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Now, there is a half hour allotted to those who are opposed to this legislation. It is supposed to be devoted to those who are not members of any organization, but opposed. Is there any one present who desires to testify at this time?

Mr. ALLEN. I do, sir.
The CHAIRMAN. You are a property owner!
Mr. ALLEN. Yes, sir.

STATEMENT OF MR. ARTHUR ALLEN

(The witness was sworn by the chairman.) The CHAIRMAN. Now, Mr. Allen, just proceed in your own way.

Mr. ALLEN. I have a brief statement to make. I own a very small apartment, containing 12 apartments, at 1745 Kalorama Road. We never have any trouble up there. The apartments consist of three rooms, kitchen and bath which rent for $52.50 in front and $47.50 in the rear. We always have them filled.

I am opposed to the legislation.

The CHAIRMAN. You never have had any case before the Rent Commission?

Mr. ALLEN. No, we never will on those rents. I am here before this committee to say I am opposed to any rent_law. When I make an investment, I am going to control the money I have saved. When I bought my apartment at 1745 Kalorama Road and received the deed for it, I thought I owned it. I figured I could arrange this income on a business basis, to take care of depreciation, repairs and taxes.

I am a very small investor, but I am frank to say that as long as there is a Rent Commission or a rent law, a rent act of any

kind that might take away any of my property rights or my right to conduct my business affairs, I will not put my savings in any proposition over which I have not full control.

I do not see why any investor should be content with 8 per cent net on real estate when there are so many good bonds on the market paying 612 and 7 per cent. Any piece of property is a source of worry and expense, and if any rent legislation is passed it drives from the real estate field conservative investors who are too good business men to place their savings in a proposition subject to outside interference.

Probably this has already been called to your attention, but I will mention it at this time, that preceding 1916 rents in Washington were very reasonable. After eight years of rent control, rents have reached their present height, and it is my conclusion, based on this fact, that rent legislation has worked a greater hardship on the tenants of Washington than any other one thing. I feel that had the rent supervision stopped when the armistice was signed in 1918, the city of Washington by this time would have been over-built just as it was in 1916 and tenants could pick and choose inuch lower rents than they can to-day. Rents were low without any rent legislation, but they have gotten higher and higher in eight years of rent legislation.

The CHAIRMAN. If you feel so sure about that, ought not the property owners to advocate a rent bill?

per cent.

Mr. ALLEN. I do not think a property owner is a selfish man. There are plenty of places where he can invest money and get 642

The CHAIRMAN. You made the statement that you were satisfied that it was the rent legislation that made the high rents possible. If that is true, would not the prospect of greater return be rather attractive?

Mr. ALLEN. Yes; if every man were a selfish man.

What I do not want is to have another man interfere in my affairs, and I am not going to go in that kind of a proposition where I do not have full control of my money. There are many things that a fellow can get into where he is not subject to these things. I have not purchased any more apartments, although I could have. I am just a little bit of a fellow and they have driven those men off the landlord list. They have gotten it into the hands of men who like to speculate.

The CHAIRMAN. Your general principle is that you are opposed to any legislation controlling any return on investment?

Mr. ALLEN. Controlling any return on my money.

The CHAIRMAN. Are you opposed to the fixing of rates of interest by States; in other words, fixing the legal rate of interest ? Mr. ALLEN. Well, I would not be opposed to that; no.

The CHAIRMAN. Some States, you know, make the legal rate 5 per cent, some 6 per cent, some 8 per cent, and some as high as 10 per cent; yet the State fixes the rate of interest.

Mr. ALLEN. But that is a concrete thing and a piece of property is not.

The CHAIRMAN. But I take it from your general principle that you are opposed to any law that could control the return on your money?

Mr. ALLEN. Control return where I have a business interest in it.

The CHAIRMAN. You do not go as far as controlling interest on loans ?

Mr. ALLEN. No. I want to say this also, that I am in the blueprint business here, and just as soon as this legislation came up that you are all talking about here my business went flat. Soon after election the thing started up, and that meant the fellows were thinking of building, they were thinking of investing their money, but the little fellow is not going to do that; he is not going to be subjected to what he must when he puts his savings in an apartment.

