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decontrolled cities housing is better and more available than in the controlled cities.
Mr. DuLAURANCE. Yes, sir.
Mr. DuLAURANCE. Well, I think it is especially so of the cities that actually lost population during the 10-year period, and gained net dwellings. That carries out the same argument.
There are 23 of the 231 larger cities in the country which lost population. They had a vacancy ratio at the time. They gained new dwellings, and yet they are still under control.
Mr. BROWN. If there are no further questions, you may stand aside.
STATEMENT OF WILLIAM SCHMIDT, PRESIDENT, PROPERTY
OWNERS ASSOCIATION OF AMERICA
Mr. SCHMIDT. Mr. Chairman and members of the committee, my name is William Schmidt. I am president of the Property Owners Association of America. I thank you for the opportunity of being heard again although I have always hoped on all previous occasions that it would be the last time that it would be necessary to speak against this law. It seems that it is a law for which Congress has always been apologizing—it has always been passed for just a short time and supposedly to take care of an emergency,
Now, it has been continuously on the statute books for a matter of 10 years. During those 10 years our population increased 14.5 percent while our occupied dwellings increased 23 percent.
Over half of the units that used to be under control have freed themselves by the local option route. In every case it has been shown that there is a surplus of housing as soon as controls are removed. Not in a single case has the prediction of bloodshed and riots, or 300 percent and 100 percent rent increases been verified. It seems strange that any intelligent statesmen should ever have made such predictions. Over 200 communities have freed themselves from rent controls, ranging in size from the city of Los Angeles to a little village of a few thousand people and nowhere is there any trouble-nobody ever asks to have the city become recontrolled. Any recontrol that has taken place has been by the capricious action of Government authorities who are mainly interested in perpetuating the life of their bureaus.
Last year I included in my testimony, and in the record, a pamphlet published by John and Richard Usher and entitled "Rent Control in War and Peace.” In addition to giving a very excellent explanation of the appearance of the so-called housing shortage and the deceptiveness of this shortage, this pamphlet gives an enormous amount of information on the population increase and the dwelling increases during the years from 1940 to 1950 in about 231 cities. These figures have been obtained from the United States Census Bureau and are absolutely correct. At that time I made the statement, and I repeat it now, that on the basis of the evidence presented here the American people have enjoyed an increasing supply of housing accommodations everywhere during the last 12 years. Rent control has benefited nobody
and has just added to the burdens of the taxpayers. Over $300 million have been spent to date for the enforcement of rent control only and the enforcement is very ineffective.
You will always find that if there is no real agreement in the consciousness of the people between the law on the statute books and their own conscience it simply will not work. We found that out during prohibition and we are finding it out every time any attempt is made to control prices or wages.
Furthermore, at all times it has been possible for most any of the tenants to purchase their own home and become independent of the landlord.
Nothing is easier than to escape the clutches of the landlord. The bargaining condition of all of the tenants involved would be greatly increased even if only 2 or 3 percent of the tenants were to decide that the rents are too high and they will purchase a home of their own.
Now, many statesmen have said that the building industry has priced itself out of the low income market. That is just one of those statements that people make on the basis of snap judgment and without rhyme or reason. For your benefit, I include in the records herewith an article copied from our official publication, Free Enterprise. This article shows that the average man had to spend about 221 weeks of his salary in 1940 in order to buy the average home-mind you, not to buy the cheapest home possible, but the average home as it was actually purchased at that time. During the war when we put restrictions on housing and would not permit any house to be constructed, except for $6,000 or less, the cost of the average home to the average wage worker went down below 100 weeks' pay. Since then, the cost computed in terms of so many weekly pay envelopes has increased again and in 1951 it stands at 179 weeks' pay. These figures are for the Chicago area and they are typical; and the source of the information is clearly given in the accompanying article, which is entirely self-explanatory.
I think that the accompanying article and the figures therein prove one point conclusively--namely, that any American citizen, regardless of his economic status, who wishes to take upon himself the responsibility of a home can do so.
I am not going to read the article, but I hope it will be included in the record.
Mr. BROWN. That may be done.
Average cost of homes in the Chicago metropolitan area in terms of average weekly pay
Source of information: The information for the cost of homes has been obtained from the Bell Savings and Loan Association. This company underwrites a very large prcentage of the mortgages being made and maintains a statistical department.
The information for the average weekly wages is obtained from the Industry Report of Hours and Earnings by the United States Department of Labor. These figʻires represent the national average while the average cost of homes is for the Chicago metropolitan region. Probably in the Chicago metropolitan area the average wage may be slightly higher.
