Evening star., 1924-03-13
AMERICAN SECURITY.
STOCK IS ACTIVE
Feature of Trading Today on
Local Board-Southern
Dividend Pleasing.

Strength and activity in shares Of
the American Security and Trust
Company proved the outstanding fea-
ture of local trading today This is
sue sold to the extent of forty shares,
with net advance of IL points,
closing at 504, the days high.
Washington Railway and Electric
preferred shares were active and
fairly easy, selling at 1914 and 1885,
while Lanston brought 72A and
Riggs National Bank 2S6.
Capital Traction 5s were unchanged
at 9614 and $1,000 District of Colum-
bia Paper 6s sold at IS. Potomac
Electric consolidated 5s changed
hands at 81 and Railway As were Off
to 713i.
SOuthern's Action Gratifying.
A question that has perhaps been
the subject of more speculation in
recent weeks than any other single
topic of discussion in Wall street was
definitely settled this morning when
directors of the Southern railway
initiated quarterly dividend rate OF
4, IL per cent on the common stock.
| That these shares would take Their
place among the dividend paying
issues was generally accepted be-
| lief, but beyond this the prospective
policy of the directors was the sub
| ject of q widespread difference Of
opinion.
From one quarter came assertions
J that dividends would be inaugurated
| at the rate of $500 per year, while
~ how n..ya Ia ~
equally positive assurances that the
| company would initiate a per cent
rate In the last few days adherentS
| of the latter rate were in the major
| ity which served TO stimulate the
I upward movement with the result
| that on the eve of the directors meet
| ing the shares advanced to new
high level at 52I4. 1t advanced to -
! in tdoay's carly trading.
Redmond Methods Exposed.
The Wall Street Journal today
bares, in Boston dispatch. the meth
cd of procedure used by the recently
declared bankrupt firm of G. F. Red
mond Il Co., which maintained local
office.
4,rlefly, the plan was TO accept from
customer 20 per cent of the pur
chase price of securities, listed or un-
listed, the customer then to pay .
per cent month on the principal
with interest at per cent on unpaid
balances. The promises of the firm
assured big profits and their method
of doing business carried no apparent
pitfalls to the uninitiated.
Being members of no exchange, the
firm was compelled to pay full com
missions 10 the brokers who executed
the cir orders for listed securities. 'AL
the start their business was looked
on with favor by several reputable
stock exchange houses. They were
given instantaneous quotations over
private telephone wires from legitl-
| mate brokers.
! The growth of the firms business
! knew no bounds. Its rules with its
| customers were hard and fast. A de-
4 1inquent customer was allowed only
! five days grace on his monthly pay
| ments; if his per cent was not forth
coming within that time, his account
became a margin one. Nine times
Frequently his account showed
"Ioss'-but G. F. Redmond & Co. was
rot the loser
Biggest Play Made in 1920.
During the drastic stock marhet
decline in 1920 the firm made its big
gest play. The drastic liquidation
that took place at that time theoreti-
ally wiped out thousands Of accounts
| with the house. Millions of dollars
! were lost to the customers. How
! many millions the firm got the re-
ceivers may learn.
! knowing that their solvency de-
/ to deliver stocks or cash balances to
| customers, 6. F. Redmond & Co.
| never delayed a moment when Gus
I toners personally applied for funds
/ or stocks. But il was different with
| other houses directed by the firms
! customers to take up the account.
! One Boston Stock Exchange house
| waited for three weeks before it was
| able 10 get an account delivered. ON!
| on threat of immediate court action
did q. F. Redmond Il Co. give UP.
! But they always took care of Gus
/ toners who appealed in person.
The firms statesmen were continu-
| ously instructed to keep the GUS
!; toners trading. Don't let them ac-
; cumulate credit balances. If a stock
shows a profit. switch the customer
| into something else
Not being exchange members, they
! laid no stress on commission profits
! on listed stocks and only stocks nee
! eSSary for delivery or exhibit were
carried on hand.
| A new account would be opened
and the 20 per cent margin paid
down. The customers buy order was
! eventually balanced with a sell order
| in the name of a dummy or number
account. The firm was usually not
long of stocks; and the customer was
paying 3 per cent cash into the firm
each month, plus per cent interest.
But the cash was gong into the TILL
| of G. f. Redmond & Co. When a
slump occurred III the market, the
customer if delinquent on his pay
ments would be wiped out--on the
books IL he kept up his payments, he
was advised to switch into something
else.
Subscription Books Closed.
| Treasury subscription books for the
| current offering of s400,000,000 OF
[ 4 per cent certificates, dated March Is,
! 1924. and maturing in one year, closed
| at the close of business March II, il
! was announced last night
! No further subscriptions will be
| received.
Debate Judges Named.
| Howard Moran, vice president OF
| the American Security and Trust
Company; Enoch a. Chase. local at
torney, and sydney +. Taliaferro.
professor at Georgetown University.
| will constitute the judicial committee
at the debate tomorrow night be-
tween teams of the Washington and
! Baltimore chapters, American In
| stitute of Banking.
LABOR IN LIVELY DEMAND