Evening star., 1924-05-13

president of that concern were on
very friendly terms, 1 will put it,
with the president and vice president
Of tho F. H. Smith Company. They
agreed upon the assessment board
that would be appointed to value
these properties each time.
II would like to modify the term
innocent | think the first people
VINO took the notes were not inno-
cent. but they sold them to other
people who were innocent. For in
stance, the bank would take over a
lot of the notes and sell them to
their customers, but they took the
notes over at large discount and
would sell them at par. That is the
reason why l say the emergency still
exists. Whether it exists in the num-
ber of houses or not, it exists be-
cause the law of supply and demand
no longer is regulating the situation.
The supply may be all right, but it
is prohibitive so far as prices are
concerned and prevents the demand
being effective. The people cannot
pay the prices that are charged The
people cannot pay the rental on the
property and at the same time pay
the interest on million or two mil
hon dollars of watered stock"
After outlining six general reasons
for high prices and rents, the report
of the investigators then gives the
following details:
Lists Parties Concerned.
There are listed below the names
of individuals, firms and corpora
connected directly or indirectly with
or form part of the con. n.oination in
an attempt to control the real estate
situation in the District of Columbia:
The F. H. Smith Company; J. Eris
Powell president; G: Bryan Pitts,
vice president; Samuel j. Henry, vice
president; William II. West, vice
president; Edwin l.. Feugel, general
manager; G. Edward Perry, assist
ant secretary; Bernard T.. Niehmann,
Collifiower, salesman; Flora f. Davis.
bookkeeper; Frank s. Carroll, clerk;
Francis n. Cook, clerk.
Emory L. Coblentz, president Fred
erick (Md.) Trust Company.
Frank 3. Essex, co-oWner of r. p
Whitty Company, contractors.
Frederick (Md) Trust Company.
Commonwealth Finance Corpora
tion of New York.
In addition to these there are
minor operators, evidently employed
as dummies for the larger operators.
This list includes: w. A. Mills. c. w.
Simpson Company, II. w. Stubble
field, q. A. Street. Felix Lake, Nam
ME f. Goss. David w. Burke and c.
w. Donaldson.
The +. II. Smith Company operate
under many incorporated names, or
subsidiaries which have been formed
by some of the members of this
combination or their allies. Listed
herewith are some of the names of
these subsidiaries: The Metropolitan
Properties Corporation, the District
Properties Corporation, the District
Apartment Corporation, the Chateau
Thierry Corporation, the Lincoln
Properties Corporation, the West
moreland Corporation, the Massa-
chusetts Corporation the Hotel Ham
ilton Corporation and many others.
The officers. directors and stock
holders of these corporations are
either officers or clerks of the F. H.
Smith Company, or persons connected
directly or indirectly with the r. H.
Smith Company or connected with
some of the banks or financial cor
porationS lending money on the oper-
ations mentioned in this report. This
Will be noted in the transcripts of
deeds and trusts taken from the land
records of the District of Columbia
These transcriptions are attached to
the report and marked exhibits
Sees Smith Company i'm Control
The combination, as it exists, seems
largely controlled by the +. II. Smith
Company, which either own or con-
troll a large percentage of the apart
ment houses and office buildings, of
the newer and larger construction,
Your attention is directed to the
names of Felix Lake, Mamie Z. Goss,
David w. Burke and c. w. Donaldson
One or more of these names appear
corporations of the F. II. Smith Com
pany have bought, sold or loaned
money on the property. 1t il evident
from Investigations that these four
people. especially Felix Lake. operat-
ed in these deals as agent, or tool, for
the L. III. Smith COmpauV
With further reference to an at
tempt to control the real estate situa-
ton by combination your atten-
ton is again directed to the name of
Felix Lake
1T is a conceded fact in Washing
ton that Felix Lake did not buy these
properties for himself, and. as he is
man OF very limited means, it is quite
evIdent, Judging from the amounts in
Volved in these transactions. that he
was acting only as an agent for some
one else
During the year 1921 Felix Lake
purchased. or there was decided in his
name, millions of dollars worth of
property. OF this amount we have
$4,000, 600"
1T will be noted by the records
that all of the property, with the
exception of a few pieces that were
in the name of Felix Lake. has been
transferred to the f. H Smith Co.
or subsidiaries of the f. H. Smith
Company.
Again, during the period while he
was purchasing, millions of dollars
being secured against him in the
District courts for amounts of from
20 for groceries and merchandise to
slo,OOO on unpaid notes and service
rendered
Call "Tool" of Combination.
We contend that Felix Lake never
was the owner of any of this property,
put was one of the members of the
com bination, or merely a tool of the
combination.
As to the methods used, it is quite
evident that this combination is at
by creating inflated or false prices
without, really affecting tfA real or
true value, as is indicated by sales
or properties at public auction on
which large sums of money have been
borrowed or fictitious trusts have been
placed. This imitation is created by
loadlng property with fictitious trusts
and then selling these trusts or the
property to outside interests. The
sound, conservative industrial, com
merclal, and residential growth of
the community has been retarded nv
these inflated prices"
me report theN gives detailed illus
tratlons of how a number of apart
ments were inflated through repeated
sales. The first illustration given in
lne report is that of the PentiIIv
apartments. which follows:
IN this instance, Frank B. Carroll
assistant manager of the F.. H. Smith
company purchased on February 2S.
1917. the property from Z. G. Walker
for 100000. subject to a first deed of
trust of 100000. He gave as deferred
payment second deed of trust on
The property amounting to S125,OOO,
and the balance, $4,000, was evil
IDENTIFY paid in cash. Carroll then
borrowed. on February %, 1922. from