The number of weeks' pay required to d'irchase home column is obtained by dividing the cost of the average home by the average weekly pay. The cost in weeks' pay is extraordinarily low in the years 1942 to 1945 becarise of the
fact that there
were Government restrictions in those year that made it impossible to build a high-priced home. For several years materials were only furnished for homes costing $6,000 or less. In the other years before and after this period, the average cost has been affected by the relative number of well-to-do people or poor people that decide to build a home. It is, of course, obvious that the people can affect the average cost by their free choice of having a home more or less frugal or more or less luxurious, as the case may be.
We believe that the above calculations show conclusively that the average man can hold his on in a competitive market and that
he is better able to provide a home for himself than ever before in the history of the Nation.
Mr. SCHMIDT. Furthermore, the American citizens have availed themselves of that opportunity and in view of the fact that the Government has not controlled the cost of new buildings except the latest attempt to meddle with the credit regulations on the production and sale of housing accommodations. We have had an excellent increase in the construction of individual housing. If we had had enough judgment to treat the apartment industry with the same amount of neglect—that is, if we had not interfered in any way with the operation of rental housing we would be in a position to look back upon a splendid record of apartment house construction. I think I can easily prove this point by presenting for your consideration a comparison of the amount of apartment house construction in the city of Chicago during the period from 1920 to 1930 as compared with the amount of construction that has taken place in the same city from 1945 to date. During 1920-30 there were constructed in the city of Chicago 300,000 new modern rental units-all of these were built with private capital without any Government guarantees whatsoever. Now, during the period from 1945 to 1951 the records show that we built only a total of 15,000 new units in Chicago, that is new rental units, compared with an average of 25,000 units in a single year for a decade. Furthermore, these 15,000 units have only been built because the Government guaranteed 90 percent of the total value of the project as a loan.
The average rental in Chicago is only $44 per month, while the average wage is $60 per week or better. If we had not had any rent control the American people would not be paying any more than the usual percentage of their monthly income for rents and you would
have maintained the confidence of the investor in this type of property and many hundreds of thousands of units would have been constructed and would be available for public occupancy. If you had only had the foresight to leave the American people to their own devices they would be better off today.
The guardianship imposed by the Government on this industry has been 100 percent evil. We are definitely deteriorating the housing standards and we are creating slums at a far greater rate than we can ever rebuild them.
I have on previous occasions given you many examples of how the judiciary in combination with the Housing Expeditor's office is mistreating our citizens. I came across another glaring example of this when I visited the city of Peoria the other day and I found that a landlord in that city is in jeopardy of a $30,000 judgment and the Government is trying to deny him the right of a jury trial. I am enclosing in the records herewith an article published in Free Enterprise which gives in complete detail all of the relevant facts in connection with this case.
Again I would like to have your indulgence to print this in the record.
Mr. BROWN (presiding). It may be inserted. (The article referred to is as follows:)
(From Free Enterprise, Chicago, Ill., May 12, 1952]
PROPERTY OWNERS DENIED JURY TRIAL Every day we get new evidence of the continuing encroachment of the power of the bureaucrats of the Federal Government upon the individual rights of our citizens.
Our Constitution provides that man cannot be deprived of his property without due process of law and if one citizen sues another one for an amount exceeding $20 the defendant is entitled to a jury trial. In spite of these restrictions in the Constitution, it seems that our judiciary and our bureaucrats, or the two of them in combination, have developed a civil procedure that effectively disposes of substantial rights guaranteed our citizens in the Constitution.
We came across this news the other day when we were visiting in Peoria, Ill. In that city, there is a case pending of the United States of America, plaintif, v. Nelson Hewitt and Mrs. Mary Hewitt, defendants, Civil Action No. P 1253.
This particular suit is putting the defendants in jeopardy to the extent of a large share of their life savings, if not all of it. The amount of the indictment ran as high as $30,000. We understand that the indictment was drawn so sloppily that Mr. Hewitt was indicted for about half of that amount because he sold a group of individual houses on a contract for warranty deed. They tried to make an overcharge out of that and I think that part has been eflectively stopped by a preliminary consideration on the part of the court.
The amazing thing about this is that any official of the United States Government should ever make such indictment which is absolutely unfounded and unsupported by any law passed on the statute books. It is a disgrace that a property owner would have to spend large sums of money to defend himself against charges that should never have been brought against him in the first place. If some private citizen hires a shyster attorney and he brings what you might call a nuisance suit, that is not very nice but it is not punishable and there is little we can do to protect the citizens from such a thing.
However, an agency of the United States Government should be scrupulous and careful enough to not institute an indictment against a citizen when they do not have the slightest justification of it under law.
