put through to hit certain people and it is hitting a great many others who are not concerned and who are not violating any law of humanity or profit.

Now, if there is anything you wish to ask I would be glad to answer it as far as I can.

STATEMENT OF S. HERBERT GIESY.

Mr. GIESY. Mr. Chairman, I am a member of the bar here and have represented and am representing the owners of certain pieces of real estate, and they have been peculiarly affected by this proposed legislation. So it seems to me that it is advisable to give the committee the information of how this bill is affecting property and also how it is affecting the possibility of increasing the housing facilities.

I was led to come up here by the statement of Capt. Peyser here the other day that there were 14.000 more people expected in Washington before the 1st of June. If that is the case the bill that provides for the expenditure of $10,000,000 for housing facilities here is more important than this measure pending before the committee to-day. But I have an estate to close at the present time, and as showing the effect of this bill on the increasing of the housing facilities, which is what is really needed here, I have been trying to sell a lot belonging to that estate, which is assessed by the assessors at 65 cents a foot. I have been trying to sell it at 70 cents to close the estate, and I have been met with the proposition, going to builders about it, that they can not build at the present time. They say, “We don't know what rent we are going to get." Building materials are high, labor is high, and they will not buy a vacant piece of property. they say, because they can not undertake to improve it on account of the cost of labor and material and the uncertainty about rent.

I have the same condition with a lot belonging to some people in the Northeast here who have illness in the family and who are really in need of their money. I have been attempting to straighten up that situation and have found the same thing. We can not build with the present cost of labor and material and the uncertainty of rent. We do not know after we go to the expense of labor and material what we can get in the way of rent.

For one of my clients recently I applied for a loan, and on account. of this bill it could not be secured. I will file the letter with the committee. I was told that after the loan was practically allowed that because of the pendency of this legislation $5,000 could not be put on this property. The letter referred to is as follows:

Mr. S. HERBERT GIESY, Washington, D. C.

BALTIMORE, MD.. March 18, 1918.

DEAR SIR: I am sorry that absence from my office should have prevented my sooner acknowledging your letters of the 12th and 14th instants.

The legislation pending in Congress in reference to rents will, I fear, render it difficult for me to place loans on improved property in the District of Columbia.

The note on the Alexandria property you mention looks attractive, and it might be worth while to let me know the particulars, although I am not usually able to place paper except when secured by deeds in which I am trustee.

Very truly, yours,

J. S. T. WATERS, Attorney and Counselor at Lair.

It seems to me at the present time that the watchword in this war rather than saving and control of prices should be to produce. We have to produce more of everything, more wheat, and certainly produce more houses in Washington, and the production of more accommodations is not to be accomplished by the uncertainty which this bill is making.

I wish to call the committee's attention to another matter, and that is the fixing of the date of September 30, 1916, as the date of normal rent. As has been testified by several witnesses before this committee, September 30, 1916, was at the end of a period of depression in Washington, the most marked for some time. Why the committee fixed on September 30 is a mystery.

Senator HOLLIS. It ought not to be

Mr. GIESY. The war was not declared until April 1, 1917, so the changed conditions on account of the war were not occasioned until April 10, 1917.

Senator HOLLIS. September 30 is the time of the year when leases for houses usually expire, and that was at the end of the usual renting year before the war broke out, and that is the reason for selecting that date. It may not be a good reason, but it undoubtedly was the

reason.

Mr. GIESY. I want to call the attention of the committee to the case of Guinn v. United States (238 U. S., 365), which is the grandfather case. The Supreme Court commented upon the taking of the date of January 1, 1866, as a period for determination and said that they could not arrive at any particular reason why that date of January 1, 1866, was adopted. Taking one sentence out of that decision, the court said:

Certainly it can not be said that there was any peculiar necromancy in the time named which engendered attributes affecting the qualification to vote which would not exist at another and different period unless the fifteenth amendment was in view.

In other words, the Supreme Court disparages the selection of a date orbitrarily unless there is some reason for it, and in that they commented unfavorably upon the selection of that date, January

1. 1866.

Senator HOLLIS. Mr. Wardman, we would like to get a little benefit from your experience.

