Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-03
HEARINGS OPENED
ONL|CENS|NG BILLS
FOR REALTY TRADE
Witness Declares Investiga-
ton Was Result of F. H.
Smith Co. indictments.
REALT0R DENIES RING
COULD FUNCTION HERE
Washington Board Spokesman De-
Clares Dishonest and Incompetent
Dealers Only Are Hit.

Alleged fraudulent activities of the
F. H. Smith Co., large real estate
finance concern, officials of which have
been indicted on fraud charges, inspired
the Senate to launch an investigation OF
real estate conditions here, which has
resulted in the drafting of three meas
ures concerning promotion of securities,
mortgage foreclosures, and the licensing
of real estate operators, members of the
House District committee were told this
morning when hearings started on the
proposed license law.
Patman Questions Brinkman.
Oscar H. Brinkman, former secretary
to the Senate District committee, who
was employed to draft the bills for the
Senate committee headed by Senator
Blaine of Wisconsin, made the state
ment in reply to questions by Repre-
sentative Patman of Texas as to the
need and purpose of license law for
brokers and statesmen.
Fears were voiced by Mr.. Patman
during the hearing that adoption of a
license law, while designed to eliminate
from the local field dishonest or incom-
petent dealers, might result in reducing
the number of real estate men here
and make 1t easier for them to form q
combine or trust with the intent of
holding up real estate prices or rentals.
Mr.. Brinkman doubted if this would
be the result, because of the large num-
Der of dealers who probably would re-
main IN business here, among whom he
believed would be sufncient number
Of independent" brokers to assure COM
petition.
Trust or Ring" DiscIaimed.
A direct disclaimer that a real estate
trust or ring exists or could operate
in washington was made by John A..
Petty, spokesman for the Washington
Real Estate Board. which, for several
years, has urged passage of a license
law similar to those in operation now
in IS States Of the country.
Because of the severe competition in
real estate business here, he declared,
it would be utterly impossible" for
ring" to be created or to function in
holding up rental prices or market VAL
ues Of property. He declared that the
proposed license law urged by the local
realtors, which is modelled after the
law fostered by the National Association
Of Real Estate Boards, would eliminate
from the local business only those found
to be guilty of dishonest, fraudulent
acts or those found utterly incompetent,
leaving the field as open to legitimate
competition as at present.
Mr.. Petty told the committee that he
had been in business here for IS years
and for nearly a decade had been ON
cially connected with the Real Estate
Board. In all that time, he asserted,
he never had heard any suggestion,
formal or informal, of any activity de-
signed to control rental or sale prices
through . ring" or otherwise.
At the outset Of the hearing, which
was conducted by Representative Nc
Leod Of Michigan, acting chairman of
the House District committee, Mr..
Brinkman offered the license measure
which he drafted for the Blaine Senate
committee as substitute for bin in
troduced last Fall by Senator Capper
and Representative zihlman, chairmen
of the Senate and House District COM
mittees.
The Blaine measure, he contended,
was more practicable, provided greater
protection to the public and set up bet
ter machinery than the other, though it
differs mostly in what were described
as minor details. Both are based on
tional realtors body.
Eliminates Fake Sale.
One of the major differences In the
two bills is that the Blaine measure
contains a clause making it illegal for
any licensed operator to execute a simu-
lated or fake sale or mortgage or trust
transaction with. the intent Of mislead-
ing others as to the value Of property
concerned.
Urging adoption of the Blaine bill,
Mr.. Brinkman pointed out that it would
provide for a licensing commission COM
than two of whom would be engaged
actively in real estate business, with the
District tax assessor serving as an ex-
oficio member.