matters of wrong practice, voluntarily, through the agency of the real-estate board, we have been doing this kind of work for 10 years, recovering money for people, helping to send some birds to jail, and so forth-I know from my personal experience that it would be a great benefit to the citizens of Washington to have a place where they could go officially and get help.

Mr. MCLEOD. If there is no objection, we will meet again on Friday.

Mr. HALL of Indiana: I would like to hear this gentleman after he has examined the Senate bill. I move we adjourn.

Mr. MCLEOD. The committee will stand adjourned until Friday of this week at 10.30.

(Thereupon at 12.05 o'clock p. m. the subcommittee adjourned until next Friday, March 7, 1930, at 10.30 o'clock a. m.)

REAL ESTATE, MORTGAGE FORECLOSURE, AND BLUE

SKY LEGISLATION

FRIDAY, MARCH 7, 1930

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON JUDICIARY OF THE COMMITTEE

ON THE DISTRICT OF COLUMBIA,

Washington, D. C.

The subcommittee met at 10.30 o'clock a. m., pursuant to call, Hon. Clarence J. McLeod (chairman of the subcommittee) presiding. Mr. MCLEOD. The committee will be in order.

(The committee thereupon proceeded to the consideration of H. R. 10476, which is as follows:)

[H. R. 10476, Seventy-first Congress, second session]

A BILL To define, regulate, and license real-estate brokers and real-estate salesmen; to create a Real Estate Commission in the District of Columbia; to protect the public against fraud in real-estate transactions, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled

ENACTMENT AND PROHIBITION CLAUSE

SECTION 1. That on and after sixty days from the date of approval of this act it shall be unlawful for any person, firm, partnership, copartnership, association, or corporation to act as a real-estate broker or real-estate salesman, or to advertise or assume to act as such, without a license issued by the Real Estate Commission of the District of Columbia.

DEFINITIONS AND EXCEPTIONS

SEC. 2. Whenever used in this article "real-estate broker " means any person, firm, association, partnership, or corporation, who, for another and for a fee, commission, or other valuable consideration, lists for sale, sells, exchanges, buys, rents, or leases, or offers or attempts to negotiate a sale, exchange, purchase, lease, or rental of an estate or interest in real estate, or collects or offers or attempts to collect rent or income for the use of real estate, or negotiates or offers or attempts to negotiate, a loan secured or to be secured by a mortgage, deed of trust, or other encumbrance upon or transfer of real estate: Provided, however, That this definition shall not apply to the sale of space for advertising of real estate in any newspaper, magazine, or other publication.

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99 Real-estate salesman means a person employed by a licensed real-estate broker to list for sale, sell, or offer for sale, to buy or offer to buy, or to negotiate the purchase or sale, or exchange of real estate, or to negotiate a loan on real estate, or to lease or rent or offer to lease, rent, or place for rent, any real estate, or collect or offer or attempt to collect rent or income for the use of real estate for or in behalf of such real-estate broker.

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One act for a compensation or valuable consideration of buying or selling real estate for or of another, or offering for another to buy, sell, or exchange real estate, or leasing, renting, or offering to lease or rent real estate, except as herein specifically excepted, shall constitute the person, firm, partnership, copartnership, association, or corporation performing, or offering or attempting to perform any of the acts enumerated herein, a real-estate broker or a real-estate salesman within the meaning of this act.

The provisions of this act shall not apply to receivers, referees, administrators, executors, guardians, or other persons appointed or acting under the judgment or order of any court; or public officers while performing their official duty, or attorneys at law in the ordinary practice of their profession.

CREATION OF COMMISSION

SEC. 3. There is hereby created the Real Estate Commission of the District of Columbia. The Commissioners of the District of Columbia within thirty days after the approval of this act shall appoint three persons, not more than two of whom shall have been actively engaged in or closely connected with the business or vocation of real-estate broker or real-estate salesman within five years immediately prior to the enactment of this act, who shall serve as members of said Real Estate Commission of the District of Columbia. In addition thereto, the assessor of the District of Columbia shall serve, ex officio, as a member of said real-estate commission but without added compensation for his services as such. One member of said commission shall be appointed for a term of one year; one member shall be appointed for a term of two years; one member for a term of three years, and until their successors are appointed and qualified; thereafter the term of the members of said commission shall be for three years and until their successors are appointed and qualified. Members to fill vacancies shall be appointed for the unexpired term. The Commissioners of the District of Columbia may remove members of the real-estate commission at any time for cause.

