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In its discretion the commission may recognize, in lieu of the recommendations and statements required to accompany an application for license, the license issued to a nonresident broker or salesman in any State upon payment of the license fee and the filing by the applicant with the commission of a certified copy of applicant's license issued by such State.

(1) Provided, That such applicant, if a broker, shall maintain an active place of business in the State by which he is originally licensed; and

(2) Provided further, That every nonresident applicant shall file an irrevocable consent that suits and actions may be commenced against such applicant in the proper court of the District of Columbia in which a cause of action may rise and wherein the plaintiff may reside, by the service of any process or pleading allthorized by the laws of the District of Columbia on the secretary of the commission, said consent stipulating and agreeing that such service of such process or pleadings on said secretary shall be taken and held in all courts to be as valid and binding as if due service had been made upon said applicant in the District of Columbia. Said instrument containing such consent shall be authenticated by the seal thereof, if a corporation, or by the acknowledged signature of a member or officer thereof, if otherwise. All such applications, except from individuals, shall be accompanied by the duly certified copy of the resolution of the proper officers or managing board, authorizing the proper officer to execute the same. In case any process or pleadings mentioned in the case are served upon the secretary of the commission, it shall be by duplicate copies, one of which shall be filed in the office of the commission and the other immediately forwarded by registered mail to the main office of the applicant against which said process or pleadings are directed.

(3) Provided further, however, That every nonresident of the District of Columbia shall file a bond in form and content the same as is required of applicants under section 5 in this act.

Sec. 11. The commission shall at least semiannually publish a list of the names and addresses of all licensees licensed by it under the provisions of this act, and of all persons whose license has been suspended or revoked within one year, together with such other information relative to the enforcement of the provisions of this act as it may deem of interest to the public. One of such lists shall be mailed to each newspaper published in the District of Columbia, and one list shall be mailed to the secretary and to each Commissioner of the District of Columbia, to be kept as a public record in their respective offices, and one list shall be mailed to the prosecuting attorney for the District of Columbia.

Such lists shall also be mailed by the commission to any person in the District of Columbia upon request.

Sec. 12. Any person or corporation violating a provision of this act shall upon conviction thereof, if a person, be punished by a fine of not more than $500, or by imprisonment for a term not to exceed one year, or by both such fine and imprisonment, in the discretion of the court, and if a corporation, be punished by a fine of not more than $10,000. Any officer or agent of a corporation, or member or agent of a copartnership or association, who shall personally participate in or be accessory to any violation of this act by such copartnership, association or corporation, shall be subject to the penalties herein prescribed for individuals. All fines and penalties shall inure to the Real Estate Commission of the District of Columbia, and be covered in the Treasury of the United States as hereinbefcre provided.

This law shall not be construed to release any person from civil liability or criminal prosecution under the general laws of the District of Columbia.

The commission may refer a complaint for violation of section 4 of this act before any court of competent jurisdiction in the District of Columbia, and it may take the necessary legal steps through the proper legal officers of the District of Columbia to enforce the provisions of this act and collect the penalties herein provided.

SEC. 13. When the term “the commission” is used herein, it means the Real Estate Commission of the District Of Columbia.

Sec. 14. When an application for license is filed during the first half of a calendar year, the full annual fee shall be charged therefor. When an application for license is filed during the last half of the calendar year, then only one-half of the annual fee plus $1 shall be charged; but such licenses in either case shall expire on December 31 of that year.

SEC. 15. If any clause, sentence, paragraph, or part of this act shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in

its operations to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered.

Sec. 16. All laws, acts, or parts of laws or acts inconsistent or in conflict with this act or any of its provisions are hereby repealed in so far as and to the extent that they may so be inconsistent or in conflict therewith.

Sec. 17. This act shall take effect immediately, but licenses hereunder sha'. not be required prior to the 1st day of March, A. D. 1925.

(The bill (H. R. 11643) to prevent fraudulent transactions respecting real estate, introduced in the House by Mr. Blanton on January 14, 1925, is as follows:)

Be it enacted, etc., That the real consideration shall be stated in every deed, deed of trust, or other conveyance of real property situated within the District of Columbia, and it shall be unlawful for any grantor, whether an individual, copartnership, association, or corporation, to execute any deed, deed of trust, or other conveyance of real property situated within the District of Columbia, that does not state the real and true consideration. And it shall likewise be unlawful for any lessor, whether an individual, copartnership, association, or corporation to execute any lease or rental contract concerning any building or part thereof or land appurtenant thereto in the District of Columbia, unless the real and true consideration therefor is stated in such contract.

Sec. 2. It shall be unlawful for any person, copartnership, association, or corporation to enter into or become a party to any contract, agreement, or understanding, or in any manner whatsoever to confederate, combine, or act with another, or others, for the purpose and with the design of lessening or preventing, or tending to lessen or prevent, full and free competition in the renting of real estate, or any building or part thereof or land appurtenant thereto, in the District of Columbia, or to fix rents within the District of Columbia.

