'.

t26

The Realht RllLeRootr.)f Califolnie,

I,ours F. EpprcII
Pr esideat N atbrqd A ssaciatian H.:atl! Rourns. 1923

The RealtaBlue Book ol Co,liforntuL

327

Movement The National Professional and the Realtor it Serves
BnrL. F. EPPrcu Specinl Obiectiues of the National Associo"tion-Seroice to Boo,rds-An Inlormation Bureau-Publicq,tions-EducoUon, nesearch--Some Poli.ciesof the Natiornl Associlrtiafl" Re<tl,tot''-Ethics. AN doesnot live to himself alone. Every man who is wo*h his salt has an int€rest larger than his own narrow, selfish, irnme_ diate concem in ihe work with vrhich he earns his bread. And among men whose business is the dealing in real estate th€re has comeabout a growing and very vivid realizationof what can be the future of the particular kind of servicethe community looks to them to perform. The National Associationof Real Estate Boards is proud to rem€mber that it was the first great body of businessm€n, anal the first American organization outside of the medical profession, the legal profession and the United TlTothetae, to adopt and enforce for its membeNa codeof businessethics. The code,defining the relationship of the broker to his client, to the public and to his fellow broker, is one of the greatest contdbutions of our professionto American business morality. I think that we may farrly say that within the past year the Association,which createdfor itself this standard of relationships. goneon lo a npw development has in conducl business lf consciousness. is enteringa new period. It has oJ profescional begun to examine in scientiffc detail the conditionsunderlying real estatejudgments. We are moving toward a more accurateequipmentfor tNly professionalselvice, and toward general recognitionof ihe fact that it to servicethat the Realtor.is equipped glve. is iruly pro{essional was foundedin Chicagoin 1908,approxiNational Association The In sixteen years it has grown mately thirty boards pa*icipating. until it now includesover five hundredboardsthroughoutthe United Statesand Canada. SinceapproxTheseboardshave an activemenbershipo{ 36,000. imatelv half the boards have firlllls as active members inst€ad of individuals,the nnmber of actual individual real estatemer in the Assoand other ciation probably exceeds 50,000. The number of associate 20,000. New boards s.re of classes mernbersin our boards exceeds being organizedand are coming in at the rate of approximately one hundred per year. The work of organizing real estateinterests

I
428
The P'ealta Bhe Book ol Califomi.l

ll

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SPECIAI OBJECTI\IES OI, THE NATIONAL ASSOCIATION

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iiems ii is proving puuiicitv and a meaium

T.heRed,l,t1J BhLeBook ol Caliloi nicl

:129

o . i l r ( s r , r . r . l a t \ ^ . . j 1 s q o , / i s s e t ! i , r g a c n . o U t . c oo f t . . v ^ u e , .o . . . T I , F N 1 i o n i ' r A . . . o . i , r ' o i . . r . . t i r r gh ^ r t . , . . ^ \ . a r . j , v . r . J . a , . r n b _ . o r . r r t l i n ( r . C . n u r , i r r , l , , i . r l s 2 . e : . r f , . t , . o t r xr ' l d n " e l 1,..1 .al'f,al5il u r o . r s , d . t h , r p d e r ' :l r i o . a . . a t r tl r . s , , , . o g , r : _ . d . 1 , c i . . \ r l ^ r . - " r r , _

