Evening star., 1947-08-28


directors of the Washington board
j. Garrett Bethel, Lewis r.
Breuninger, Lewis F.. Colbert, s. Do
Ian Donohoe, c. H. Hillegeist, pres
ident of w. r.. E. B.; Edward K.
Jones, William l.. Lebling, S. Miles
Montgomery, F. Moran McConihe,
William L. Orem, jr.: Thomas w.
Sandoz, J. Hawley Smith. Raymond
M. Taylor, DeVere r. Weldon and
Carey Winston.
These Washington realtors are
listed in the civil suit as being
members also of N. A. r. E. B.
The civil suit goes further by as
serting:
"All of the present members Of
the Washington Board, other than
those members specifically named
herein as defendants, are hereby
sued as class. They constitute a
class of persons having identical in
tereSts In the subject matter of this
action ana are SO numerous as to
make it impractical to bring them
all before the court.
Various persons, not made de-
PENDANTS herein. participated as Go
conspirators with the defendants in
the offenses hereinafter charged,
and performed acts and made state
ments in furtherance of the effec-
tuation thereof.
These co-conspirators include ta)
those who have been officers and
members of the Washington board
and individuals who, from time to
time, acted as the representatives
of the members in meetings and
other activities Of the Washington
board, and ID, those who have been
officers. directors and members of
committees of the national associa-
ton"
Charges Competition Eliminated.
The grand jury indictment
charged, and the Government also
complained in it's civil suit, that the
alleged conspiracy between w. r.
E. B. and N. A. R. E. B. not only
eliminated competition among real
estate dealers here but also increased
the amounts paid as commissions
to brokers by as much, as from Is
to so per cent.
The activities and business poll
cies of real estate brokers engaged
in selling, exchanging, leasing and
managing real property, and the
Improvements thereon, in the Dis
trict OF Columbia have been actively
and effectively restricted and domi-
mated" the indictment stated.
Prior to February Is, 1943, the in
dictment noted, the Washington
boards schedule of commissions on
sales of real estate was 5 per cent
ON the first $1,000 Of the sales price.
On that date. the board adopted a
new schedule which, according to
the indictment, required" members
to abide by rule which read:
The commission on all sales of
real estate within the District Of
Columbia shall be per cent Of the
sales price up to and including
$4,000 and 3 per cent on the excess
above s50000."
Standard Contract Cited.
The indictment stated that the
Washington board also issues a
standard form of sales contract
which contains the following provi-
sion:
The seller agrees to pay the agent
the regular rate of commission fixed
by tine Washington Real Estate
Board"
Referring to the conspiracy charge
the indictment held that:
For many years prior to January
l. 1947, the national associa ton had
a committee on rates, rules and GUS
toms. One Of the purposes of said
committee was to raise brokerage
commission rates and achieve uni
formity in said rates throughout the
United States, including the District
Of Columbia.
said committee made studies Of
brokerage commission rates prevail
ing in various States and in the
District of Columbia and thereafter
Initiated q plan to raise rates of
commission charged by various
members of the national association
throughout the United States, in
Guiding those doing business In the
District of Columbia, and to achieve
uniformity in those rates.
I'm accordance with the recon-
mendations OF the national associa-
ton. the Washington board in
creased the rates established in its
schedule of commissions.
Condition Of Membership.
members of the washington
board agree as a. condition Of men,
bership in the national association
to abide by the code of ethics of
the national association. Article 8
Of this code requires each member
Of each local real estate board. in
Guiding the Washington board, to
observe the schedule of commissions
established by the local board of
which he is a member.
Article IA of the constitution and
bylaws of the Washington board
provides that said board may adopt
specific rules of practice or ethics
and that any such rules. when
adopted, are binding on each men,
ber.
In accordance with this provi-
sion, the Washington board has
adopted schedule of commissions
which fixes the standard rates of
commissions charged by its members
for acting as agents in the sale,
exchange, lease and management
of real property in the District of
Columbia. All members of the
Washington board agree and have
agreed, as a condition of member
ship, to abide by this code of ethics,
and, in accordance wherewith, men,
bers sohere and have adhered to
the schedule of commissions estab-
lished by the Washington board.
Action Comes Unexpectedly.
The handing down OF the indict-
ment came unexpectedly about $3.50
pm. yesterday. Since August 90
the jury had questioned 10 Of the
20 witnesses said to have been sub
poened. Thess included several ON