'.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

The National ProfessionalMovement

and the Realtor it Serves
BnrL. F. EPPrcu

Specinl Obiectiues of the National Associo"tion-Seroice

to Boo,rds-An Inlormation Bureau-Publicq,tions-Educo-
Uon, 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 re-
m€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 relation-
ship 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
conduclin businessrelationships. has goneon lo a npw development
oJ profescional consciousness. lf is enteringa new period. It has
begun to examine in scientiffc detail the conditionsunderlying real
estatejudgments.
We are moving toward a more accurateequipmentfor tNly pro-
fessionalselvice, and toward general recognitionof ihe fact that it
is iruly pro{essionalservicethat the Realtor.is equippedto glve.
The National Associationwas foundedin Chicagoin 1908,approxi-
mately thirty boards pa*icipating. In sixteen years it has grown
until it now includesover five hundredboardsthroughoutthe United
Statesand Canada.
Theseboardshave an activemenbershipo{ 36,000.Sinceapprox-
imatelv half the boards have firlllls as active members inst€ad of indi-
viduals,the nnmber of actual individual real estatemer in the Asso-
ciation probably exceeds50,000. The number of associateand other
classesof mernbersin our boards exceeds20,000. New boards s.re
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 lir"":rfifffi,rrT,"ij'{,lhfl?i::til"*j",i:"Associations
arebeins
i SPECIAI OBJECTI\IES OI, THE NATIONAL ASSOCIATION
ils eady ypars Lhe National Association devoted irs
--^-!i]i,lq
ii"""',"ffi;*T1',
ilflfrli.s;,sl#,,ff
","ff i""*:,i#if.:xJ:;iii
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I iTfJJi:1lril;,rof
essi
onas
"
""'*r"$::,:xT"1
*"mir;lF*iT[xltli? Y "":'t:"ffJu"""'iilff
sreatnationalpoticies,
*"r11,,r"S:ff;rlitfiof representins
reel
.
(e) The developmenu
of ethicai standards.
r{;li:Tts.{"f
-".#*1f il'l*"xiiln*xx1,*,:T*
ti,rmf*ffrr,$*ir},;*t?'ldh"
IJi:fl?T;"ltf",iX.,i"l'fJ[i,H1t
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::"X':hfr?X'ffl}#ii"H;
iil"Uili:Lfit"'liTft:H;fliil[ ",,",uare
fitrfid
codire.,
and issued
ill}ilifirx
il:f,"Ji:H#l#l'#i; *i'ii"T1"'llr
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l13ji"l"rf""if
fi i&:'"ii
tt€attor trom another city for a visit i'"",*"::*-g
i':i4'dtr***i,1i'lal
ffiffi
;:tfr
:"":?Tiilt:.,i:"lil:,#.*i,,
l&I:1""*l*f
*
;*i;13*i
iiemsandii is proving
"il"trsf,ffi
:"":nffi: i,l"te
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 T.heRed,l,t1J
BhLeBook ol Caliloi nicl :129

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,onsi-
bilities and since qu:rlifications fol our DrofessioD ale pcrso;al in
clar':rcter, and siuce such qualificatioDs catlnot ilhere in a corpora-
tion, the Dilectors fcel it best to recomrDerd the iDdiviallrai member-
ship plan. Other pubiic?rtions.!r.hichhrve bee issued are the fo ow-
rng:
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 show-
trlducational cour'ses.
State associations.
Gettiing publicitv ioj the board.
Housirrg slll!'eys.
These pamphlets can be obtained flo r headquattels b:' :lppiica-
tion by nntr bo:rlds tlDt desir'ethem.
,{pP1aisals by ).ezrlcstate 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
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 _
1,..1 . 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 x rl ' l d n " e
.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 , _
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\ .no4, - 4 t . . o- r ' , i r .n
mar|li5!li ^:; 'gnf l'"lrn d.r.. Jr"d.,jI " . , r h . f V a , n. . p x ; - _
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 : o0nn 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 .
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$l . n . r {i s , s s u n t i n si s
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 1d,s \ . , , | | a ,tt, r ' o r . F r rt o
] i r ^ r . . r o. I o l g t ! 4 , i ] 1 , 2 1 2a n d , j r ; n " d
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
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.
The Realtor Secretaries'Division.
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
has its own individual members. Each Division has comndtteeato
investigatein detail specificsubjectsand are uncoveringa large un-
touchedfield 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-operationwith the Depart-
ment o{ Agriculture and the Federal Fal'rn Loan System,is under-
takiDg to discoverand developthb 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 developeda poster advertis-
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
active committeesat work. One of thesecommittees.for instance.is
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 enormousaccumula-
tion of data as to various plans for coveringthe secondmortgagehas
beengarhered.
Thesefew examplesare cited to showthe char.acterof the activi-
ties of the Divisions. By the Divisional plan the Associationhas suc-
ceededin attracting and intercsting the active assistanceof a large
number of able m€n throughoutthe country.

