Senator POMERENE. Let me put another question to you. I have no knowledge about this matter, except the statement was made to me yesterday by gentlemen who made claims that there was a movement on foot to raise these prices so as to compel tenants to buy out in the outskirts. Is that correct? Mr. HAGNER. I have not heard anything of that kind. I do believe this, though: If Congress passes legislation which will make it impossible for people to rent furnished houses-and as a rule they are rented to people of the richer class if there is legislation which prevents furnished houses from being available, I believe then people will have to buy. Senator POMERENE. Let me put this question to you: You have heard of a good many cases of profiteering here in the District, have you not? Mr. HAGNER. It depends on what you call profiteering, Mr. Chairman. Senator POMERENE. What do you call profiteering? Mr. HAGNER. I would call it profiteering where, due to the conditions, at a hardship to the tenant, you made the tenant pay an exorbitant rental for something which he had to have. Senator POMERENE. Does not that condition exist to some extent? Mr. HAGNER. To my knowledge, I do not know of it. I have heard of it, as you have; but I do not know of a single case where there is a tenant who feels that he is working under a hardship with the rental he pays. Senator POMERENE. Is it your judgment that that condition, assuming that it does exist, should be controlled by legislation? Mr. HAGNER. If it is possible to do it without curtailing the supply. That is where the stumbling-block comes, as to how to do it; but I personally do not know of this talked-of profiteering. Senator POMERENE. You may proceed. Mr. HAGNER. That is about all I have to say. Mr. FAIRFAX. Mr. Chairman, there is a gentleman here who is a member of the association, an ex-Commissioner of the District of Columbia, Col. M. M. Parker, who would like to say a few words. Senator POMERENE. Judge Howry has something to say. We will hear him first and then Col. Parker. STATEMENT OF CHARLES B. HOWRY, ESQ. Mr. HoWRY. Mr. Chairman, I will detain you but a few minutes. I have been in conference with no real estate agent or property owner, and therefore I am speaking for myself, but predicated largely upon some knowledge of the conditions which have prevailed with reference to the ownership of property. My case is not exceptional. In my judgment, all legislation is dangerous when you undertake to deal with the law of supply and demand. I want to observe at the outset that in my judgment the property owner is treated worse in this city with respect to residence property than in any other community within my knowledge, or with respect to any other class of property in the possession of an owner. When this House bill comes here with its clauses of additional taxation, in my judgment it will result in double taxation. It must inevitably have that result when you go back and fix a basis beginning with what I may term the prewar period. It has seemed to me that if you are going to legislate on the subject, you should fix a period beginning with October, 1917. I may better illustrate my point in this way; and I cite my own case as an instance of the injustice that will result from this bill, particularly with property in what I may term the transition state, property that is neither business property up to a particular point nor residence property, that intermediate class of property of which I am the unfortunate possessor. I want to say that my observation has been, and I want to emphasize it, that to the owner of a piece of residence property that is not what you would call first-class residence property, the gravest injustice is done by the laws of the District of Columbia, in that the tenant has all the advantage, and the landlord has none. I say that because you are compelled to make repairs Senator POMERENE. In what respect? You are going into the details now, are you? Mr. HoWRY. Yes. The tenant has all the advantage in this way—that I may bluntly say that I have had tenants move out between two suns, and where is my remedy? I want just to put a concrete case that is fresh in my mind, because I have had to suffer from it. I have paid approximately $1,000 on two pieces of property of my own within the last 12 months, and I am not through yet, where one house was practically wrecked by a tenant, and I was completely remediless, and am now and forever will be as far as the expenses go. In other words, on property that cost me in excess of $30,000 I am to the bad more than $250 after I have paid for the repairs and the taxes. Now, I say that it is the gravest piece of injustice from my viewpoint-and I am not speaking for myself alone, for I have conferred incidentally and accidentally and casually from time to time. with other property-owners-that the landlord with anything but high-class property, where the tenant is liable to be well-to-do, is at such a disadvantage that I felt that it is a piece of oppression to strike at that class. Now I come back