In 1916 this town was plastered with "For sale" and " To let” signs. It will be overbuilt again if you take this thing away. When I came to this town, you could buy a house for $4,500 and pay $250 down and $40 a month. We have had eight years of this thing, and they are going up all the time.

The CHAIRMAN. Do you think that the prices of houses and the rentals charged have gone up more rapidly than other things?

Mr. ALLEN. I think that the rents have gone up because there have not been enough houses to go around. It is like wheat and corn; it is only a question of supply and demand. If you have 200 places to rent and only 150 families to go there, you will see the rents come down.

The CHAIRMAN. Statements have been presented to this committee at this hearing that rentals have not advanced to the same extent as wages, food, and clothing have. Now, in your judgment, have rents advanced more rapidly than other things owing to this rent legislation?

Mr. ALLEN. I could only answer that generally. I think they have advanced a whole lot.

The CHAIRMAN. Of course, it is only a personal view.

Mr. ALLEN. That is all. This whole thing is only a personal proposition, but I want you to know how I feel. There is many a

a little fellow who would buy an apartment house if there were not a rent commission. He would not build where these big rents come from; he would build what the ordinary man could pay for, but he is not going to do it with the rent act effective. He is going to buy something that he knows that nobody is going to fool with.

The CHAIRMAN. You have no further statement to make?
Mr. ALLEN. No, sir.
The CHAIRMAN. Are there any other property owners?
(No response.)
Then we will call the tenants.

Now, I am going to make this suggestion, that the tenants give short, concise statements, no individual to take up too much time unless he has some very definite and important statement to make.

We have first on the list Mr. Ryan.

STATEMENT OF MR. WILLIAM E. RYAN

(The witness was sworn by the chairman.)

Nr. RYAN. Mr. Chairman and gentlemen of the committee, I want to make a few remarks explanatory of something I will say later on. I am the son of a soldier who died at about one-half my age in the

a Civil War, and the father of a war veteran. My only son served in the late war.

Prior to the late war, I lived in a house; in fact, I always lived in a house until I moved into the apartment I now occupy. I sold the property owing to the death of my wife and the breaking down of one of my daughters through war work in the Treasury Department and elesewhere, she having been worked from 8 in the morning to 9 at night and sometimes all night long and all day Sunday.

On June 1, 1920, I subleased from a Mrs. Muldrow apartment No. 505, Fontanet Courts, Fourteenth and Fairmont Streets NW. I took possession at the rate of $86 a month, unfurnished, $1 being for the privilege of receiving telephone messages. We did not take possession until the 15th.

Senator JONES, of Washington. What is the size of your apartment?

Mr. Ryan. There are four rooms and a bath and a kitchen and some closets. I say there are four rooms; the owner says there are five. The way he explains that is that there is a hallway that widens out fanlike that he calls a room. There are two bedrooms, bath, kitchen, and dining room. I took that apartment at $85 a month rental. The agent for the apartment was the Swartzell, Rheem & Hensey Co. I do not know who the owners were at that time.

The first rent I paid I received a receipt for from Doctor Muldrow. The second rent, for July, I received a receipt for from the Swartzell, Rheem & Hensey Co., made out in the name of Lawrence Muldrow. I accepted it. The receipt for August I received from the Swartzell, I Rheem & Hensey Co., and that was also made out in the name of Lawrence Muldrow. When I was about to pay the rent for September, I went to the office and told them that I was not Mrs. Lawrence Muldrow, that I had the lease, the lease was assigned to me, and I insisted that my other two receipts be made out in my own name, which was done.

Late in September of 1920 her lease was to expire. Our understanding was when we took possession of the apartment that our lease would continue after October 1. Late in September, 1920, my daughter being very ill, I received several telegrams from Senator Brandegee to come to Connecticut, to go into the campaign for President Harding and Senator Brandegee.

