Mr. WARDMAN. Yes; but you generally get a good idea when you go into an apartment what the furniture is worth. I would not want the job, but I could put a good, fair price for both sides and make it equitable and just.

Senator HOLLIS. We intend to close the hearing to-day for general witnesses. Let me ask, is there anyone else who would like to be heard?

Mr. BRADLEY. I would like to say a few words.

Senator HOLLIS. Is there anyone else who desires to address the committee?

Mr. FAIRFAX. I would like to be heard for a few minutes.

Mr. CARR. I would like to have a minute.

Mr. B. H. WARNER, Jr. I represent some clients from out of town who wanted me to advise them when these hearings came off, and they have requested me to arrange if possible a day when they might be heard. The gentleman whom I refer to is in the banking business, and he says he would like to arrange a day when he could have his attorney appear before the committee.

Senator HOLLIS. Is there anything peculiar about him so that his testimony would be different from the rest of the testimony we have heard? I do not think we have gotten very much new since the first day.

Mr. WARNER. I think not, except that his interests are largely in financial matters and he has heretofore made loans on real estate, and he perhaps would be affected by this proposed legislation.

Senator HOLLIS. That will be left to Senator Pomerene when he gets back next week.

Mr. BATES WARREN. May I ask a question of Mr. Wardman?
Senator HoLlis. Yes.

Mr. WARREN. What is the average price that you charge for rooms in your apartments?

Mr. WARDMAN. I should say that most of mine rent for from $12 to $15 per month.

Mr. WARREN. Is that where you have elevators?

Mr. WARDMAN. Yes.

Mr. WARREN. You had buildings that were finished or practically came into the renting market after September 30, 1916? Mr. WARDMAN. Yes.

Mr. WARREN. What would be the comparison of the rent between those you rented prior to that--have you any buildings that you rented prior to September, 1916?

Mr. WARDMAN. Yes.

Mr. WARREN. What proportion of those have you?

Mr. WARDMAN. Well. I have several buildings.

Mr. WARREN. How does the price as now fixed compare to those fixed prior to September, 1916, in the new buildings?

Mr. WARDMAN. You mean the apartments I finished last October? Mr. WARREN. Yes.

Mr. WARDMAN. Well, I have kept mine about the same price as 1916. I will say this, too, that my increased cost of these buildings was 38 per cent, compared to two years ago.

Senator HOLLIS. Do you mean to run or to build?

Mr. WARDMAN. To build. But I have kept the apartments about the same price per room.

Mr. WARREN. What I am trying to get at is to compare the two prices allowed in the bill; that is, property finished prior to September, 1916, and property finished after September, 1916.

Mr. WARDMAN. Yes.

Mr. WARREN. Have you any of the buildings you have finished in September, 1916, which have been assessed?

Mr. WARDMAN. Oh, yes; they are assessed.

Mr. WARREN. Are you getting less or more than 10 per cent gross on that assessed value?

Mr. WARDMAN. Am I getting less than 10 per cent?

Mr. WARREN. Less or more?

Mr. WARDMAN. I think I am getting more than 10 per cent.

Mr. WARREN. Could you operate your apartment houses if you were confined to 10 per cent on the assessed value for your rent? Mr. WARDMAN. Oh, no, no, no; you could not. How could one? Not at all.

Senator HOLLIS. The difference is largely between the assessed value and the investment value, is it not? The assessed value is about two-thirds, is it not?

Mr. WARDMAN. Yes; but you could not run an apartment on a 10 per cent basis-10 per cent of the assessed valuation.

Mr. WARREN. Could you on a 20 per cent basis?

Mr. WARDMAN. Twenty per cent of the assessed valuation or 20 per cent of the full value?

Mr. WARREN. Take full value. I think the bill means full valuation.

Senator HOLLIS. Then that is the way you want to put your question.

Mr. WARREN. Yes; 20 per cent on a full valuation by the assessor.
Mr. WARDMAN. I think that would be about right.

Mr. WARREN. Could you operate for anything less than that?
Mr. WARDMAN. I would not want to.

Senator HOLLIS. We can give Mr. Bradley a few minutes. I think we can give him 10 minutes.

STATEMENT OF MR. THOMAS BRADLEY, VICE PRESIDENT WASHINGTON LOAN & TRUST CO.

