Evening star., 1935-04-16
MAN WHOLOANED
SHOREHAM FUNDS
KEPT ANONYMOUS
BraIove ResiSts Efforts to
Find From Whom He
Got $500, 900.
CREDIT TIMID, HE SAYS
AS INQUIRY RECESSES
Hearings to Resume in Week or
Ten Days, With Court Jus.
tices Summoned.

y
the special House committee lnvesti-
eating mortgage refinancing recessed
yesterday after Harry M. Bralove,
local builder, had successfully re-
sisted efforts of committee members
to identify the man from whom he
obtained $500, 1000 used in ref1nancine
the Shoreham Hotel.
Committee Chairman SABBATH an
nounced the hearings will be resumed
within a week or 10 days. when Dis
trict Supreme Court Justices F. Dick
inson Let's, Joseph w. Cox, Peyton
Gordon and several lawyers will be
asked to appear as witnesses Mr.
SABBATH said the committee desired
some time to go over the evidence al
ready taken and decide what matters
it will take up next.
Edward F. Colladay, Washington
attorney, told the committee yester-
day that Bralove obtained the
100000 from Henry L. Doherty. utili-
ties operator. Desiring to go further
into this transaction, the committee
recalled Bralove, who had testified
earlier.
Bralove Objects to Answering.
'Did you get that money from Mr.
Doherty?" Representative O'Malley Of
Wisconsin, asked.
Bralove objected to answering the
question. He explained that credit Il
timid" and said he couldn't see why
his sources should be embarrassed un-
less an answer would be material tc
the investigation. After some discus.
sion, in which O'Malley said hi
couldn't see why this man of mys.
terry" should be shielded, Chairman
SABBATH announced he would take tht
matter under consideration and ruiz
on the question at the next session.
O'Malley then asked the witness !!
he had obtained the money through
Edmund D. Rheem, former head o.
Swartzell, Rheem g. Hensey Co., nov
serving seven-year penitentiary SEN
tence in connection with the failure
Of his firm. Bralove said he did no
get 1t from Rheem. He added that Il
was personal loan, for which no col.
lateral was required, and that it hai
been repaid with interest.
Colladay was questioned at length
concerning the compromise Of a leas,
with Dulin g. Martin while he wa.
serving as receiver for the La Sale
Apartments. Dulin & Martin owec
approximately $4,000 under a 90
year lease, which was compromised
for $500 and the lease Cancelled
Contending this action was unfair
to the note holders, the committee
asked Colladay If his allegiance was
divided between the La Sale and
Dulin g. Martin. This was denied BY
the witness.
Are you sure that at every stage
Of the proceedings you were absolutely
loyal to the La Sale note holders?"
Colladay replied that he had been
entirely SO, and suggested the ques-
tions were getting close to accusa-
tons. but that he was willing to
answer them.
Deal Might Have Failed.
He then explained the compromise
was made because the receivers con-
sidered it the best means of getting
Dulin & Martin out of the building so
the space they occupied could be
rented to the Government for more
money. Unless they had eompro-
missed, he said, Dulin & Martin, by
refusing to vacate, could have ruined
the chances of leasing to the Gov
ernment.
Earlier, Colladay told of negotiations
for a loan by the Shoreham Hotel
Noteholders' Committee, of which he
was q member, for the purpose of re-
organizing that property. It had
been suggested the committee should
have bought out Bralove's claim, to-
gether with some 100000 in other
claims, to give the noteholders clear
title to the hotel.
THE committee" Colladay said,
'had tried for long while to get
money. Every one who came along
had no money to offer. We also tried
the Reconstruction Finance Corp
Then Bralove came along with an
offer to lend $500, 900, and he was
the only one who could produce. We
borrowed the money and felt we were
lucky to get 1t.
Denies Anything Wrong.
He also denied there was anything
wrong in the fact that the committee
did not inform the noteholders of a
contract with Bralove, especially in
view of the fact that the contract was
never consummated. 1.-THE commit
tee," he declared, had been given full
power to act for the noteholders. We
did not disclose the fact of the con-
tract because we were dealing with
various hostile interests and we did
not want them to know about 1t"
He expressed the belief the Shore
ham reorganization was one of the
best in the country and that the note
holders, If they hold on to their Sc
curities, will realize dollar for dollar
on their investment.
Rush L. Holland, former Mayfiower
Hotel receiver, told the committee
several prominent men, including Post
master General Farley and former Vice
President Curtis, had been given pre-
ferred rates at the hotel. He said
the loss Of revenue to the hotel was
more than made up by the increase
in business, which resulted from hav-
ing them there.
Rents Here Scored.
Chairman SABBATH, depressing from
the main purpose Of the investiga-
ton, asserted that rents In Washing
ton are "disgracefully high," and asked
william L. Beale, vice president of
the American Security & Trust Co.,
if this was due to over-capitalization.
Beale said he didn't think so, that
rental rates are regulated by supply
and demand.
Mr.. SABBATH then said he intended
to recommend to the President that
10 apartments be constructed here
with Government funds as means
Of forcing rents down and improving
living conditions. He said he pro-
posed to have two of these set aside