his alternative would be that would be sold under an executory contract of sale-what is known as the land contracts-and the title would not pass to the man, and he would be a tenant by sufferance until he had paid and gotten his equity, and then he would be given the deed. The grave danger of this would be that the man who sold may become financially involved and judgments may be rendered against him so he can not carry out his contract.

Mr. MCLEOD. That is the universal custom.

Mr. ADDISON. Yes; but we do not want to encourage that. We would prefer by far to give title to the man at the time of acquisition. Gentlemen, as far as this other bill is concerned, there are some very serious things that he has done in it. In his hurry to make amendments he made it inconsistent; but outside of that it is a perfectly clear bill, and it is just a question as to whether or not it should be a blue-sky type of control or a fraud type of control.

Mr. MCLEOD. You are talking about Senate 3491?

Mr. ADDISON. Yes. I might say, in connection with that, a committee was likewise appointed consisting of Miss Mary E. Croggon of the Women's Bar Association of the District of Columbia; Thomas P. Littlepage, of the Bar Association of the District of Columbia; myself, representing the Bankers' Association; Mr. Alfred H. Lawson of the Washington Real Estate Board; Mr. Louis Rothschild of the Better Business Bureau of Washington; and Mr. Paul V. Keyser, representing the Southeastern Group of the Investment Bankers Association of America. We are of the unanimous opinion, and so made a statement to the Senate committee, that the Capper bill was a better bill, in our opinion, for the District of Columbia than the other bill. We, however, were of the opinion that there should be some bill controlling fraud in the sale of securities.

Mr. LOOFBOUROW. You have none whatever in the District of Columbia?

Mr. ADDISON. We have none; no, sir. We have been advocating for some time, and we had Senator Capper introduce the Capper bill prior to Senator Blaine's blue sky bill.

Mr. LOOFBOUROw. As a matter of fact, your residents here in the District are very largely investors?

Mr. ADDISON. Yes, sir. We have a higher type of citizenry as investors per inhabitant than they have elsewhere that I know of except maybe New York.

This bill puts it under the Public Utilities Commission of the District of Columbia. It did not belong there. The Public Utilities Commission is to take charge as drawn by Mr. Brinkman. They are not equipped to do it; and no sale could be made as to those securities, I would say, under this bill or under either bill, as far as that is concerned. The Wardman securities could have been sold because they were listed on the Chicago stock exchange.

Mr. LOOFBOUROw. The Public Utilities Commission is for the purpose of administering public utilities; administrative matters.

if

Mr. ADDISON. I know it is, but this bill provides that they handle it. Mr. LOOFBOUROw. Is there anything further?

Mr. ADDISON. No, Congressman, except this: If it is possible, and you find that you are going to report out this bill or either bill, I ask that you give some of these other organizations an opportunity

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to be heard. They have been kind enough to ask me to save your time by going through the detail, but there are underlying features of this thing that ought to be given serious consideration. Frankly, it is better not to have any bill than to have a bill that is going to hamper legitimate business. I might say to you that the District Commissioners are in favor of the Capper bill, and under date of April 3 they wrote a letter

Mr. MCLEOD. The Capper bill has not been passed by the Senate. Mr. ADDISON. But the Blaine bill was passed.

Mr. LOOFBOUROW. Are the commissioners opposed to the Capper bill?

Mr. ADDISON. No; the Capper bill was advocated by the commissioners under their letter of April 3, 1930.

If it is not asking too much of your time, some of the other gentlemen might want to say a final word.

Mr. MCLEOD. If there is nothing more in this bill

Mr. LOOFBOUROw. Mr. James, did you wish to be heard?

