STATEMENT BY GEORGE H. FRATES, WAshington_RepRESENTATIVE OF THE NATIONAL ASSOCIATION OF RETAIL DRUGGISTS

My name is George H. Frates. I am the Washington representative of the National Association of Retail Druggists, an association comprising 35,000 small independent retail pharmacists practicing their profession in every State of the Union and the District of Columbia. My address is 1163 National Press Building, Washington, D. C. Every State pharmaceutical association in the country is a member of the NARD.

We are vitally interested in section 453 (a) and (b) and (c) of Senate bill 1397. The preponderant majority of independent retail druggists rent the premises wherein they conduct their business. During the last emergency there were flagrant cases of rent increases by landlords that sounded the death knell for many small independent druggists. Today the same viscious pattern is being followed by some avaricious, greedy property owners.

OPS has frozen retail selling prices. The Wage Stabilization Board has frozen wages. Residential rents are under Federal jurisdiction. Why not commercial rents, too?

The incongruity of freezing residential rents for a druggist and his family is established when the next morning he learns he is out of business because his commercial landlord has made his rent prohibitive. This presents an ugly picture for the small-business man in our ecouomy-made more ridiculous by governmental controlled profits-permitting no opportunity to meet the landlord's ultimatum.

The Office of Price Stabilization, the Administrator of the Economic Stabilization Agency and the Rent Control Administrator have concurred in the President's recommendation to Congress that authority be conferred upon Government to exercise stabilization of commercial rents, with particular emphasis for the protection of independent small-business enterprises.

It is our sincere belief that one of the contributing factors to inflation is occasioned by not applying the freeze formula clear "across the board” in the instance of rent control.

We will now list some examples of commercial rent increases taken from our files. They are authentic pleas for relief. We do not wish to divulge the names of the druggists for the public record, for fear the landlords involved would wreak vengeance upon complainants. If, however, the committee wishes to view them in executive session they are at your disposal

(1) "How can you expect lower consumer prices when commercial rents have increased from 33% to 100 percent, as of May 1?"

(2) "I think we are a good example of why we should have commercial rent controls. We are now paying $150 per month-this is just 5 percent of our gross volume. * * * Our landlord has notified us that beginning 1952 our rental will be $200. This difference is the difference between making a living or not." (3) "I rent the building I am in at $150 and the landlord says the rent must be $200 per month June 1. I cannot raise the price of merchandise. Please advise if this is a crazy set-up or not."

(4) "I wish to report that our rent has been raised 75 percent during the past 2 years. The last increase of 15 percent coming 2 months ago (January 1, 1951)." (5) "I and my wife conduct a small neighborhood drug store on a side street. * * * For more than 23 years we have struggled in this one-man store to keep things going. The income has never been large enough nor the term of lease long enough to interest a buyer. So we have always been forced to hang on or lose everything. The building of which this store is a part, has been footballed around by at least eight different owners. During the depression years we were paying $55 rent which we were hard pressed to meet. Subsequently, we were raised to $80. This rental was bearable since conditions had improved nationally. A succeeding landlord raised me to $85 then to $90 per month. The newest landlord has already threatened to raise my rent to $125 when my lease expires this forthcoming September. I am now confronted with an immediate 35 percent increase in rent or an over-all increase of more than 56 percent for the past 3 years. What to do now is the question which I now leave to our peers on the aforementioned committee (B. & C.)."

(6) "I am at present paying a high rental of $125 per month plus heating of the store which comes to about 8 percent of sales or more. At the expiration of my lease in December, my landlord is asking a 100 percent increase or double my present rental. This will completely force me out of business. I wrote to the Senate Small Business Committee about this."

(7) "Have been renting the present location from the same landlord for 14 years. Originally paid $200 per month for the first 5 years. $215 per month for the next 5 years and $300 per month now. Landlord now wants $600 per month, double the rental, and if he is to give me a new lease now, the new rental takes effect immediately, not at the expiration of the present lease."

(8) "I pay $150 per month now with lease expiring this September. He wants $375 for the next lease, $225 as a minimum per month and 5 percent of total sales for the year, which will be an average of $375 per month. He is now hinting that pay the taxes and upkeep. Sincerely wishing that something can be done to correct the greed."

(9) "For 17 years I have paid a rental of $125 per month. The building was sold to a new owner. Now lease has expired. The new owner is now asking $200 per month."

(10) "To obtain a lease 6 years ago I was raised 30 percent. Now that the lease has expired I cannot obtain a lease unless I would agree to another substantial increase. As I cannot afford an increase I am now without a lease."

