STATEMENT OF RICHARD 0. HAASE, CHAIRMAN, LEGISLATION AND TAXATION COMMITTEE, WASHINGTON BOARD OF REALTORS

Mr. HAASE. Mr. Chairman and members of the Subcommittee. I would like to read a prepared statement for the Washington Board of Realtors.

It supports this bill, H.R. 16948.

My name is Richard O. Haase, and I appear today as Chairman of the Legislation and Taxation Committee of the Washington Board of Realtors.

Unfortunately, we had very short notice of this hearing and as a consequence, had little time to prepare a comprehensive statement on H.R. 16948. We would like this Committee to know that our Association supports this legislation because we feel that removal of the rubble, created by our recent riots, is the responsibility of the local government, just as it is the responsibility of the local government to remove trash and debris. If the local government had performed its function and duty to maintain law and order during the riots of April, there would be no need now to determine who bears the responsibility of removing the damaged buildings.

We feel that it would add insult to injury to require the property owners to remove the ashes of what was once a proud possession. In many cases these property owners lost everything they owned. Many will not be in a position to rebuild, and, if they do, it is doubtful that they will be able to insure their property due to the potential future risk.

If, through H.R. 16948, the local government is required to remove riot-caused debris, then in future disturbances better protection may be given to property.

I thank you.

Mr. WHITENER. Thank you.

Mr. Winn?

Mr. WINN. Thank you, Mr. Haase, for a very fine statement. We are sorry that we do not have more time for discussion, but you have a comprehensive statement and I think you have made your point very clear here. That is why this Committee is looking into the problems presented by what has happened.

POLICE AND GOVERNMENT PROTECTION

Do you think that additional police protection and additional responsibility of the local government could protect the property under the circumstances of the April 4th and 5th riots?

I am not saying that they could not have improved the situation. I think they have admitted that they probably could have done a better job under the circumstances, but when anything like that takes place, they cannot protect everybody's property, although we expect it. Do you think we really have enough police in the District of Columbia police department, or did have, to have prevented it, and whether, if we doubled the police force, we could have protected or could protect all of the properties that we would all like to protect?

Mr. HAASE. Mr. Winn, I think that hindsight in retrospect is very good. What I would say sounds like good judgment now. We have

heard the phrase of "long hot summers" before this event of 1968. I believe that after the assassination it became intense, there were intense emotions in the city of Washington-and it probably would have erupted. I think it would have been better at that time for the local police force, who commendably did an excellent job in my opinion, to have augmented their forces when it became apparent they could not handle the situation-or it should have become apparent and 24 hours were lost before Federal troops were brought into the city. And during that time there were vandalism and arson throughout.

I think it is as if a man were to come to you and tell you that a tidal wave, such as I read about on the West Coast, would happen within three days, and you waited until the three days before you moved out all of the people and protected their property. I think it was a case the evidence is where it was there, that it would happen. I think this was too big a thing for the local police to handle.

Mr. WINN. What you are saying is that, as the Committee has heard in the last several days, the police did the best they could under the circumstances?

Mr. HAASE. Yes, sir, under the circumstances.

Mr. WINN. That seems to me to be about the whole story in a nutshell.

Many of us think, too, that after the experience we had in Detroit, where there was a long lapse before the troops were moved in, that possibly the District of Columbia could have moved earlier. There seems to be some discrepancy there as to how soon they moved in.

Does the Washington Board of Realtors have any recommendations to make on types of protective improvements, other than maybe additional policemen or Federal troops!

We cannot continue to move Federal troops in and out.

It cost us over $5 million to bring them in here in April.

Mr. HAASE. I think that looting is a crime; that vandalizing is a crime, and that these crimes should be met with extreme measures. I, for one, believe in the strict policy of law enforcement.

You saw in the papers, you saw in Time Magazine, and in Life Magazine, and in other news media, people running in and out of the

stores.

Mr. WINN. Could you get your Board to go on record on that statement, to enforce the laws the way they are written?

Mr. HAASE. I certainly will try.

FINANCING RECONSTRUCTION

Mr. WINN. I think many of us would appreciate it if the businessmen would come out as a group and let the authorities know how they feel. Do you agree with the witness before you that the real estate people and the mortgage companies will not lend, or are very reticent about lending in neighborhoods such as the few that were badly hit? Mr. HAASE. Absolutely.

