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to much, if anything, for the reason that they were denying the tenants all comforts, heat, elevator service, etc. They furnished some of the apartments, and I think they asked as much as 300 per cent on the value of the furniture, or were asking it. That was in addition to the exorbitant rent they charged them for the rooms. Mr recollection is that we cut those prices quite a good deal, especially on those furnished rooms.
Mr. ANTHONY. What has been the general policy in determining values? Do you determine them on the prewar value of the building, the actual cost of construction, or the present-day value? Would you take the actual cost of the building, if it were put up during the war peak cost of construction ?
Mr. OYSTER. We estimated, of course, as to what the buildings cost, and building costs increased during the war anywhere from 10 to 30 per cent.
Mr. ANTHONY. Do you go into the actual costs?
Mr. OYSTER. We took care of each case as it was presented to us separately. Of course, some buildings were much better constructed than others, and we tried to be as liberal as we could toward the investment made by those builders.
Mr. ANTHONY. What is the interest rate for loans of money on apartment buildings now? What does the builder have to pay for his money?
Mr. OYSTER. I understand it is about 7 per cent.
Mr. ANTHONY. What is the highest rate the builder had to pay during the war?
Mr. Oyster. The highest I ever heard of was about 8 per cent.
Mr. ANTHONY. If you allow a man only 6 per cent net revenue, how can he afford to pay 8 per cent for the money that went into the building?
Mr. OYSTER. The secretary of the commission has answered that.
Mr. Sisson. I understood the clerk to say that they added that interest in the cost.
Mr. OYSTER. They would not allow them 6 per cent on the borrowed money. Mr. Sisson. I understood that from the clerk.
The CHAIRMAN. He allowed that as a part of the expense of operating the building:
Mr. ANTHONY. Would it be practicable for anybody to pay 7 per cent for money that goes into rental property? Is not that practically prohibitive?
Mr. OYSTER. If they paid 7 per cent they only get 7 to 8 per cent for it.
Mr. ANTHONY. They used to pay about 5 per cent.
Mr. OYSTER. Before the war you could get money here at 4 per cent on apartment houses. Not many of them paid as much as 5 per cent but during the war the rate increased.
The Rent Commission acted very promptly after organization, and got together the best information they could get from builders and others, and they fixed what they considered a fair and reasonable increase over the prewar prices. That was a guide in a sense for the Rent Commission, and they have followed it. They followed it until this case went to the Court of Appeals, where the law was declared unconstitutional by a divided court. Then all of these landlords who had had cases determined by the Rent Commission
who have mission, understan incre
immediately advanced their rents from 75 to 100 per cent. Those who have increased such prices will probably be handled by the Rent Commission, now that the Supreme Court has declared the law constitutional. I understand many of those people have come in and turned over all of the increased rent that they have collected over the amount fixed by the Rent Commission. That was largely because of the fact that a penalty was attached, and they did not want their action made public. I understand they have returned the excessive rents, or the amounts collected in excess of the rent fixed by the Rent Commission.
Mr. Šisson. The tenants will get the benefit of that?
Mr. BYRNS. Did I understand you to say that there was only one suit pending?
Mr. ROPER. No, sir; there is one large suit pending.
Mr. BYRNS. That rather indicates that the landlords of the city here see that the Rent Commission has not done them any serious injustice in fixing the rents.
Mr. ROPER. That is true. In the matter of the Monmouth Hotel, it should be pointed out that the evidence in that case showed that there was a great deal of secondhand material put into the building, even though it was built during the war. The evidence showed that the elevators were second hand, and that even the window frames were second hand. The heating plant was a vapor-heating plant which, according to some of the testimony, had not been tried out thoroughly, and even to-day it will not heat a part of the building. It is impossible to heat it, and the owner has offered $10,000, I am informed, to anybody that would show him what is wrong with the heating plant and how to make it heat the building.
Mr. OYSTER. The moral effect of that was wonderful, and it brought a great many people together on a compromise basis.
The CHAIRMAN. Will you be kind enough to furnish for the record a copy of your pay roll, and a statement of any incidental expenses you may have outside of the pay roll, so that we may have it definitely before us? Mr. ROPER. I will do so.
$208. 33 208. 33 208. 33 208. 33 125.00 41. 67
A. Lestwich Sinclair, member...
Total semimonthly pay roll...,
$5,000.00 Oct. 16 to 31....
EXBIBIT B. Statement as of Nov. 1, 1921, showing incidental expenses of the Rent Commission of the
District of Columbia in addition to salaries.
From Jan. 21, 1920, to Nov. 1, 1921:
538.40 Telephone service...........
424. 20 Periodicals, books of reference and telegrams. 107.32 General services in cleaning offices, linen, etc. 30.00
Incidental expenses incurred to Nov. 1, 1921..........
Total appropriations made for the Rent Com
showing enlarged items and additional items now
$3, 231. 64 Rental of quarters........
205.00 Stationery and equipment...
100.00 Telephone service........
35.00 Periodicals, books of reference and telegrams..... 15.00 General services (char service, time service, linen service, repair service for offices)..
50.00 Briefs, court fees, etc., for attorney.............. 425.00
4, 775.00 16, 158. 20
Total expense budget on per-month basis...... 4, 186. 64
Commission from Dec. 22, 1921, to May 22, 1922, the ex-
MONDAY, NOVEMBER 7, 1921. INTERSTATE COMMERCE COMMISSION.
