ials. With bad transportation one has to carry larger stocks. At the time of revaluing the inventory in 1921 the stock was unduly high because transportation had been so bad. But we learned long ago never to buy ahead for speculative purposes. When prices are going up it is considered good business to buy far ahead, and when prices are up to buy as little as possible. It needs no argument to demonstrate that, if you buy materials at ten cents a pound and the material goes later to twenty cents a pound you will have a distinct advantage over the man who is compelled to buy at twenty cents. But we have found that thus buying ahead does not pay. It is entering into a guessing contest. It is not business. If a man buys a large stock at ten cents, he is in a fine position as long as the other man is paying twenty cents. Then he later gets a chance to buy more of the material at twenty cents, and it seems to be a good buy because everything points to the price going to thirty cents. Having great satisfaction in his previous judgment, on which he made money, he of course makes the new purchase. Then the price drops and he is just where he started. We have carefully figured, over the years, that buying ahead of requirements does not pay--that the gains on one purchase will be offset by the losses
