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purpose here, which is to get housing here for the people who must come here, at reasonable rentals.
Representative Johnson. I agree with you as long as you use the words “reasonable rentals."
Senator POMERENE. Let us see what this situation is. You adopt here as the basis certain properties which were rented in the year 1916—for the year ending September 30, 1916. I think it may be fairly said that from 50 per cent to two-thirds of the properties in the city were rented at that time, during that period. They were rented at given rates; they may have been reasonable or may have been unreasonable. Since that time we seem to agree that there has been an increase in wages of from 60 to 70 per cent, in materials for repairs an increase of 70 to 75 per cent, and an increase in fuel of from 25 per cent to 100 per cent. Now, with this you only allow an increase of 10 per cent upon these properties, whether that rental has been reasonable or unreasonable, and then out of that 10 per cent of increase in the gross rentals the landlord is expected to pay an increase in wage of 60 to 70 per cent, an increase in cost of materials for repairs of from 70 to 75 per cent, and an increase in fuel charges, as has been indicated, of from 25 to 100 per cent. I would like your judgment as to how much of a margin there is going to be with all those increased charges.
Representative Johnson. In my judgment, if you will take the average apartment house or hotel and apply the increased wages and material to it, you will find it not so important as at first glance it seems to be; or, in other words, it will not bear the proportion to the total gross income that your question implies it would bear.
You must bear in mind another thing, Senator, that in 1916 the very houses to which this rule is made applicable and to which you have just referred, were only one-half or two-thirds full. Now they are three-thirds full, and the janitor service and that kind of service applies to houses three-thirds full instead of to the same house when it is two-thirds full. The manager of the Powhatan Hotal stated that they had to hire the same help for their hotel when it was half full as when it was all full.
I wish to be clearly understood about the per cent. I am not tied down to any particular per cent. I am as open to reason and to argument upon that subject as you are. But some per cent to start with, in my judgment, has to be named, and it has been named, and it is that per cent that passed the House by 121 majority. Therefore it has at least the right to be considered as being somewhere near the proper per cent. If it is not, I will join you in ascertaining the correct per cent and then writing it into a bill and helping you pass it.
Senator POMERENE. I would like to have some specific information, if you can give it, upon this point.
Representative Johnson. I occupy the same attitude, Senator, that you do. You are acting in a legislative capacity, and so am I. I have already said that I have no personal grievance; that I am here just simply for the public good; and you have no more right to ask me to furnish you conclusive proof than I have to ask you.
Senator POMERENE. I am not demanding it of you if you have not
Representative Johnson. I understand; you are not demanding it, but you put the question to me that way.
Senator POMERENE. Just exactly the way I would put the question to anybody who would testify on that subject, because we are expected here
Representative Johnson. I was asked to testify.
Senator POMERENE. I do not care anything about that. It is perfectly proper that you should do so, and we are glad to have the benefit of your views, and I think I have profited by them in certain particulars, but this is a serious problem to me. Representative JOHNSON. It is a very serious one to everybody.
Senator POMERENE. And I confess that my indignation has been aroused by some of these stories which have been told about profiteering, and † have not any doubt that there is a vast deal of truth in them. But now, on the other hand, if we are going to get to the point, if we leave a margin here that is too narrow
Representative Johnson. Then I will help you to correct it. We are both acting from the same standpoint, namely, a legislative standpoint.
Senator POMERENE. Well, that is exactly true; but without knowing specifically about the portion of these gross rents which is eaten up by wage and material costs and maintenance and depreciation and things of that sort, I do not know, I am afraid this limitation that you have placed on here is too extreme. That is the way it appears to me now.
Representative Johnson. I believe when you come to satisfy yourself that it is not big enough, you can use upon my mind the same arguments that you use upon yours and convince me, and if so, I will be glad indeed to cooperate with you.
Senator POMERENE. That is all.
Mr. WARDMAN. Mr. Chairman, could I ask Mr. Johnson a question?
Senator POMERENE. Just a moment, here. Senator Saulsbury, have you any questions?
Senator SAULSBURY. I have nothing further. I have no questions.
Mr. MYRON M. PARKER. Mr. Chairman, would it be in order for me to occupy a moment's time in presenting a case that Mr. Johnson is more or less familiar with?
Senator Hollis. I do not want to go on any longer, Mr. Chairman. I think we have gone on long enough to-day. That is the way I feel about it.
