RENT OF BUILDINGS.

MONDAY, JULY 16, 1917.

(See pp. 92, 93, 336, 752, 908.)

STATEMENTS OF MR. JOHN C. SCOFIELD, ASSISTANT AND CHIEF CLERK; CAPT. WALTER E. KRUESI, OFFICE QUARTERMASTER GENERAL: AND COL. W. W. HARTS, IN CHARGE OF PUBLIC BUILDINGS AND GROUNDS.

The CHAIRMAN. "For rent of buildings in the District of Columbia, fiscal year nineteen hundred and eighteen, $196,400; and the Secretary of War is hereby authorized to enter into contracts for the lease of suitable buildings for the use of the War Department as follows: One for a period not exceeding five years from date of completion, at an annual rental of not exceeding $92,800, and one for a period not exceeding two years, beginning July first, nineteen hundred and eighteen, at an annual rental not exceeding $40,000: Prorided, That the Secretary of War is hereby authorized to take over from the Navy Department the unexpired portion of the lease for the rented building on New York Avenue between Seventeenth and Eighteenth Streets northwest, known as the Navy Annex, from such time as the Navy Department can relinquish the building to the War Department, at an annual rental not exceeding $40,000."

MONROE COURT, FIFTEENTH AND M STREETS.

Mr. SCOFIELD. The rental of 66,000 square feet of space in the fireproof building at Fifteenth and M Streets NW., from the 1st of August, 1917, to July 1, 1918, we estimate at $36,667. That is at the rate of $40,000 a year.

The CHAIRMAN. How much a square foot?

Mr. SCOFIELD. About 60 cents. That does not include the space in the basement, does it?

Capt. KRUESI. Yes, sir; it is 60.4 cents. I believe.

The CHAIRMAN. About 66,000 feet?

Capt. KRUESI. Yes, sir; 60,000 square feet, at $40,000, would be 66 cents.

The CHAIRMAN. Is that the available space?

Capt. KRUESI. The net rentable area, excluding corridors.

The CHAIRMAN. Where is this building located?

Mr. SCOFIELD. At Fifteenth and M Streets NW. It is a new apartment house which is nearly completed. It is on the southwest

corner.

The CHAIRMAN. A yearly contract?

Capt. KRUESI. Yes, sir; a one-year contract, with the request that the Secretary be authorized to renew it for a period not exceeding

two years.

The CHAIRMAN. What service goes with this?

Capt. KRUESI. None. The owners will provide shades, screens, and awnings, and certain things of that kind which we frequently do provide.

The CHAIRMAN. Have you any estimate of what it will cost for heat, light, and elevator and janitor service?

Capt. KRUESI. I have no estimate.

Mr. SCOFIELD. The heat and light will cost $6,000 or $8,000 a year. The CHAIRMAN. Has it been estimated?

Mr. SCOFIELD. There is no estimate. I am figuring on the estimates for the other buildings. There is no estimate included.

The CHAIRMAN. This building is now in the course of construction?

Mr. SCOFIELD. Yes, sir.

The CHAIRMAN. You propose to take the whole building?

Mr. SCOFIELD. Yes, sir. Four floors are arranged for apartments; it is being built for an apartment house. The upper floors are not yet partitioned off. The board which the Secretary appointed to look into the question of space for the department found this to be the best proposition that was submitted to them. The owner agreed to make certain changes.

The CHAIRMAN. Will the four stories already constructed for apartments be suitable for offices?

Mr. SCOFIELD. He has agreed to take down certain partitions. It was concluded that with those changes they would make admirable offices. Col. Harts, who was on the board, can tell you about that.

Col. HARTS. With the changes that are proposed by our board and consented to by the owners, the building will furnish very excellent office accommodations.

The CHAIRMAN. Do you know what the building is to cost?

Col. HARTS. No, sir; we have not any information from the owner. The CHAIRMAN. Will they not furnish that information?

Col. HARTS. I think they would.

The CHAIRMAN. Please furnish us with information as to what the building is to cost and the present assessed valuation of the land. Mr. SCOFIELD. Yes, sir.

From: Capt. W. E. Kruesi.

To: Assistant and Chief Clerk, War Department.
Subject: Valuation of Monroe Court.

JULY 17, 1917.

Referring to your request, I have determined from Mr. John L. Warren that the property at the southwest corner of Fifteenth and M Streets, upon which Monroe Court is located, is assessed at $1.45 per foot for 16,400 feet, or $23,780. He states, however, that the property cost him in trades about $50,000. The unfinished building was assessed in June at $100.000. It was then somewhat more than half completed.