Mr. WINN. And so there is a big movement underway to get additional money put in by the lending agencies and the insurance companies into these same districts to rebuild these districts, making a big front-page splash about the money they are going to put in there, but

if you go to the individual mortgage company it is almost impossible to get a loan on a building or a rental on a business.

Mr. HAASE. Yes, sir, absolutely.

Mr. WINN. Thank you. That is all.

Mr. WHITENER. I observe that you say in your statement that the police did the best job they could and that the District Government did all they could under the circumstances?

Mr. HAASE. Yes, sir.

Mr. WHITENER. That was in your oral presentation, but in your prepared statement you say that had the local government performed its function and its duty to maintain law and order in the riot neighborhoods there would have been no need now to say who bears the responsibility for the damaged buildings.

Mr. HAASE. I have read in the papers and have read from the testimony here, just as the statement which was read this morning, that one organization stated the police were hamstrung in their ability to perform their function.

Mr. Murphy sat in and said that he did not give any orders. Am I quoting him correctly? I do not want to be misquoting.

Mr. WHITENER. You gave your own version of it.

Mr. HAASE. I have not heard anything contrary to it, I think. There are so many conflicting arguments about what actually happened, about what orders they were under

Mr. WHITENER. Your organization recommends that H.R. 16948 be enacted into law to authorize or to require the District of Columbia Government to pay the cost of the removal of the damaged buildings and the debris.

COMPENSATION FOR OTHER LOSSES

What is the disposition of your organization towards payment for compensation to innocent people who were injured, those who were killed in the disturbance?

Mr. HAASE. Well, I would not wish to comment on that, because I would say something that I am not authorized to say. I would be glad to take it up with the members of the Board.

Mr. WHITENER. This is the thing that bothers me, so many having the zeal for the removal of rubble and debris. I am wondering about those people who have had hospital bills, funeral bills, the loss of earnings. There are not only those people but also the employees in some of these businesses who were innocent of any wrongdoing who have been deprived of their weekly paychecks.

Mr. HAASE. Let me say, Mr. Chairman, that these merchants pay real estate taxes. That represents the greatest single revenue that the city has, and that money from taxes on real estate goes to pay for the police force. The merchants are entitled to protection under the law.

Mr. WHITENER. Of course, other citizens pay their sales taxes and their property taxes, and the other taxes imposed by law which entitles them to be protected in their pursuits, too.

Mr. HAASE. Yes, sir.

Mr. WHITENER. We are entitled to protection for our property, too. This, to me, is the real issue before us.

It has been suggested from time to time-I believe in England they enacted into law some statute which took care of compensating victims of crime. I was just wondering, if we enacted this legislation, if we ought to put a premium on rubble and lower it on life and limb. Mr. HAASE. I see your point.

Mr. WHITENER. Do you have any personal comment? I know that you cannot speak for your association.

Mr. HAASE. No. I would agree with you; let me say that. I think what you say has merit.

Mr. WHITENER. I read an account in the press this morning about a Negro woman who was an occupant in an apartment above one of these buildings that the hoodlums set on fire. She was taken out, as I understand it, from the apartment to the undertaking establishment. I do not know her; all I know is what I read in the paper. But, in addition to the loss of her life, we know that somebody had to pay for her funeral and the like, and yet no one is saying that we ought to look at that. I wonder if we should not consider that, too, and give some thought to that as well. Do you have any further questions?

Mr. WINN. Do you know whether the Washington Board of Realtors have made any study of what percentage of the owners might open again?

Mr. HAASE. No, we have not.

Mr. WINN. If the District pays for cleaning up the rubble out there, you do not have any idea as to that yet?

Mr. HAASE. Not yet, sir, but I will bring that up and furnish the Committee with a statement on that.

Mr. HAASE. I think it would be most intersting to have. Thank you very much.

Mr. WHITENER. Thank you.

Our next witness is Mr. Abe Liss, President, Midtown Business Association.

Before Mr. Liss testifies, we will make the statement of Mr. Hilliard Schulberg, Executive Director, Retail Liquor Dealers Association, Washington, D.C., a part of the record at this point.