(11) "Our rent has just been upped from $500 to $750, although our business has been on the decline. I have been in my present location 20 years. During all my stay, not 1 cent has been contributed by the lessors for improvements of any kind."

(12) "I operate a pharmacy and am being forced from my present location by a very greedy landlord. Five years ago, upon making a new lease, my rent was doubled. * * * Now my rent is $150 which is about all this location can stand. Three weeks ago I approached the landlord for a new lease and was told that the rent would be $250 per month from April 1. The landlord says that is his rent or he will let the store stand idle. Under the law, I can remain here for 2 years after legal action which I cannot afford. This is certainly a case of greed in the extreme and I believe such men should be stopped in any such practice." (13) "Back in 1933 we started in business at the present location. We paid $75 per month with all utilities furnished with exception of electricity. Today we are paying $200 per month, plus all utilities and pay one-half of the coal bill and pay the janitor for his services. Since the landlady cannot raise the rent on her apartments, she raises our rent. Besides, she has never spent 1 cent for any repairs. She is forcing us out of business by another increase in rent. Would never give us a lease for more than 2 years. Wants $25 per month more now and $50 per month more in 1952. We cannot pay a cent more than the present $200. My wife and I put in daily 14 hours, needless to mention all the problems that we have with the help situation. We have not had a vacation in the past 11 years, so you can readily understand we have both been on the job early and late to help serve our community."

* * *

(14) "We purchased our store in 1945, at which time it was rented for $85 per month. We have obtained a lease for 5 years with an option for renewal at a figure to be determined at that time. This rental was to be $100 per month. Now the lease has expired and the landlord wants $200 per month. During these 5 years we have done extensive alterations to improve the appearance of our store, this at no cost whatever to the landlord. We feel we are getting a raw deal. We feel that small-business men need some protection from unscrupulous landlords." (15) "In April 1948 I was paying $75 per month. Because my lease has expired I am compelled to pay $180, under the guise of taking the store for his

own use.

(16) "My landlord wants to up me from $140 per month to the equivalent of $650."

(17) "While in service, I contacted the landlord of the building in which I am located and agreed on a rent of $135 per month. This was in 1946 but when the lease was drawn up the rent was $200. We told him it was unfair and it was agreed that the rent the first year would be $175 and the next year $200, with an option for three more years at $200. Expenditures on our part for the last 5 years amount to close to $5,000 for remodeling, plumbing, electrical work, painting, etc. Our lease is due for renewal and shows an increase in rent to $250, showing over 100 percent increase in rent over previous occupant."

(18) "In 1945 I paid $85 per month. In 1947 I was raised to $100 per month. In 1949 I was raised to $125 per month. As soon as my landlady found out that building materials were frozen, she raised it to $135 per month. I pay for my own heat, my own water, my own window insurance and repairs. Her taxes and insurance are up only about 15 percent over 1945. Mine is only a small neighborhood store * * * I may have to go out of business. When I protested about the raises, she said everybody else is doing the same thing."

(19) "Our lease has just expired, after a 5-year term, at a rental of $135 per month. Our landlord now requests a slight increase of $115, making a total monthly rent of $250. I believe you will find this is as unreasonable as we do." (20) "This is to notify you that we are definitely in favor of rent control for small business. We think this expresses the thoughts of more than 60,000 druggists in this country.'

(21) "My rent has increased in five years from $105 to $175 per month. I am paying more than any other store in the same building. Some of equal area. other stores are paying from $65 to $100 per month."

The

(22) "December 1950, we are wondering if anything has been done to protect the small-business man in the freeze that is sure to come. The main thing to be considered, that was not controlled last time, is the drug store rent. Many store owners were caught in the squeeze between ceiling prices and rent which was raised higher and higher. Something should be done to be certain that the rent of business places has a ceiling along with other things."

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(23) * * * You have evidence of the Federation's position on the subject of commercial rent * * *. You will note the majority of the members favored rent control. It is interesting to note that if the poll could be made currently with what the members are now facing the portion favoring adoption would be even greater * * *. Although I cannot make this statement officially until the poll is actually taken. It goes without saying that small business will be the victim of one rent increase upon another unless something is done. I know in my own private business it is the same thing every year-another rent increase. You are aware that the Senate Small Business Committee recently polled 20,000 firms on this question * * * You can feel assured of our fullest cooperation."-George J. Burger, Vice President, National Federation of Independent Business.

(24) "I assure you that I will do anything I can to work with you in bringing this matter (commercial rent control) to the attention of Congress."-W. W. Marsh, General Manager, National Association of Independent Tire Dealers, Inc. (25) "The Farmers Union has supported rent control, both on residential and commercial housing since its inception."--James G. Patton, President, National Farmers Union.

