the case. They brought out a verdict, also in record time, but they did not give any explanation of their verdict. All the Court record says is that the judgment is reversed and then it gives a case number. This case number refers to the Cloyd Miller case. That is the case where Judge Paul Jones in Cleveland declared the law unconstitutional about 2 years prior to that. At that time, the Supreme Court found Judge Paul Jones in error, and they had at least the decency to write a decision justifying their verdict. In fact, there was even & minority decision.

Judge Jackson, at that time, pointed out that this type of legislation, under war powers, was a very dangerous type of legislation. Well, it seems that when the Shaw case came up to the Supreme Court, the Court had further deteriorated because they did not find it necessary to write any opinion in connection with the verdict.

Now the reference to the Cloyd Miller case is absolutely absurd because, in the law as it stood at that time, there were none of the features that Judge Shaw had criticized. Judge Shaw took special pains to state in his opinion that he had no quarrel with any of the decisions that the Supreme Court had made on prior occasions, and he specifically referred to the Cloyd Miller case, and said that he was concurring in that opinion, but that here under the local-option features, new elements were introduced, and that he felt that the delegation of powers was beyond all reason and could not be justified. Now I am not saying that Judge Shaw is right, but I think that if the decision of a Federal judge is reversed, he is entitled to know the reason why. I think that a plaintiff, if he hires an attorney and takes the case up to the Supreme Court and his case is denied, that he is entitled to an explanation of the verdict. I consider that the conduct of the Supreme Court is a public scandal and I am amazed that it has not generated a wave of criticism. No one compelled the Supreme Court to hear this case, if they thought it was unimportant. There was no need to hear it, but if they did hear it, I think they are morally obliged to give the citizens and the legal profession and all the judges the benefit of their opinions, and the reasons that are guiding them in bringing in a verdict.

We cannot insist that they bring in a verdict that should please the plaintiff or the defendant, but I think we are entitled that our Supreme Court should bring in a verdict that is logical and justifiable, and that clearly states the reasons behind the decision.

I have publicly stated that the Supreme Court simply could not meet the issue on a legal basis, that they were simply helping out the Administration, and that they figured that they had to correct any mistakes that Congress might have made, regardless of the rights of the defendant or plaintiff in this case, and that they decided the issue on purely political reasons. I protest against any such decision.

Gentlemen, I think I can see the handwriting on the wall in this coming election. If you keep on taking away the freedoms of the American people, you are going to have a very difficult time to get reelected. Forget about this old slogan that there are more tenants than landlords. It is not true and never was, the tenant is a vanishing species.

At the time rent control came in, there were 21,000,000 tenants in this country. I think now, you have about 17,000,000 left, and they

are getting to be fewer and fewer every day. As a matter of fact, there are only two cities in this whole United States where the tenants outnumber the owners. Those two cities are Chicago and New York. Even there, the percentage of tenants is constantly decreasing.

The American people have been very patient and have permitted Congress to whittle away a great deal of their freedom, but believe me, gentlemen, the American people are doing a little thinking. You may be surprised at what is going to happen at the next election. We recommend that you let this rent-control law expire and pass no extension of it whatsoever. If, however, you feel that you must extend the rent-control law, be sure to make an amendment so that the local council shall have more power than the Director of Price Stabilization.

In other words, while we feel that the local-option feature is unconstitutional, we think it has done a lot of good and should be retained in undiminished force.

I thank you.

The CHAIRMAN. Thank you, Mr. Schmidt.

Have you any questions, gentlemen?

Senator CAPEHART. I would like to identify Mr. Henry A. Werking, president of the American Home Owners, Inc., who is sitting out there, and place into the record at this point his statement.

The CHAIRMAN. Without objection it will be done.

Senator CAPEHART. He has some recommendations for amendments and I would like to have his statement placed in the record at this point.

(The statement of Mr. Werking follows:)

STATEMENT OF HENRY A. WERking, PresidenNT OF AMERICAN HOME OWNERS, INC.,

We are definitely opposed to controls such as is brought forward by the bills S. 2645 and H. R. 6546. There is no excuse for rent control.

May we ask that you help the property owner and please make the following changes in the law? We will refer to a collation of acts under the Housing and Rent Act of 1947 as amended.

Page 19: The word "governor" should be changed to "mayor" or "town-board president.'

