps forward if there was a general gathering up of this milk." 
 
 Mr. Dana further stated that he believed in the assembling of milk 
 producers and in milk distribution by a central organization, but, as he 
 stated, he would treat them both as quasi-public utilities to be regulated 
 by some governmental authority. On his attention being then drawn 
 to the fact that the Dairymen's League was apparently expressly ex- 
 empted from governmental authority, he nevertheless insisted that he 
 considered Dr. Porter's activities in this connection perfectly proper. 
 
 Council member, Datus Clark, when asked (page 498) whether he 
 approved of Commissioner Porter's being paid by the Dairymen's League 
 while acting as Commissioner of Foods and Markets, replied : "I think 
 it is unfortunate; no, I do not." And again (page 498), when asked 
 whether he approved of Commissioner Porter's activity in reference to 
 the milk contract of the Binghamton Ice Cream Company, Mr. Clark 
 replied : "While perfectly free to do anything of the kind as director of 
 the Dairymen's League, I would not think, as Commissionerr of Foods 
 ^and Markets, that he should enter into such matters." Further (page 
 501), Mr. Clark, in, answer to one of my questions, said: "It unfits a 
 man, in a way, to be under fire so much as Dr. Porter is unfortunately. 
 That surely cuts short his efflciency, to aA extent. I know it would 
 mine." 
 
 Councilman John W. Gerow, formerly a president of the Dairymen's 
 League, stated that he thought it "unfortunate", that Dr. Porter had 
 been receiving pay from the Dairymen's League while he was holding 
 public office and that he should separate himself from one connection or 
 the other, I inquired of Mr. Gerow (page 501) : "Q. You think Dr. Por- 
 ter's efficiency has been impaired? A. I do, on general principles. I 
 know it would impair mine." 
 
 The same question and answer in another form are repeated on page 
 503 of the minutes. 
 
 Dr. Jonathan P. Day, Commissioner of Markets for New York city 
 and ex-officio member of the Council, in his testimony (page 569) re- 
 ferred to the fact that he and Miss Van Arsdale, also a member of the 
 Council, had been appointed on a committee with Dr. Porter to make 
 an investigation of cold storage warehouses this summer. Dr. Porter 
 conducted the investigation himself and practically completed it without 
 consulting Dr. Day or Miss Van Arsdale. Dr. Day stated that he felt 
 
141 
 
 very keenly in the matter, and (see page 571) said, "I had this suspicion, 
 that Dr. Porter did not want me and Miss Van Arsdale along, and Miss 
 Van Arsdale had the same suspicion." At page 572, referring to the 
 matter of stamping cold storage eggs. Dr. Day was asked: "Q. What 
 was the real reason for the suspension of the regulation last November?" 
 He replied : "I don't know why. I have understood from men in the egg 
 business that they made that request of Dr. Porter because it handi- 
 capped them less in their business." In consequence of Dr. Porter's 
 failure to enforce the regulation, after it automatically lapsed in Feb- 
 ruary, Dr. Day stated (page 572) : "People are buying cold storage eggs 
 thinking they are buying fresh eggs because they are not stamped." 
 
 Dr. Day considered (page 575) Dr. Porter's action in accepting 
 pay from the Dairymen's League as a "tactical blunder." "The thing 
 itself would give an impression he was working for the Dairymen's 
 League instead of for the people," testified Dr. Day. On page 577 Dr. 
 Day testified that he did not think it was proper for Dr. Porter to be 
 connected with the Dairymen's League at the same time that he was 
 Commissioner of Foods and Markets, and added, "Dr. Porter did give 
 me this impression at first, that he was very much — that he was quite 
 concerned about the organization of the Grange or the organization of 
 the Dairymen's League." When the proposition was suggested that the 
 Council should be given power, somewhat after the manner of the Public 
 Service Commissions, to regulate the price of milk (page 579), Dr. Day 
 testified that he had written to District Attorney Swann on December 
 2, 1918, to this effect : "You will see that the Commissioner of Foods and 
 Markets for the State, who is a director of the Dairymen's League, be- 
 lieves that the Dairymen's League and the State Grange should be the 
 final court of appeal in this matter." Dr. Day (page 584) stated that 
 he thought Dr. Porter's activity in the matter of the Borden option was 
 a proper one. 
 
