The reform was carries out only on 1 April 1938 when the number of rural municipalities was reduced from 365 to 248 plus 33 cities. The following criteria were established: the rural municipality is of the right size, if, considering the given number of tasks, it is capable of performing the tasks in the best possible manner and in the most practical way while being accessible to the public, and if its maintenance is the cheapest.
Reformini jõuti aga alles 1. aprillil 1938. aastal, kui valdade arvu vähendati 365-lt 248-le, millele lisandus 33 linna. Kriteeriumideks seati, et ratsionaalse suurusega on vald, mis antud ülesannete hulga puhul suudab neid kõige paremini ja otstarbekamalt täita ning mis seejuures on rahvale kättesaadav ja mille ülalpidamine kõige odavam.