(26) "We will support to the utmost of our ability, bona fide legislation which will prevent the greedy and scandalous injustices which have been perpetrated upon the retail merchants because of the absence of effective commercial rent control."- George R. Nelson, Grand Lodge Representative, International Association of Machinists.

(27) "For the protection of the small-business man, engaged in the grocery business, we feel that we can follow no other course than to take a firm stand to see that these independent businessmen are not forced to lose their established place of business through the imposition of burdensome rent increases."-Harold O. Smith, Jr., United States Wholesale Grocers' Association, Inc.

Rent is a major item in the cost of doing business. If a retail druggist is expected to hold the line and stay in business to serve the public its necessary pharmaceuticals and render a professional service in compounding and dispensing 389,178,886 physicians and dentists prescriptions per year, then we submit that the Congress should protect the public welfare by controlling commercial rents. We make no request for special consideration-rather we indicate the resulting impact on the public health if the corner druggist is not there to accommodate the public's medical requirements.

Repeatedly, Congress is on record as having stated that the small business is the backbone of our Nation. If free enterprise is to survive, the small independent businessman must have some semblance of protection and reasonable help from his government. Given a fair and equitable opportunity, your druggist can remain freely competitive. It is only when insurmountable obstacles beyond his ability to circumvent-impediments which road-block his professional activities-that the reverse is true.

As Mr. Tighe Woods, Housing Expeditor, has pointed out in testimony before your committee, both Mr. Wilson and Mr. Johnson have said "the authority to control rents on business accommodations is necessary to fill a major gap in our existing powers to stabilize the economy and to prevent the businessman, particularly the small-business man, from being caught in the squeeze between controlled prices for the things he sells and increased costs due to rising rents." The Senate Select Committee on Small Business reports that commercial rents increased 78.5 percent between 1940 and 1950 in six large cities.

It is obvious that price controls on commodities, without a corresponding control on commercial rents, places the small retailer in an extremely precarious position-one that blueprints disaster.

We plea for protection. We ask you, our Federal lawmakers, to seriously consider our plight to the end, that the retail economy, as represented by small business may not perish within our system of free enterprise.

STATEMENT OF Mrs. Catherine Victor, Detroit, Mich., Member of Various LOCAL AND NATIONAL PROPERTY OWNERS ORGANIZATIONS

The atom bomb could not have been more horrifying for us than our experience on the 10th of April was, as a result of rent control.

Our home was surrounded by police, doors smashed in, dragging us out like the worst kind of hoodlums or criminals, fingerprinting; the judge booming at us with the most horrible accusations, more fingerprinting, a number of reporters and photographers comprising the OPA hold-up and final payoff.

I would like to have included the court record of our case, but the transcript was tampered with and it is so mutilated that there is no sense to it. Most of the vicious words are excluded or replaced with something in our favor.

I remember two most searing remarks by Judge Picard which are not in the transcript at all:

1. "Oh, the landlord-I wish that more of those landlords were brought here so that I could throw them in jail, then maybe we would have a better place to live in."

2. Toward the end of the hearing Judge Picard remarked: "Give him the works and fingerprint him, too, because he is the head of the house, and keep them both in jail until they pay up," and he asked the OPA attorney, "What is the limit I can give them?"

Rent control is the worst enemy of American freedom; it gnaws at the very heart of America; it creates hatred between landlord and tenant; it puts a fear into property owners' minds-that they would rather lock up the vacant room or flat and go to work peacefully than take a chance on even the best tenant.

I beg you for justice and the return of American freedom for American home owners. Before telling you of the fantastic, near-tragedy event that took place in our home in connection with rent control a few weeks ago. As the situation stands today we fear our Government and our courts, instead of looking for justice to them. When our Government creates the bureaus of none less than Gestapo methods-the OPA instructing their agents how to trap the innocent victims to gain their point-that's bad. Here is one example of it. The following notice is put under the doors of the tenants in Detroit:

"An Inspector from the Detroit area rent office was here to make an inspection of this property.

"Please call Woodward 2-5930, Extension 13, between 8 and 10 a. m. for an appointment so an inspection can be made."

When they fail to get a response from the tenant then they send agents to trap the tenants, asking all kinds of questions, teaching them how to create trouble for landlords by promising the tenant to get the rent money back for them. If the tenants cannot be converted on those Gestapo fake promises of the OPAthen they tell them to sign their names on the dotted line, that they are satisfied with their place, which in turn the OPA uses it as a complaint against their landlord, as it was done in our case and unknowingly to decent tenants.