STATEMENTS OF MR. GEORGE B. McGINTY, SECRETARY,
AND MR. W. M. LOCKWOOD, DISBURSING OFFICER.
The CHAIRMAN. Mr. McGinty, we have an estimate from the Interstate Commerce Commission for an additional appropriation, which we should like very much to have you tell us about, but before you begin to tell us about the desirability, from your standpoint, of this appropriation, we should like to have you tell us how you have allotted the $1,900,000 which was appropriated for the use of the commission. Mr. McGinty. We have 13 major bureaus in the commission.
The CHAIRMAN. Will you please enumerate them?
Mr. McGINTY. Administration, finance, accounts, statistics, formal cases, informal cases, traffic, law, inquiry, service, safety, locomotive inspection, and valuation.
· FUNCTIONS OF BUREAUS. The CHAIRMAN. Can you briefly state the functions of each one of those bureaus, in just a word as to each?
Mr. McGINTY. Administration takes care of internal detailed administrative duties, expenditures, clerical assistance, files, stenographic work, docket work, serving of notices, and so forth.
Finance, I think I mentioned that next, is the newest organization in the commission, built up as a result of the new activities placed upon the commission by the transportation act of 1920.
The CHAIRMAN. Under which they are authorized to make loans? Mr. McGINTY. Authorized to make loans, to issue certificates of public convenience and necessity when approved by the commission. İt handles matters respecting acquisition of control by one carrier of another carrier—consolidation of carriers, recovery of excess net railway operating income, general railroad contingent fund, retention of excess earnings from newly-constructed lines of railroads, issuance of securities, assumption of obligations, reimbursement of deficits during Federal control, guarantee of income after termination of Federal control, etc.
The CHAIRMAN. Please enumerate the other bureaus. Mr. McGINTY. Accounts-under section 20 of the act to regulate commerce we prescribe the manner in which the carriers' accounts shall be kept, with which, I think, you are familiar.
The CHAIRMAN. Yes, sir. Mr. McGINTY. We have used that bureau also in the work of completing the adjustments of the railway operating income for the test period, which were made necessary as a result of our examinations of the accounts for the three years ended June 30, 1917, for the purpose of enabling the commission to make final certification to the President of the amount of average annual operating income of carriers under Federal control.
Statistics cover all the statistical information with respect to the carriers. I think, perhaps, you know what I mean by that.
The CHAIRMAN. Yes, sir; it is not necessary to go into details about that.
Mr. McGinty. Formal cases; that is, the bureau in which attorneys are employed for the purpose of assisting the commission in handling formal cases. These attorneys, designated examiners, act more or less as masters in chancery-go out and take the testimony in formal proceedings for the commission and come back and prepare tentative reports for the consideration of the commission.
The CHAIRMÁN. That applies to rates ?
Mr. McGinty. To complaints as to excessive, discriminatory, unreasonable rates and other violations of the act to Regulate Commerce.
Mr. KELLEY. Are they all attorneys?
Mr. KELLEY. How many of them are there?
Mr. McGinty. Seventy-one. Informal cases in our bureau which handles for the commission the thousands of complaints that come to us more or less in an initial form of inquiry or complaints that are made to us which we believe we can adjust between the complainant and the carrier without the necessity and expense of formal proceedings. We dispose of thousands of complaints yearly in this informal bureau, in which must be correspondence clerks who are familiar with the rulings and precedents of the commission and the
Traffic. The carriers are required to file with us two copies of each tariff and our bureau of traffic has charge of all of these tariffs. In this bureau are boards, sections, and divisions which deal with the publication and filing of tariffs; the suspension of rates pending investigation; applications for relief from the provisions of section 4 of the act; the classification of freight; express charges; matters affecting charges for transportation, etc.
Law. We have a small number of people in our bureau of law, the chief counsel and two assistant counsels. They take care of the orders of the commission that are attacked in the courts and also give us legal interpretations on many questions that arise within the commission.
Inquiry. A bureau which originally was named bureau of investigation, which indicates in a way the meaning of the bureau. It is not a bureau of prosecution, but we do investigate complaints of discriminations, violations of the law, and we turn the evidence over to the Department of Justice and assist the United States attorneys in handling such matters.
Mr. KELLEY. It is the criminal section?
Service. During the congestion at this time last year this was about the most important bureau that we had, because it had to handle the service of cars, the congestion, embargoes, and matters of that kind. We have had very little service work lately and therefore we have a very small service bureau now..
The CHAIRMAN. It directs the allotment of equipment to different places?
Mr. McGinty. Exactly. If we should be pleasantly surprised with an unusual movement of traffic, then, again, this would be one of our most important bureaus.
Safety--we operate under several safety acts, respecting safety appliances, standard hours of service, investigation of accidents, investigation of new devices for the safety of the traveling public, all matters of safety of that description fall within that bureau.
The CHAIRMAN. Regardless of whether you are investigating or enforcing the acts ?
Mr. McGinty. Yes, sir.
Locomotive inspection is also safety, but applies only to the locomotive. Originally the law required us to inspect the locomotive boiler and later on Congress put the inspection of the entire locomotive under this bureau.
Valuation is the ascertainment of the value of the properties of the carriers and we have been proceeding with it several years, and I think, perhaps, you are familiar with that.