Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-31
Protection From Loss.

petent civic leaders and, indeed, also,
among outstanding leaders and a large
body of those engaged in this form of
business.
Experiences here and elsewhere have
shown that, no matter how honest or
how conservative the majority of the
operators IN any field of business en-
deavor may be, there is always the pos
Sibility of mistakes or fraudulent deal
ings on the part of the incompetent or
the INSCRIPTIONS. The scandals and
investigations, which have resulted in
some cases in prosecutions by the Gov
eminent, that have been visited in sue
cession upon Washington in the past
several years, have been shocking and
damaging to those investors and deal
ers who know that investments in real
estate and realty securities can be, and
should be- both safe and profitable to
the dealer and investor alike.
Washington looks to Congress, as it
must, for constructive action which will
set up needed forms of protection OF
reasonable character, which will assure
the private investor of square deal.
Such type OF protection also will pro-
vide square deal for the operators who
conduct their business along competent,
sound and honest lines.
Committees of Congress for the past
five or six years have had before them
for consideration a number of proposals
directed to this end. Hearings have
been held on several types OF proposed
legislation. Investigations have been
made, sometimes under the compulsion
of subpoenas, which have brought to
light facts particularly emphasizing the
need for constructive, corrective legisla-
ton. None of the facts disclosed has
served as a blanket indictment OF the
business of real estate or realty securi-
ties. This is an honorable and produc-
tive and fundamental business. Millions
OF purchasers Of dwellings and millions
of investors in mortgage bond issues
here and in cities throughout the coun-
try have found their holdings satisfying
and profitable. The evidences OF mis-
adventures and misdemeanors and fall
ures here end there have brought to
mind time and again. however, that the
Government should set up protection for
the public. Otherwise, confidence in
what could be a "gilt-edge" type Of
business may decline to an extent dam
aging to public welfare. Reasonable
regulation Is justified because the pri-
vate investor makes possible realty de-
velopments both large and small.
Congress, under authority of the
Federal Constitution, is the legislative
body for the District, which now has
only the privilege of petition regarding
its needs. Local residents, through
various organizations, have. petitioned
time and again for such protection.
Congress. through numerous hearings
conducted by its committees. has been
informed Of the needs. The time has
come for constructive action.
Just what forms of regulation are
required is a matter for the discretion
and Judgment of Congress. One pro-
posed law provides for the licensing
Of local real estate brokers and sales
men along lines of a model law now
in effect in twenty-five States of this
country. Under this law any broker or
salesman found guilty of unethical acts,
fraudulent practices or gross misrep-
resentation could be barred from activi-
ties here. Organized real estate men
likewise have asked that this type
Of regulation be imposed upon them
selves. This proposal has been before
Congress for five or six years. The
Senate has passed such bill, but the
House has not yet voted on the matter.
For a number Of years the Better
Business Bureau and other agencies
have urged the adoption of some form
Of regulation of the sale of securities.
AS yet no affirmative action has been
taken by Congress. One type Of law
would set up Blue Sky Commission
TO pass upon securities before they
could be sold. Another type of regu-
lation. known as a fraud law, would
provide for licensing and bonding Of
agents selling securities, give the
United States attorney additional pow
ers Of investigation and an injunction
power 10 stop fraudulent dealings.
There is q growing feeling, also that
mortgage banking firms, handling mil
lions of dollars of the funds of private
investors, should be placed under some
form of Government supervision COM
parable to the supervision now main
tanned by the Government over ma
tional banks savings banks and build
ing and loan associations. Such SUI
pervision has served to protect the GUS
toners Of such institutions. Such SUI
peryision, instead Of raising question
as to the integrity Of the banks and
building and loan associations, has
stimulated public confidence in them
There are responsible folk who be-
lieye the extension of such supervision
over the affairs Of mortgage banks
would prove helpful to the public and
in no wise damaging to the mortgage
houses.
It is to be hoped that Congress-
despite its many other cares and re-
sponsibilities, will consider these ques-
tons and act in the protection OF the
public of Washington.
A loyal Californian talks about the
glories Of its climate. The motion