IIDUCATION

The Associationrecogdzes that one of its great tasks is the

developmentof real estateeducation. From all parts of the country
are coming demandsfor textbooksand for a standardizedreal estate
coursewhich can be installedin colleges,in Y. M. C. A. schoolsand,
 The Realtu BIue Book at Cali,forni& 331

where these facilities are la.cking, in the real estate boards them-
Last year the Associalion grappiedseriouslywith lhis problem
and called a conferpnceal, Madison,Wisronsin, at which rhe lnler-
nationalCommirleeof the y. M. C. A., thp Institutefor Resparch in
Land Economir"s, of rhe tlni\,ersilyof Wisconsin,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 committeeconsistedof a representa-
tive of the NationalAssociation, the lnstiiute lor Research_ in Land
trconomicsand of the Y. M. C. A. This Joint Cornfiitiee found. uDon
jnvestigalion.that therewas
tjracticallyno rpal psjaielil.eraturedf a
kind -suilablefor studenlsand beginnersavailable. Its first task,
ureretoret{ and tt was not a small task), was lo get under way as soon
as possrble the procluclion
of the properkind of simple,yet accurate
anclcomprehensivetextbooks.
.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,an instructor's manual has beenprepar€das well as problem
sh-eels._Jhis bookwas writren by E. M.-Fiiher, AssislanrSicretary
of the National Associationof Real Estaie Boards. For other book;
seeBibliography,Realty Blue Book.
We look forward to the time when young men will go to uni-
versities and obtain a degreewhich is evide;ce of thciathorougb
educationalprepalation for l.he}eal esl,atebusiness. When that ti;e
comeswe will have establishedour 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. Sur-
veys 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 ieven-
year 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......._.... r.69 !.44

1 9 1 6 .. _ _ _ . . . . . . .- _ . . - . . . . . 6.13 1.12 1.6?
r 9 1 ? . _ , . . . _ . . . _... . . . _._ 6,10 1.43 1,67
1 9 1 8 . , . . . . . . . . . . -. - . . . 6.72 4.38 7.71
1 9 1 9. _ _ . . _ . . _ . . . _ . _ . _ . . . . . 5,90 1.66 1.46
1S20.__.....,............_..... 6.08 4.66 1.12
1921 6.21 4 . 3t 1 . 46
This tsble shows the earnings of all American Insurance Com-
panies 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 per-
sons, 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 conventionsand meetingsthe Associationfeelsthe 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 summarizedbriefly:
(a) The Associetionhas, for some yeals, advocatedand pro-
motealthe 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 of honesry.goodreputationand fair detlint
and are keepingmany undesirable men oul of the business.Siyteen
statesnorFhave licenselaws and a goodmany other slaies a-reprepar-
ing 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
unscrupulousdealers. In this it is proving sur"cessful.T_hetask still
remains, however, for the real estate boards to develoD new and
highpr standardsof professionalservice. No leaislationctn do this.
Tn ragald lo taxation, lbe Associationhas for some tjme advo-
cated 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..webelieve.appealto anyonewho studiesUe subjecl,
The Associationis also strongly in favor of l,heMcFa_dden Reso-
lution for an arnendmenlto the United StatesConstitutioDwhich 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 meansthe li.rnitationof invesL
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 becomea pledgeof integrily and fair dealing. A lecent survey
ot our Ooards-show that 95 per cent of our membemwere using it
reg)larly in tleir busine$. in their advertising,in their correspond-
ence. The value of l,hisword cannot be esrimtted in dolla$. 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 becomethar 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?sits standad ol con-
duct, and,i.s etut4tl,ed,
to i,ts benelits."
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 aJlpossiblepressureto bear
on any violator to cease. If this should fail. cornmunicatewith the
National Association,which will in fum use ijs best eforts by corre-
spondence.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 Associationis one of its Ereat
achievemeniq.This codewas one of {hp first srpa! businesscodes
developed
in lhe Unijed States.
 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 transgressionoccurs should .arefully
rnvesugaleatl ot lhe circumstan(esand lakp disciplinary aclion. It
.somelimestakes.ourage lo exTel a man for unei_hicalconduct,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 becomesonly - -" -a
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 associationsthai 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.rsof rhe National Association. thFrefore, view with appmvai
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-everoprnga ctearlng house lor state associations and is usins all
ot the powers a[ its command for effeclive cGoperation with slate
asaociations.