GREATER PROFITS FOR EVERY BUSINESS 223
tion costs, this article need not be a de luxe item. When
this manufacturer has built up the capital to safeguard his
company against the inevitable reaction of retailers which
will seriously cut into his business for two or three years
while he is getting established, he intends to go directly into
mail selling of his product.
From his investigations and his research he believes that
when he establishes this new method he can save probably
6o per cent of the present cost to the consumer. If so, the
business of his manufacturing company can be tripled or
quadrupled within five years. This will reduce still further
the overhead per unit of his production and make profitable
still lower retail prices.
What this manufacturer purposes doing is essentially to
apply the Model Stock Plan to retailing his product by mail,
because his retail dealers will not apply it in their stores.
Because so much waste still exists in retail distribution, such
dangers for distributors in all lines and all classes of goods are
very great. But these dangers will be minimized or elimi-
nated in businesses where the Model Stock Plan principles are
energetically applied to reducing the wastes of distribution.
It is in this aspect that the Model Stock Plan intimately
touches the nation’s banks and bankers. The banker’s
business is, of course, to lend out money in such a way that
he will get back his capital, with interest, surely and
promptly. He cannot afford to take any chances with his
depositors’ and stockholders’ funds. No matter how good
the character of the borrower, if the borrower persists in
doing business on methods that have become obsolete in
comparison with those of competition, the banker is not at all
sure of being repaid. The old methods, particularly of distri-
bution, are rapidly becoming obsolete. Many bankers
have lost money because a borrower did not reorganize his
business to compete successfully with modern chain-store or
mass production. Such a banker does not need to be
reminded that the less efficient businesses are rapidly becom-
ing poor credit risks. Those bankers whose lendings are in
any considerable degree among distributors are finding it
