Mr. MACCHESNEY. But it would also apply, Senator, to this case where they attempt to say that by reason of the rental conditions in the District of Columbia which are dangerous to the public health, comforts, morals, peace, and welfare, and burdensome to public officers and employees, and if that is disputed, as it is disputed by the real estate interests in Washington-and I am not pretending to pass on those facts although I believe them to be true on account of the survey and all that which is available to you-if the facts as are there stated in that survey are true, then they do dispute and they will offer evidence that the conditions are not as stated in this bill, and then it would become necessary for whoever was charged with the responsibility of this act to introduce evidence to sustain these allegations or the legislation would be unconstitutional.

The CHAIRMAN. Would the emergency depend entirely upon the number of vacant apartments or vacant houses, or might an emergency exist from the rentals charged making it impossible for the employees of the Government, on their salaries, to rent these vacant apartments or houses? Could an emergency of that character be considered as an emergency in law?

Mr. MACCHESNEY. I should think not, and I will tell you why. It is a personal emergency which we all have to meet when we have not money to meet our bills, and sometimes it is a terrible thing, of course, and there is no blinking the hardship of it.

The CHAIRMAN. To make my question applicable directly

Mr. MACCHESNEY. I was going to refer you, Senator, to the fifth amendment on that, "nor shall private property be taken for public use without just compensation. There never has been

The CHAIRMAN. I had not completed my question in order to get it thoroughly understood. While there are plenty of vacant houses and apartments-we all admit that-yet they are not of the moderatepriced apartment houses, and there is a shortage, I think even the real estate people will admit, of moderate-priced apartments and houses which the employees of the Government could rent at their present salaries. In other words, Washington does not compare with other cities in the character of rental properties.

Mr. MACCHESNEY. Of course, so far as the number of houses vacant are concerned at moderate rentals, all I know as to the exact number was contained in the survey which was read to this committee this morning and which showed some hundreds of vacant apartments and houses at low rentals.

The CHAIRMAN. In their report of last June they state there was a shortage of moderate-priced houses and moderate-priced apartments of 1,000 apartments and at least 500 houses, and that is their own. national report.

Representative BLANTON. I beg the Senator's pardon, that is not the report of anybody from Washington; that is a national organi

zation.

The CHAIRMAN. That is a report from Washington.

Representative HAMMER. And signed by Mr. Petty. He said he thought he signed that report.

The CHAIRMAN. I made inquiry this morning and the report was made by the secretary of the board to the national board.

Mr. MACCHESNEY. That is correct, Senator.

The CHAIRMAN. And was signed by the secretary of the board.

Mr. MACCHESNEY. That is correct.

The CHAIRMAN. And the national quotation is a quotation of what was given by the Washington board. If there was that shortage then, and it has been admitted here on the stand that there have been no moderate-priced houses built for rent since then, that shortage must still exist or the testimony was not correct.

Mr. MACCHESNEY. Senator, may I call attention that I have no object here except to help the committee arrive at the facts. The CHAIRMAN. That is all I want to do.

Mr. MACCHESNEY. But as general counsel for the real estate interests of this country and representing the National Association, I call attention to the fact that that is a semi-annual survey and that the facts are based upon the local board's reports to the National Association and are compiled by a professor in the University of Wisconsin who is a competent statistician, Dr. Fisher; but there is a more recent report, under date of December 31, 1924, which has been handed to the committee and which was gotten up regardless of this hearing, and which I have not examined in detail myself, but which I understand shows that there has been a substantial change.

The CHAIRMAN. I will admit that, but you understand my question. The testimony submitted here this morning was that there had been no cheap houses built for rent; that they had all been built for sale during the last year. If that is true, how has this shortage of six months ago disappeared entirely?

Mr. WHITEFORD. People bought the houses instead of renting. Mr. MACCHESNEY. I could not answer that question myself. Senator COPELAND. Mr. Chairman, let me suggest that we extract from this willing and learned and kind witness all the law we can and then we can later discuss the facts.

The CHAIRMAN. That is a question that is involved here as to whether such an emergency would be considered an emergency from a legal standpoint.