Sec. 3. When placing trust liens upon real property in the District of Columbia, such trusts shall be numbered consecutively in the instrument creating same as the first trust, the second trust, or the third trust, and so forth; and each trust shall retain its so specified priority of lien until the indebtedness which it secures is fully paid. And when any trust indebtedness matures, and the owner of such indebtedness refuses to renew same, any other lender of money by paying to the owner of such trust indehtedness the amount due, may at the instance of the owner of the property, renew such trust indebtedness for any new term agreed upon by the owner of the property, and be inured to the same priority of lien and all other rights held by the holder of such matured trust indebtedness, as fixed by the priority specified in his deed of trust. And as each trust indebtedness is fully paid and satisfied by the owner of the property, the trust indebtedness next below it in priority will then inure to the priority of the trust indebtedness so paid off and satisfied. And it shall be unlawful for any person, copartnership, association, or corporation (a) to execute any deed of trust that fails to specify therein its true priority, or (b) to enter into or become a party to any agreement or understanding, or in any manner whatsoever to confederate, combine, or act with another, or others, for the purpose and with the design of influencing or hindering some other lender of money from taking up and extending maturing trust indebtedness.

Sec. 4. It shall be unlawful for any person, copartnership, association, or corporation to enter into or become a party to any contract, agreement, or understanding, or in any manner whatsoever to confederate, combine, or act with another or others in (a) executing a deed conveying real property in the District of Columbia that is not a bona fide sale, but is a simulated sale of such property, executed for the purpose and with the intent of increasing the value of such property, and designed to mislead and defraud others; or (b) executing a deed of trust upon real property situated in the District of Columbia that does not represent a bona fide indebtedness, but is a simulated transaction, executed for the purpose and with the intent of fraudulently selling to others securities that are not bona fide, in that the said trust has been pyramided upon others when the real value of the property known to such conspirators did not warrant

Sec. 5. Any person or corporation violating any provision of sections 1 or 2 or 3 or 4 of this act shall, upon conviction thereof, if a person, be punished by a fine of not more than $1,000 or by imprisonment for a term of not to exceed one year, or by both such fine and imprisonment, in the discretion of the court; and if a corporation, be punished by a fine of not more than $10,000. Any officer or agent of a corporation, or member or agent of a copartnership or asso

same.

ciation, who shall personally participate in or be accessory to any violation of this act by such copartnership, association, or corporation, shall be subject to the penalties herein prescribed for individuals.

The penalties herein are cumulative, and this law shall not be construed to release any person, copartnership, association, or corporation from civil liability or criminal prosecution under other laws now in force in the District of Columbia.

SEC. 6. All laws or parts of laws in conflict with this be, and the same are hereby, repealed.

The CHAIRMAN. Mr. Petty, I notice from your statement that while the membership of your organization is less than 200, yet the number of real estate licenses issued in the District exceeded 600. issued for the purpose of granting permission to conduct the real estate business in Washington. Therefore your organization has really had practically no control over the real estate business in Washington on account of its limited number of membership. Is that true?

Mr. PETTY. I will state it this way. First, we have 119 members and the licenses issued were 591. We have a very direct control over our own membership, and by reason of that

The CHAIRMAN. I am talking about the real estate business.
Mr. PETTY. I did not quite finish my answer.

We also have, by reason of our prestige in operations here, a substantial influence over many men not in the organization.

Mr. CHAIRMAN. Since you know the States have assumed to enact legislation giving such an organiztion control over the real estate business, and your organization certainly knowing the real need of some control here, but being opposed to a rent commission, why is it that your organization has never asked for legislation through which you thought you could correct the situation as the States have done?

Mr. PETTY. I have been suggesting to my committee for some time this legislation, and this year we decided at our annual meeting to shape up the legislation during the year for presentation to Congress at its next session on the theory that it would not be able to consider it and enact it during the short session.

Senator COPELAND. I think you said in reply to Congressman Blanton that the passage of a rent act would lead to discord and dissension and differences. Why do you think so?

Mr. PETTY. I think it would continue the discord and the dissension.

Senator COPELAND. How and why?

Mr. PETTY. Simply because it puts in the power of the certain classes of tenants to treat landlords in any fashion they want. It restricts the operation of a normal business status which would otherwise exist between landlords and tenants.

Senator COPELAND. You mean because they have the right of appeal to somebody and on that account, by exercising that right. they become disagreeable?

Mr. PETTY. Yes. Senator COPELAND. I suppose you would like a system like Russia, where the people have no chance at all, and therefore they were so cowed that they never appealed to anybody for anything?