STATEMENT OF C. C. JAMES, COUNCIL FOR THE COOPERATIVE (?) BUILDING ASSOCIATION

Mr. JAMES. It occurred to me, to get the whole picture, we ought to put in the record the efforts we made with Mr. Brinkman to meet his views in reference to certain items that he asked us to take up for consideration. As Mr. Addison has referred to, he called usI think I was not present-in November or October, saying that he wished us to cover three points: To pass a law giving notice to the grantor or equitable owner of the property; to regulate trustee's commissions, especially if there was no sale of the property; and to give 15 days to redeem said property, after it had been sold at auction, by the equitable owner. A committee of seven were appointed to cooperate with Mr. Brinkman in trying to devise an amendment to the law that would meet his views and ours; and we submitted to him on January 2 the result of our labors, and he called me up and said he would consult with Senator Blaine about it, but we never heard from him until the Blaine bill was introduced. I think the whole picture ought to go in. We are perfectly willing to cooperate if you think there is necessity for some law, but we would like to have time to do it right. That is all we are asking. Mr. LOOFBOUROW. I will say to you gentlemen, frankly, I think there ought to be some more formal method of foreclosing mortgages than you have here, and that there ought to be a period of redemption. There is no question about that in my mind. I think the general concurrence of opinion throughout the States of the country is to that effect; but I certainly would hestitate to impose on the District of Columbia a method as vague as you have described. Mr. ADDISON. What I am trying to impress on you is that this thing is a very serious question.

Mr. LOOFBOUROw. The bill is very vague in some places.

Mr. ADDISON. We do not want to go away without at least trying. There has not been a single association of this District that has advocated what has been passed by the Senate; and I dare say that not a Senator with the exception of Senator Blaine has read the bill through.

Mr. JAMES. I just want to add one other thing. When these terrible things have happened it has not been the man that borrowed the money that has been hurt; it has been the man who adjusted the matter. I did not want some of you to get the wrong angle in thinking of these recent troubles.

STATEMENT OF RUFUS LUSK, OF THE COOPERATIVE BUILDING ASSOCIATION

Mr. LUSK. I want to speak in regard to the general foreclosure situation. We got a great many records of realty companies here in Washington. The number of foreclosures has been steadily going down for the last nine months. During the last nine months, compared to a similar month in the previous year, the number of foreclosures has been about 50 per cent less. In 1928 there were about 1,700 houses foreclosed; in 1929 the number was about 1,600; and there were only about 1,400 last year. The big decrease came in the last half. So far this year our foreclosures have been running only 50 per cent of what they were last year, and I estimate that the total number of houses that will be foreclosed at auction during this year will be less than a thousand, or not over 1 per cent of all the homes that we have in the District of Columbia.

That is quite a different condition from what exists in other cities. In Baltimore on January 1, 1930, there were 2,500 houses that were ready to be foreclosed. They had to declare a mortmain, and that same condition has existed in many other States. Despite the depressed condition which we are in everywhere, the number of houses that are being foreclosed has been steadily dropping off. I submit that simply to indicate to you that the conditions are not quite as bad as some people would paint them. Only 1 per cent of the houses are being foreclosed in a year. That is a mighty small number; and remember we foreclosed those under first trust and deferred trusts or any other way in which they might be foreclosed.

Mr. ADDISON. And sometimes it is resorted to go into court and get an injunction against foreclosure until rights are adjudicated. There is no objection now, but we have that remedy and it is being resorted to, and when there is any way of avoiding it, that should not be done. I think it may be well to say there is no hurry for this bill because that right is there now.

Mr. MCLEOD. Mr. Petty is here. I think he would like to say a word on Senate 3940.

STATEMENT OF JOHN A. PETTY, EXECUTIVE SECRETARY OF THE WASHINGTON REAL ESTATE BOARD

Mr. LOOFBOUROw. In the first place, tell us what this bill does. Mr. PETTY. This Senate 3490?

Mr. LOOFBOURow. Yes.

Mr. PETTY. This bill sets up a real estate commission to license real estate brokers and salesmen, and gives that commission the authority to suspend or revoke the licenses of any broker, or to deny them. Mr. LOOFBOUROW. You have no license system?

Mr. PETTY. We have no license other than a purely income revenue producing tax like a store tax, but no provision or regulation. Mr. LOOFBOUROW. Occupation tax.

Mr. PETTY. This bill is based fundamentally on the model real estate brokers' license law that is now in operation in 25 States of the Union, in all of its elemental and fundamental principles.

There is one section in the bill which was incorporated by Mr. Brinkman which does not appear in any of the license laws, and which the Real Estate Board objected to solely because it was not a part of a real-estate brokers' license law; but in the desire to have this corrective legislation we did not stand on that objection. That particular section does with fraudulent dealings and simulative transactions and improper mortgaging, that are predicated on fraud, when it is desired to defraud some one. So, as I say, with that exception, and that is a part of this bill, with that exception it is based on the same fundamental principles as the laws in 25 States. Our organization has advocated this type of legislation since about 1924. We have introduced it in each session of Congress.

