houses, ostensibly for patriotic reasons, are giving more consideration to the dollar than they are to patriotism, because if they are willing to open their houses at all they would be willing to open them at such prices as the House and the Senate in their wisdom would fix on. Now, I do not know, of course, what you gentelmen are going to do, but in the bill that Mr. Bates Warren submitted to you, and which is found on page 29, sec. 6 provides:

That the President is hereby authorized to appoint a Board of Rent Appeals consisting of three persons, who shall be citizens of the United States and at least two of whom shall be residents of the District of Columbia.

If that were done, if any three men were appointed as a board, the question would sooner or later arise whether all three of them would have to agree to a proposition, or whether a majority would control. In the absence of the statute specifying otherwise, all three would have to agree upon any proposition. I take it for granted that that will be accepted without any further argument about it.

Senator HOLLIS. I can not let that go, because I think it is just the other way. I am not sure.

Representative JOHNSON. No; you will find that just the reverse of what you say is the accepted rule. The rule which applies to the unanimous verdict of a jury is the fundamental principle that is laid down for all commissions and boards; and unless the law specifically states that less than all of them may do a thing, it requires all of them to do it.

Senator HOLLIS. I am quite sure there are decisions the other way, Mr. Johnson. They are, in my State, just the other way.

Representative JOHNSON. In any event, it is well enough to bear that in mind if you make provision for a board of three.

Further along, on page 30 of the record, Mr. Bates Warren says: Why, the mere introduction of this bill practically stopped the profiteering. Now, if the mere introduction of the bill, and the passage of it by the House of Representatives, has stopped profiteering, then the enactment of a law certainly will stop it; but if Congress fails to pass a law that will stop it, then we have the right to take it for granted that it will be resumed again just so soon as that failure becomes a fact-becomes assured.

Senator Pomerene asked a question on page 31 of the record, and I will read from the record as follows:

Senator POMERENE. Let me make a suggestion in regard to this bill as you have read it here. I am not committing myself either to the general plan or to the details of it. You are submitting to this administrator absolute control of the fixing of the prices. You are laying down no general rule, no landmarks by which to guide him at all, and I think that in that respect, assuming that it was all right in other respects, it is very seriously defective.

I agree with Senator Pomerene in that; and in that connection I may say that the bill I have introduced lays down a rule for all, while none of the bills which they have introduced lays down a rule for any. Then, at the bottom of page 31 I find this:

Senator DILLINGHAM. Mr. Warren, there is another class of property that you have not referred to, and that is the real estate that is occupied for mercantile and manufacturing purposes.

Mr. WARREN. Business property; yes.

Senator DILLINGHAM. Business property.

Mr. WARREN. I see no reason on earth for putting it in the bill, because there is no profiteering suggested as to that at all.

It has been very seriously suggested. The renters of storehouses have complained that their rent has been increased without their having the right to increase the price of the goods they sell beyond the limit fixed by the Food Commission. If business property is not to figure in this legislation at all, then the United States can be profiteered upon ad libitum in business properties, because they have taken over nothing that I know of except business property.

By the way, Representative Nolan, of California, told me the other day, and since then I have seen something of it in the papers, that the War Department is paying $36,000 a year for some property on M Street, a garage, I believe, which just a short time theretofore had been renting for $6,000 a year. That is business property. The man who ran that garage rented it for $6,000 a year, but when the Government comes to rent it they pay $36,000 a year.

Senator DILLINGHAM. There is a very common complaint among renters, Mr. Johnson, which has come to my ears, that the Government itself has been the chief sinner; that the agents of the Government have voluntarily offered prices which are exorbitant. As a result of such offers lessees who have been occupying year after year have been turned out and have been compelled to seek new places. There is very much complaint of that kind.

Representative JOHNSON. Do you not think, Senator, that if any representative of the Government has gone and made a bargain so outrageously extravagant as the one just referred to the Government ought to be protected?

Senator DILLINGHAM. Against itself?

Representative JOHNSON. Yes; against its agent who has acted unwisely?

Senator DILLINGHAM. Perhaps so. I was not thinking of that phase of it. I was thinking of the action which has undoubtedly produced very bad results. in this city.

Representative JOHNSON. Now, down here at the Center Market, the Government owns that property, and it is under lease to the Washington Market Co. For that land the Government is getting six-tenths of 1 per cent of its value in the way of rental, while exCongressman Levy, from the State of New York, said in the cloakroom of the House last week in the presence of myself, Representative Crosser, and perhaps others, that down back of the Pan American Building somewhere-I do not know just exactly the location-the Government is paying 9 cents a square foot rental for property which Mr. Levy said had been offered to him for 25 cents a square foot. In other words, the Government is paying rent of 35 or 40 per cent for ground while at the same time it lets the Washington Market Co. have ground at six-tenths of 1 per cent. That is business property, and it comes within the purview of the question you submitted to Mr. Bates Warren, which I have just read.

Now, if there is anybody in any of the Government bureaus who is wasting money by paying exorbitant rentals to anybody he ought to be stopped.

Senator POMERENE. Who is responsible for that market case that you speak of?