One day a representative of the Swartzell, Rheem & Hensey Co. called at my apartment, and I happened to be home. He said who he was and he came in, and he said to me, “Mr. Ryan, this property is going over to Mr. Allan E. Walker, and all the tenants are supposed to buy their apartments." I said, " That is interesting; how about my apartment?” “$2,000 in cash, and so much a month." “What do I buy?” “ The building, not the realty.” “Overhead charges and all for the tenants to take care of?” “Yes.” “Well,

“ " now, supposing I do not buy?" "Well, then, you will have to go out on October 1.” “Well," I said, “You give my respects to the firm and say to them that I will not buy, I will not move, and I will pay them no more rent.”

I telegraphed Senator Brandegee or his secretary-who is now secretary to Senator Butler—that I would be in Connecticut three days later. I went to a trust company here and agreed to deposit my rents with the trust company, thinking that they would bring a receipted voucher. They did. I left.

They brought suit against me and also against 64 other tenants in that building. They sued them all in the municipal court, but my case was brought separately from those of the other tenants. They sued the others in the municipal court but they sued me in the Supreme Court. The cases of the other tenants had gone to the court of appeals and mine had not reached the court of appeals when lo, the United States Supreme Court declared the law constitutional. They were beaten, and paid the expenses.

In about a year they got the rent. Then it seems the property changed hands and it was purchased by the present owner. That company is simply the incorporation of a gentleman and his two

Mr. Carrick is the owner of Fontenet Courts. But before that purchase was made I demanded a physical examination of Fontenet Courts, for we live on the sixth floor and there are 16 windows in that apartment, if you take the four in the door's which are half windows. There are partial awnings there, and my daughter, who was sick with nervous prostration, had just returned from New Jersey and from Johns Hopkins Hospital and it was not entirely shaded and there were other inconveniences.

sons.

The Rent Commission made a physical examination of Fontenet Courts-Mrs. Taylor made the examination--and directed that the rent of our apartment should be reduced $5. I believe that one or two other apartments also received reductions, but the rent was likewise raised in several apartments. That showed the fairness of the examination.

So the rent continued at $80 a month and that went along all right. Now, on the 1st day of July, 1924, I received a communication from the present owner, Mr. Carrick. It is dated June 1. I have not the slip with me, for I am just out of the court in this case. This slip had on it:

From June 1, 1924, your rent will be increased to $100.
From $80 to $100.
The CHAIRMAN. When did you get that notice?

Mr. Ryan. June 1, 1924. Now, that notice was attached to this communication. My attorney must have lost it. The communication itself, which accompanied that notice, reads as follows:

As you know,"---this is a very poor carbon copy and I am not sure that I can decipher it, but I will do the best I can—"the Ball Rent law has not been in effect"Then there is something I can not make out “and is no longer operative.” Then there is a lot I can not make out. However, he ends up by saying:

The collapse of the Ball law is not causing the owner of Fontenet Courts to raise the rents on this or any other building, with a total of over 400 tenants-- that i::, in all the buildings he ovns- except those confiscatory rates at $20 a room.

Then he says:

This letter explains the notice enclosed herewith.” Raising my rent from $80 to $100 a month, beginning June 1, 1924.

The Fidelity Storage Co. tries at all times to treat all its patrons justly and fairly, knowing that this is the best way to build up its business and keep a good name in the community from which it expects to get its income.

I will just interrupt myself to say that one of those apartments burned not so long ago, and a gentleman and his wife and a little boy lost everything they had. Another apartment burned only last week. They did not sue; I should have. Last week they got an "ouster" to get out of the apartment by the 1st of February. The rent is paid. That is the generosity with which he treats his tenants.

Now, Mr. Chairman, on the 5th day of January I saw an article in the Times, I think it was, in which Harry Wardman was reported to have had an interview with the President of the United States in which he said that rents were being lowered in Washington; that he himself was interested in the present law, the law which you are about to pass; that it would be to his interest because he is now incorporated, but that he was opposed to it. I cut that communication out and I wrote the President a letter in which I said that these apartments were constructed prior to the World War, that my particular apartment rented at $65 prior to the war, but that the rent had been increased to $85 a month, had been then lowered by the Rent Commission to $80 and now that they wanted $100

That was not quite in keeping with Mr. Wardman's statement that rents were lowering.

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