 Miss Van Arsdale, a member of the Council, testified (page 625), 
 when questioned about Dr. Porter's dual capacity as a Commissioner of 
 Foods and Markets and a member of the Dairymen's League, that she 
 thought it would probably be difficult for him to be unprejudiced in the 
 matter of licensing and bonding milk shippers. 
 
 Frank W; Howe, a member of the Council, testified (see page 655) 
 in reference to the matter of the Borden option, that he thought the 
 Council had "no right or business to promote the interests of any 
 organization as such". 
 
142 
 
 On page 664, Dean Howe stated that he thought it was undesirable 
 that Dr. Porter should have been a director of the Dairymen's League 
 at the same time that he was Commissioner and receiving f 10 a day and 
 expenses from the League. "I would not want to have been put in that 
 situation", testified Dean Howe. 
 
 Councilman William F. Pratt testified (at page 709) that he did not 
 approve of Dr. Porter's being a director of the Dairymen's League at 
 the same time that he was Commissioner, but that the matter had never 
 been brought to the attention of the Council prior to this investigation. 
 Mr. Pratt was surprised to learn that the suspension of the regulation 
 in regard to the stamping of cold storage eggs had not mechanically 
 ceased when the Federal Food Administration control lapsed, and that 
 he had supposed, that the regulation was being enforced. 
 
 On page 728, Councilman Morrell testified that in his opinion it was 
 not a proper thing for Dr. Porter to be a director of the Dairymen's 
 League at the same time that he was Commissioner. Mr. Morrell also 
 thought that there had been "neglect somewhere" in regard to the failure 
 to enforce the egg-stamping regulation. 
 
 Councilman John G. Pembleton admitted that conditions might 
 arise very readily where Dr. Porter would be embarrassed either in one 
 capacity or another as a director of the Dairymen's League and as Com- 
 missioner of Foods and Markets, and added that he did not want to 
 criticize a member of the Department, but he had applauded the resigna- 
 tion of Dr. Porter from the directorate of the Dairymen's League. 
 (Page 754.) Mr. Pembleton has himself acted as counsel for the Dairy- 
 men's League. 
 
 Daniel Franklin, an agent of the Bureau of Licenses in Dr. Porter's 
 Division, testified ( on page 965 ) that he had heard during his connection 
 with the Department that some of the milk dealers on filing a personal 
 bond with the Dairymen's League had been exempted from filing a bond 
 with the Department of Foods and Markets. 
 
 Judge Beal, who has been in charge of the Bureau of Licenses since 
 the 1st of September, 1919, testified as follows, at page 977: 
 
 "Q. Do you know of any custom in the Department of not requiring 
 a bond where the applicant filed a bond with the Dairymen's League? 
 A. I have found in the files records to the effect that the bond had been 
 filed with the Dairymen's League, but I never found any authority in 
 
143 
 
 the Act for it, and I have not followed that as a practice during my 
 term of office." 
 
 "Q. In these files that you have examined where that statement has 
 been made, does that appear as a reason for exempting the applicant 
 from the filing of the bond with the department? A. It has been stated 
 that a bond was filed with the Dairymen's League in the reports, or some- 
 thing of that sort." 
 
 Without going into further details of the minutes of the testimony 
 that has been taken before me, I think it is clear that Dr. Porter has hot 
 been, and is not to-day, the proper man for the position of Commissioner 
 of Foods and Markets. His attitude has been consistently, so far as the 
 record discloses, one in favor of the producer, rather than the consumer, 
 whereas his division is peculiarly concerned with the interests of the 
 consumer, as its very name implies. Numerous questions to the mem- 
 bers of the Council and to Dr. Porter have failed to bring out that any- 
 thing has been actually accomplished constructively for the benefit of 
 the consumer as such, during the period of Dr. Porters' incumbency. 
 