for locai boalds which sets up the irdividual Realtor as the best unit of membership. Due to the fact that the Iiealtor has ethical rest,onsibilities and since qu:rlifications fol our DrofessioD ale pcrso;al in clar':rcter, and siuce such qualificatioDs catlnot ilhere in a corporation, the Dilectors fcel it best to recomrDerd the iDdiviallrai membership plan. Other pubiic?rtions.!r.hichhrve bee issued are the fo owrng: l\{ultipie Listing. Duiies and Obligations of the Boald Secletsr.y_ How to Hold Successfnl Board Meetings The National Association. Real Estate Board Appraisals. Secretaries'X{anual. Connissiorr r.ates. Committee activities. Board Meetings (new edition). Financing boalds. Plomoting and protecti E,,Realtor'.,, Multiple Listjns (new edition). Board adveltisirrg. Boald Flouse Organs. Conducting an Olvn l_our Hohe campaign aDd showtrlducational cour'ses. State associations. Gettiing publicitv ioj the board. Housirrg slll!'eys. These pamphlets can be obtained flo r headquattels b:' :lppiication by nntr bo:rlds tlDt desir'ethem. ,{pP1aisals by ).ezrl cstate boald conDrittees do ntuch to stinulate a f n | a i . i r . si r . n . \ , i l . 1 - ' , a \ r , e i . o . t r nt , r ' r . t . r l : r " n " "i o : "rrLi',zi g

t . 4 p \ o t u - r e v h r . h . ^ i I . . , , r , oL , u r I d: r r , p , . : : s i$ . n . r {i s , s s u n t i n si s l s h o \ vr U y , ' l c . i , ' l r r .i l i . - a x r 'r l p t J : s J ' c o r . i n ^t ie e so l o u r ,t - " n . . _ f l v e o o r 1 ,s \ . , , | | a ,tt, r ' o r . F r r o i r ^ r . . r o. I o l g t ! 4 , i ] 1 , 2 1 2 n d , j r ; n " d d t] a l e e sa m o u n t r g t o $ 1 7 ; , 6 1 1 . Thesc a],e or1ly a fcly o{ the direct vays in \.hich the Nationai Association is ser.\'illg mernber boards.
THE SDVEN DIVISIONS

ly by ashing the Natiorat -\sso(iation throu;h its ,"","b";. ;;;r.;;-1; a p n | n i r . s o r '.,S ' 0 4 . , ' 0 O . 0.n 4 - 4 t . . o- r ' , i r .n \ o, . " . , r h . f V a ,n . p x ; - _ mar|li5!li ^:; 'gnf l'"lrn d.r.. Jr"d.,jI ha N.riorirt Assoc,riion is getting this apDr':r"isat s-or.titol meuber b"aras ,t ,r cosf.iapirro*_ i t a i c l \ ' . S : o0 n n . r '| , , n I j I d i " j . i i r , 9 f o . r o n n f l o ' 1 , . , , . " ; . , 1 . , , ; 1 . n

The real eslate business is becoming Dlole anal more l ghly specialized. Thc Nalional Associatiot has Iecognized this fact aril in ordel to give specialists iD r:lr'ious brarches uf he t rsiness o" onno._ tuDity to get togethel rnd confcr and \i'orii out Ureil special u.oblems ' ''.'-.lhe -{ssociation has set up selcn glent Divisions as folloi";,

