The Washington times., 1929-05-11
T FINANCING
CROOKED.
SENATOR
THINKS

Armed with abundant data
on realty financing in the Dis
trict, Senator Smith W. Brook
hart of Iowa declared today
he would press passage by the
Senate of his resolution for
an investigation Of the real
estate and finance corporations
Of Washington.
The 1owan expects to file with the
Senate, within the next few days, IN
formation detailing specific instances
In which he believes shady financing
was involved.
This memorandum will be put In
by Senator Brookhart after the judi
ciary Committee has considered his
resolution, Senator George W. Nor
ris, of Nebraska, chairman of the
committee, said his group probably
would consider the matter at meet
ing on Monday.
Sees Quick Action
Brookhart is certain the commit
tee will recommend an investigation
to be made, either by the full COM
mittee or a subcommittee thereof,
during the recess which the Senate
will take late this month, while the
Finance Committee is studying the
tariff bill.
The author of the resolution said
he would decline to make any def
mite statements about his informa-
ton until he has filed his memo
randum. He did say, however, that
the resolution Is the result of three
months investigation, not only in
Washington but in other cities
throughout the country.
II am no stranger to inVestiga.
tions of blue sky activities" said
the Iowan. Before I came to the
Senate, | prosecuted and sent to
prison a combine of dishonest stock
promoters in my home county.
oddly enough. the investigation
into the Washington situation was
brought to my attention as a re-
suit of mortgage bond sales in
Washington, Iowa. One was $500
bond, and the other was for $500.
They had been sold as a result of
advertisements by Washington
realty investment company.
Bonds Worthless
when 1 examined the bonds, I
found they were worthless, and i'm
mediately began an inquiry. I did
not acquaint the investment com.
pany with my actions, but pursued
the trail until / was certain of my
ground
The F. H. Smith Company, Wash.
ingt0n realty investment corpora.
ton, is the only company mentioned
in the Brookhart resolution. That
organization came into the limelight
in 1924, when the Senate District
Committee conducted a searching
inquiry into local real estate prac-
tees to determine the advisability
of extending the life of the Ball
rent act.
The committee devoted a consider.
able section of its report to the
activities of the Smith COMPANY
Edward H. Schirmer, Investigator
for the committee, charged that the
Smith organization was pyramiding
trusts on apartment house and hotel
property In order to increase their
valuation, and thus to obtain a.
higher scale of rates from the Rent
Commission.
Schrimer also charged that the
Smith Corporation and affiliated
interests comprised a combine de.
sign to control the real estate-sitsia.
ton.
The name of the Commonwealth
Finance Corporation, of New York,
appears at frequent intervals in the
Schirmer report, in connection with
charges that 1t had lost money
through its dealings with the Smith
organization.
The BroOkhart resolution states,
It is alleged, that the New York
company has been defrauded of
more than $1,000, 900 of its assets by
reason of fraudulent nisrepresenta.
tion as to real estate values in the
District of Columbia.
In the course of Brookhart's own
investigation, he said, he has called
to his office several prominent
Washingtonians. many engaged in
real estate operations, The major.
ity of these men, he said, have no
sympathy with sharp practice in
realty financing In the District.