to my original proposition, that any interference with the law of supply and demand is dangerous legislation, because practically it means an assault upon the constitutional right of a man not to have his property taken from him without due process of law. It is an indirect way, and it is an oppressive way, of legislating. Senator HOLLIS. Judge, right there a minute on supply and demand: The Government has tremendously increased the demand for the purposes of this war. Are we to let the supply undertake to meet that in its own way, no matter what the prices are? Mr. HowRY. No, sir; I think there is a more practical way to get at it. I told you at the outset that I had been in conference with nobody, and I am giving you my individual views as a man of affairs. I never saw this bill, the proposed administrative bill, with right of appeal to a rental board, and all that sort of thing-until it was handed to me a few minutes ago; and the thoughts will just have to come to me as I gather it in this fashion to give my own viewɑ about it. I think there is a way to meet that. Now, suppose you take a piece of property. A landlord rents it; then his tenant sublets it. I have a case in hand right now where my tenant was forced upon me by a real estate agent that had no authority, and is interfering with my own lease of a house. I am a tenant, likewise, in another house. Senator SHERMAN. Have you not any clause in your leases prohibiting that being done without your consent? Mr. HoWRY. There is such a clause, but what am I to do? Senator SHERMAN. I never found a landlord here in my case that was helpless, when they talked to me. They have laid down the law to me, and I think I know what it is; and the landlord that wants to avail himself of a forfeiture of the lease can evict the tenant that violates it. He can put the tenant out. Mr. HowRY. Yes; but when you are met by the tenant who is getting, by subletting, five times the rent that I get, and by the agent, who says she understood thus and so, what are you to do? Senator SHERMAN. Have you a written lease? Mr. HoWRY. They made a written lease without my authority. Senator SHERMAN. No; your original lease, the lessor's lease to the tenant. You are the landlord, the owner of the property? Mr. HoWRY. Yes. Senator SHERMAN. And you leased. Now, when the tenant subleases, you have in your lease a subleasing clause. Mr. HoWRY. There is where the difficulty comes in with me. They say they understood thus and so. Senator SHERMAN. They can not change that by any parole understanding, by word of mouth. Mr. HoWRY. I do not think so; but I want to repeat Senator SHERMAN. Why do you not evict your tenant that gets 500 per cent advance, and does as he pleases with you, you say? Why do you not put out a tenant who does anything of that sort? Mr. HoWRY. I am going to do it, or going to hold the agent liable. Senator SHERMAN. Why do you not do it, instead of asking us to consider it in legislation? It is a case for the landlord to deal with, not Congress. Mr. HoWRY. I have just gotten to it in the last three or four days. Senator SHERMAN. I got to it last fall. Mr. HoWRY. I think, if you are going to legislate on the subject, that you ought to strike at the subtenant; and if you are going to prevent profiteering you have got to reach out your Brierian arms to everybody and take in the subtenant, and the subtenant of the subtenant. I have had no experience whatever, gentlemen, with the matter of apartment houses. I know this and I am impartial here in my statements. We are all seeking justice, or are supposed to be. I have a little interest, which I have disclosed; but I was about to rent an apartment for $1,800, and the next thing I heard it was jumped up to $2,500. I said: "I will not take it." I want an apartment. The difficulty about the House bill, in my judgment, is that it does not admit of the adjustment of the equities, considering the cost of what is put on a house, and the cost of getting coal, and supplying the house with the necessary things at the increased rates to keep it in order. I say that it is a bill that in my humble judgment is not workable; and when I say it is not workable, I mean that it is attended with so many difficulties that the legislature ought to look into it, and get all the information it possibly can-as I am glad to to see you are doing this morning—and apply a distinct and a different remedy. Senator POMERENE. You spoke a moment ago about constructing this bill so as to reach out to the subtenant. What remedy would you have against the subtenant, or in what way would you control him? What have you in mind? Mr. HoWRY. I would put some drastic hand upon the subtenant. Senator POMERENE. Wherein has he offended, that you would want to reach him? Mr. HoWRY. If you are going to accomplish the object that legislation has set out to accomplish-that is to say, to prevent profiteering—you must touch the matter at every point of the compass. Senator SHERMAN. Write a section in the bill that no sublease is to be allowed unless it is approved