Evening star., 1948-05-26
NoRea|tyBroker
Punished for Fee
Cuts, Rush Says
Practice Takes Place
Only Too Often,'
Board OfficioI Says
By FIuncis p Douglas

By Fioncis P. Douglas
Charles ]. Rush, executive
secretary Of the Washington
Real Estate Board, testified to-
day in the Governments anti
trust prosecution of the Wash
ington board and the National
Association of Real Esate Boards
that while the District board re-
garded cutting commissions as
unethical no disciplinary action
ever was taken against those
who did it.
The Government charges the
Washington board and the national
association conspired to fix commits
sions on real estate transactions.
The case, a criminal action, is being
tried in Justice Edward M. Curran's
division of District Court.
While Mr.. Rush was being ques-
toned by Attorney William E. Leahy,
representing the Washington Board,
Justice Curran brought up hypo-
thetical case in which an owner
offered property at $4,000 and a
broker reported an offer of $45, 900.
The justice asked whether in such
an instance the owner might say
he would sell for SAT 500 if the broker
would take a commission of per
cent instead of 5 per cent.
Done "OnIy Too Often"
Mr.. Rush replied sadly that this
was done only too often"
Mr.. Leahy asked whether the
District Board ever disciplined,
suspended expelled or dragged on
the carpet" a broker for cutting fees.
Mr.. Rush replied, mo sir" and con-
ceded that the board exercised no
control over the individual broker.
Mr. Rush said as executive secre-
tary he received many letters asking
for the standard rates of commits
sions. He said that prior to last
August 27, the date of the indict-
ment of the two organizations, he
answered many questions about cut
ting rates with the statement it was
not good policy"
Lowell Baker of Chicago, admin
istrative secretary of the national
association, followed Mr. Rush on
the stand. He was questioned only
briefly.
The next witness was Herbert U.
Nelson, executive vice president of
the national association which has
headquarters in Chicago and a
branch Office here.
Nelson Letter Cited.
It was brought out that, in the late
1e30s, Mr.. Nelson had written a
letter saying that personally he had
long favored uniform commissions
in the realty business. The letter
was not Immediately admitted in
evidence.
Mr. Rush was on the stand all
day yesterday.
The Government so far has
brought out that:
The rules of the Washington
board formerly provided that it is
unethical to solicit business in nor
NAL instances at less than the
boards schedule of commissions.
On January 20, 1943, the Washing
ton board changed its schedule of
commissions. Since 1917 the COM
mission on sales had been per
cent of the first $1,000 of the sale
price and per cent on the amount
above $1,000 in the area close to
the heart of the city, and per cent
straight outside that area. This was
changed to per cent of the first
s50.000 and per cent on the excess
throughout the District.
Lease Commissions Changed.
A meeting on December 10. 1914
made changes in commissions for
leases on business properties. After
the change, the commission was s.
per cent on the first years rental,
21a per cent for the next 20 years,
l per cent for the next 81 years.
then half of l per cent for 81 years
and finally one-quarter OF l per
cent.
Mr.. Rush called the changes
notifications or Qualifications.
The Government introduced al
most 80 documents as exhibits In la
boriously building up its case. Mr..
Leahy then began questioning Mr..
Rush.
Testifies on Services.
Mr. Leahy brought out that the
national association has no control
over the Washington board. He also
had Mr.. Rush testify to the numer-
Gus services the board provides its
members.
Mr.. Rush testified that, while
there are 4,361 brokers and sales
men licensed here, only about $50
are affiliated with the board.