He states that he is unable to state the cost of the building, because it is not yet complete, and that he is unable to state or to estimate the cost, because it is not yet complete, and he will be put to considerable additional expense on account of his agreement to remove certain partitions and equipment from the building and to store and replace this equipment at the end of the Government lease. He holds the property for sale at from $375,000 to $400,000.

WALTER E. KRUESI,

Captain Quartermaster, United States Reserves. The CHAIRMAN. What is the situation with respect to office space in the War Department?

Mr. SCOFIELD. They are working out in the corridors, absolutely crowded in the rooms. We have had to move the Surgeon General and the Insular Bureau to the Mills Building, which we have rented. The CHAIRMAN. The Provost General has gone down to the Land Office?

Mr. SCOFIELD. Yes, sir; the Land Office is full. We have rented the Hooe Building for the Ordnance Bureau, also the old Red Cross

building at 1624 H Street NW., on the southeast corner of Seventeenth and H Streets, and the Wallach House, at 1801 I Street NW., for the Ordnance Bureau. The Ordnance, in addition, have rented out of their appropriation the Knickerbocker Hotel, 1701 and 1703 New York Avenue. They have under contract a building for their drafting force at Eighteenth and E Streets, a six-story building, built expressly for that purpose, to which an addition of three stories is now being made, which they have included in their estimates.

The CHAIRMAN. Do I understand you to say that the Secretary of War appointed a board to take up the question of additional quarters for the War Department?

Mr. SCOFIELD. Yes, sir.

The CHAIRMAN. Who were the members of that board?

Mr. SCOFIELD. The Assistant Secretary of War, Judge Ingraham, Col. Harts, Maj. MacArthur, Capt. Kruesi, and Mr. Kiefer, of The Adjutant General's Office. These estimates are the result.

The CHAIRMAN. Did the board investigate the buildings belonging to the Government on the south side of Pennsylvania Avenue?

Capt. KRUESI. Yes, sir. We recommended that one building be repaired. That is included in this estimate, 506-508 Fourteenth Street.

Mr. SCOFIELD. The Darby Building, so called, which was damaged by fire on May 9. It is almost opposite the District Building on Fourteenth Street.

The CHAIRMAN. Are there any other buildings which were found suitable?

Mr. SCOFIELD. No other buildings were found suitable. A thorough investigation was made some time before; Col. Harts had it made. It was thought that the Oxford Hotel building might be used. It was used prior to 1888 by the Quartermaster's Department as an office building, but the Treasury Department had a lease with the present tenants and did not feel that they should be compelled to vacate it.

The CHAIRMAN. That lease is at will.

We

Mr. SCOFIELD. Yes, sir. Subsequently the Treasury Department decided to take that building. They have also decided to take the Emergency Hospital building, which we were going to use. have taken the Panorama Building on Fifteenth Street and Ohio Avenue and are using it for the depot quartermaster. We examined the Grand Army of the Republic Building and thought we could use it. It was not as suitable as you would think from the exterior. There was an objection on account of the fact that the Grand Army of the Republic people use that building. The officials of the Treasury Department did not encourage us very much.

The CHAIRMAN. It has been turned over to the Grand Army of the Republic for their use.

Mr. SCOFIELD. Yes, sir. They have had it at a nominal rental. Mr. CANNON. They are on the third floor?

Mr. SCOFIELD. Yes, sir. The first floor, which we thought could be used to great advantage, is occupied by the Public Health Service. At that time the Secretary wrote a letter to you about it. It was made in pursuance of your suggestion to the Secretary.

The CHAIRMAN. Mr. Cannon made that suggestion.

4400-17-6

Mr. CANNON. It was suggested at one of the hearings.

Mr. SCOFIELD. Yes, sir. The Secretary came back and told me and I immediately got busy and asked Col. Harts to have a personal investigation made and I went myself and inspected the buildings. I found that these buildings which I thought could be used—the Darby Building, the Grand Army of the Republic Building

The CHAIRMAN (interposing). Where is the Darby Building? Mr. SCOFIELD. On Fourteenth Street, just below the Avenue, 506508 Fourteenth Street. It was occupied as a paper-box factory and a lithograph shop. They had three or four separate enterprises in it. It was rejected by one or two persons that I tried to persuade to use it for an office building. I also thought that the Graham Building could be utilized. I asked Col. Harts to have the buildings inspected. He had an engineer investigate them very carefully-in fact, every building on the squares owned by the Government, and as a result of that investigation three buildings were selected.

