STATEMENT OF ELIZABETH CROSS

Mrs. CROSS. Now, may I say that Mr. Clark in his statement said he did not think a member of the real estate board should act on the commission. I do not think that is fair. I think the commission should be composed of, or have in its membership, one realestate man.

Mr. BRINKMAN. May I add a word, Mr. Chairman and gentlemen of the committee? I do not wish to be understood as saying that simulated transactions were through trust companies and banks, only; they are handled by private parties or corporations who have the title to the property in their names.

Mr. MCLEOD. The subcommittee will now go into executive session.

REAL ESTATE, MORTGAGE FORECLOSURE, AND BLUE

SKY LEGISLATION

WEDNESDAY, MARCH 12, 1930

HOUSE OF REPRESENTATIVES,

COMMITTEE OF THE DISTRICT OF COLUMBIA,

Washington, D. C.

The committee this day met, Hon. Clarence J. McLeod presiding. Mr. MCLEOD. The committee will be in order. The subcommittee on judiciary desires to report H. R. 4950 later known as H. R. 10476, the latter being a substitute for 4950, that the provisions of both were fully considered, and the subcommittee desires to report H. R. 10476 to the full committee, striking out everything in the bill with the exception of section 14. This report is submitted for the consideration of the full committee; also included in that report is the correction of the title of the bill. The title was corrected to read, "to protect the public against fraud in real-estate transactions, and for other purposes." The balance of the title is stricken out.

Mr. LAMPERT. I was unable to be present at the meeting of the subcommittee and I am rather surprised at the action. I do not understand it. I would like to have you explain to me the purpose of it. What will we have in place of the bill if the recommendation of the subcommittee be carried out?

Mr. MCLEOD. The majority report of the subcommittee is that there was no need of a real-estate commission but there was a need for section 14, which is merely a penalty clause for violation of certain real-estate regulations. It is merely an elaboration of section 8 of the bill.

Mr. LAMPERT. Did the subcommittee hear Mr. Petty, secretary of the local real-estate committee, at that hearing?

Mr. MCLEOD. The subcommittee heard witnesses, including Mr. Petty and Mr. Brinkman, former clerk of the Senate committee. Mr. LAMPERT. Were they both in favor of the action taken by the subcommittee?

Mr. MCLEOD. Yes. There was no testimony presented to the subcommittee in opposition to the bill, the general idea of the bill, but the attitude of the subcommittee was that there was no need, and the subcommittee opposed such a regulation as included in the plans of the bill rather than to institute such a real-estate commission. Mr. LAMPERT. This bill introduced by you is exactly in line with the bill introduced by Senator Blaine in the Senate?

Mr. MCLEOD. That is correct.

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Mr. LAMPERT. It is patterned after the Wisconsin law, is it not? Mr. MCLEOD. I could not say that; I do not know. This Blaine bill was drawn and prepared by Mr. Brinkman, who was formerly clerk of the Senate District Committee, at the request of the United States Senate.

Mr. LAMPERT. Is he present this morning?

Mr. MCLEOD. Yes.

Mr. PALMISANO. Do I understand it would be unlawful to execute a deed which does not represent a real bona fide sale?

Mr. PATMAN. For the purpose and with the intent of misleading. Mr. PALMISANO. It could easily be construed that way. In Maryland we make it unlawful and you must make an affidavit that the mortgage is a bona fide mortgage.

Mr. PATMAN. You have got to show there is no purpose to mislead others to their detriment.

Mr. PALMISANO. I do not see where they can mislead anyone. Mr. PATMAN. Suppose you go out and buy a home and they say it has a first trust. That would be persuasive with you in arriving at the value of the property.

Mr. PALMISANO. That is where the unlawful part comes in. I can not see that. Suppose I transfer my property, it might be, to some relative.

Mr. PATMAN. That would not have anything to do with it.

Mr. MCCLINTOCK. They have eliminated everything except section 14.