Page 25 (g): There should be inserted here as follows: Security deposits are permitted for keys $5 and for damage to furnishings and property up to $100. To guarantee leaving an apartment or house clean $10. All deposits to be returned to tenant at time of moving less charges or damages.

Page 30 (1) (c): Beginning with the words "In establishing any maximum rent," should be changed to read as follows: "In establishing any maximum rent for any housing accommodations under this subsection, the President shall establish rent at the rent the units were renting for when the area is declared a critical defense housing area." The local office intends to cut rents back that have been decontrolled. This is wrong and the above change should be made in the law. Congress should protect investors who have made investments on the basis of the decontrol section of law.

Page 31 (1): We ask that the following sentence be removed from law: "That in any area where maximum rents are removed under the procedures provided in subsection (e) or (j) of this section, maximum rents may be reestablished after the expiration of 30 days on the determination and certification of the Secretary of Defense and the Director of Defense Mobilization, acting jointly." This is not fair to local authorities who vote for decontrol to have their work undone in 30 days, or are threatened to be recontrolled. Please rip these words from the law. Page 32 (0): The words "be increased to 120 per centum", be changed to "be increased to 150 per centum." We need this increase here in Indianapolis, Ind. in order to improve old properties and eliminate slums. Will you help us?

Page 38 (2): This paragraph requires that any person who rents to keep records. But the local office refused to accept rent receipts if tenant says the paid more than

rent receipt calls for. A clause should be inserted stating as follows: "When tenant accepts a rent receipt for a certain amount of rent and that rent is legal, the tenant's claim shall not be recognized by the Rent Stabilization Office." Let's stop this racket. Why punish all landlords for the sins of a few?

Page 16 (d): It states that "The President is authorized to issue such regulations and orders, consistent with the provisions of this title." There is one regulation that should be changed. A tenant who does not put one nickel into my business is required to be put in as manager and tell me what I can get in rent for a unit. This is wrong and the following should be inserted: "Anyone registering a unit for rent may do so without a tenant living in unit and the Rent Office must establish a price whether or not a tenant lives in unit.' Also Rent Stabilization Office shall tell the owner of a unit to be constructed what the rent will be when same is finished.

SUMMARY

1. The word "governor" changed to "mayor" or "town-board president." 2. Security deposits permitted.

3. Decontrolled units to be recontrolled at rent at time recontrolled.

4. If area is decontrolled it cannot be recontrolled in 30 days.

5. All units rented on June 30, 1947, whether registered or not should be increased 150 percent.

6. Rent receipts are to be recognized as final.

7. A rental unit shall be registered without tenant living in unit.

The CHAIRMAN. The next witness is Mr. Henry DuLaurence, of the National Apartment Owners Association.

STATEMENT OF HENRY DuLAURENCE, JR., REPRESENTING NATIONAL APARTMENT OWNERS ASSOCIATION, INC., ACCOMPANIED BY R. L. VANDERSLICE, EXECUTIVE DIRECTOR, CHICAGO RESIDENTIAL HOTEL ASSOCIATION

Mr. VANDERSLICE. I am R. L. Vanderslice, president of the National Apartment Owners Association, and executive director of the Chicago Residential Hotel Association.

Our statement in behalf of the group will be submitted by Mr. DuLaurence.

If it pleases the chairman, I would like, at the conclusion of his remarks, to say a few words.

The CHAIRMAN. We shall be glad to have anything you wish filed for the record. We have had the pleasure of seeing you here but we have not allowed anyone else to testify except the witness. We have refused many other people.

Mr. VANDERSLICE. I do not expect to testify.

The CHAIRMAN. We will be glad to file anything you wish to have filed.

Mr. VANDERSLICE. I would ask that my statement follow his, if I may.

The CHAIRMAN. It will be filed in the record.

Senator DIRKSEN. I want to ask Mr. Vanderslice one or two questions about conditions that obtain now.

The CHAIRMAN. That will be all right. I merely established the rule that we could not have two witnesses from the same association because of the element of time.

Mr. VANDERSLICE. I was not intending to be a witness.

The CHAIRMAN. You may ask him questions at any time you want, of course.

Mr. DULAURENCE. I would like to have the entire transcript of our testimony made a part of the record.

96315-52-pt. 3

The CHAIRMAN. Without objection, the entire transcript will be printed in the record.