STATEMENT OF MR. HARRY WARDMAN.

Senator HOLLIS. You are a builder and the owner of many apartment houses in Washington, are you not?

Mr. WARDMAN. Yes.

Senator HOLLIS. And you operate for yourself alone?

Mr. WARDMAN. Yes.

Senator HOLLIS. How do you think this matter should be handled?

Mr. WARDMAN. Well, I just do not know how to answer that. This situation came so suddenly that I was practically taken off my feet, and I suppose most of the other real estate men were.

Senator HOLLIS. Do you mean the pendency and passage of this bill or the war situation?

Mr. WARDMAN. The war situation. In regard to the Johnson bill I am absolutely in favor of some legislation that will try to let the people have accommodations at something like reasonable increase.

Senator HOLLIS. That is, you do not want to get the real estate owners of the city of Washington unpopular because some men might take advantage of the situation to profiteer; that is your attitude?

Mr. WARDMAN. Yes. So far as the profiteering is concerned, I find that profiteering has really come more from women, and a great many of them widows, that have had fine homes and nice furniture, and a great many of them made a very nice living here in Washington. I know one woman in particular who has been in an apartment of mine, and she has charged very high rent, but she has very fine furniture. I think she pays me about $105 a month, and she has rented her apartment to officers, and they pay her $300. As I say, however, she has exceptionally fine furniture, and indeed she is a fine woman. She has been used to good things, and she has put the good things in the apartment. I suppose that what she has got in that apartment could not be equaled in any hotel in the United States for less than $30 a day.

Senator DILLINGHAM. Has she lived in this apartment?

Mr. WARDMAN. No; she has never lived in it, but she has had a fine house in the northwestern section and she had this furniture and she put it in this apartment and these officers were very glad to pay $300 a month for the apartment. In fact, they would have paid more. Women of that kind, that have been used to good things, don't you know, they know what good things are and they will give the people these good things, and naturally they will try to make a little money for themselves, enough to pay expenses. Now, we have had a great many women who have rented probably 8 or 10 apartments in different buildings, furnished them, for the past several years, and they have rented these apartments for double the rent they pay. If they have paid $37.50 a month for an apartment unfurnished they would rent it for $75.

Senator HOLLIS. Do you think that is a fair proportion, as you observe it, to charge; that is, about double?

Mr. WARDMAN. That is the proportion that I have always recognized, and I will say now that I have not any objection at the present time, and I know that people are doing that, to allowing them to do it still.

Senator HOLLIS. Would that be perhaps a fair share to put in legislation, if you were going to have any, that apartments rented from a landlord and furnished and then rented furnished, that the tenant should not pay more than twice for the furnished apartment than the apartment rented for unfurnished?

Mr. WARDMAN. Well, Senator, I do not know just how you are going to cover that. If a person wants luxury, and you are going to give them luxurious furniture, of course that is worth more than ordinary furniture.

Senator HOLLIS. Well, in war I do not feel sorry if I cut people off from luxuries. I do not want to hit any legitimate business, but luxuries have not any especial claim in these times.

Mr. WARDMAN. This one woman that I speak of is furnishing linen and china and silverware, and such things; but as a rule the

people who rent out an apartment at double the price of the unfurnished apartment do not furnish linen, china, and silverware. Senator DILLINGHAM. According to your observation, how far is that system of subletting by women affecting the housing of Government employees whose cases have been so much discussed in this hearing?

Mr. WARDMAN. Well, I should say that most of these people who come here for $100 a month do not get in that kind of apartments; they naturally look for rooms, although we have some apartments, one room, kitchen, and bath, where two girls could occupy a room and furnish it themselves, and pay $25 or $30 a month. They would furnish it satisfactorily to themselves.

Senator DILLINGHAM. Has that system of subletting affected that class of apartments as much as the higher-priced ones?

Mr. WARDMAN. We have not had much subletting, I think, in our office. I think our total collections are $45,000 a month, and our increase is only about $300. The other increase has come from the few people who are subletting that we have rented to.