Now, when an official of the rent office makes a case against a property owner that has sold his property he is absolutely wrong because there has been no restriction placed upon the sale of property by any law.
That is, of course, as of yesterday-tomorrow, they may "monkey" with that and they have just recently placed credit restrictions on the statute books which,
in turn, are also an unconstitutional interference with the rights of our citizens. So, day by day this process continues and more and more a citizen finds himself unable to seek correction of this by going into the courts.
Until recently there was at least the safeguard of a jury trial. Now, they claim that this is just an outgrowth of the injunctive process and that there is no jury trial involved in an injunction and they are quoting all kinds of legal precedents in support of their claim.
In the above-mentioned case in Peoria a jury trial had already been agreed upon and a date had been set. Now, before this jury trial came around the Government went into court with a motion to dismiss the jury trial, stating that the defendant was not entitled to such protection under the law.
The Government presents the following argument: “Refund of charges is sought under authority
of the Housing and Rent Act of 1947, as amended, under section 206 (b) thereof, which is entirely injunctive proceedings.
Damages to the United States are sought under Section 205 of the Act as incidental to the equitable relief.”
Until a short time ago it was news to the attorney defending Mr. Hewitt that such a thing could be done but he was furnished with the following list of previous cases:
"In an action for restitution, there is no right to a jury trial.
The following cases are authority for this purpose: 1. McCoy v. Woods (177 F. 2d 354 (C. A. 4) 7-884) 2. Woods v. Stein (53 F. Supp. 911 (D. C. Wash.) 6-452) 3. United States v. Hart (86 F. Supp. 787 (E. D. Va.) 7-904) 4. Woods v. Deep Vein Connelsville Coal Co. (W. D. Pa.) No. 7518 Judge Maris,
January 10, 1950 5. Woods v. Alex Swanson (W. D. Pa.) No. 7560, Judge Maris, January 10, 1950 6. Woods v. Wilson (Civ. No. 7830 (E. D. Pa.) Judge Clary) 7. Woods v. Zellaes (Civ. No. 9314 (E. D. Pa.) Judge Clary 8-163) 8. United States v. Maine (N. D. Ohio E. D. No. 26379 May 15, 1950) 9. Woods v. Richman (174 F. (2) 614)
There is no right to a jury trial in an action for treble damages. An action by the United States to recover statutory damages under section 205 of the Housing and Rent Act of 1947, as amended, is not in the nature of a suit at common law and was unknown to common law at the time of adoption of the seventh amendment to the Constitution in 1791.
It follows that the present action is not one in which there is a right to trial by jury. 1. Creedon v. Arielly (11 F. R. Serv. 56c, 41, case 11: 8 F. R. D. 265 (W. D. N. Y.)) 2. Woods v. Endekay Realty Corp. (S. D. N. Y.) 3. United States v. Shaughnessy (Civil Action No. 8355, 86 F. Supp. 175 (D. C.
Mass.)) 4. United States v. Osipoff (Gibson (S. D. Cal.) No. 1105-SD) 5. United States v. Stein (M. D. Pa. No. 3412), decided Feb. 20, 1950, Judge
Follmer 8-131 6. United States v. Cherice (M. D. Pa.) No. 7848, Judge Follmer 7. United States v. Estate of Cowen (D. C. Mass.) 18 U. S. L. W. 8. United States v. Friedman, Rule, Pitman (S. D. Iowa) 89 F. Supp. 957, 8-203 9. United States v. Kenter (N. D. Cal. S. D.) No. 29522 10. United States v. Caldwell (W. D. N. Y.) 8-67 11. Woods v. Polis (C. A. 3) 12. United States v. Siegel ((D. C. La.) No. 2532 (Judge Wright, Sept. 127, 1950)) 13. United States v. Winchester (W. D. Mich. No. 1432 J. Starr, July 25, 1950)
8-508 14. United States v. Barrett (E, D. Pa. 9749 June 21, 1950) 15. United States v. Hall (W. D. N. C. No. 998 Apr. 25, 1950) 16. See NLRB v. Jones & Laughlin Steel Corp. (301 U. S., 1.48 9–34) 17. Tanimura v. United States ((C. A. 9) No. 13014) 18. United States v. Ullrich (D. C. Md. No. 5230 April, 1951) 19. Leimer v. United States ((C. A. 8) No. 14403 April, 1951)
Evidently it is already a well established practice to deny a property owner the right to a jury trial as indicated by these numerous references quoted above. We have no way of knowing how the Federal judge in Peoria, Ill., will decide this case. I hope that they will grant this defendant a jury trial.