The CHAIRMAN. I read a statement that the Oxford Hotel people had offered to supply the Treasury Department with an equal amount of space elsewhere if they were permitted to continue their lease. Do you know whether that is so?

Mr. SCOFIELD. I do not know. I saw that in the paper. I had talked to Mr. Wilmeth, or somebody in his office, and my impression is that he said it was so. I am not sure that I talked with him.

BUILDING EIGHTEENTH AND G STREETS.

The CHAIRMAN. You also ask to be authorized to enter into a contract for the lease of a building for the period of five years at an annual rental of not exceeding $92,800.

Mr. SCOFIELD. That is for the rental of 125,000 square feet, more or less, at the corner of Eighteenth and G Streets, one square from the War Department, a building which it is proposed to be erected by the Commerce Building Co. It is immediately back of the building which the company has just completed for the Interstate Commerce Commission. They propose to rent it for $92,800, which is fifty-some cents a square foot.

Capt. KRUESI. Fifty-eight cents a square foot gross and 74.2 cents per square foot net rentable area.

Mr. BYRNS. Do you think that it is advisable for the Government to rent buildings for a period of five years?

Mr. SCOFIELD. For three years, anyway.

The CHAIRMAN. These people have already erected the building for the Interstate Commerce Commission at Eighteenth and Pennsylvania Avenue, and they have a lot which goes back to G Street? Mr. SCOFIELD. Yes, sir.

The CHAIRMAN. That is an 11-story building?

Mr. SCOFIELD. Yes, sir.

The CHAIRMAN. And if they add to that building they can then get the Avenue frontage-that is, they can have the height which comes from the frontage on the Avenue?

Col. HARTS. I think that is the rule. If it is the same building, I think they can get the Avenue frontage.

The CHAIRMAN. They ask 74 cents a square foot. That is high?

Mr. SCOFIELD. That is not high at present prices.

The CHAIRMAN. I think the Interstate Commerce Building was very much less.

Mr. SCOFIELD. Thirty-six and a fraction cents.

Capt. KRUESI. That is gross. That compares to 58 cents gross. Mr. BYRNS. What is the cost of the Department of Labor Building, right near there?

Capt. KRUESI. One-tenth cent more per foot per annum.

Mr. BYRNS. I understand that the Department of Justice gets their building cheaper?

The CHAIRMAN. Then, there is the Commerce Building.

Capt. KRUESI. That is quite a bit cheaper. That was built some time ago, when the land was a great deal cheaper.

Mr. SCOFIELD. All of that land has gone up very greatly since the construction of the Interior Department Building, the Red Cross Building, and other buildings in the vicinity.

The CHAIRMAN. Were there any inquiries made as to what returns these figures would give on the investment?

Mr. SCOFIELD. So far as I know, there was not.

Capt. KRUESI. They said they could not tell what it would cost to build, and no one would build it upon fixed-price contract. They have got to build from day to day.

The CHAIRMAN. They must make a contract for the material. You do not mean to tell me anything like that. No man starts a building without making a contract for material.

Capt. KRUESI. They have not been able to contract yet, because this is a paper proposition now.

The CHAIRMAN. They do not expect to have this building on their hands at the end of five years, because if they make this contract they will put a provision in it that the War Department must surrender at the end of five years such portion of this building as may be required by the Interstate Commerce Commission?

Capt. KRUESI. Yes, sir.

The CHAIRMAN. So that they expect to have an immediate tenant for a large part, if not all, of this building when it is finished. Therefore it is not such a speculation as it would be if they were building on a five-year contract with the War Department with no hope of filling it afterwards.

Mr. SCOFIELD. We are really tenants by sufferance?

Capt. KRUESI. Not for the five years. The Interstate Commerce Commission told me that they had requested this company to buy that other lot in order to have ground for an addition for their future purposes. That came to me from the Interstate Commerce Commission, and then Mr. Evans afterwards confirmed it. They said that they had done that at the instance of the Interstate Commerce Commission, which will eventually need more space than they now have.

The CHAIRMAN. If you people make this lease, they will have that condition in it?

Capt. KRUESI. They put that in a letter to us.

The CHAIRMAN. Regardless of the wishes of the War Department, they would have to vacate when the Interstate Commerce Commission wanted the property?