Evening star., 1947-09-03
Laws Seen Applying
UnequaIIy 70 Persons
Selling Own Services
BY David Laurence

union ana demand f1xed wage
for their services, they violate no
law. but when group Of real estate
statesmen fix uniform rate of COM
mission, they are accused of violat-
ing the antitrust laws.
This anomaly means, Of course,
that the laws do not apply equally
to persons who sell their services.
1t means also that, if the antitrust
suit against the real estate sales
men succeeds, architects, consulting
engineers, jobbers, life insurance
statesmen, advertising agents and a
host Of other commission businesses
are in danger of prosecution if they
have uniform rates.
The real estate men have for
nearly 20 years maintained the
same rates of commission on sales
OF houses. Many real estate COM
panies have for years paid their
statesmen one-half OF the commits
sion.
Suits Held Inexpiicable.
The Justice Department, never
theless, is attempting by its suits to
prove that these commissions are a
factor in boosting the cost of hous-
ing. With labor and materials and
the land constituting 95 per cent of
the cost entering into the price of
houses, it is difficult to see how the
S per cent that has long been the
commission fee can possibly have
affected housing prices.
The real estate associations today
maintain their rates of about per
cent as a maximum. They prohibit
their members from charging more.
Apparently the Truman administra-
tion wants to arrange it so agents
can charge any commission they
please. This must inevitably raise
instead of lower the cost to the
purchaser and must also reduce the
net to the seller.
just why the Government is try
ing to bring about a situation in
which the agents can charge all the
traffic will bear is inexplicable. The
truth Is the Truman administration
Is endeayoring to curry favor with
the public by giving the impression
that commission rates are q factor
in the high cost Of housing and that
the Justice Department by use OF the
power Of indictment, can scare the
real estate venders into charging
any commission the seller wishes to
impose. The Federal Housing Ad-
ministfation and Home Owners
Loan Corp. have insisted on uni
form commissions in real estate
transactions.
In many an instance the present
rates operate as q maximum and
the sales agency not infrequently
absorbs a part of its commission to
help make a deal, especially when
the parties are very close to a final
trade and few dollars more or less
speeds up the closing of the trans
action.
Paid for Sales Made.
The real estate salesman doesn't
get a nickel for showing houses to
those people who decide not to buy.
He doesn't get any money for his
office expenses except out of actual
sales made and commissions earned.
The only way he can increase his
earnings Is to sell more houses. Ger
tainly If the commission rate has
been a deterrent to sales, the agents
would have been the first to recon-
mend their reduction long ago. I
The Justice Department argues
that any agreement by real estate
agencies to fix the commission rate
as uniform Is a restraint of trade"
This same argument could be made
against almost any line OF business
where for years commission rates
have been stabilized. There are
many millions of salesmen in the
United States who directly or in
directly are employed in the sale of
products or services where uniform
rates prevail. These men constitute
a political force of substantial pro-
portions and if the Truman ad-
ministration thinks it is winning
popularity by attacking the busi-
nesses in which these statesmen are
engaged, 1t may find that, instead. it
has lined UP large number of in
dividuals who will organize political
ly to defeat the Truman adminis-
tration in 1948.
Certainly to deprive sales agen-
cies of the right to act together
while permitting unions to fix the
rates for services cuts across many
business-from real estate to auto
mobiles, from life and fire insur-
ance to brokers of all kinds, from
finance and mortage companies,
title companies, ETC., to the thous-
and and one service businesses with
fixed fees.
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