224 THE MODEL STOCK PLAN 
worthwhile to familiarize themselves with the Model Stock 
Plan method of planning and control that so reduces the 
risks of doing a distributive business.! 
Bankers know that a business using the Model Stock Plan 
will earn greater total profits through having a faster rate of 
turnover, will lose less through mark-downs, and will increase 
its volume of sales more rapidly. In every instance the 
Model Stock business will inevitably attain a better set of 
those credit ratios on which bankers so largely base their 
judgment of a business. 
Moreover, it is in times of business depression that the 
banks have their heaviest losses. Bankers are learning that 
the store with stocks at the price levels of greatest demand is 
more surely and quickly able to get into thoroughly safe 
condition at the first threat of a business panic; likewise, 
that such a store is often able to make even larger total 
profits when general business conditions are bad than when 
they are booming.? So at the most troublesome times for 
the bank, its Model Stock borrowers will require less than 
ordinary attention and care. 
It is plain to me, therefore, that in the not too distant 
future the most progressive bankers will aid their customers 
to see how great improvements they can make in the safety 
and success of their businesses by applying the Model Stock 
Plan. I likewise suspect that the business which can show a 
record of having used the Model Stock Plan profitably for 
some years will, when this time comes, be considered a 
preferred credit risk by those bankers who know the most 
about what makes a retailer a desirable customer for a bank. 
Nor is the Model Stock Plan’s usefulness in the retail 
field confined to any single class or kind of stores. It was 
* Many of the larger banks are, of course, retaining or employing engineers 
who survey and report on the operating policies and methods of applicants 
for loans before the loans are made and who work with customers when the 
need arises to safeguard the bank’s interests. These management engineers 
are particularly alert to such modern developments as the Model Stock Plan 
in its relation to the whole field of distribution. 
2 As has been described in Chap. VII, p. 103, the experience of the Filene 
store in Boston during the slump conditions of 1920 to 1g2r is one instance 
of the greater total-profit possibilities in times of general business depression.