Mr. BRADLEY. I want to touch very briefly on one phase only of the proposed bill, which has given us a great deal of concern. We have charge of a large number of houses in the District of Columbia, a small proportion of the total number, but probably 75 to 100 that are rented as rooming houses, that do not belong to us. They belong to charitable institutions and are held by us.

Senator HOLLIS. You mean houses that were originally private dwellings?

Mr. BRADLEY. Yes; they were originally private dwellings. They are in the zone from which the fashionable residents have moved away, and they have been rented for years for rooming purposes. I think we have probably from 75 to 100 such houses, as nearly as I can estimate. We can not see now how under this bill, if it becomes a law, which places the penalty for overcharging for rooms in those buildings upon the land or upon the ultimate owner, how we

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can continue to rent those houses. We have raised the rents in none of them, and we expect to raise the rent in none of them as far as lies within our control. In some cases there may be pressure brought that we can not withstand, but there has been no attempt on our part to raise the rents at all. We know these houses are largely occupied by the professional room renters, and such houses are the first ones to be filled up at such a time as this, and I have no doubt that in a great many cases there has been and is being now an overcharge, although we have no definite knowledge in regard to what the charges for rooms are. It would be impossible for us to visit the houses and find out. Under this clause which visits the heavy penalty upon the property we can see that it would be impossible, unless that is modified in some way, for us or any one else to continue renting those houses without grave danger of being penalized so heavily that it will amount to almost confiscation of the property. That is the point I want to emphasize, that it is a matter that is beyond a control of the owner to fix the rent that his tenants may charge for the rooms they may rent. The owner does not raise the

That is the point I want to bring out. We take it that the object of this legislation is twofold-to prevent profiteering, but without jeopardizing the housing facilities of Washington. We do not want to do anything to restrict it, and yet you gentlemen are lawyers, and I venture to say that if any of you were trustees of an estate owning such property in Washington you would be unable to see how you could protect the interests of the estate and continue to rent that property for rooming purposes to tenants, 9 out of 10 of whom are financially irresponsible, without running the danger of serious loss to the interests confided to your care.

Senator HOLLIS. Is the percentage of the loss of rent from the people you rent to pretty high?

Mr. BRADLEY. For that class of property?

Senator HOLLIS. Yes.

Mr. BRADLEY. It has been in the past, but for the first time in years they are enjoying prosperity. I have no doubt they are charg ing all they can get, and we are in accord with this legislation, and we believe they should be controlled and restricted.

Senator HOLLIS. Are these people that rent these houses as a rule people who are in reduced circumstances, such people as widows who have been left with some furniture and who are trying to make a living by renting rooms?

Mr. BRADLEY. Yes; few of them have their property in their own name. Some of them are broken-down business men who rent the houses, and their wives perhaps own the furniture. I never knew of any of them making more than a fair living. The conditions under which the average tenant of a rooming house lives are very pitiable. They often crowd themselves into one room. I am speaking now of normal conditions. I don't know about to-day; I think they are making money now. But what we are trying to work out is something by which we can continue to rent these houses. I suppose that just in the small number that we rent there are housed probably from 700 to 1,000 people, and probably all those people, or certainly a large per cent of them, are paying more to-day than would be

allowed under this bill. Now, we can not jeopardize the interests of an estate committed to our care by renting a house for rooming purposes when we keep our rent down, and then be subjected to the financial desire of an irresponsible tenant.

Senator HOLLIS. I think we get your point, and we thank you! Senator SHERMAN. Would there be any objection to requiring a tenant to report to the landlord if the tenant sublets beyond a certain time, say, a week?

Mr. BRADLEY. That would not help you! Under the law in the District the tenant is entitled to 30 days notice to vacate. We would have no protection if they did not report correctly. Suppose they did not report, suppose they reported incorrectly and afterwards the claim was made. Take the bill as it stands to-day. It is effective from April 1. I think it is a fair guess to say that there is not a rooniing house in Washington I am speaking of the professional class that is not charging all that they can get for their rooms. practically all of them are doing it.