330

The Realtlt BIue Book ol C<.Ulorni<L

The Home Builders and SubdividersDivision. The Mortgage and Finance Division. The Farm Lands Division. The Industrial Property Division. The Property ManagementDivision. The Brokers' Divfuion. Division. The Realtor Secretaries' The Divisions are eachgovernedby an ExecutiveCommitteeof line electedfor three years, nrith a Chairman, Vice-Chairman,and Secretary. Each Division is self-goveming,exceptthat final control is vestedin the Dir€cto$ of the National Association. Each Division to has its own individual members. Each Division has comndtteea investigatein detail specificsubjectsand are uncoveringa large untouchedfield of real estateknowledge. To discussth€ work of each division in detail is impossible. A few itlustrations of the studies being urdertaken and work done, however,may be of interest. (1) The Farm Lands Division,in co-operation with the Department o{ Agriculture and the Federal Fal'rn Loan System,is underthb takiDg to discoverand develop underlyingprinciplesof larm lands appraisalsand to b ng this activity to the same level of efficiency which is evidentin the appraisalof city properties. The Government is ereatly interestedin this enterpriseand is lending aid. (2) The Farm Lands Division has developed poster advertisa ing sel'vicesimilar to that in use by city operatorsand fostered by the National Association. (3) The Farm Lands Division has alsomadean intensivestudy of the {a|m lands financing situation. The Home Builders and SubdividersDivision has also a group of for active committees work. One of thesecommittees. instance.is at making a vast collectionof forms of subdivisionadvedising vrhich has b€entumed into a circulating libmry. Membersof this Division, 'whenthey have an advedising problem,will find quickly availableall of the best and up to date examplesof subdivisionadve*ising now in use throughout the counhy. The Mortgage and Finance Division has a list of committees making specialstudiesof an intensivecharacter. Oneof thesestudies, for instance,concernssecondmortgagesiwhich is one of the most difficult problems in real estate ffnancing. At enormousaccumulation of data as to various plans for coveringthe second mortgagehas beengarhered. Thesefew examples cited to showthe char.acter the activiare of ties of the Divisions. By the Divisional plan the Association has sucin ceeded attracting and intercsting the active assistance a large of number of able m€n throughoutthe country.
IIDUCATION

The Associationrecogdzes that one of its great tasks is the of development real estateeducation. From all parts of the country are coming demandsfor textbooksand for a standardized real estate coursewhich can be installedin colleges, Y. M. C. A. schoolsand, in

The Realtu BIue Book at Cali,forni&

331

where these facilities are la.cking, in the real estate boards themLast year the Associalion grappied seriously with lhis problem and called a conferpnce Madison,Wisronsin, at which rhe lnleral, national Commirlee the y. M. C. A., thp Institutefor Resparch of in Land Economir"s, rhe tlni\,ersilyof Wisconsin, of and the National Asaocistion were represented. This conferelce drafted a stardard cou$e and then appointed a committed of three to carTy forward the preparationof the course. This committeeconsisted a representaof tive of the NationalAssociation, lnstiiute lor Research_ Land the in trconomics and of the Y. M. C. A. This Joint Cornfiitiee found. uDon jnvestigalion. that therewas tjractically rpal psjaielil.erature a no df kind -suilable for studenlsand beginners available. Its first task, ureretoret{ and tt was not a small task), was lo get under way as soon as possrble procluclion the properkind of simple, accurate the of yet anclcomprehensive textbooks. .In l,his,Lhe Association. through the Joinl Committce,has made notableprogress. The firsl elerhentalybook,entitled ..The principles of Real Estate Practice," has beenissuedby the Macmillan Comp;ny. Accompanying this textbook, for the use of instructors in real estate course, instructor's manual has beenprepar€das well as problem an sh-eels._Jhis bookwas writren by E. M.-Fiiher, Assislanr Sicretary of the National Association Real Estaie Boards. For other book; of seeBibliography,Realty Blue Book. We look forward to the time when young men will go to universities and obtain a degreewhich is evide;ce of thciathorougb educationalprepalation for l.he}eal esl,ate business. When that ti;e comeswe will have established our calling on the true professional plane where it belongs.
RESDARCII

The Associationhas, during the past few months, undertaken research work of utility Lo thp real estate business as a \yhole. Surveys are made of real estate conditions thr.ctughout the United States and Canada. One survey was summarized and analyzert by Babsons and -was given nalion $ide publicity. Ios findings'proved io be a netplul gurde as wetl as a true pictuj"e l,o Realtors and businass men At a cost of some 92,000 the Association mad€ a study of the mortgage loan investmenls of all American Insurance companies whose assetsexceeded9500,000. This investigation covered the ievenyear period lrom l9l5 l,o 1921, the period which witnesses l,hegreatesl, prlce movement in Dur economic history. The sludy compared the eamings of life insurance companies on their moftgage invpstments wrth therr earnings on stocks and bonds. Wlen it is remembered that during the war years [h; earnings on stocks and bonds were hish. tha favorable results shown by this investigation on behalf of riai estate. are the more surprising. This little table summarizes this greal rnvestrganon,