Mr. DULAURENCE. I shall not read the whole transcript because of the time allotted. I will try to read parts of it and give you detailed information.

Chairman Maybank and members of the Senate Banking and Currency Committee, my name is Henry DuLaurence, and I am from Cleveland, Ohio. I am privileged as chairman of the legislative committee of the National Apartment Owners Association to submit the views and recommendations of that association with respect to the proposed extension of the Housing and Rent Act of 1947, as amended.

Our association is a Nation-wide organization and is made up primarily of owners of apartment buildings consisting on the average of from two to six units. These buildings are mostly individually owned, and usually represent the owner's primary source of income and livelihood. The association membership, both geographically and numerically, is fairly representative of the large percentage of owners of residential rental property in the country.

Our association is unalterably opposed to rent control. However, we have agreed primarily to limit ourselves to a discussion of the inequities of the present rent-control law and its administration. Our purpose, of course, is to obtain fair and equitable treatment for an industry that is important to our national standard of living and especially to the life savings of millions of small property owners.

It should be remembered that 80 percent of all rental property is owned by people who own five units or less and have income of less than $5,000. My source on this information is the Bureau of Census and Bureau of Economic Research of Notre Dame.

ALL HOUSING ACCOMMODATIONS SHOULD BE DECONTROLLED

In the event Congress continues emergency economic stabilization controls for a limited period of time, then rent controls should be continued only in areas properly found to be critical defense areas.

Our association has always been unalterably opposed to the continuation of Federal controls over rentals by the Housing Rent Act of July 1, 1947, and by the subsequent extensions of the act. We wish again to renew and reaffirm our conviction that 10 years of stringent and discriminatory controls over rentals and rental practices are enough. Our industry is the only industry which has been continuously under "temporary" controls since the inception of such controls in March of 1942.

For 10 long years we have sought to live within a rent structure frozen to 1941 levels, and permitted only the most meager of rental adjustments by the Federal agencies which have administered such controls.

However, the present defense effort has resulted in the reimposition of controls over prices, wages, priorities, and credits. Should this committee determine to recommend the continuance of present controls for a limited period of time, we are confident it will do so with due regard for fairness of administration, and with particular emphasis on the freeing of all elements of our economy including rentals from the present controls as speedily as possible.

The orderly decontrol of rental accommodations can best be effected by continuing Federal rent controls only over those areas properly found and certified to be critical defense areas. This would free from controls areas not found to be critical defense areas, and would give full effect to the desires of Congress to eliminate unneeded controls not directly required by the national defense effort.

Thus, Federal rent controls would be continued only in areas designated as critical defense areas as such areas are now defined in the Housing and Rent Act and only on a finding, after due notice and public hearing, that there has been an actual and substantial in-migration of labor and that excessive rents have actually and in fact occurred.

The provisions of the act relating to rental adjustments are too limited in scope, and the administration of them has been inequitable and contrary to law.

Now, at this time I would like to read a series of inequities that I have drawn up very briefly, and then proceed to talk about them a little later.

I would also like to say that although we are unalterably opposed to rent controls and believe that the law is improper economically, socially, and does not cure the problem that we are trying to cure, nevertheless I have been impressed after reading the law, that Congress has tried to be fair and equitable in the law from the provisions as provided.

I think that the great injustice and harm caused by the law is its maladministration.

First, rent control as administered promotes the deterioration of rental housing.

2. Improvement of property is discouraged because of failure to give adequate and realistic rental increases.

3. Many adjustments by the Rent Office have been completely inadequate when you consider the increased cost of operation.

4. Entire areas of substandard rents are permitted to exist because of lack of mandatory provisions to increase those rents to realistic levels.

5. The Office of Rent Stabilization amends the regulations retroactively frequently causing severe hardship.

6. If Congress intended that the 20 percent be given in addition to previous adjustments, it is not being done.

7. The law is being unequally enforced throughout the country, depending a great deal on the whims and prejudices of the rent control directors and their advisory boards.

8. Rent offices require that applications for rent increases be made out strictly accordingly to their rules and regulations, and failure to do so generally results in a denial, regardless of the equities.

9. The rent-control law provides no effective judicial review from the decisions of the Rent Office.

10. No provision is made for the change of advisory-board personnel, nor are the property owners given any voice in selecting their representatives.

11. In many cases local advisory boards are not truly representative in their make-up, particularly in the public members.