The report is the fourth in a series of reports to the Congress on the cost of treating municipal, industrial, and other effluents to attain water quality standards. The report, then, considers the question of efficiency, directing its attention to: (1) the distribution of investments as compared to the distribution of polluting activities and the location of water pollution: (2) the results of municipal and industrial waste treatment investments made over the life of the Federal construction grant program, in terms of reduction of oxygen demand and nutrients in sewage; (3) avoidable increase in local operating, maintenance, financing, and overhead costs of waste treatment; and (4) the questionable strategy of making use of investment capital essentially to forestall some future needs.