Senator DILLINGHAM. What you want to say will take only a moment?
Mr. PARKER. Yes.
Senator DILLINGHAM. I had it in mind to ask Mr. Johnson about that case Col. Parker refers to. It already appears in the evidence, and I would like to have Mr. Johnson's view as to the operation of the proposed law on that case. Col. Parker spoke about the case in his testimony. It is the Atlantic Building property. I presume you read that testimony?
Representative Johnson. Yes; and I have a communication from the gentleman. Upon seeing Col. Parker now I remember that I have met him before.
I received a communication from him relative to a piece of office property, and I also received a communication from a woman relative to another piece of Col. Parker's property. Now, which is it he desires to ask me about?
Senator DILLINGHAM. I assume that it is the Atlantic Building that he testified about when before the committee.
Mr. PARKER. Yes; it is the Atlantic Building. Without going into the details of that letter, since the Senator is familiar with it, also Mr. Johnson, I will state in a word that the operation of the lease that we unfortunately entered into with the Department of Agriculture for the use of the building by the Bureau
of Forestry reduced the income in 1902 from $37,500 to $18,000. Three years ago the Government lease expired, and at that time everything was absolutely flat in Washington. The Department of Agriculture, taking advantage of that, served notice on me as president of the Atlantic Building Co. that unless the rental was reduced to $18,000 they would move out. There was nothing else to do except to make that lease or to have an empty building at that time. Under the operation of that lease, for these three years we have been able to pay less than 1 per cent, not counting out depreciation, and this last year we will lose $2,000 cash. The shareholders are the heirs of an estate, and they $ are dependent on the income from that building, and it struck me they were entitled to as much consideration as a clerk that might come here and get $1,200 or more a year. Under the House bill we could add only 10 per cent, which would deprive all the shareholders of the Atlantic Building Co. of any income, and not only deprive them of all income but compel them to make an assessment upon themselves every year so long as the war lasted, be it 1 or 10 years.
Representative Johnson. I do not know that piece of property, Senator Dillingham
Mr. PARKER. It is where the Bureau of Forestry is.
Representative Johnson (continuing). But I have been told that it was an old piece of property, and that the people who were in it abandoned it and went to newer office buildings, and that the rental of it decreased because of that.
Mr. PARKER. The information that the Member has got is absoJutely false. The condition that we made with the Department of Agriculture was—and it was very foolishly made—that we should give them further space as required. At the time they came there they occupied only three or four rooms in the Department of Agriculture Building, and they did not have 50 clerks.
Senator POMERENE. Let me suggest that we had your statement about this, and I accept your statement of facts about it, so far as I am personally concerned, and we understand that rumors can be afloat, etc.
What we are interested in here is the formulation of some rule which will enable us to treat all landlords and tenants equitably, and I do not know that we are interested in the specific dollars and cents that any particular property may bring. I do not know that that is going to help us very much. Unless it is desired to present some statement along this line, that is all. For one member of the committee, I would like to have a statement by some of these property holders here showing what their rentals were during 1916, and then taking into account the increase in the cost of wages of 60 or 70 per cent—say 60 per cent—an increase in the cost of materials used in repairs of, we will say, 75 per cent, and an increase in the cost of coal, we will say, of 50 per cent, taking the maximum or a medium figure, then let us know what the result would be. So far as I am concerned, I do not care to hear any further oral testimony on this, but I would like to have that kind of a statement so that it could be put in the record. Do you see any objection to that?
Senator Hollis. I do not believe an ex parte statement of that kind is very valuable.
Representative Johnson. I was going to suggest, if you will permit me
Senator POMERENE. I was going to suggest that if necessary we could get some accountant to go over these statements.
Representative Johnson. I would suggest that you go further, and not let a landlord pick out any one piece of his property, but let him take his property as a whole.
Senator DILLINGHAM. I would like to go a step further than that. I think everything you have suggested is right, but it has been claimed here that the year 1916 constituted a period of special depression, when dwellings and property were in no demand. I would like to know to what extent that is true, if there are any statistics, and how far it affected rents in that year as compared wih rentals in normal years. That would help us, I think.
Senator POMERENE. I am going to take the liberty of suggesting, then, that these statements be sent to the committee, and after they are received by the committee it can then determine what, if anything, further is wanted.
Senator DILLINGHAM. That is satisfactory to me.
