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Let's get our ground rules straight here. We have permission to meet, so we will hear you out.
Mr. SELIG. I have a prepared statement that I want to read. But I have just four or five comments that I would like to make beforehand.
Apparently you gentlemen are sort of loaded for bear when was invited to be here. I am now suddenly confronted with this article that was put in my hand just a few minutes ago. I know you fellows will ask questions about that later. (The material referred to follows:)
August 11, 1966.
DEAR AMBASSADOR MACARTHUR: The Department of State and the Department of Commerce have supplied me with some very helpful information relating to a bili I have introduced, the Interstate Land Sales Full Disclosure Act. This information specifically relates to the sale of land in Brazil to American investors by a Mr. Stanley Selig of Selig Brothers in Indianapolis. In 1965 the Department of State prepared an Operations Memorandum relative to claims Mr. Selig has made as to the conditions of title on land he is selling. As a result of an inquiry made in your airgram dated July 22, 1966, to the Embassy in Brasilia, it was reported to me that the operations memorandum dated May 28, 1965, is still pertinent. This information was supplied to me by the Department of Commerce with the request that it be used for background only and not placed in the record.
Mr. Stanley Selig will appear before the Subcommittee on Securities of the Banking and Currency Committee on August 18 to testify on his operations. He has stated to me in a wire, “I have proof that I have clear title to my land and that my land has been surveyed and staked. All of my titles have been recorded with the proper authorities in Brazil," Both this statement and the statements made in a sales brochure are in direct contradiction to the information contained in your operations memorandum of May 28, 1965. Although Mr. Selig will not be testifying under oath, it seems important to me that the conflict between his claims and the careful investigation of our Brazilian Embassy be made part of the public record.
HARRISON A. WILLIAMS, Jr.
AUGUST 17, 1966. Hon. HARRISON WILLIAMS, U.S. Senate.
DEAR SENATOR WILLIAMS: This is in reply to your letter of August 11, 1966, concerning the scheduled testimony of Mr. Stanley Selig before the Subcommittee on Securities of the Banking and Currency Committee of the Senate.
As regards your question concerning the area called Brasilia Suburbio, our Embassy in Brasilia checked with the only two land registry and notarial offices existing in Goiania, the capital city of the State of Goias, on May 21 and 22, 1965. On those dates, the Embassy obtained certificates from these two land offices stating there was no registration at either of those two offices of a tract called Brasilia Suburbio, property of elig Bros. Real Estate Co. or of Mr. Selig. The Embassy also stated that it was informed that under Brazilian law all land contracts with a value above Cr$10,000 (approximately $5 at current exchange rates) must be registered with a land office. For purposes of binding the transaction between buyer and seller, the contract may be registered at any land office in Brazil, but to insure title, it must be registered at the land office in the district in which the land is located.
The Embassy stated that Brasilia Suburbio is in the district of Niquelandia in the State of Goias. In May 1965, an Embassy officer obtained a certificate from the notary public of Niquelandia, Theophilo Jose Taveira, which stated there was no authorized subdivision named Brasilia Suburbio registered in Niquelandia either in the name of Selig Bros. Real Estate Co. or in the names of Stanley or Ben Selig. Mr. Taveira also reported, however, that Mr. Arpad Szuecs owned "a tract composed of cultivated land and pasture” which is 9,992 alquieres (one alquiere equals approximately 12 acres) in size. Mr. Szuecs is described in the Selig brochure as a person who "looks after our Brazilian enterprises."
Questions 2 and 3 in your letter concern areas called Sitios Portland and Colorado. The Embassy at Brasilia stated in May 1965 that the son of the notary mentioned above, Mr. Jose Taveira, was the broker who sold the Portland and Colorado tracts to the Selig Bros., but that he could not or would not state whether these tracts were registered according to Brazilian law. The Embassy added that one of its officers met with the state attorney for the State of Goias and a Brazilian cartographer and was informed that Sitios Portland and Colorado were located in an area which was to be the seventh step in a plan of rural expropriation by the State of Goias. He was also informed that the State of Goias had some years previously published official notices that land in this area was to be expropriated and that as no one had presented rightful claims to the land, the Goias Government considered it as belonging to the State.
With regard to your question concerning the existence of one of the "world's largest hydroelectric powerplants" near land allegedly owned by Selig Bros. in the Tocantins River Basin some 155 miles north of Brasilia, the Embassy in Brasilia reported on August 16, 1966, that although possible dam sites on the Tocantins River have been surveyed, no powerplant now exists on the Tocantins, nor is one under construction or planned for the near future. (The Embassy had stated in May 1965 that "the powerplant is supposedly located 155 miles north of Brasilia. There is no large powerplant at this location. The Embassy therefore knows of no large hydroelectric plant 155 miles north of Brasilia.")