Senator SHERMAN. They are charging these prices to transients? Mr. BRADLEY. Yes; and also in some cases roomers who have lived with them for a good while-permanent tenants. Another thought: There is only one thing that we could do, and that is to notify the tenant to vacate, and that would take a couple of months, during which time the estate of the owners would be penalized heavily. If we require the tenant to report monthly and they reported that they were overcharging, as we know they are, we would have to act on that. If we did not, there is the penalty. An administrator would have that elasticity and flexibility about it that would permit those people to make whatever charge was reasonable and proper. I understand that they worked their figures down now so that they can tell very closely what is a fair charge for a room. But to penalize the owner for a violation or infraction of charges in excess of that amount makes it impossible for the person having charge of the property whose interests are committed to their charge to continue to rent it.

Mr. WARREN. I would like to ask Mr. Bradley to say one word with respect to the superior lien provision, the effect it would have upon the lending of money in the District on financial institutions, etc.

Mr. BRADLEY. I do not think any financial institution or anyone lending other people's money could lend it on property that had to be subject to penalties of this kind which the owner could not control.

STATEMENT OF MR. CHARLES W. FAIRFAX.

Mr. FAIRFAX. Mr. Chairman and gentlemen of the committee, what Mr. Bradley has stated is true, but this provision he refers to has not only thrown a scare into the trustees of estates, but the owners and agents of property. Let me read from the bill section 5, page 7, of the Johnson bill, at line 8:

"real

and any person who shall hereafter pay for the use or occupancy of any estate any amount of money, or at a rate exceeding that fixed by such deductions, may sue therefor in the municipal court or in the Supreme Court of the District of Columbia, without regard to the amount in controversy, and in such action shall be entitled to recover of the person receiving such excess, or his agent in the transaction, double the amount thereof, and the costs of suit, in

cluding a reasonable attorney's fee of not less than $50, but no such action shall be instituted more than five years after the termination of the lease or other agreement under which such payments were made.

Now, you see, gentlemen, that involves everybody in litigation who might have anything whatsoever to do with the management of the property. It perpetuates the opportunity for anybody to set up a claim, no matter how insignificant, because the attorney is not to receive less than $50. It leaves the door open for a five-year term in which to instigate litigation. As a matter of fact it may so involve titles that in order to sell a piece of property or to borrow money on a piece of property, if this bill will pass, and during the period of the war, any time prior to the expiration of the war, the seller or the owner of the property to make the sale or to borrow the money might have to give to the person advancing money a bond of indemnity so as to make him safe and harmless against any claim of profiteering that might arise by somebody in possession of the property.

Such a bond as that would not only be expensive, but it would be almost impossible to give to the satisfaction of a buyer of the property or the lender of money.

Mr. WARREN. May I interrupt? The surety companies, as I am informed, have announced themselves that they would not give such a bond.

Mr. FAIRFAX. I am not surprised.

Senator HOLLIS. They would insure against burglars, and I guess they would insure against that if they were paid enough.

Mr. FAIRFAX. They can probably tell how much furniture or valuables are in a house that may possibly be stolen by a burglar, but they perhaps can not tell how much a profiteerer could get for the use of a building. I sincerely trust that you will give careful thought and attention to that section of the bill. I hope you will be able to reach a unanimous conclusion to refuse to support such a penalty, so as to get that information out to the public and relieve the owners of property and the lenders of money from any fear whatsoever of the possibility of this legislation and put an end to the prospect of notices being served on tenants to vacate the properties for fear on the part of the owners that the tenants might profiteer, and fasten a lien on the real estate. That is the situation, that is perhaps going to grow from bad to worse, and if you gentlemen, if you do agree that you will not support such a form of penalty, to make the owner responsible for the action of his tenant, you will certainly aid us here in preventing a bad case growing to be a worse one.

Senator SHERMAN. Do you think that section 5 affects the title to the property? I am speaking of the Johnson bill.

Mr. FAIRFAX. It does, Senator Sherman, because it goes on and makes it a superior lien to the real estate.

Senator SHERMAN. Section 5 says that the recovery shall be from the agent or the person who receives the excess.

Mr. FAIRFAX. Yes; you are right about that.
Senator SHERMAN. That is a personal action.

Mr. FAIRFAX. Yes; you are right, but it involves the agent.
Mr. WARREN. But it does in another place.