Mr. COLLADAY. Mr. Chairman, may I have just one word. Because I was ill
Senator POMERENE. We have been sitting here a pretty long time, now.
STATEMENT OF MR. EDWARD F. COLLADAY.
Mr. COLLADAY. There is a mistake in the record with reference to me, personally. I was sick in Atlantic City when the hearings were held. I am chairman of the committee on law and legislation of the citizens' association. My name is E. F. Colladay. The bill which was filed by Mr. Shreve is not the bill which our committee approved. I would like to file with the committee the one which we did approve.
I would also like the liberty to state that Mr. Johnson has made an error in saying that the citizens' associations of the District of Columbia are comprised largely of the real estate dealers. They are not. There is not a real estate man in my own association. I am not a property owner, except of my home. The committee over which I preside heard the real estate men, as your committee has heard them, and declined to approve certain amendments which they desired, and we disapproved Mr. Johnson's bill; I will with the consent of the committee file this bill with the single amendment which the federation of citizens' associations requested.
Senator POMERENE. Very well.
(The amended bill submitted by Mr. Colladay is here printed in full as follows:) A BILL To provide further for the national security and defense by controlling
and regulating rents of real estate in the District of Columbia. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That by reason of the existence of a state of war it is essential to the national security and defense and for the successful prosecution of the war to establish governmental control and assure adequate regulation of rents of real estate in the District of Columbia during the war. For such purpose the instrumentalities, means, methods, powers, authorities, duties, obligations, and prohibitions hereinafter set forth are created; established, conferred, and prescribed. The President is authorized to make such regulations and to issue such orders as are essential effectively to carry out the provisions of this act.
SEC. 2. That in the interpretation and construction of this act the following rules shall be observed, namely:
First. The term “real estate” as herein used shall be construed to include lands, buildings, parts of buildings, houses, dwellings, apartments, rooms, suites of rooms and every improvement and structure whatsoever, and every portion and part thereof, situated and being in the District of Columbia, and any and all estates and rights therein or thereto.
Second. The word “party” or “person shall include individuals, legal representatives of individuals, partnerships, joint-stock companies, associations, corporations, societies, bodies corporate, the Government of the United States in all its branches, departments, bureaus, boards, councils, and other agencies and instrumentalities, and all representatives, agencies, bodies, and instrumentalities acting for or in behalf of or employed or used by any and all foreign Governments not at war with the United States, unless such construction would be unreasonable; and the reference to any officer shall include any person authorized by law, or by regulation made in accordance with this act, to perform the duties of his office.
Third. Words importing the singular number shall be held to include the plural, and vice versa, except where such construction would be unreasonable.
Fourth. Words importing the masculine gender shall be held to include all genders, except where such construction would be unreasonable.
Fifth. The term “rent or “rent from real estate ” shall include any and all amounts received for the daily, weekly, monthly, yearly, or other periodical or term use or occupancy of real estate, or any part or multiple of any such periods of time.
SEC. 3. That the President is authorized, from time to time, to fix the amount of rent of real estate in the District of Columbia and to revise and change the amount of existing rents thereof, so that the same shall be just and reasonable, which may now or hereafter be rented, leased, subleased, transferred by assignment of lease or rental contract, used, or occupied by any party or person.
SEC. 4. That the President is hereby authorized to appoint a rent administrator, who shall be a citizen of the United States and resident of the District of Columbia, who shall have full power and authority, under the direction of the President, to revise and change and (or) to fix, upon request of any party or person in interest, or otherwise as the rent administrator may determine. the amount of rent which can be lawfully charged and received for the use and occupation of any real estate in the District of Columbia which is now or may hereafter be rented, leased, subleased, used, or occupied by any party or person; and any and all orders of the rent administrator revising and changing existing rents shall take effect as of the date of the application to the rent administrator: Provided, That any party in interest may prosecute an appeal from any order of the rent administrator to the board of rent appeals provided for in this act, under and in accordance with such rules and regulations as may be made respecting appeals; and until such appeal shall be decided by the board of rent appeals the order of the rent administrator shall be superseded by the appeal.
SEC. 5. That from and after the date of promulgation of any order of the rent administrator fixing an amount of rent in any case it shall be unlawful and be a violation of this act for any person to charge or receive a greater rent than the amount so fixed, subject, however, to the right of appeal hereinbefore created.