The real-estate commission immediately upon the qualification of the member appointed in each year shall organize by selecting from its members a chairman, and may do all things necessary and convenient for carrying into effect the provisions of this act and may from time to time promulgate necessary rules, regulations, and forms.

Each member of the commission, except the ex officio member, shall receive as full compensation for each day the greater part of which is actually devoted to the work of said commission the sum of $15, but no member shall receive in any one year a greater sum than $2,000.

The Commissioners of the District of Columbia shall provide for the use of the real-estate commission such office space, furniture, stationery, fuel, light, and other proper conveniences as shall be reasonably necessary for carrying out the provisions of this act.

The real-estate commission shall employ, and at its discretion, discharge, a secretary and such assistants as shall be deemed necessary to dicharge the dutie imposed by the provisions of this act, and it shall prescribe their duties and fix their compensation.

The commission shall adopt a seal with such design as it may prescribe engraved thereon by which it shall authenticate its proceedings. Copies of all records and papers in the office of the commission, duly certified and authenticated by the seal of said commission, shall be received in evidence in all courts equally and with like effect as the original. The commission shall keep a record of all its proceedings and a complete stenographic record of all hearings authorized under this act.

All records kept in the office of the commission under authority of this act shall be open to public inspection under reasonable rules and regulations to be prescribed by the commission.

All fees and charges collected by the commission under the provisions of this act shall be paid into the Treasury of the United States to the credit of the District of Columbia. All expenses incurred by the commission under the provisions of this act, including compensation to members, the secretary, clerks, and assistants, shall be paid out of the fund so created and such appropriation as Congress may make for the purpose, upon warrants of the auditor of the District of Columbia from time to time when vouchers therefor are exhibited and approved by the commission.

QUALIFICATIONS FOR LICENSE

SEC. 4. No license under the provisions of this act shall be issued to any person who has not attained the age of twenty-one years, nor to any person who can not read, write, and understand the English language; nor until the commission has received satisfactory proof that the applicant is trustworthy and competent to transact the business of a real-estate broker or real-estate salesman in such a manner as to safeguard the interests of the public.

In determining competency, the commission shall require proof that the applicant for a broker's license has a fair understanding of the general purposes and general legal effect of deeds, mortgages, land contracts of sale and leases, a general and fair understanding of the obligations between principal and agent, as well as of the provisions of this chapter.

No license shall be issued to any person, firm, partnership, copartnership, association, or corporation whose application has been rejected in the District of Columbia or any State within three months prior to date of application, or whose real-estate license has been revoked in the District of Columbia or any State within one year prior to date of application.

APPLICATION FOR LICENSE

SEC. 5. Every applicant for a license under the provisions of this act shall apply therefor in writing upon blanks furnished by the Real Estate Commission. The application of every person for a real-estate broker's license or a realestate salesman's license shall be accompanied by the recommendation of at least two residents of the District of Columbia, real-estate owners, who have owned real estate in the District of Columbia for a period of at least one year and who are not related to the applicant but who have personally known the applicant for a period of at least six months prior to the date of application, which recommendation shall certify that the applicant bears a good reputation for honesty, truthfulness, fair dealing, and competency, and recommend that a license be granted to the applicant.

The applicant of every firm, partnership, copartnership, association, or corporation for a real-estate broker's license shall state the location of the place or places for which said license is desired and set forth in the period of time, if any, which said applicant has been engaged in the real-estate business, together with a complete list of all former places where the applicant may have been engaged in business for a period of thirty days or more during the five years preceding date of application, accounting for such entire period. Such applications shall also state the name and resident of each individual member or officer of said applicant who actively participates in the brokerage business thereof.