by the landlord in writing, and indorsed on the lease, if there is a written lease; and then the responsibility will be on the lessor if there is any sublease made at exorbitant rates. Mr. WARREN. What would you do, Senator Sherman, in a case where they sublet a room, and you could not find out, in nine cases out of ten, the rent that would be charged and received? Senator SHERMAN. Follow the same process. Pulp has not yet gotten so high that a written lease is expensive. I can still buy them for 5 cents apiece. Mr. WARREN. I meant, they would rent the room, and you would not know anything about it. You would not know whether it was a guest or a renter in the house. Senator SHERMAN. The landlord would have no knowledge of it? Mr. WARREN. No; he would have no knowledge of it. He could stop it if he knew of it, but he does not know of it. Senator SHERMAN. I think that is what is the matter; the landlord does not keep track of his property. Mr. HowRY. I only want to make one more observation, and then I am through. My idea of reaching the difficulty is not to lay down a hard-and-fast rule for every house. That is almost impossible; but I think it ought to apply to a furnished as well as to an unfurnished house. There is a difficulty when you come to consider the matter of a furnished house, and that is this: I can not better express it than it was expressed by my neighbor, Mrs. Gen. Black, the other day. She said that of course if a landlord furnishes handsome furniture, or satisfactory furniture, what may suit the judgment of one tenant is different from what may suit another. That is to say, one person would take it for so much and another person would take it for more or less; but I think that any legislation that is directed to prevent profiteering ought to apply to everybody alike, in a sense. The defect as I see it in this substitute bill is the arbitrary and unlimited power given to a rent administrator or to a rent administrative board; but it occurs to me that where property is valued at so much, as shown by the assessment books and by the judgment of people competent to express an opinion on the subject, the rental ought to be something commensurate with the value of that property when you are dealing with the question of what an owner shall get out of it. I believe, sir, that is all I have to say. Senator POMERENE. Judge, I want to renew my question to you. You have spoken of these subtenants. What is the substance of their offending that you want to be relieved against? We are seeking to reach the profiteer, the man who is charging too much. That is the principal bone of contention here. In what respect has the subtenant so conducted himself that we should look after him? Mr. HoWRY. I think that when a subtenant gets a piece of property for something that is reasonable, or something that is contemplated to be provided for by legislation-you must remember that there are a great many subtenants who are irresponsible Senator POMERENE. We can not meet the case of that class of people at all. That is true. There are a good many of them who are irresponsible financially. Mr. HoWRY. You can not touch their pocket nerve; but you can make it a misdemeanor, and punish them in that way. Senator POMERENE. Oh, surely. If they have in any way injured the property, I dare say there are laws in the District now for meeting such a situation as that; are there not? Mr. HoWRY. Well, my experience has been that they do not amount to much. [Laughter.] You might as well not reach it in the law. I think that the tenant can be reached as well as the landlord, and he ought to be. Gentlemen, I am obliged to you. FURTHER STATEMENT OF BATES WARREN, ESQ. Senator DILLINGHAM. I should like to ask Mr. Warren one question. It has been stated by somebody that there has been an arrangement reached between the owners of apartment houses that in the future they will not permit subletting. What can you tell us about that? Mr. WARREN. I do not know that there has been any concerted action, but a number of owners have taken the precaution that I told you I had taken-that is, to prevent subletting in the future. Senator DILLINGHAM. Is that pretty general? Mr. WARREN. Yes, sir; that is very general. The owners of most of the apartments are doing it, as I understand. Mr. PEYSER. Do you mean subletting or assigning leases? Mr. WARREN. Subletting by the tenant. It is the same thing as assigning. Mr. PEYSER. That is going to affect the housing proposition, is it not? Mr. WARREN. That is a thing that most of us have done. Mr. Wardman, here, is the owner of a large number of apartments, and I know that he has taken action along practically the same line that I have. STATEMENT OF MYRON M. PARKER, ESQ. Mr. PARKER. Mr. Chairman, I want to refer to one piece of property, and show you the great injustice that will be done to it by this bill. Senator POMERENE. What is your business, please? Mr. PARKER. I have been in the real estate business for 40 years. I refer to the injustice that would come to one piece of property under |