Representative JOHNSON. A former Congress. The District of Columbia Committee of the House, of which I am chairman, has

authorized me to report out a bill taking back that property from the Washington Market Co.

Senator POMERENE. Is that a long-time lease?

Representative JOHNSON. It is a 99-year lease. I do not want to impose upon you by giving you its history here.

Senator DILLINGHAM. I do not believe we have the time for that. Representative JOHNSON. Neither do I.

Senator POMERENE. I do not think we want that.

Representative JOHNSON. To continue: If the fine plan should be adopted as a remedy against profiteering, the man who is getting $30,000 more for that garage to which we have just referred than he is paying for it would pay a $500 or a $1,000 fine according to these bills and still be a big winner; but if the income-tax provision which is proposed in my bill is adhered to, he just simply goes and reports and pays it all in and would have to disgorge under the income-tax provision all except the 10 per cent or whatever other per cent Congress ultimately may fix in the bill. There will be no informer. The department which made that lease with him would not have to inform or report; but under the income-tax plan automatically that extortion would be surrendered.

Some argument has been made here by one gentleman-I read it in the hearing; I do not remember by which one of the witnesses-who took the position that the Government, in making these leases at exorbitant figures, should not squeal, but go ahead and pay them. I take exactly the opposite view of it; and when he took the position that he did, at the same time, without knowing it, he took the position that when any contract for Army or other supplies has been fraudulently made by any officer or employee of the Government, the Government should stand it. If the Government has been wronged at Hog Island or elsewhere in regard to contracts, or if it had been wronged in the building of cantonments upon the cost-plus plan or any other plan, the Government not only should take steps to protect itself but it should, in my judgment, and, I believe, in the judgment of everybody else, recover that which has been wrongfully taken from it.

Senator SAULSBURY. Would I interrupt your sequence if I asked you a question or two as to what your opinion would be about the percentage that might be allowed as fair rental, a percentage based on the value of the property as assessed, in case the committee should take that view?

Representative JOHNSON. The bill which I introduced and which passed the House does not deal with assessed values at all.

Senator SAULSBURY. I understand that; but I want to get all the information you have, because you have certainly pursued this inquiry very extensively. Supposing the committee should take the view that the rule in regard to fair rentals to be charged should be a percentage of the value of the property as assessed. You have stated that you did not oppose 15 per cent on furniture, for example, as a fair rental.

pose it.

Representative JOHNSON. I think that is high, but I did not opSenator SAULSBURY. Yes; I understand. Now, suppose the committee should take the view that a fair rental could be reached by

that rule and should provide the machinery for holding the rental down.

Representative JOHNSON. And take assessment values, instead of possibly a more liberal value for rental purposes, that might be fixed by the assessor; is that what you mean?

Senator SAULSBURY. Yes; suppose that the renters were notRepresentative JOHNSON. If the rentals were to be based by the present plan on the assessed valuations

Senator SAULSBURY. I would say, rather, on the basis of the assessment—that is, 100 per cent value, and not on the two-thirds value. Representative JOHNSON. Yes; I understand you. If the per cent in that case should be more liberal than the per cent I have fixed in the bill, and that is 10 per cent, I might acquiesce, just as I did relative to furniture.

Senator SAULSBURY. Ten per cent would not be an unreasonable rental for real estate in the District, speaking generally, would it? Representative JOHNSON. I do not think so.

Senator SAULSBURY. Yes.

Representative JOHNSON. Senator, I will say this about valuations for taxable purposes in the District of Columbia: I believe that since 1912-I have not seen the last assessment-the valuations in the District of Columbia for taxable purposes have been sufficient.

Senator SAULSBURY. That was my conclusion.

Representative JOHNSON. I entertain no doubt about that. But, at the same time, I do insist that the rate of taxation is quite low, because the property pays taxes only on two-thirds of the valuation. Senator SAULSBURY. But if the rate, of course, brings it up

Representative JOHNSON (continuing). And by paying tax only on two-thirds of the value-the rate on taxation on real estate is $1.50 a hundred, and if you pay taxes on only two-thirds of its value that reduces the rate to $1 a hundred.

Senator SAULSBURY. Yes.

Representative JOHNSON. The three-thirds assessed value in the District of Columbia closely approximates the real value. That is my opinion about it.

Senator SAULSBURY. In other words, the assessor has fairly assessed property in the District of Columbia?

Representative JOHNSON. Yes; that is my opinion about it.

Senator SAULSBURY. That is what I think, too, after going through that long fiscal inquiry of two years ago.

Representative JOHNSON. Yes; and as I was saying, the low rate in the District of Columbia is not brought about because the property is not assessed sufficiently high, but because of the adoption of the two-thirds valuation rule, and that reduces taxation to $1 a hundred on real estate, which, as I was about to say a few moments ago, is lower than that in some 30 or 40 cities of approximately comparable size to this, that I found.

Senator SAULSBURY. I differed with you in regard to that.
Representative JOHNSON. Yes; I know you did.

Senator SAULSBURY. And it seemed to me it was about the average. But, of course, that is a long story.

Representative JOHNSON. Yes; too long for us to go into here,

Senator.