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SUBCOMMITTEE ON INSURANCE AND BANKS OF THE COMMITTEE ON THE DISTRICT OF COLUMBIA, Washington, D. C. The subcommittee met, pursuant to call, at 10 o'clock a. m., the committee room, Capitol, Senator John J. Blaine presiding. Present: Senators Blaine, Vandenberg, and Kean.


Present also: O. H. Brinkman, Esq., attorney for the committee. Leon Tobriner, Esq., attorney for the Federal American National Bank.

The subcommittee was proceeding under the terms of S. Res. 58, which is here printed in full, as follows:

[S. Res. 58, Seventy-first Congress, first session]


Whereas it is alleged that many millions of dollars of real-estate mortgage notes and bonds, secured by trust deed or otherwise, on real estate within the District of Columbia, have been issued, in excess of the value of the properties so mortgaged, and which securities have been sold throughout the United States through alleged questionable means and methods, to innocent purchasers, and that purchasers of homes and other real estate are denied their day in court in default of their payment of principal or interest; and

Whereas the laws for the District of Columbia are either absent or ineffective for the protection of innocent purchasers of such securities and homes and real estate, in the following particulars, namely:

(a) No adequate law relating to the issuance and sale of stocks, bonds, and mortgages, and other securities, as affecting real estate or otherwise;

(b) No law inhibiting unethical, unfair, and unscrupulous real-estate and finance operators; and

(c) No law providing for an orderly foreclosure of trust deeds, mortgages, or contracts relating to the purchase and sale of real estate, through court procedure: Therefore be it

Resolved, That the Committee on the District of Columbia, or a duly authorized subcommittee thereof, is hereby authorized and directed to make a full and complete investigation in respect to the several matters herein before set forth, including the issuance and methods of sale of stocks, bonds, or other securities of a different character than heretofore stated, and other relative or similar matters, and to report to the Senate as soon as practicable the result of its investigations, together with its recommendations, if any, for necessary legislation. For the purposes of this resolution the committee, or any duly authorized subcommittee thereof, is authorized to hold hearings, to sit and act at such times and places

during the sessions and recesses of the Senate in the Seventy-first Congress until the final report is submitted, to employ such clerical and other assistants, to require by subpoena or otherwise the attendance of such witnesses and the production of such books, papers, and documents, to administer such oaths, and to take such testimony and make such expenditures as it deems advisable. The cost of stenographic services to report such hearings shall not be in excess of 25 cents per hundred words. The expenses of the committee, which shall not exceed $2,500, shall be paid from the contingent fund of the Senate upon vouchers approved by the chairman.

Senator BLAINE. The committee will come to order.

We will take up the examination of witnesses who have been connected with this matter, not as principals but as the dictums of principals, and the subcommittee is the subcommittee of the Committee on the District of Columbia, exercising its authority under Senate Resolution 58. I need not read that resolution.

Mr. Brinkman has been designated by the committee as its attorney and will call and examine the witnesses, he being familiar with the circumstances. Mr. Brinkman, will you call your first witness? Mr. BRINKMAN. Will Mrs. Minnie W. Reed step up, please? Thereupon,

Mrs. MINNIE W. REED, of 1734 Irving Street NW., Washington, D. C., was called as a witness, and being first duly sworn, upon

examination testified as follows:

Senator BLAINE. Now, will you state your full name?

Mrs. REED. Minnie W. Reed.

Senator BLAINE. Address?

Mrs. REED. 1734 Irving Street NW.

Senator BLAINE. Washington, D. C.?

Mrs. REED. Washington, D. C.

Senator BLAINE. Are you a married woman?

Mrs. REED. Yes.

Senator BLAINE. And did you purchase some property in the District?

Mrs. REED. Yes.

Senator BLAINE. Now, Mr. Brinkman will examine you as to the details.

Mr. BRINKMAN. Mrs. Reed, did you bring any papers or contracts with you?

Mrs. REED. Yes, I brought them; everything.

Mr. BRINKMAN. May I have them?

Mrs. REED. Yes.

Mr. BRINKMAN. I would like to explain to the committee that I have not examined these witnesses in detail myself. I have talked with them in a rather superficial manner, but I have not examined their documents yet.

Mrs. Reed, on May 1, 1928, did you enter into a contract with the Joseph Shapiro Co. (Inc.), which I hand to you, for the purchase of a home?

Mrs. REED. I did.

Mr. BRINKMAN. Is that your signature, and the signature of the other parties to the contract?

Mrs. REED. Yes, this is the paper.

Senator BLAINE. Would you like to have that offered in evidence, Mr. Brinkman?


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