Senator HOLLIS. The 1st of October is the time of the renewal of leases, is the general time for shifting in Washington, is it not? Mr. WARDMAN. Yes.

Senator HOLLIS. Did you anticipate the great rush that has developed this winter?

Mr. WARDMAN. We did not.

Senator HOLLIS. So that, as a rule, you renewed at the same prices? Mr. WARDMAN. We renewed at the same prices; yes.

Senator HOLLIS. Feeling pretty well satisfied to get things filled up at the regular prices?

Mr. WARDMAN. Yes.

Senator HOLLIS. Now, then, of course an unusual situation has developed this winter?

Mr. WARDMAN. Yes.

Senator HOLLIS. Your expenses have gone up?

Mr. WARDMAN. Yes.

Senator HOLLIS. And next fall when you renew, you naturally expect to advance your rates, do you not?

Mr. WARDMAN. Well, now, up until the Johnson bill was spoken of in the papers I had practically started to advance my rents with the newcomers; otherwise, as a person moved out, the new person who would take that apartment I started to advance the rent 50 cents per room.

Senator SHERMAN. Per month?

Mr. WARDMAN. Per month. And I practically let almost everybody know that that was going to be done with me next autumn; or, otherwise, the next renting.

Senator HOLLIS. Give us that in percentages, if you can. Can you give us a rough estimate of that what percentage of the total rent that would be?

Mr. WARDMAN. I figure that it might pay the extra coal bill; that is about all.

Senator HOLLIS. Would that be a 10 per cent advance?

Mr. WARDMAN. Oh, no; it would be about 5 per cent. I should say.

49995-18- -10

Senator HOLLIS. You had in mind, then, within a month or two. that next fall you would not advance your rents more than about 5 per cent?

Mr. WARDMAN. Well, that is all that I was going to do. Senator HOLLIS. Would you mind telling the committee what consideration prompted you to fix it about there?**** {" Mr. WARDMAN. At about 5 per cent? }

Senator HOLLIS. Yes.'

Mr. WARDMAN. Well, in the first place, I was satisfied with keeping my apartments full. and all that I was looking for really was to try to get the additional expense in renting the apartments-the maintenance.

Senator HOLLIS. But you did not figure that the 5 per cent advance would pay all the extra maintenance, did you? / ! -*

Mr. WARDMAN. Well, I did not know about that. I would rather that the deficit would be on my side than the other man's side: that is the way I looked at it. I would rather undercharge than overcharge.

Senator HOLLIS. Do you believe that putting this matter in the hands of a rent administrator would be practical and work out? Mr. WARDMAN. I think we would handle the situation under a rent administrator better than any other way.

Senator HOLLIS. I see, from reading the proposed bills. that the plan is comparable to the appointment of a food administrator?

Mr. WARDMAN. Well, I should say we can handle the situation. At the present time, you know, you really have stopped profiteering: we never have a call any more, never have anybody come to our office in regard to any excessive rent that they are asking for apart

ments.

Senator HOLLIS. That is, there are no further complaints?

Mr. WARDMAN. Not one.

Senator HOLLIS. Do you make your leases with the stipulation that if the tenant does not notify you 30 or 60 days before the expiration of the lease that he will not renew, that the landlord shall have the option to hold him another year?

Mr. WARDMAN, No.

Senator HOLLIS. Have you ever known that to be effective, to work out, where anybody has been held in that way?

Mr. WARDAMAN. You mean an automatic lease?

Senator HOLLIS. Yes: that is, it is incumbent upon the tenant to notify the landlord that he does not propose to occupy the apartment at the expiration of the lease, and if he fails to give that notice the landlord can hold him another year on the same terms?

Mr. WARDAMAN. We have not that in our leases. I think there have been some leases of that kind; I think Mr. Schneider has that clause

Senator HOLLIS. I had one tendered to me and I would not sign it. and then they gave me another one that they apparently have for people that will not agree to such a lease as I speak of.

Senator SHERMAN, It is automatic on the tenant, but not on the landlord?

Senator HOLLIS. Yes.

Mr. WARDAMAN. We notify everybody when their lease expires to come in and sign a new lease every year. The situation is very