Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-26
PARKWAY failure
HIT BY COMMITTEE
Cooperative Apartment Idea
Found Sound, but Gilbert
DepIores Rash Ventures.

Holders Of the second trust on the
Parkway Apartments, cooperative
ownership project erected at Connecti-
cut avenue and Macomb street, failed
to exercise any precaution to protect
the buyers and countenanced the sale
under plan that any reasonable per-
son should have known was doomed
to failure" Representative Gilbert, act
ing chairman of the Gibson subcommit-
tee, which conducted an inquiry into
cooperative apartment business here,
declared today in announcing con-
clusions reached by the COMMITTEES ON
the subject.
While criticizing the financial oper-
alton Of the Parkway Apartments, how
ever, Mr.. Gilbert made it clear that
the committee in its study found that
the cooperative apartment idea is
fundamentally sound.
"The hearings have been productive
of evidence leading to the conviction
that the cooperative apartment plan
is fundamentally sound when properly
conceived, properly financed and prop
erly managed, with safeguards set up
for the protection of investors"
Warrant Issued for Arrest.
The Parkway failed last Spring as
cooperative project and was sold at
auction in July last under foreclosure
by holders of the second trust, Roy L.
Neuhauser and Sol Lansburgh, who also
suffered financial loss, according to teS-
timony of Mr.. Neuhauser at the
hearings. Warrants have been issued
for the arrest of Arthur M. Suit, who
was president of the Parkway corpora
tion.
The Gilbert statement adds: "It ap-
pears from the testimony that the hold
ers of the second trust on the Parkway
Apartments did not profit by the trans
action. On the contrary, it appears
that they lost money" He added, how
ever, that the committee feels that they
are entitled to little sympathy"
simultaneously with the report on the
hearings letter sent to Mr.. Gilbert
by the Better Business Bureau was
Rothschild, urging the enactment of
securities law for the District as a
means of protecting purchasers of stock
in cooperative apartments.
Findings Of Subcommittee.
The findings of the Gibson subcom-
mittee as reported today by Mr.. Gilbert
were announced as follows:
Members of the Gibson subcommit-
tee of the House committee on the Dis
trict of Columbia have just concluded
an inquiry conducted into the plan for
the sale of apartment houses to tenants
on cooperative ownership basis. The
object of the inquiry was to determine
the financial arrangements and plan Of
operation of cooperative apartments as
1t applies particularly to investors in
such apartments.
During hearings on this subject, tes-
timony was adduced from real estate
who have built up successful business
in cooperative apartments and also
from those connected in one way or
another with one cooperative project
which failed. with loss to those who
had invested in apartments in this
building.
1.-The hearings have been productive
of evidence leading to the conviction
that the cooperative apartment plan is
fundamentally sound when properly
conceived, properly financed and prop
erly managed, with safeguards set up
for the protection of investors.
I'm fact, though evidence was taken
concerning the failure of this one prof.
ect in question. the inquiry was not
productive of evidence tending to show
that the cooperative idea is wrong. I
believe that when a cooperative apart
ment project is properly planned by
honest, experienced and conscientious
operators. there is little doubt that it
should succeed SO long as there are
buyers in the market for permanent
apartment homes.
Believed Overpriced.
I'm the instance of the Parkway
Apartments. which was investigated by
the committee in connection with its
general study of the matter. there was
evidence which indicated that it was
conceived and improperly
from the start. Evidence
seemed to indicate also that the building
as offered to prospective purchasers was
It seemed apparent also
from testimony that this particular
apartment project was overfinanced,
which placed in jeopardy the invest
ment of those who purchased apart
.nents. It appeared from the testimony
that the holders of the second trust on
the Parkway Apartment did not profit
by the transaction. On the contrary,
1t appeared that they lost money. The
however, feels that they are
entitled to little sympathy. in SO far as
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