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One responded, “Has a law providing a test of fairness.”
Twelve responded, “Have an advertising control law."

The total exceeds the number reporting and it is obvious that some respondents felt that more than one principle was embodied in their situation.

In response to the questioning statement: "Federal legislation has been introduced. If it did not preempt State laws and dealt only with subdividers (not agents), such a bill would probably be viewed by my State as:"

Ten completed the statement with“Unnecessary.”

Fourteen completed the statement with "Needed to supplement State laws."

Eight completed the statement with “Vital to effective control of abuses.”

Fairness dictates that I point out that the last group of (opinion) answers conveys the opinions of the individuals reporting. It is my belief that because of NARELLO's structure, the organization, as such, cannot take what might be termed as an organization position on such a matter.

(The committee's questions to Mr. Van Horn and his response follow :)

1. May we have two copies of three recent property reports from the New Jersey Commission? We would like to have a good sampling of such reports from several states.

2. May we have your observations on the following suggestion made on the second day of the hearing :

“Senator WILLIAMS. *** maybe people wouldn't read a long prospectus ; I suppose they could make them so long that it would really discourage reading. But we might have an amendment that would require the advertis

ing to conform to the disclosure of the filed prospectus." 3. Mr. Bertoch of Florida, on the day following your testimony, made a lengthy statement saying, in effect, that either the Federal government should have an all-encompassing statute pre-empting state regulation, or it should stand aside and wait for a uniform state law or some other form of widespread state action,

He asserted that States would be likely to repeal their legislation, or sharply curtail regulatory activity, if federal regulation were to be established. No example of this attitude, he said, could be found in your testimony. In answer to inquiries about the source of this interpretation of your statement, Mr. Betoch said that it was based on this excerpt from your testimony:

“Mr. VAN HORN. We view it (S. 2672) as something which could cause us to seek repeal of the out-of-state promotional land section of our statute and to repeal applicable rules and regulations without undermining the

protection of New Jersey citizens. Do you agree with Mr. Bertoch's interpretation of your testimony? Do you seek a pre-emptive federal law?

4. Mr. Bertoch also submitted for the record a summary (enclosed) of a meeting at which, on January 19, you and others met to discuss the bill. I'd welcome any comments you may wish to give on this summary.

*

STATE OF NEW JERSEY,
DEPARTMENT OF BANKING AND INSURANCE,

Elizabeth, N.J., July 7, 1966.
Hon. HARRISON A. WILLIAMS, Jr.,
Old Senate Office Building,
Washington, D.C.

DEAR SENATOR WILLIAMS: * *
Responding to the points in your letter:

1. Copies of certain New Jersey Real Estate Commission public reports are attached.

2. The point raised here has potential validity. However, if the preparation of the prospectus is covered (as to content, scope and manner of presentation) by rule and regulation—so as to require the essentials in a brief and readable form as, let us say, a preface to any other material which may be permitted this objection disappears.

If the prospectus is not so controlled, it may easily become a "pitch piece" or a welter of material or both, just as some documents I've seen.

3. As the maker of the remarks Mr. Bertoch quotes, I say to you categorically that his interpretation was farthest from my mind. The clear thrust of my intent was to suggest that it could relieve the New Jersey Real Estate Commission of an onerous task and simultaneously plug leaks which neither New Jersey nor any other State can plug under the present situation.

Perhaps at this point in my testimony, I should have reiterated the matter of better protection touched upon elsewhere in my letter. I see nothing about the bill which would require New Jersey to make any such move, though it would appear to create a desirable possibility of New Jersey making the move that my testimony indicated.

4. I prefer not to comment on Mr. Bertoch's summary of the January meeting since I was not present all of both days. In any event, my testimony on June 21 represents the considered consensus (and unanimous position) of the New Jersey Real Estate Commission. Hence, I'd prefer to stand on that statement.

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Sincerely

A. W. VAN HORN. Senator WILLIAMS. We will recess. If the remaining witnesses can be back at 1:30, we will reconvene at that time.

(Whereupon, at 12:25 p.m., the committee was recessed to reconvene at 1:30 p.m.)

