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mittee from considering bills correcting other phases of the situation in another matter.
Mr. PETTY. We assumed that this would occupy the time of the committee and there would be no opportunity to consider a license law.
The CHAIRMAN. I think we all understand each other now, and it is not necessary to go further on that phase of the matter.
Mr. Petty. Just one thing further. The license law was never intended as a substitute for the rent fixing law, because the license law has no connection with the proposition of fixing rents.
The CHAIRMAN. I would like to answer that. It is not a question of fixing rents. It is a question of preventing the continuation of certain conditions which exist here in Washington and of permitting the law of supply and demand to regulate the situation. Tho law of supply and demand can not regulate so long as fraud is practiced. There are certain fraudulent conditions existing here in Washington that interfere with the law of supply and demand regulating the rental rates. If we can eliminate that condition and let the law of supply and demand regulate the situation, I do not care whether it is done one way or another. Then we will accomplish results, and that is what I am after.
Senator Jones of Washington. In other words, there is a situation here that we are trying to meet. We are not trying to pass certain legislation, but trying to meet a particular situation. If you
have a proposal to meet that situation, we would like to have it.
Representative HAMMER. They offered a substitute for this bill last year before the House committee--at least, some of the realtors did.
Mr. Petty. It may have been offered by individuals, but our organization has never gotten into the rent question until this legislation was presented—that is, as an organization. Some of our individual members have been prominent in their opposition, but as an organization we never opposed this character of legislation until this bill was presented.
Senator Jones of Washington. If the organization denies the proposition that there are any evils here that need correction, of course, you take a flat-footed stand against this or any other similar legislation. But if you do recognize particular evils that ought to be corrected by legislation, then you ought to present some proposition that would help correct it, and that is what we want.
Mr. BRANDENBURG. I do not think we admit that evils do exist that are extraordinary, but we deny that Congress has any power to pass a bill of this character that could be enforced and which would not be declared unconstitutional.
Senator Jones of Washington. Are you going to propose anything to meet the evils that exist in the District of Columbia ?
Mr. BRANDENBURG. We do not think we can propose anything to meet rent conditions.
Senator Jones of Washington. So you are going to take the position that there is no legislation necessary to meet conditions as they exist here to-day?
Mr. BRANDENBURG. We do if you undertake to pass a bill that we do not think you have a constitutional right to pass.
Senator Jones of Washington. Why not try to help us get proper legislation, then?
Mr. BRANDENBURG. We would like to do so if you want it. The great trouble is, as Senator Ball has referred to it, this so-called pyramiding of trusts, whatever that may be. If Congress will pass law to punish that, all well and good. But why punish every landlord and every owner of property in the District of Columbia because there is fraud practiced somewhere else?
Senator JONES of Washington. Why not try to frame or help us to frame legislation that will meet the evils that exist here?
The CHAIRMAN. So long as the real estate people of Washington are going to permit licenses to be granted to people who are fraudulent in their acts, they can get around any law against pyramiding or anything else. That will happen if you have a lot of fraudulent people working together. But if your organization controlled all licenses and was held repsonsible for every man being fair and just in his dealings in the real estate business and would take that responsibility, I think
you could probably correct all of these troubles That was my idea when I talked with Mr. Petty.
Mr. BRANDENBURG. I think the organization is working along that line.
Representative BLANTON. If your organization will get behind the substitute proposed by Congressman Jost of Missouri you will cure nine-tenths of the evils that
exist, in my judgment. That substitute ought to be passed regardless of this measure we are now considering. It is set forth in the Congressional Record of April 8, 1924, when the rent bill passed the House.
Senator JONES of Washington. I want to suggest that, in my judgment, unless your organization and you people try to help us frame some legislation that will meet the situation here, you will not render very much service by simply taking a flat-footed position against this or any other legislation.
Senator COPELAND. Would not this help a little? Suppose we grant for the moment that the Congress has the right to pass the bill.
