Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-20

ton Of the lots and consideration of
top of this. he said, is comparison of
current sales of properties in the vi
entity of the one being assessed.
Citing the difficulty" of arriving at
fair market value" he pointed to the
case of the City Club Building. He re-
ported that it was sold at auction for
1888 900, whereas the assessed value was
100000, and whereas also competent
real estate appraisers had declared II
to be worth in excess of $1,000, 900,
prior to the auction sale.
Mayfower Operated at Loss.
Thomas w. Fitzgerald, certified pub
lie accountant, told the committee the
Mayfower had been operating at loss
ever since, and before the bonds were
issued in April, 1923. He also said that
estimates of 70 per cent of capacity
occupancy, on which statement bonds
were issued, was, in fact. never reached.
The accountants testimony with re-
Elected a condition which Senator
Blaine described as inflated"
The several Wardman companies
were so interlocked in the matter of
their organization that it is almost
impossible to distinguish among them
in some cases." Fitzgerald asserted. I'm
some cases the same assest have been
pledged by several different Wardman
concerns in support of different security
issues"
Fitzgerald testified that some of the
500 bonds, sold two years ago, sold
through Halsey, Stuart & Co., are now
bringing only $50 and $40.
Were they sold all over the country?"
Senator Blaine asked.
Yes, and many of them to women"
Brinkman answered.
Sets Loss at $780, 900.
Up to last September 80, Fitzgerald
resumed, the Wardman companies
sustained a total loss of approximately
$3,500,000. He said this total loss
estimate would have been increased by
nearly 81 100000 more If the financing
costs had been properly charged.
In September, 1880, Fitzgerald said,
the Wardman Realty & Construction
Co. had assets of $1,800,000 and out
standing liabilities of $4,458,623. The
has $4,000, 900 in bonds which will fall
due during the coming year, and has
made no provision to meet them, he
said.
Mr.. Brinkman then told the commit
tee that the several Wardman organ
lZaIlOnS had ralSc d money through the
sale of first, second, third and fourth
mortgage bonds He explained, how
ever, that these bond issues were other
wise identified for purposes misleading
prospective purchasers.
THE term first and refunding mort
gage which appears in some of the
advertising matter, was, apparently,
nothing more than deceptive language
designed to make second-mortgage
bonds appear as a first-mortgage ISSUE"
Senator Blaine stated.
Smith Co. Method Cited.
Mr.. Brinkman asserted this method
of financing was virtually the same as
that employed by the F. H. Smith Co.,
several of whose officials are now fac
ing criminal prosecution for their ac-
Invites in this connection.
Senator Blaine offered Paul v. Key
ser. representing the American Invest
ment Bankers Association a chance to
express his opinion regarding the bond
issues.
II have no doubt there has been in
the past an overoptimism. which, in
some instances, has gone beyond this
to the extent of being unreasonable"
Mr.. Keyser said I'VE have all agreed
on the need of better protection here.
Our group only disagrees with you as
to the particular method which might
best be followed"
Mr. Addison asserted the present bill
would stifle development in the city
by precluding financing operation until
after the buildings had been completed
and assessed :,