Below is a brief résumé of our rent-control problems concerning three tenants for whom Federal Judge Picard ordered us to be jailed until we paid $778 and a $1,037 lien was placed against our property.

Judge Picard ordered us to pay Mr. Rayburn $184. The Rayburns rented the apartment with the understanding that only two people were to occupy it-but from seven to eight other persons moved in with them, including Mr. Rayburn's mother who had asthma. Because of overcrowded conditions and neglect, insects accumulated: when I insisted that the insects be sprayed, Mr. Rayburn claimed that I annoyed his mother's asthma and he threatened to sue us. The Rayburns had a lovely two-room front apartment-everything furnished, except their food and clothing for $12 per week, Judge Picard ordered us to pay one-third back to the OPA.

Judge Picard also ordered us to pay to the OPA $424 to another tenant, Mr. and Mrs. Johnson. When these people rented the apartment they were to be the only occupants with an occasional visit from their parents and Mrs. Johnson's

disowned daughter. Unknowing to us, they moved in several cats, later promising to get rid of them; instead they accumulated many more cats. Mrs. Johnson's daughter moved in, and was soliciting immoral business over our telephone to such an extent that once she stated it was an offer of $85 per week job, but she had to spend three nights a week with the man who called her. Another girl of the same caliber as the daughter was brought into the apartment. This girl was brought in without our knowledge or permission. When we objected to the use of our telephone, we were threatened. We pleaded with the Johnsons to move out of our house but they stayed on, disgracing our house to the lowest possible level. Finally, we were forced to tell all of our tenants to move so that we could close the house, because of Johnsons. All of our decent tenants moved but the Johnsons viciously and maliciously defied us. When the case reached the court the Johnsons were forced to get out of our house by the prosecutor.

Johnsons had a five-room flat and bath, nicely furnished, with new refrigerator, gas heat, light and gas furnished, except their food for $18 per week, barely enough to cover the expenses, but Judge Picard forced us to give one-half of it to the OPA.

Judge Picard also ordered us to pay $70 refund to Mr. and Mrs. Collins through the OPA. The Collins were tricked by the OPA agents to sign their name. The following is a notarized statement signed by the Collins:

"We, the tenants of Mr. and Mrs. Victor of 1365 Spruce St., Detroit, 1 Mich., have never complained to the OPA. Our name was used through trickery, forgery, and fraud by the OPA.

"We sincerely regret that such action has been used against Mr. and Mrs. Victor, faked by a branch of our American Government against them. If there is any way that this shameful act on the part of the OPA could be erased, we would stand at all times ready to help retract this moral and financial suffering brought on to Mr. and Mrs. Victor by using our name unknowingly to us."

WILLIAM C. COLLINS.
LILLIAN COLLINS.

Subscribed and sworn to before me this 14th day of April A. D. 1951.

JULIUS M. GROSSBART, Notary Public, Wayne County, Mich.

My commission expires December 8, 1952.

While our son was fighting in World War II for the very freedoms the Rent Control Act was taking away from us, we were suffering crucial oppressions.

The order for arrest in the above case was for Catherine Victor only, but when the doors were smashed down by two United States marshals and two uniformed city policemen, Jack Victor and Catherine Victor were both arrested and forced to go before Judge Picard. In spite of the United States marshal telling Judge Picard that Jack Victor was never served with any paper, the judge insisted on finding us both guilty and stated "Keep them in jail until they pay up." When we asked Judge Picard to let us get an attorney to defend us in this case, he refused, saying "You'll get your attorney when I get through with you." During the hearing he abused his position by accusing us of being communistic, which we consider defamation of our character.

Yes, we fear the judges-we have knowledge of an old woman, whose son was killed in the war and whose son's insurance money was used to improve the building for tenants, but Judge Cody cut the rent and told the tenants to live there as long as they wished in spite of the owner begging the judge to move them out and she offered to return all the rent, if they would only move because they were too abusive.

There are many cases of record we could refer to—including insanity, suicides, etc., that can be traced to the Rent Control Act-and even murders.

All this is such a nightmare that we wish that there was some way to awaken and find that there is freedom and justice for all.

America will not exist long on half free and half slavery. Please give us back solid freedom, so we can get along with our tenants as we got along with our landlords before we bought our homes the hard way.

Our property was never registered with OPA, but I was renting it even cheaper than those under the OPA, because I wanted to get along with my tenants, otherwise they wouldn't have lived with us some 7 years, but the OPA kept on snooping and disturbing our tenants, but having read the Constitution of the United States of America I saw our God-given alienable rights were being crippled and taken away by the Rent Control Act.