ORGANIZATION AND FUNCTIONS.

The Real Estate and Commandeering Division of the Bureau of Industrial Housing and Transportation was formed March 1, 1918, at which time William E. Shannon, of Washington, D. C., was asked to organize it and was appointed its manager. Its functions were chiefly advisory until the acts authorizing the President to provide housing for war needs and giving appropriations for such housing had been passed. It was then intrusted with acquiring for the bureau, and later for the United States Housing Corporation, the real properties determined to be necessary in carrying out the provisions of said acts.

To acquire real property quickly, at reasonable prices, and in parts of the country where living conditions were most congested, was a problem requiring the expert services of realtors and builders. They were best qualified to ascertain values, to make negotiations, to advise as to the most practical choice of sites and their probable investment value, to make the necessary contracts, to attend to problems of title, and later to negotiate and execute sales and dispose of the properties acquired. This division through them has tried to conduct its work in accordance with ordinary business policies.

COOPERATION OF NATIONAL ASSOCIATION OF REAL

ESTATE BOARDS.

Some time in the early part of January, 1918, Mr. William M. Garland, of Los Angeles, Calif., president of the National Association of Real Estate Boards, after considering in what way and to what extent the real estate men of this country might best assist in the work of the war with respect to housing demands, tendered the services of 150 war appraisal committees, which were selected by the association from as many cities, to the Hon. Otto M. Eidlitz, then chairman of the housing committee of the Council of National

Defense. Experienced realtors from all parts of America were drawn to serve as investigators, negotiators, and as members of appraisal committees.

RECOMMENDATIONS AS TO GENERAL POLICY. One of the original policies of the bureau, as decided upon in May, 1918, was to lend money to housing companies to be formed in communities where housing was determined as needed. Some cities had already formed such companies and other cities were ready to organize them on a large scale, provided this bureau would cooperate in financing them. The Real Estate Division did not favor the policy of lending to one local organization, believing that it would be better policy to lend in such a way as to stimulate building organizations, individuals, and property owners to build houses, Neither of these policies was finally adopted, but the questions raised by them are of interest, and a copy of a statement by the Real Estate Division regarding them is given in Chapter III.

ACQUISITION OF PROPERTIES.

The final policy of the bureau as adopted was to lease, buy, or requisition lands to provide the necessary housing itself. In order to do its part in carrying out this policy a general procedure was formulated and adopted by this division, which has been continued without substantial changes in all cases of the acquisition of properties.

The preliminary step in acquiring lands was to send two scouts or investigators, selected from the list of realtors furnished by the National Association of Real Estate Boards, to a community where the bureau had been requested to build houses. Invariably the scouts came from a community other than the one to be investigated and did not disclose the nature of their mission. It usually took from one to four days to size up the situation and get an estimate of the value

of the particular properties recommended for consideration by the bureau and other parcels that might be equally satisfactory. Their report ended the only confidential proceedings.

The next step of the bureau was to send out a committee, known as a committee on sites, composed of a realtor, an engineer, an architect, and a town planner. Their investigation was a more exhaustive one, touching upon every phase of the proposed development.

METHOD OF APPRAISAL.

The report of this committee on sites was considered by the bureau staff, and if it was decided to proceed with the project, appraisals were secured upon the various proposed sites from the tax assessor, the mayor, and committees of the chamber of commerce, of the board of trade, of the Rotary Club, and of the real estate board, or other similar representative men or organizations. Such appraisals often represented the opinions of 17 men in all, who served without compensation.

When the reports came in from the committees and the municipal officials, the manager of the division examined their respective ratings, and with his assistant managers decided what constituted the real worth of the land, which they called the official appraisal.

At this stage of the proceedings many of the most prominent men of the community had been thus taken into the confidence of the bureau, had expressed an opinion of the respective values of the several properties under consideration, and were in a position to follow subsequent negotiations with intelligent understanding. The press of the community was also in touch with the situation, every move in the program being made in the light of full publicity.

NEGOTIATING FOR PURCHASE.

The bureau, upon the recommendation of the committee on sites, having authorized the acquisition of certain lots or parcels of property in a given community, sent a negotiator to obtain it, armed with a full record of the case. The negotiator was a realtor, either from the division or employed by the division on a per diem basis. Great care was exercised to make sure that the negotiator approached his task with a full sense of personal responsibility in carrying out the true spirit of the Department of Labor.

Although his instructions provided for many contingencies, the outstanding facts were constantly before him that he was expected to acquire property in the exercise of his best judgment "within established limitations of cost" set out in his memoranda, although under his certificate of appointment he was clothed with the fullest authority.

It was made plain to him, further, that "all contracts, leases, or other instruments committing the corporation must be taken subject to the approval of the president of the corporation" and that he was expected to coordinate his work in the field with the representatives of its Legal, Engineering, Town Planning, and Architectural Divisions. (A copy of the instructions to the negotiators is given on page 144.) One of the policies of the division was always to deal with the owners of the land direct, except where requested otherwise, and not to pay any commissions on any transactions. In so far as practicable, the negotiator was expected to preserve, and, if necessary, to create legitimate competition between owners of properties and to discourage any conviction on their part that their property had been selected by the corporation.

CONTRACT FOR PROPERTY.

In the beginning, the use of options by the negotiator was encouraged, but the practice was later abandoned because of the time required to close options into contracts. The greater part of the property acquired by the negotiators has, therefore, been taken under contracts, made subject to the ratification and approval of the corporation. The contracts provided for the right of immediate entry, so that the building construction need not be delayed. (Copies of the more important forms used by the corporation are given on pages 144-155 and 178-179.)

The policy of the division was to decentralize the labor as much as possible, and local attorneys were employed to assist the negotiators to examine titles and to advise as to local laws. When a negotiator had obtained an agreement with an owner, the local attorney at once prepared and had executed by the owner of the property a quadruple contract. Two copies of this were left with the local attorney-one for his office files and the other for delivery to the seller upon approval of the same by this bureau. Upon their receipt they were passed upon by the division counsel and a memorandum termed "executive approval sheet" was immediately prepared giving the general and substantial parts of the contract. To this sheet was appended one of the quadruple contracts, and in this manner the same were presented first to the manager of the Real Estate and Commandeering Division and then to the president of the Housing Corporation, respectively, for their signatures and approval. If passed by them this file was then submitted to the directors for final ratification, after which the original contract and the executive approval sheet were transmitted to the general manager, and thereafter finally filed with the Fiscal Division. The proposed purchase having been