Tkc Reolta BIue Eouk ol CalilorniaL

Comparison of the Average Gross Rates of Income Eam€d by Insurance Companieson MortgEges and Stocks and Bonds
AYerase G.oss

4_67

1915......._.... 1 9 1 6 .. _ _ _ . . . . . . . _ . . - . . . . . r 9 1 ? . _ , . . . _ . . . _... . . . _._ 1 9 1 8 . , . . . . . . . . . .- - . . . . 1 9 1 9. _ _ . . _ . . _ . . . _ . _ . _ . . . . . 1S20.__.....,............_.....
1921

6.13 6,10 6.72 5,90 6.08 6.21

r.69 1.12 1.43 4.38 1.66 4.66 4 . 3t

!.44 1.6? 1,67 7.71 1.46 1.12 1.4 6

This tsble shows the earnings of all American Insurance Companies during the €even-year period to be on mortgages 6.1 per cent and on stock a1l.lbonds4.6 per cent, a diferential of 1.4 per cent in favor of mortgages. This meansthat mortgages earned approximate ly twenty-five per cent more than stocks and bonds. We believe that every Realtor and every real estate board should find oppodunity to bring this fact to the attention of th€ public in every community. It is the greatest argument for the safety and for the earning power of real estatesecuritiesthat has ever been advanced. When you remember that the heads of the great life insurance comlani€a are men who make a lifetime study of the investment field and who therefore ought to know more about stocks and bonds than most persons, the comparison is still more favorable. We believe that in b nging these facts forward, prepared by reliable ard well-known investigators,the National Associationhas done a sreat service to the real estate business as a whole.
SOME POLICIES OT THE NATIONAL ASSOCIATION

In its conventions and meetingsthe Association feelsthe pulseol real estate opinion ihroughout the country and thus becomes the natural vehicle for the expression of national policies. A few of these policiesmay be summarized briefly: (a) The Associetionhas, for some yeals, advocatedand promotealthe adoption of real estate license laws by the respective states. We recognize that such laws will not cure all the evils of the real estate business. They are proving effective,however,in setting up minimum requiremenls honesry. goodreputation of and fair detlint and are keeping many undesirable men oul of the business.Siyteen statesnorF have license laws and a goodmany other slaies a-re preparing lo enacl tlem. To furlhpr lhe administrative developmentof licenselax' the Associationhas organizeda committeeconsistingof th€ administmtive ofiicers of licenselaws in all of the sixteenstates. The nlair purpose of the license law is to Drotect the Drblic from unscrupulous dealers. In this it is proving sur"cessful. T_he task still remains, however, for the real estate boards to develoD new and highpr standardsof professional service. No leaislationctn do this. Tn ragald lo taxation, lbe Associationhas for some tjme advocated the abolition of the surtaxes in the hiqher brackets of the

Tke Reolta Btua Book al CaEforn ,

333

Federal Itrcome Tax. The Association is also a stmng advocate of t))e salestax for Federal purposesto replaceou! pres6nt numerous lll)(ufy taxes. stamp taxes and other taxes which are a nuisance. a! well as tle higher divisions of the jncome tax. The simplicity of admiinist_ratiotr, the productiveness and tlle equity of a tax-on gross sales-will..we believe. appealto anyonewho studiesUe subjecl, The Associationis also strongly in favor of l,heMcFa_dden Resolution for an arnendmenl the United StatesConstitutioD to which will male possible the taxation of the income from municipal, state and Iederal bonds. Ile virtual exemplionlrom raxation of vast incomes from wealth ilrvestedin tax exempt securitiesis becominga national evil. This policy meaDsthat the rest of us have to carrv-heaviertax burdens, both locallyand nationallJ.Tt meanstle witldriwal oI much acLi\€capital from new eDterprises.It means li.rnitation invesL the of meit funds for the clevelopmentof real estate. The Association ha,s repeatedly gone on record in this matter and in the next Congresswe hope to bring all possible p&ssure to bear.
Ii.EI\LTOR