Representative BLANTON. On that point, Mr. Chairman, I would like to ask the General a question to bring out some information. On April 28 of last year Mr. Martin B. Madden, who is chairman of the House Committee on Appropriations, in debate on the floor of the House made the statement that there are 30,000 surplus employees here that the Government was trying to send home and that they had not been able yet to send them home or separate them from the pay roll. Now, regardless of legislative declaration

Senator COPELAND. I hope they are not Democrats?

Representative BLANTON. I should not be surprised. There are Democrats in New York who love pie.

Representative HAMMER. And in Texas.

Senator COPELAND. And in that respect they are like Democrats everywhere.

Representative BLANTON. General, regardless of legislative declaration, if there should be presented to the court facts showing that the health and morals of the people of Washington will compare favorably with any city in the United States at this time, would the court accept the mere declaration of Congress as against the facts, in your opinion, or would they consider the facts in construing the law?

27363-25-PT 3- 4

Mr. MACCHESNEY. They would undoubtedly consider the facts. and, of course, as I said to the chairman with reference to how these houses became vacant which were not vacant in June, I have no means of knowing, but a careful checkup would show.

The Real Estate Board made this report to the national organization for statistical purposes without any view to this hearing. Therefore it can not be regarded as having been prepared for this purpose. It shows that last December there had been a constantly improving situation so far as the tenants were concerned and a constantly deteriorating situation so far as the landlords were concerned. In other words, the business was getting worse for the landlords but getting better for the tenants under the conditions as they existed. As to whether or not that would be regarded as an emergency, Senator, I will attempt to answer that by saying that in my judgment it would not be because private property may not be taken for public use without just compensation and "they shall not be deprived of life, liberty or property without due process of law."

It has always been held that you can not exercise the plenary powers of the Government because of personal as opposed to national distress, and I think it is fair to say that pitiable as the conditions of some of the underpaid Federal employees may be, that it does not constitute a national emergency but a personal emergency due to the penuriousness of the Federal Government in the payment of certain classes of its employees. It is not fair to load that situation upon a limited group of real estate owners in the city of Washington which properly should be spread over the taxpayers of the United States, and I do not believe there is a court in the Union which would hold that the personal emergency or the inability of an underpaid Federal employee would constitute an emergency within the meaning of the declarations of the court sufficient to justify legislation any more than a personal emergency of the Senator or myself, if we were unable to pay our bills.

Senator COPELAND. General, what do you have to say about section 20?

Mr. MAC CHESNEY. I have some cases on that, Munn v. IllinoisSenator COPELAND. It fits in here in the discussion that is on now. Here is property which is devoted to public use, and consequently have we not an interest in it.

Mr. MACCHESNEY. I thought I might save the time of the committee, if the Senator would permit me, perhaps, to finish my reply to Mr. Blanton. Section 20 should be discussed in the light of the Munn v. Illinois decision.

Senator COPELAND. I would be glad of any answer to the gentleman that is complete.

Representative BLANTON. I was very sure that the court would take judicial knowledge of the fact that the health and morals of the people of the District was very far superior to those of New York and Chicago that I thought they would hold this unconstitutional.

Mr. MACCHESNEY. I do not think they would take judicial notice because under the decisions which I have quoted to the committee, it is very clear that in the absence of evidence one way or the other, the court would take the declaration of the Congress of the United States, that the morality of Washington is on the thin edge because

the Supreme Court in discussing the Adkins case dealt with that very question, and Mr. Justice Sutherland said:

We should hestitate to sustain the law upon the theory that lack of adequate wage is necessarily an indication of immorality or that morality is any greater among the well-to-do than it is among the poor.

And whenever you attempt to say that because of high-priced living conditions or inadequate wages you have got to have a statute on that subject because of the question of morals, you are basing morality upon financial considerations, and I but quote the Supreme Court of the United States which says you better go slow when you go that far.

Senator COPELAND. Of course, General, I am not going to reply to that now, but I would like to argue that matter with you some time. Mr. MACCHESNEY. I might say for your private ear that I did not agree with the majority opinion of the United States Supreme Court with reference to the minimum-wage law, but that is another question.

I would like to go for a moment to the question which you did raise with reference to the bread case.

Mr. GORE. May I ask the Senator a question?
Senator COPELAND. Certainly.