The CHAIRMAN. There is no question on that point.
The CHAIRMAN. Whether the bill we pass would be constitutional or not is the question.
Senator COPELAND. Let us assume that we have the right to pass it. What are the objections to to this bill ?
Mr. PETTY. The objections to this particular bill you are now considering?
Senator COPELAND. Yes.
Mr. Petty. If I had to tell all the objections we have to it, it would take all the time to-day and to-morrow, too.
Senator COPELAND. That is the reason why we are having the hearings.
Senator Jones of Washington. But that is not the sole reason. We would like to have you suggest something that would help out if this bill is not satisfactory. We not only want your objections to this bill, but we want your suggestions about some legislation that will meet and cure the evils existing in the District of Columbia if you do not believe this bill will do that.
The CHAIRMAN. I think perhaps I ought to state the position of the committee as I understand it. The joint committee is not working in the interest of the tenants alone any more than it is working in the interest of the landlords alone. We do not want to enact any law that is not just as fair to the landlord as it is to the tenant. We want to do justice to all. We want to protect both the tenant and the landlord. But you real estate people are in a position, as Senator Jones has suggested, to help us in the matter of this legislation. However, if you take the position that no legislation shall be passed and that the conditions are to continue to exist, then we have got to make the best effort we can to enact some sort of law without your help.
Mr. BATES WARREN. Mr. Chairman, may I make a brief statement?
The CHAIRMAN. You may.
Mr. WARREN. We never have been invited to help prepare the bill. Every time it has been presented here prepared without any request to us to help, except in the beginning when Senator Pomerene was kind enough to ask me to help and I suggested this commission in the beginning. I presented the first law that was presented for enactment, and it is no more like this bill than cheese is like chalk. Since that time we have never been asked to help prepare a bill. If you will look in the record of the hearings held in this very room you will find that Senator Pomerene was severely criticized for asking the real estate men to help prepare that bill. You will find it in the record of the hearings. The criticism came from Congressman Ben Johnson and it is in your records now.
The CHAIRMAN. Did not I ask you to come and help?
The CHAIRMAN. I had not anything to do with the preparation of this bill, not a bit more than you had. It is not a committee bill. It is merely a bill that has been presented to the committee for consideration and is being considered by us now.
Mr. WARREN. I would be very much pleased to help some if we have to have this sort of legislation. If we have to have it, I think we ought to have it properly.
Senator COPELAND. Do you not think we ought to have it?
Mr. WARREN. I do not like to be called upon to make an answer to that question without explaining it.
Senator COPELAND. We do not seem to be doing anything else. Why not let him explain it?
Mr. WARREN. There are other witnesses here who want to be heard.
Representative BLANTON. I move that Mr. Petty, who has been brought here as a witness, proceed with his testimony. Up to this time he has not been able to say a word.
The CHAIRMAN. Very well; proceed, Mr. Petty.
Mr. PETTY. I would like to add further that we as real estate men, do not believe that if this rent legislation ceases to exist there is going to be any undue alarm necessary on the part of the tenants. Acting in that belief, about three months ago, during the tenants' agitation of the so-called tenants' league and right in the heat of that, we had a meeting and communicated with the tenants, proposing that we would be willing to appoint a committee to meet in confer
ence with a committee from the tenants and to find means to offer to such tenants as may be threatened or suffering with or from abuse such help as was within our power to offer.
Up to that time, which was toward the close of their campaign of agitation, with all the advantages of front-page news stories in all the papers, they had only been able to identify two or three property owners and accuse them of abuse. We felt that that was typical of what the situation would be if the law was released, and things allowed to function normally without the restriction of this control legislation. We knew that among our membership represented in our board there was ample property at fair, just rentals in which we could place tenants if they were abused unjustly. We also knew that through our connection with bankers and leading men of the city we could bring pressure to bear on property owners in the few cases that might arise, and have them withdraw their attempt of abuse.