With respect to your question on Petropolis de Brasilia, the Embassy office in Brasilia stated on August 16, 1966, that it had contacted the office in Brasilia of the State of Goias and was told that that office knows of no such project. As to its location eighteen miles north of the Federal District of Brasilia, the Embassy notes that the Federal District is an area which occupies approximately 2,200 square miles (larger than the State of Delaware), that the City of Brasilia occupies a small part of it, and that almost all of it is underdeveloped prairie land.
With respect to the relationship to American buyers of Brasilian lands of Brazilian Land Reform Law No. 4504, the Embassy in Brasilia advised the Department in early August 1966 that the Selig Co. brochures which it has seen did not mention this law. It requires registration of land with the Brazilian Land Reform Institute under penalty of fine for failure to do so and permits expropriation if necessary for "social welfare” purposes. In this regard, I am enclosing for your information a United Press International news story from Goiania dated August 12, 1966, which is illustrative of a problem which can arise in the ownership of agricultural lands in Brazil by American citizens. The Embassy in Brasilia in February 1966 informed the Department that the State of Goias planned to expropriate lands belonging to some 192 American citizens and it is presumed that these are the lands to which the UPI story refers. It should also be noted that landowners are entitled to negotiate with the State on the amounts to be paid by it for the land to be expropriated and that in the event of failure to do so the State may expropriate the property by judicial action and pay the owners accordingly. In the case of these expropriations, the Embassy notes that the judicial price would be the equivalent of approximately $0.23 to $0.27 U.S. per acre. The Embassy has also stated that it is unlikely that Mr. Selig was the seller of the land in question, as his advertised sites are located in another area of the State of Goias.
The Embassy in Brasilia stated August 16, 1966, that most of the Selig land now advertised is located in the municipality of Ponte Alta do Norte, some 400 miles north of Brasilia. The Embassy added that this area lacks access roads, so that it would be difficult to make a complete check of its legal registry in the pertinent municipal land offices.
I hope that the foregoing information answers the questions contained in your letter. Should you desire further information, please do not hesitate to call upon us. Sincerely yours,
DOUGLAS MACARTHUR II, Assistant Secretary for Congressional Relations.
DEPARTMENT OF STATE,
Washington, September 15, 1966. Hon. HARRISON WILLIAMS, U.S. Senate.
DEAR SENATOR WILLIAMS: I refer to my letter of August 17, 1966, which answered questions posed in your letter of August 11 regarding claims made by Selig Bros. of Indianapolis in their brochure advertising lands for sale in Brazil.
Question 5 of your letter referred to a development called Petropolis de Brasilia in the State of Goias. We have now received further information from our Embassy in Brasilia on this development. The Embassy has now reported that it has checked the municipalities in the State of Goias adjacent to the northern border of the Brasilia Federal District and has uncovered no lot with the name of Petropolis de Brasilia and no evidence of the ownership of any land in these municipalities by either Selig Bros. or their representative in Brazil, Mr. Arpad Szuecs.
I hope this information is helpful to you and should you desire further information, please do not hesitate to call upon us. Sincerely yours,
DOUGLAS MACARTHUR II,
Assistant Secretary for Congressional Relations. It surprises me that the State of Florida has an operator working her boundaries such as the witness preceding me testified about. Florida is one of the few States within the United States that does have registration regulations. In fact I think it is the State of Florida that is one of the States that wants to assess me $3,000 to send a man to Brazil, South America, to inspect my land.
Florida ordered me to cease and desist as far as selling my land is concerned. I could not even afford to take the people that buy my land to Brazil by Panama boat, with the prices that I am getting out of my land.
Now I am going to surprise you gentlemen. I believe that the interstate land full disclosure bill would be a good thing, providing you make full inspection and investigation about what you are talking about instead of what some of these States are doing, they have made no investigation, all they have been doing is casting reflections and insinuations.
Senator WILLIAMS. Now I missed something there. Could you repeat that last sentence?
Mr. SELIG. All they have been doing is casting reflections and insinuations.
Senator WILLIAMS. You are for full disclosure and inspection?
Mr. SELIG. I want them to inspect and to inquire and come up with the truth. I am for this sort of thing.
Gentlemen, I have this prepared statement, it will take 17 or 18 minutes of your time. About myself and my qualifications
Senator WILLIAMS. Why don't you summarize that? I have read your statement. We will put the entire statement in the record.
I gather you have a farm background?
Mr. SELIG. If I can't read my statement, I am not willing to testify here.
Senator WILLIAMS. All right. Go ahead, read it.