Mr. GORE. I wondered whether the Senator wanted to be understood as saying the rich are more moral than the poor?

Senator COPELAND. No; I do not. I think the rich are sometimes overcrowded.

Mr. MACCHESNEY. The Senator referred to bread cases, and had me a little bit embarrassed this afternoon with reference to the parallel between the bread cases and the rent legislation, because I remembered very well some of the bread cases and I think I have all of them here now.

In the case of Schmidinger v. Chicago (226 U. S. 578), the Supreme Court of the United States in discussing a measure fixing the sizes of loaves of bread to be sold in the city of Chicago, said in speaking of the measure:

It has not fixed the price at which bread must be sold. It has only prescribed that the standard weight must be found in the loaves of the sizes authorized.

It is urged that this ordinance interferes with the freedom of contract guaranteed in the fourteenth amendment, for it is said that there is a demand for loaves of bread of sizes other than those fixed in the ordinance. This court has had frequent occasion to declare that there is no absolute freedom of contract. The exercise of the police power, fixing weights and measures and standard sizes, must necessarily limit the freedom of contract which would otherwise exist. * * * So long as such action has a reasonable relation to the exercise of the power belonging to the local legislative body, and is not so arbitrary or capricious as to be a deprivation of due process of law, freedom of contract is not interfered with in a constitutional sense.

The Schmidinger case was this. They claimed it attempted to fix the price of bread in the city of Chicago. What it did say was that bread should weigh a pound and should have certain qualities, and did not fix the price at which it should be sold.

The bakers did not like it, I remember very well, because their favorite device was that instead of raising the price of bread and calling the attention of the public to it, they lowered the quality of the bread and the weight of the bread. This compelled them to furnish a given quality and a given quantity of bread, and then they

could fix the price if they wanted to, but they had to take the onus which went with the raising of the price of bread. That is the theory upon which these cases have proceeded, and there are two other bread cases.

The case which you had in mind, Senator, was the Mobile caseMayor of Mobile v. Uhle. This was an Alabama case and not a Supreme Court of the United States, such as the case I have just cited to you, and there are no cases in the Supreme Court of the United States which uphold price-fixing statutes of the character indicated.

This Alabama case upheld a fine against a baker who had not complied with the law regulating the baker's trade and fixing the size, quality, and price of a loaf of bread; but there was not argued in that case, and there was not passed upon by the court, the question of quality, quantity, or price, but it went up to the court and the case was decided upon the fact that the baker had failed to take out a license; and that is all the case decided. So that it is not a case in point at all, Senator, with reference to that question.

Representative BLANTON. And if I understand you, General, the Supreme Court of the United States has never yet held constitutional a price-fixing measure in peace time?

Mr. MACCHESNEY. I did not go that far.

Representative BLANTON. Well, has it ever held that?

Mr. MACCHESNEY. It never has in the realm of bread or food legislation except under the Lever Act; and so far as I know, it has

not

Representative BLANTON. I mean as a peace-time measure, do you know of any Supreme Court decision that has upheld a price-fixing peace-time measure?

Mr. MACCHESNEY. Do you mean a regulatory act? There are a good many of those.

Representative BLANTON. I mean fixing the price of any commodity in peace time.

Mr. MACCHESNEY. That depends on what you call a commodityrailroad transportation?

Representative BLANTON. No; I mean food.

Mr. MACCHESNEY. No; except under the Lever Act.
Representative BLANTON. Or clothing?

Mr. MACCHESNEY. But there are plenty of regulations fixing the compensation which may be charged, but they are in a wholly different field.

Representative BLANTON. Yes; that is as to transportation and so forth.

Mr. MACCHESNEY. But so far as I know with reference to food or clothing, there is none except under the war-time legislation. Under the Lever Act, there was an indictment and conviction sustained, I believe, as to the question of sugar.

Representative BLANTON. But that was under the war-time power. Mr. MACCHESNEY. Yes. While the war was on, its effectiveness was sustained, as I remember it, and it was applied with reference to the fixing of the price of sugar; that is my recollection. So I think we to-day have that case against us, Senator, on that point, but it was war-time legislation and has no applicability to the case in point.