(The statement of Hilliard Schulberg referred to follows:)

STATEMENT OF HILLIARD SCHULBERG, EXECUTIVE DIRECTOR, WASHINGTON, D.C., RETAIL LIQUOR DEALERS ASSOCIATION, ON H.R. 16948, MAY 17, 1968

My name is Hilliard Schulberg. I am the Executive Director of the Washington, D.C. Retail Liquor Dealers Association, an organization comprised of those retail licensees who sell alcoholic beverages for off-premises consumption. We appreciate the opportunity afforded us to express our views concerning the rebuilding of the areas devastated by the recent civil disturbance in the District of Columbia.

Like many other small businessmen, our people were hard hit and suffered grievous losses. Reports indicate that approximately 35 stores were totally destroyed and 150 others damaged and looted. From information available as of April 23, 1968, the projected losses sustained by liquor dealers, covering damages to real property, inventory and fixtures, totals $7,780,000 with an uninsured loss of $2,300,000. The uncontrolled destruction, burning and looting that took place certainly was not of our making; we became the innocent victims of a deliberate policy of forebearance by the authorities which permitted an unjust enrichment of law violators at the expense of small neighborhood merchants. The protection that should have been available was noticeably absent.

There is now no point in quarrelling with a decision of the authorities which determined that law enforcement would be suspended, that rioters and burners

would be invited to help themselves to the property of others, that small businessmen would become the reluctant hosts for this party.

Now, however, it seems to us that the invitors should pick up the check; the very least the government should do for those who were victimized is recompense them for the losses they sustained, including payment for the removal of debris from their destroyed properties.

Second, total support should be mounted to secure passage of the so-called "backup reinsurance bills" S. 3028 and H.R. 17003, now pending before the Banking and Currency Committees of both Houses of Congress. These bills will provide for industry and government participation in setting up reinsurance pools so that it would be possible to make insurance available for all, including those in high risk areas.

Third, the authorities must move without delay to have introduced into the Congress for speedy enactment the necessary legislation to enable the District of Columbia to participate in the above insurance program. Insurance companies are cancelling policies now. Each day we are receiving calls concerning further cancellations. It is axiomatic that without insurance no business can continue, be rehabilitated, or survive. And it is also very clear that unless this Federal reinsurance program and the necessary District participation legislation is enacted, insurance will not be available for the neighborhoods; if it is not, these areas will die. People who live in or around troubled areas are learning the hard way that empty store fronts ruin neighborhoods just as they drain and strain city treasuries.

Fourth, merchants must be given assurance that sufficient restraints and police protection will be available; that that which occurred will not happen again. Without such assurance, to what purpose would be rebuilding, restoration, or remaining in business? The philosophy of buying restraint of the criminals from doing greater crimes by offering the alternative of property destruction is false and self-defeating. No one must be allowed to act without the law.

Fifth, if the foregoing can be accomplished, the displaced merchants should be granted a priority in returning to the areas which must be rebuilt and repaired. Where restoration is feasible, property owners should be given the necessary building permits without delay. Where an urban renewal program is needed, this should be made known quickly and here, too, those displaced should be given priority in obtaining locations. Sufficient commercial premises should be scheduled so that no one of the affected merchants who want to return to business should be denied that opportunity.

We agree with the urban renewal program set forth in the editorial which appeared in the April 21 issue of the Sunday Star, a part of which we quote:

"This approach would differ sharply from the typical urban renewal project in which entire city blocks are subjected to replanning and to drastic change. The major riot damage in this instance has been confined to the narrow strips of mixed small-business and run-down residential properties fronting on one side of the city blocks. For the most part, the housing existing elsewhere in these blocks is solid and substantial.

"The urban renewal plans need not require total reconstruction even in these strip areas. Where sound structures exist, they might well remain. Where rehabilitation is possible, that might be proposed. Ironically, however, the major benefits could result where destruction and demolition occur. For at those sites it is possible to make the most significant improvementsincluding substantial increases in housing for low and moderate-income families.

"Most of the damaged or destroyed structures contained ground-level commercial uses with only one or two stories of housing above. Why not, in the reconstruction, provide housing of much greater density by building higher in the air? Imaginatively planned, some of these units could help satisfy at least a portion of the demand for public housing. Some could make use of rent supplements and the diversity of other types of federal housing aids-with the ground levels devoted, as before, to business use. "What of the business operators burned out in the riots?

"We believe that those who choose to return should have that opportunity on a first-priority basis. Urban renewal, combined with small-business loans and other available aids, offers a feasible administrative means of accomplishing this."

Sixth, every effort should be made to secure the cooperation of the Small Business Administration so that financial assistance may become available,