You must realize that in a situation as we have it here in Washington, where for six or seven years property owners have been absolutely without control of their property and tenants have been in absolute control, during that time there has been a great deal of hard feeling, antagonism, and ill-will that developed between the landlords and the tenants due entirely to the existence of the rent legislation. I have been in the real estate business for 18 years, exclusive of the four years I was secretary of the organization. Many of those years I worked in the rent department and in days gone by we treated the tenants with exactly the same degree of courtesy and we received from them the same degree of courtesy that they received from our landlords. The disagreeable tenant that we had to get rid of was, generally speaking, the exception. I am merely stating that as incidental to show that that condition has arisen.
When the rental legislation is released there may be an isolated case where some tenant has defied a landlord for six years and that landlord, acting within his constitutional rights, may want to dispossess that tenant. But bear this in mind. There are hundreds of the owners of vacant properties competing with each other to get tenants. They would be glad to get that particular tenant who has up to that time had no fight with them and transfer that tenant over to a new landlord.
We offered this proposition to the tenants' league and they very promptly declined it. They said if we would join for a permanent rent law they would have a committee meet us. We made the offer in perfect good faith and they turned it down simply because they knew that we had submitted a proposition that was going to take all of the thunder out of their game.
Representative HAMMER. Would you mind giving us briefly the merits of your proposition?
Mr. PETTY. Of the proposition I made to them?
Representative HAMMER. No. I mean the merits of your proposition as to legislation to help the situation and remedy the evils which exist.
Mr. Petty. I just wanted to bring out this thought, that our board and incidentally our members were not criticised in this tenants' agitation and the rent commissioner herself was good enough to say that if those people were members of the board they would not be doing those particular things.
I want to say further that when Mr. Coolidge was intimated as having suggested that the real estate and banking interests get together to correct the evils by proper legislation, we were much interested. Acting in perfect good faith we invited a group of 15 men, bankers, builders, property owners and business men, real estate men among others, into our board meeting. We said,
We said, "Here is a proposition coming from the President." We submitted to the President a letter offering, in the event this legislation passes, to assure him that we, the representative men of the city, backed by our organization, pledged our names to him to see that there would be no excessive injustice done to Government employees or others. We offered that
Representative HAMMER. I have learned that any man paying $50 can get a license to engage in the real estate business in the District of Columbia. Have you got a remedy for that evil ?
Mr. PETTY. Indeed we have.
Representative HAMMER. We would like to have the provisions of that law.
Representative BLANTON. Will any proposed legislation benefit the very people whom we want to benefit if it is possible to do so—the parties who are tenants ? What is your idea about whether or not such a bill as we have here will stop building operations!
Mr. Petty. I would say to Mr. Blanton that if this bill is passed it will absolutely stop building propositions, and I will justify that statement by adding this statement
Representative BLANTON. I would like to ask a question before you go on further.
Mr. PETTY. Permit me to add to that before you ask another question. Since rental legislation has been on the statute books there has not been a single dwelling house or two-family flat built in Washington City for rent. I do not think that statement can be disproved. Not a single dwelling house, not a single two-family flat for rental purposes has been built since before this legislation existed, and you gentlemen can verify it. Previously there were rows of twofamily flats built in all sections of the city and rows of houses bought by investers for rental purposes. None of that has gone on since this law was enacted. The building operations that have gone on in the mean time has been in the line of high-class apartment houses, with a considerable number of moderate-class apartments, but they were put up by the builders under the belief that this was temporary legislation and that eventually, in a year or so, it would be gone.
Representative BLANTON. With regard to getting money for building purposes and new construction, is Washington dependent upon outside money or has it enough money locally to furnish all needed construction?
Mr. PETTY. I would only be able to give my own opinion.
Mr. Petty. My opinion is that for smaller properties we have ample money here and for a considerable portion of the larger properties.
Representative BLANTON. Will that money be forthcoming under such a law as is proposed by the bill we are considering?