Mr. Petty. That is the very system they have in Russia, as I understand it.

Senator COPELAND. It is on that account, is it?

Mr. PETTY. Yes, sir.

Senator COPELAND. Do you question the legal power of Congress to pass this act?

Mr. PETTY. I am not a lawyer.

Senator COPELAND. Your organization must have taken some counsel in the matter.

Mr. Petty. We have no right to question the power of Congress to do anything. We may have our opinion about it as individuals.

Senator COPELAND. It would be helpful to the committee if you would tell the committee what your opinions are.

Mr. PETTY. It is the general opinion among men with whom I have discussed it, both real estate men and lawyers, that such legislation would not be constitutional.

Senator COPELAND. You do not believe that in the presence of an emergency it could be done

Mr. PETTY. We can not go behind the courts. The courts held it constitutional in an emergency; yes, sir.

Senator COPELAND. Was not the action of the court that the present law or the law that was in force then was ineffective based on the fact that it was founded on an emergency and there was a failure to establish the fact that the emergency still existed ?

Mr. PETTY. I would like to have our counsel answer that, because that is a legal question.

Mr. WHITEFORD. The Supreme Court said in the Chastleton case that if they were called upon to pass upon the constitutionality of it from the standpoint of an emergency, “upon the facts which we judicially know we would say the emergency has ceased to exist." That was their language.

Senator COPELAND. Since the act was founded upon an emergency it was necessary to establish the fact that the emergency still existed in order to make the law hold.

Mr. WHITEFORD. If it was to hold on that point.

Senator COPELAND. You are the attorney for the Washington Real Estate Board ?

Mr. WHITEFORD. Yes, sir.

Senator COPELAND. What is your opinion about the power of Congress to pass this bill and enact it into law in the absence of an emergency?

Mr. WHITEFORD. I do not think they have the power to pass it. I do not think the police power can be extended to destroy a private contract.

Senator COPELAND. You think the right of Congress under the Constitution to legislate for the District does not go so far as that?

Mr. WHITEFORD. No, sir.
Senator COPELAND. Why do you think that?

Mr. WHITEFORD. The definition of the police power of course has been rather nebulous-

Senator COPELAND. I wonder if it would be an exercise of the police power in the ordinary sense?

Mr. WHITEFORD. You say it is clothed with a public interest. The Supreme Court said also in the minimum wage law for the District of Columbia that the necessity that women should have a living wage to protect their health and morals was clothed with a public necessity. Our court set it aside nevertheless.

Senator COPELAND. Do you remember the case of Munn against Illinois, the grain-elevator case?

Mr. WHITEFORD. Yes, sir.

Senator COPELAND. Do you not think the questions which were there determined by the court would apply to this matter sufficiently to justify Congress in passing the act if it felt so determined? I am not saying that that is the determination of Congress. I do not know. I am not clear on the subject myself, and I think it is for you folks who have a personal interest and a financial interest in the passage of the act or otherwise to bring information to us along that line.

Mr. WHITEFORD. I would be very glad if it would be of any help to the committee to submit a memorandum of some cases on that point.

Senator COPELAND. I think it would be very helpful if you would present to the committee the reasons why you think that housing is not a matter relating to the common good and having a common interest.

Mr. WHITEFORD. There are many things that relate to the common good, and undoubtedly housing does, undoubtedly the price of our foodstuffs relates to the common good, and so on. Everthying with which we are in contact in our daily life relates to the common good. But the question is whether it is so related to the common good that you can destroy the right of private contracts, or whether Congress by a mere declaration, saying “This is clothed with the public interest,” makes it so. The Supreme Court does not go that

Senator COPELAND. All these matters are discussed in the grainelevator case and the bread case and other similar cases. Mr. WHITEFORD. Oh, yes.

Senator COPELAND. And the court held apparently that your right in property was not destroyed by reason of the enactment of those laws. In my judgment it would not be destroyed here because you would not be deprived of your property nor would you be deprived of a fair return upon it. But, at least so far as I am concerned as a member of the committee, I am very interested to know the fundamental facts as to whether we are empowered to do this thing or not. I think the whole thing turns on that point. If we can not do it, there is no use attempting to do it. As for myself I am not clear in my mind as to whether the Congress can do it or not. I am inclined to think we can. That is my present view. I think I have rrogressed a little. Originally I did not think we could do it except in the presence of an emergency, but I am now inclined to think we can do it. However, I would like to know and I think it is the duty of your organization to bring us that information. This is a busy committee. The members are all so occupied with many other things that we have not the time to look into it as thoroughly as we would like, but you have a direct interest in it, and I think the committee would listen very atten.ively to any argument you presented on the matter.

Mr. WHITEFORD. If the committee wish, I shall be glad to take a part of our time to present some legal argument on that aspect of the matter.

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