AFTERNOON SESSION

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Senator MONDALE. Mr. Dickson. We are pleased to have Mr. T. C. Dickson, administrator of the Indiana Real Estate Commission to testify regarding S. 2672.

Mr. Dickson?

STATEMENT OF T. C. DICKSON, ADMINISTRATOR, INDIANA REAL

ESTATE COMMISSION

Mr. DICKSON. I am T. C. Dickson, executive secretary of the Indiana Real Estate Commission, and, as such, have found that there are two or three areas in interstate real estate sales which we find have been very hard to control.

One of those is the mail-order telephone solicitations, whichi, I think, was pretty well covered this morning:

I would like to subscribe to the recommendations of Mr. Van Horn, which he made in his speech. I think that those were pretty well covered.

I am a little bit worried on the $300,000, as the amount that can be waived on that disclosure.

Senator MONDALE. Would you regard that exemption as being too high?

Mr. DICKSON. Yes, sir. I think there would be some that would fall below that, and, especially, the ones that need control mign. be below that.

Senator MONDALE. Has it been your impression that many of the most flagrant promotions are of the smaller variety!

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Mr. DICKSON. Yes, sir. That is, within the Continental Shelf they are.

The other area which the individual States can't have very much control over is when someone is acting as a principal rather than in a brokerage capacity, and we happen to have one of those operating out of Indianapolis.

I would like to read one of the ads that has appeared in the newspaper in El Dorado, Ark., recently: FIVE HUNDRED ACRES OF GOOD FARM LAND

$800, TOTAL PRICE
$75 DOWN, $25 PER MONTH

FREE COLOR BROCHURE Five hundred acres of good farm land for vegetables, rice, wheat, corn, fruits, and most anything planted thrives. Annual rainfall, 45 inches. Temperatures range from a low of 50 degrees to a high of 85 degrees. Pioneers from all over the world are pouring into this country seeking their fortunes. Some of the largest companies in the world are building factories throughout the land. We have 750 farms of 500 acres each to sell. They are located 400 miles from the capital of Brazil, South America.

Each farm has been fully surveyed, staked, and registered. Mineral rights are included. All of our titles are free and clear, free booklets showing pictures and giving complete details are sent upon request. Selig Brothers Real Estate Company, 42 West South Street, Indianapolis, Indiana. Telephone Area Code No. 317, Melrose 4-8328. We are members of the Indianapolis Chamber of Commerce.

(A statement of Mr. Selig appears on p. 237.) Mr. DICKSON. In relation to this, we wrote to the Brazilian Consulate in Chicago, and it says they couldn't give us any information as to who owned title to any particular land, or anything of that kind. They didn't have that information.

It said there are no restrictions relative to an alien holding title and fee simple to Brazilian property.

Well, we also wrote to the U.S. Department of Commerce and they weren't quite so optimistic about title. I have a statement here from them that has information that anyone can get, and it is doubtful that clear title could be obtained on any of this, and they list only three or four companies who are purportedly able to sell Brazilianoland and give clear title to it.

Senator WILLIAMS. Are you referring to a report prepared by the U.S. Department of Commerce entitled "Information for Prospective Investors in Brazilian Real Estate"?

Mr. Dickson. U.S. Department of Commerce, Bureau of International Commerce, Washington, D.C. It is Bulletin DC 2035, July 1965.

Senator MONDALE. I think, without objection, we will include that report in the record. (See p. 356.)

Senator MONDALE. Mr. Dickson, if you have no objection, I would like to call Mr. Kenneth Hynes to the witness stand. He is the Chief of the East Coast Section, American Republics Division, Department of Commerce, and he can perhaps give us a brief description of the information contained in this report relating to this matter.

STATEMENT OF KENNETH N. HYNES, CHIEF, EAST COAST SECTION,

AMERICAN REPUBLICS DIVISION, OFFICE OF INTERNATIONAL REGIONAL ECONOMICS, BUREAU OF INTERNATIONAL COMMERCE; ACCOMPANIED BY ALAN KAY, OFFICE OF GENERAL COUNSEL, DEPARTMENT OF COMMERCE

Mr. HYNES. Thank you.
Senator MONDALE. What are the salient facts, as you found them?