The application of every individual member or officer of a firm, partnership, copartnership, association, or corporation for a real-estate broker's license shall state the full name and residence address of the applicant and the full name and business address of the firm, partnership, copartnership, association, or corporation with which he is or will be associated, the length of time he has been so associated, and in what capacity. Such application shall also state the period of time, if any, which said applicant has been engaged in the realestate business, together with a complete list of all former places where the applicant may have resided and all former places where the applicant may have been engaged in business for a period of thirty days or more during the five years preceding date of application accounting for such entire period.

The application of each person for an individual real estate broker's license shall state the full name of the applicant, his business address, and residence address. Such application shall also state the period of time, if any, which said applicant has been engaged in the real-estate business, together with a complete list of all former places where the applicant may have resided and all former places where the applicant may have been engaged in business for a period of thirty days or more during the five years preceding the date of application, accounting for such entire period.

The application of every person for a real-estate salesman's license shall state the full name of the applicant, his residence address, and the name and business address of the real-estate broker by whom he is or will be employed. Such application shall also state the period of time, if any, which said applicant has been engaged in the real-estate business, together with a complete list

of all former places where the applicant may have resided and all former places where the applicant may have been engaged in business for a period of thirty days or more during the five years preceding the date of application, accounting for such entire period. Such application shall be accompanied by a written statement by the broker by whom the applicant is employed or is about to be employed, stating that in his opinion the applicant is honest, truthful, and of good reputation, and recommending that the license be granted to the applicant.

Every application for a license under the provisions of this act shall be sworn to by the applicant and shall be accompanied by the license fee herein prescribed. In the event that the commission does not issue the license the fee shall be returned to the applicant.

Every application for a license shall be accompanied by a bond in the sum of $1,000, running to the District of Columbia, executed by two good and sufficient sureties, to be approved by the commission, or executed by a surety company duly authorized to do business in the District of Columbia: Provided, however, That no bond shall be required of any firm, partnership, copartnership, association, or corporation when the application of every member or officer of such firm, partnership, copartnership, association, or corporation actively participating in the brokerage business thereof is accompanied by a bond as provided for in this section. Said bond shall be in form approved by the commission, and conditioned that the applicant shall conduct himself and his business in accordance with the requirements of this act; and for his failure so to do any person aggrieved thereby shall have, in addition to his right of action against the principal thereof, a right to bring suit against the surety on said bond either alone or jointly with the principal thereon, and to recover in an amount not exceeding the penalty of the bond any damages sustained by reason of any act, representations, transactions, or conduct of the principal which may be prohibited by this act or enumerated as one of the causes for suspension or revocation of a license granted hereunder.

The commission, with due regard to the paramount interest of the public, may require other reasonable proof of the honesty, truthfulness, integrity, reputation, and competency of the applicant.

The commission is expressly vested with the power and authority to make and enforce any and all such reasonable rules and regulations connected with the application for any license as shall be deemed necessary to administer and enforce the provisions of this act.

PROCEDURE WHEN LICENSE IS REFUSED APPLICANT

SEC. 6. The commission, after an application in proper form has been filed, shall, before refusing to issue a license, set the application down for a hearing and determination hereinafter provided in section 9.

DETAILS RELATING TO LICENSE

SEC. 7. The commission shall issue to each licensee a license in such form and size as shall be prescribed by the commission. Every license shall show the name and address of the licensee, and if licensee is a member or officer of a firm, partnership, copartnership, association, or corporation, the full name and address of such firm, partnership, copartnership, association, or corporation shall also be shown on said license. Licenses issued to real-estate salesmen shall in addition show the name and address of the real-estate broker by whom the said salesman is or will be employed. Each license shall have imprinted thereon the seal of the commission, and in addition to the foregoing shall contain such matter as shall be prescribed by the commission. The license of each realestate salesman shall be delivered or mailed to the real-estate broker by whom such real-estate salesman is employed and shall be kept in the custody and control of such broker. It shall be the duty of each real-estate broker to conspicuously display his license in his place of business.

At any time within six months, but not thereafter, after the issuance of an original license the commission may, upon its own motion, and shall, upon the verified complaint, in writing, of any person, provided such complaint, or such complaint together with evidence, documentary or otherwise, presented therewith, shall make out prima facie case that the licensee is unworthy to hold such