On€ ol the great contributionswhich the Associationhas made to the real estale profession is the invention and safeguarding of ihe term Reallor- To lhe public ihroughouLthe United Stales lh-is word has become pledgeof integrily and fair dealing. A lecent survey a ot our Ooardsshow that 95 per cent of our membemwere using it reg)larly in tleir busine$. in their advertising,in their correspondence. The value of l,hisword cannot be esrimtted in dolla$. It has made-membership in the National Association a big asset. It has brought beforeth6 whole country jhe ideals for which-ourAssor"iation standsand given sigrificanceto affilialion with our bodv. So valuable hastlis word become thar hereand ihere real estalede;le$ are found who try to pass themselves off as Realtor.sbut who are not snal who cannot be members of real estate boards. tlle Association is using its best efforts to protect the term Realtor, which has been defined ii our constitution as follows i o /e{r, estate nttrL uho is an a,ctiuemem, be,t'-ofq, Member of the No,ti.etnl Association of neal, Estate Boaflls, dnd as surh an afilialed, mefiber of the Notianql,Asso?in tion, laho its sabjectto its rutes onl rcgxlkll;ons. bho obsem?s standad ol conits duct, and,i.s etut4tl,ed, i,ts benelits." to In this effod, however, we must have the co-operation of the menber boards. We ask that every member board be vigilant in protectingthe te"rn Realtoi.and bringing aJlpossible pressureto bear on any violator to cease. If this should fail. cornmunicate with the National Association, which will in fum use ijs best eforts by correspondence. Shouldthis measurefail we ask lhat thF locai board, through iis orvr attorney, bdng an itjunction suit. The briefs and information to carry on the suit $rilt be supplied by the National Association.
' ETHICS

The C;de of Ethics of tle National Association one of its Ereat is achievemeniq. This codewas one of {hp first srpa! business codes developed lhe Unijed States. in

331

The Realta Blue Book ol Colifomia

The National Association must look to the local boarals for the enforcementol the principles laid dowrr in this code. The boards ahollcl courageously and fj"ankly assume responsjbilily lor the acts or lls.members and when any transgression occurs should .arefully rnvesugaleatl ot lhe circumstan(esand lakp disciplinary aclion. It takes.ourage lo exTel a man for unei_hical .somelimes conduct,but rna Doafd whrch does so when justified gains self_respecras s,ell as the eskem ol Lhepublic. Unlessthe boards assisl the National Asso_ cnllon in lhe enlorcementof ihe Code of Ethics il becomes- -" a only declaMtion of good intentions and not a living, triniin! U*The State Associations are an increasingly imporiant factor in our real estate profession. There are now twentjr_nine state anal provincial associalions. Many of lhem ale exceedin;ly strone. lL i; to lhese associations thai the Naiional Associationmust looklor the canyin-g oul of irs principles and policies lo a large degree. Because or lhe facl that so much legislationatfecting real pslare is of a sl,ate cnaracter. the ip-gislative field is of special impoj"tance to lhe statc organrzallons. tt. rB no{ possiblein lhe nature of t}ings for the . NaLronalAssocialion1o fight legislativebatUesin evFry state. Also oecarseol lhe communjly of inrerestwhich always exisis in tbe sla{e. the Sfate Associalion can keep in closer touch with membpr boards and with lh€ individual meniberslhan can the Nalional Association. The oJfice.rs rhe National Association. thFrefore, view with appmvai of and ctelghl_--t_he g?owing power and influence of ouj" slate organiza_ nons. IneAatronat Associa t ion, lb rough its board of stalp presidenl,s, rs-o-everoprng ctearlng house lor state associations and is usins all a ot the powers a[ its command for effeclive cGoperation with slate asaociations.