Mr. SELIG. About myself, my own qualifications: I am Stanley Selig, living in Indianapolis, Ind. I followed my father in the real estate business some 28 years ago and have held a license since licensing was instituted in Indiana. I do business as Selig Bros. Real Estate Co., which is located at 42 West South Street, Indianapolis, Ind. I own and sell land in Brazil, South America. I spent my boyhood in Indiana farming farms that belonged to my father. Since that time, I have owned and operated several farms in Indiana and elsewhere. For all of my adult life, I have been in the real estate business. I have long been acquainted with real estate laws and other aspects concerning real estate transactions. I certainly do not believe that I qualify as a fly-by-night operator.
Senator WILLIAMs. What kind of farms are these, dairy farms or what?
Mr. SELIG. No, sir. We planted corn, soybeans, all sorts of row crops, grass. And we did have cattle and hogs. And chickens. Most anything that a Midwest farm would have.
Senator WILLIAMS. Beef or dairy cattle?
Mr. SELIG. Holsteins-no; we had the short horn. My father was a short horn
Senator WILLIAMS. You don't milk the short horns?
Senator WILLIAMS. You are a better man than I. I tried and I failed.
Did you ever milk a cow?
Senator WILLIAMS. I did too, but I could never fill the bucket. It is great training though for a young person over age 12.
Mr. SELIG. I enjoy it.
I am here to dispute the testimony of Mr. T. C. Dickson and others (see p. 55) who testified_regarding Senate bill S. 2672, concerning the Interstate Land Sales Full Disclosure Act. It is my understanding that your committee is considering revision of the Securities Act of 1933 under proposed bill S. 2672. I cannot speak for all out-of-State land sales, but I can certainly dispute the testimony of Mr. Dickson regarding my own activities.
I do not use telephone solicitations to sell land in Brazil, but I do use the mails for advertising and selling. I act as a principal in these sales because I find it the best way to control the absolute truth of information dispensed and to be sure that purchasers realize exactly what they are buying and do not have false ideas regarding my farms. Also, by taking title to the land personally, I guarantee that my purchasers will get clear, unclouded, investigated titles to any land that I sell. Every tract of my land has been fully surveyed and staked by registered engineers.
Mr. Hynes stated that deeds must be recorded in Brazil just as they are here in the United States. Apparently, no one has gone to the trouble to investigate my title transactions. If they had, they would have found where I acquired land or, in every case, where I have
sold land, that my titles are recorded in the office of the registrarCartorios— in Goiania, as well as in the county seat where the land is located.
I have taken steps to insure that none of my ground is subject to homesteaders' rights and that there are no squatters in possession thereof. I feel that my buyers can buy with confidence from me because I have spent many months and a tremendous amount of money in exploration, study, legal aspects, and investigation in order to assure my customers of unclouded titles. I do not act as a principal in these transactions to avoid the controls of Mr. Dickson and the Indiana Real Estate Commission as Mr. Dickson suggests.
I also wish to state that I am a member in good standing of the Indianapolis Chamber of Commerce. Mr. Dickson states that the Brazilian consulate in Chicago could not give any information as to who owned title to any particular land in Brazil. I would certainly have been surprised if they included a landownership registry of Brazil in their office records, but that information could have been obtained in the different Cartorios' offices in the State of Goias in Brazil, where my ownership and clear titles are recorded. Mr. Dickson says that the consul did say that there are no restrictions relative to an alien holding title to Brazilian real estate.
Gentlemen, I became interested in Brazilian land just about the time the new capital of Brazil was being erected. At that time, the interior of Brazil was practically undeveloped; and there were millions of acres of ground that could be purchased. I carefully made selections of what I thought was the best land available. I considered location, topography, quality, access to markets, and the fertility of the ground. I went over the land that I had purchased by jeep, Volkswagen, trucks, and airplane. I made inspection tours on horseback and even on múleback. I went up and down the rivers by Indian canoe and dugouts.
Next, I spent considerable time and money being certain that the land I was purchasing had clear, unclouded titles and that the land was free of squatters.
Senator WILLIAMS. This land you are describing that you bought, you have to go in by mule?
Mr. SELIG. At the time I bought it, you did, sir. Since that time I have built a roadway through there. I would like to show you this road. These are official (exhibiting map)
Senator WILLIAMS. Have you got your advertising material with you?
Mr. SELIG. Yes, sir. This roadway drawing is just one of two parts. This is the drawings showing the roadway and this is the drawing that is recorded now in the State of Goias, Brazil, South America. All of these different figures represent the elevations, the cut of the road, and so forth. Actually this drawing continues. I mean the engineers did this on account of the paper would be too long. It would continue out here. This piece actually goes right here and these cuttings here, you see.
Now this drawing is one of two. I have another drawing just like that, which is also part of this road we built there. And this connection into BR 14, which is a highway that is 2,300 miles long, and it goes from Belem to Rio. And this is now an official road of the