Mr. MCLEOD. That is right.

Mr. LAMPERT. I would like to hear from Mr. Brinkman in reference to this bill. I was not here when he appeared before the committee and I would like to hear him on the bill. I move that he be given an opportunity to be heard now for a few minutes.

Mr. PALMISANO. On section 14 especially?

Mr. LAMPERT. On the entire bill.

Mr. TARVER. I understand the request of the gentlemen is to hear this particular witness. I presume that the subcommittee had not only him but those who were opposed to the bill as well, and if we are going to undertake to review the action of the subcommittee it seems to me that the hearing that we would have would necessarily be a full hearing and that those opposing the bill as well as those favoring it should be heard.

Mr. LAMPERT. I did not think of that and under the circumstances I withdraw my motion. You are right about that.

Mr. PALMISANO. I would like to hear him on section 14.

Mr. MCLEOD. There were no witnesses opposed to the bill who testified before the subcommittee.

Mr. TARVER. I did not know that.

Mr. PATMAN. We are going to hear him. I will ask that we also call back the attorney for the independent brokers and hear his version of it, to point out some evils that should be corrected and will be corrected by section 14, and furthermore, I want this gentleman in the Better Business Bureau called back and all the others. If we are going into the matter, I think we should go into it fully. Mr. MCLEOD. There was no objection in the committee, by members of the committee, to section 14. The committee all agree on that section.

Mr. PATMAN. You are just going to hear testimony on section 14? Mr. MCLEOD. Mr. Lampert wanted a statement relative to the necessity of the bill.

Mr. PATMAN. Do you not think the subcommittee ought to make its report giving its reasons?

Mr. MCLEOD. I made a brief report.

Mr. PATMAN. I feel we ought to sustain that contention of the subcommittee if it is in our power to do so, and we ought to present the subcommittee's views fully.

Mrs. NORTON. Was it an unanimous report from the subcommittee?

Mr. MCLEOD. There was no minority report filed by the subcommittee. It was presented to the full committee with the understanding that they would have an opportunity to bring the bill before the full committee and because the subcommittee desire to report this back to the full committee it seemed that the majority members of the subcommittee present were not in agreement on the general idea of such a bill, and we thought, therefor, by reporting as we did that the full matter could be brought before the whole committee. Mr. LAMPERT. It was impossible for me to be at that subcommittee meeting.

Mr. PALMISANO. I was not present either.

Mrs. NORTON. If it was a unanimous report of the subcommittee it must be about right.

Mr. MCLEOD. Mr. Lampert moved that Mr. Brinkman make a statement relative to the bill itself. You did not specify the particular section.

Mr. PALMER. I suggest we take the time to hear from the gentleman.

Mr. MCLEOD. On the other hand, a motion is in order to vote on the report of the subcommittee. That motion has not been made, but Mr. Lampert moved that Mr. Brinkman be heard.

Mr. PATMAN. We do not object to anything that the gentleman suggests. It will be all right with me.

Mr. LAMPERT. It works all right in Wisconsin. This bill was prepared by the Senator from Wisconsin.

Mr. PATMAN. I do not object to reopening the matter, but it should be opened up fully.

Mr. LAMPERT. I think so.

Mr. PATMAN. I think it is a matter of importance.

Mr. MCLEOD. It is a fact that there is no objection on the part of the committee to hearing all sides on this bill.

Mr. WHITEHEAD. If we are going to have hearings on it, there might be some matters that are more pressing and it ought to be reported out.

Mr. MCLEOD. It is always in order to review any subcommittee's report, especially in the absence of a motion to report on the subcommittee's report. There has been no motion of that kind and there is a motion that has precedence, that of Mr. Lampert, that Mr. Brinkman be heard on the general meaning of the bill, or the general necessity of the bill. Is there any objection?

Mr. STALKER. Are you going to limit the time to 5 or 10 minutes? Mr. BRINKMAN. Five minutes will be ample as far as I am concerned.