Mr. HYNEs. First of all, the intent of the circular, of course, is to make sure that any prospective buyer of land takes prudent steps before making a purchase, just as he would in this country, to make certain that he knows what he is buying. In this connection we point out the desirability of his viewing the land before buying, if possible. But that represents a rather large expenditure on the part of the prospective buyer.

Second, he should have counsel-
Senator MONDALE. How much do these lots sell for!

Mr. HYNES. Land offered for sale about 400 miles north of Brasília in the State of Goiás is advertised by one U.S. company at $2.20 an acre. However, the price factor is really not too important in itself

. unless you know something about the land you are buying--for example, if it is accessible to markets and if the title is free and clear.

With respect to the clear title, that is another problem. One may never know who owns the land one buys. That happens in many instances, but not in all cases, of course. "Through the counsel of a good Brazilian lawyer, you should check with the local registry to see if the deed has been recorded. In many cases, the land sale is made by delivering a warranty of sale. Some real estate agents, or companies, will say that the sale is effective and that the transaction is recognized legally by the transfer of the warranty.

That is not true in Brazil. The deed must be recorded, as it must be here, and, in many instances, that is not the case with respect to certain parcels of land that have been sold.

In other words, the intent of the circular is to warn people of these things, so as to be sure and not make a mistake before they spend their money.

Senator MONDALE. Now, do you have personal knowledge of the access problem in relation to this property being sold, indicating whether it could be difficult to get to or not?

Mr. HYNES. I don't have firsthand knowledge, but we have been advised in various communications from São Paulo, from Brasília, and from Rio that visitors to that part of Goiás have said that some of the areas in which some of the lands offered for sale are located are very remote.

Senator MONDALE. What do you mean by that?

Mr. HYNES. They mean by that the land is far from means of communication.

Senator MONDALE. How far?

Mr. HyNEs. That, I can't answer specifically. Moreover, the land reportedly would require a great deal of money to be cleared for exploitation.

Senator MONDALE. To be cleared ?

Mr. HYNES. Yes, Senator.
Senator MONDALE. Timber on it?

Mr. Hynes. You will find a great diversity of land. We really can't say that we have first-hand knowledge of this land, but we depend entirely upon information supplied by our posts.

Senator MONDALE. My question was getting to that point. What information has been supplied to you that you believe is accurate?

Mr. HyNEs. We have indicated, I believe, in the circular the sort of information we have received.

Senator MONDALE. Have you been provided with reports prepared by the American Embassy, Rio de Janeiro? Mr. HYNES. Yes, Senator Mondale.

Senator MOXDALE. Without objection, we will include that report in the record. (See p. 357.)

Senator MONDALE. Is there any problem about colonization and homesteading, with respect to this

Mr. HYNES. As a matter of fact, most of the purchases we have heard about up here have been made through private agents or private real estate companies, and those sales are not parts of a colonization or homesteading project. Such projects would be arranged directly with the Federal Government in Brazil, whereas these are purchases through private agents, you see, offering private lands for sale.

STATEMENT OF T. C. DICKSON—Resumed

Senator MONDALE. Thank you very much.
Mr. Dickson, would you care to continue ?

Mr. DICKSON. This, I think, is a brochure that goes out to the public and is what they have to go along to buy their land from.

Senator MONDALE. If we might, we will include that as part of the files.

Mr. DICKSON. We can't do anything with him in the State of Indiana, because he is acting as a principal and not as an agent. And he doesn't bother us. So far as I know, he hasn't enticed in Indiana.

Senator MONDALE. He is not selling in Indiana ? Mr. DICKSON. No. Senator MONDALE. Do you know where he is concentrating his efforts?

Mr. DICKSON. I have had calls from all over the United States, practically, on it, and from their voices, and so forth, I interpret that quite a few of them are rather elderly people.

Senator MONDALE. Retired?

Mr. Dickson. Wanting to make an investment for their retirement, and I don't believe that is the proper land for them to do that with.

I do have copies of plats here that he did furnish me on all of these subdivisions. I have never seen the man, personally, but I have talked to him on the telephone once. That was the only time I was ever able to get a hold of him.

I have a copy of a letter here, from the New York Department of State, inquiring about what we could do under rule No. 10 with him; rule No. 10, of course, of our law. Evidently, he has been up

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