 Dr. Porter has had no previous experience in regard to the market- 
 ing of food products, except such as he may have gained as a milk 
 farmer. He has been a physician, practicing his profession in the City 
 of New York, where he then resided. He was for some years the State 
 Commissioner of Health and was later on appointed to his present posi- 
 tion. He lacks the necessary experience and knowledge for this most 
 important position. He has apparently abandoned all hope of bringing 
 any substantial aid to the consumer in the near future. He says (page 
 50) : "There was a time when I sympathized with him (i. 0., the con- 
 sumer) very deeply. But the more one goes into these questions of 
 economics, including marketing, the more one recognizes the difficulties 
 in the way of any immediate solution." The effect of such realization 
 has apparently been to diminish his interest in and his sympathy with 
 the consumer. He admits that he has done little or nothing to further 
 the organization of cooperative purchasers' associations. He has a 
 nebulous plan of organizing a committee representing different interests 
 to formulate some method of dealing with these questions; but no 
 progress has been made. There seems to be no vitality in the project. 
 He has taken, for further illustration, no steps to ascertain the true cost 
 of the distribution of milk in New York City. It is true that he claims 
 he could not make such an investigation because he could not get an 
 appropriation for that purpose. But it would seem that he could have 
 
144 
 
 done something effective in that direction from the large resources of 
 the Department itself. p 
 
 Indeed, neither the Council nor Commissioner Porter seem to ha^l 
 taken any great interest in devising or putting into execution any plans 
 for the benefit of the consumer. The Division of Foods and Markets is 
 intended, as T understand it, more specifically to serve the interests of 
 the consumer, while the Department of Agriculture is intended to be 
 operated rather for the benefit of the producer. As I have stated, the 
 evidence shows conclusively that neither the Council nor Commissioner 
 Porter have accomplished, nor have they attempted to accomplish, any- 
 thing of substantial benefit for the consumer. 
 
 The instances of dereliction in duty which I have previously cited 
 in the report, together with other evidence taken before me, convince me 
 that the administration of his division by Commissioner Porter has been 
 unbusinesslike and ineflflcient. 
 
 As I have stated above, the Commisisoner of Foods and Markets 
 holds office by appointment and at the pleasure of the Council of Farms 
 and Markets ; and can only be removed by the Council. 
 
 I have concluded, and I respectfully report, that the testimony 
 already taken before me establishes the fact that Commissioner Eugene 
 H. Porter is incompetent to hold his position and that his administration 
 of his duties has been inefficient. For these reasons I respectfully sug- 
 gest that you recommend to the Council of Farms and Markets that he 
 be removed from his office. 
 
 Dated, Albany, N. Y., October 9, 1919. 
 
 Eespectfully submitted, 
 
 George Goiidon Battle^ 
 
 Commissioner. 
 John Burlinson Coleman^ 
 
 Of Counsel. 
 
INDEX 
 
 PAGE 
 
 Preliminary Statement 1 
 
 Scope of Eeport 3 
 
 Constitution of Present Department 3 
 
 Law Covering Department's ActiAdties 13 
 
 Commissioner E. H. Porter 16 
 
 Commissioner C. S. Wilson 20 
 
 Karakul Sheep case 24 
 
 Bureau of Animal Industry 26 
 
 Sales of Tubercular Meat as Food 28 
 
 Dr. E. H. Kingston 32 
 
 Dog Law Indemnities 36 
 
 Irving Brokaw case 36 
 
 D. W. McLaury 39 
 
 Oleomargine 40 
 
 Milk Licenses 42 
 
 Filing System in Department 45 
 
 Bureau of Accounts 46 
 
 C. E. Dyer case ." . 49 
 
 Cold Storage 50 
 
 Department Counsel 62 
 
 Violations 67 
 
 Milk 68 
 
 State Milk Commission 78 
 
 Miscellaneous Eecommendations 87 
 
 Changes in Law 87 
 
 Weights and Measures 88 
 
 Bureau of Animal Industry 89 
 
 Tubercular Cattle 90 
 
 Cold Storage Eegulations 91 
 
 Bureau of Chemistry 93 
 
 State Laboratory 94 
 
 Feeds and Fertilizers 95 
 
 Tubercular Meat 99 
 
 Final Eecommendations 100 
 
 Department of Markets and Storage 109 
 
 Appendices : 
 
 A. Memorandum of Law on State Milk Commission 113 
 
 B. Preliminary Eeport 127 
 

 
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