Mr. LOOFBOUROW. Is this commission a gratuitous commission? Does it serve without pay, or is an appropriation necessary?

Mr. PETTY. The commissioners are paid. I think it is ten or twelve dollars a day for actual time in service. A great proportion of the work will be done, perhaps, by a secretary, a paid employee, who will take care of all the details, the commission merely passing on applications and presiding over public hearings where charges have been filed against a broker, determining whether or not his license should be either denied or revoked.

Mr. LOOFBOUROw. Do these other States create new commissions, or do they put this into the blue sky commission?

Mr. PETTY. Some States have designated the commission of securities. That is the blue sky commission. Some States have designated it officially in the banking department; but in the majority of the States they have set up a separate board; and in all of the States where they have such boards, those boards are composed of actual real-estate brokers, the same as a medical board or an architectural board or accountants' board, to pass on the qualificationsof an applicant for license and to pass on his acts when he has done something.

Mr. LOOFBOURow. Now you proceed in your own way. That is sufficient so far as the general outline is concerned.

Mr. MCLEOD. What are the changes in the House bill?

Mr. PETTY. The bill as originally introduced by us was changed by Senate Blaine's attorney, Mr. Brinkman; and we got togetherand worked out and agreed on and we accepted all the changes that were offered. Some we showed were incorrect and he changed them, but we amicably agreed to all of his changes and accepted this bill known as the Senate Blaine bill, in lieu of our bill which Senator Capper had been introducing in each Congress. Then, when we had a hearing in the Senate, this bill only took up about 10 minutes' time. Of course, there was no objection on the part of anyone to the legislation. It was indorsed by various organizations in Washington. One or two other amendments were put in at the timewhich in no way affected the principle of the bill.

I have not seen this legislation for several months and I will have to sort of locate those amendments. This is the original bill. That has not a calendar number on it.

Mr. MCLEOD. This is the bill as passed by the Senate. That is the bill, Governor [handing a paper to Mr. Petty].

I thought in your opinion, Mr. Petty, this bill was practically satisfactory to your board.

Mr. PETTY. There is no objection to the bill.

Mr. MCLEOD. You appreciate the position that the only chance of getting a bill now is to substitute a Senate bill for the House bill. Mr. PETTY. As nearly as I can recollect the only two changes which were put in by the Senate after the bill had been introduced in the House and in the Senate were, one dealing with the question of mechanics of handling finances-the fees that were collected for licenses, to be paid into the Treasury Department, and that was suggested by Mr. McCarl, the Comptroller General, merely to bring it more in keeping with the financial arrangement between the District Government and the United States Government; and another provision which exempted from the educational requirement, in order to get a license, those who had been engaged in the real estate business for two years. Under the bill the commission has a right to satisfy itself that the applicant has qualified to do a real estate business, and the amendment gave those who have been in the business two years the right to a license without submitting to an examination as to requirement. Of course there was no objection. I believe that those were the only two amendments. Mr. MCLEOD. Briefly, this is strictly a license bill?

Mr. PETTY. It is strictly a license bill with the exception of this one section, and we offer no objection to it although we felt it did not belong in this particular type of legislation; and that deals with so-called fraudulent loans and fraudulent real estate transactions. In our opinion-and Senator Blaine expressed this same opinion to me as did his attorney, Mr. Brinkman

Mr. MCLEOD. Mr. Petty, right there, was not that section you refer to placed in this bill to take care of one of the bills we have not considered here, merely to prevent fraud similar to the most scandalous F. H. Smith case?

Mr. PETTY. Primarily.

Mr. MCLEOD. We thought it had no place in this particular bill and should be a bill in itself.

Mr. PETTY. It does not only regulate real estate brokers but regulates anyone who might commit that crime; therefore I thought it was general legislation as distinct from a real-estate broker's license law. The real-estate brokers' commission would have no control over the acts of anyone unless they were licensed brokers.

Mr. MCLEOD. Therefore the Senate bill has not that provision as I understand it.

Mr. PETTY. Oh, yes.

Mr. MCLEOD. The House bill put that provision in?

Mr. PETTY. Senator Blaine put that in our bill.

Answering the gentleman's question about the make-up of the personnel here in this bill: It provides for a commission of the three assessors of the District of Columbia, to serve without addi