New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-01-21
big, Ten'' Uses
Dummy Firms
TO Boost Re1,ss
System Whereby Landlord
Shifted Property From
One to Another of His
Companies Is Disclosed
Untermyer Scores Courts
Says Transfers Should Have
Been Probcd; Assails
General Electric Officials

ten big landlords" said to be RESPONSE
bic for the flood Of rent cases in the
Washington Heights and Harlem sec
lions it was revealed at yesterdays
session of the Lockwood housing COM
mlttee that a scheme of transferring
properties to dummy companies was
used by these landlords as a basis for
their rent-boosting operations.
Samuel Untermycr, chief counsel to
the committee, said it was an aston
lshing fact that the Municipal Court
Justices never went below the surface
TO inquire into the good faith of these
transfers or tried to find out If the
convcyances were made for the express
purpose Of being used for a raise in
rent, as the testimony seemed to show.
Justices View of Transfers
1t was recalled that Justice Crane
OF the Seventh District Municipal
Court, said on the witness stand last
week that it was probably true that
ten landlords in this distr,c, were re-
sponsiblc for three fourths of the It'll
cation in this court, but added that he
didn't think that was any concern Of
the justices, and he saw no reason
why they should inquire into it, Mr.
Ontermycr showed that the transfer Of
properties by some of these landlords
TO their various aliases was one of the
chief sources of the rent-boostinp
trouble. %
The system was uncovered through
inn 1c =
watt Terry, two Of the "ten big land
lords in the Seventh Municipal Court
Instruct. Shenk was shown to be con-
nected with at least four concerns to
winch he passed his properties around
or which we're named in real estate deals
IN the course Of which rents we're boosted
as high as 100 per cent. John p.
Burns, chief clerk of the court, said
onenk appeared under at least eight
ailases III connection with from 1900
TO 1000 rent cases in the Seventh
II hope" remarked Mr.. Unterr1yer,
that the judges will see to it that
hereafter these poor, unprotected ten
ants who are brought into court have
at least sufficient consideration shown
to them TO have the judges examine
beneath the surface of these cases for
the purpose of finding out II these con-
yeyances have been juggled to create a
basis for increased rents"
The committee, acting on the sugges-
ton OF Mr.. Untermyer, ordered that the
testimony be sent to the president Of
the Board Of Municipal Court Justices
with the request that the situation be
called to the attention of the other
justices.
Company Maintains Island Resort
Testimony showing that the General
Electr!c Company maintained, at cost,
according to Mr.. Untermyer, of about
$3.50 1000, a sort of summer resort on
Association Island in Lake Ontario and
charged it to the incandescent lamp de-
partment, was offered during the exam
nation Of Franklin s. Terry, manager
OF the National Lamp Works, owned
by the General Electric. Mr.. Terry
said 1t was Injecting place where
members Of the firm and their families
go to get acquainted"
it was also intimated in the course
OF the examination Of William R. Bur
rows. manager Of the Edison Lamp
works in Newark, that ]. p. Morgan l.
20. were the bankers for the General
electric Company, and that Charles
steele and Dwight Morrow, members Of
the Morgan firm, were on the board of
Mr.. Untcrmyer said that at the m.et-
ing of the committee next Thursday he
would outline the point of view from
which,. l think, drastic measures should
be taken to prosecute the officials
connected with the General Electric
Company, based upon the testimony
taken by this committee, both for
contempt Of court and criminally.
| want TO outline the entire situation
as | understand it, 80 that the conf
mittee will be in possession Of the
basis for this request"
When Shenk, the landlord, was called
to the stand, he said he lived at 10
West 120th Street, that he had bought
and sold approximately three hundred
apartment houses In the last five years,
and handled about s30,000,000. He re-
cited his connections with the Ardmorc
Estates, Liberal Financing Corporation,
Shenk Realty and Construction Com
pany (Which did no construction), and
the Pennant Realty Company.
In 1921, he said, the Ardmore Es-
tates, firm in which he owns half the
corporate stock, had transactions with
the Liberal Financing Corporation, in
which he also was interested, amount
ing to $S.0O0000. The deals involved al
legged apartment house sales, he said.
but only s350,000 in cash figured in
the transactions.
The Shenk Realty Corporation owns
about twenty-four Washington Heights
apartment houses, he said, and the
Ardmore Estates controls about sixty.
Shenk says he is the agent for all these
houses and collects all the rents. He
added that a man named Bernard
Klahr was associated with him in the
Ardmorc Estates firm.
Shenk Explains System
Shcnk admitted that he organized the
Pcnnant Realty Company as a leasing
organization. He said he had an agree
ment with the owner of property at
18th Street and Broadway to give the
latter schedule of rentals there. He
leased the property to the new dummy
company, he said, in order to conceal
from the owner what rentals he was
getting from the apartment house.
THAT was dishonorable, wasn't it?
asked Mr.. Untermyer.
Il don't think So" replied Shenk.
The original lease for this property,
said Shenk, was for $4,000. In 1919
it was raised to $4,000. and now his
gross rentals, he said, were $4,000.
did you lease the house to boost
the rents?" asked the counsel.
"No, only to make money in a req
sonable way" Shenk answered.
Shenk denied he was interested IN