"If Winter Comes"

-and it usually does about two months from now, the rainy Eeason in the Fir manufacturing territory of the Northwest will make no change in the condition of the stock we furnish. It wilt be clean, bright, kiln-dried lumber, Ioaded under cover, and delivered to you ready to please the eye of your most discriminating customer.

(Continued from Page 8) which says, in part, regarding the independent sheet steel industry:

"Picture, if you will, a huge industry comprised of 543 hot mills. Each mill represents an investment of $175,000. The total is approximately one hundred million dollars. Add to this working capital of $37,500 for each mill, and the grand total becomes about $u0,000,000,

"Operate these m'ills at 108 per cent capacity for a month on orders taken at prevailing prices, deliver the best grade of sheets ever produced by the industry and write down in the reddest ink a net loss of $2,000,000. There you have a picture of the sheet industry as it is operating today.

The snap-judgment ldiagnobis says "Overcapacity." But the facts give lie to this opinion. Operations so far this year have averaged above 90 per cent.

Further search reveals two outstanding difficulties, Ruthless buying on the part of automobile builders has forced the sales prices of sheets below the cost of production, Weak-kneed and spineless sales policies on the part of the sheet producers have forced the mills to seek quarter."

Speaking of a sheet steel plant representing an investment of appioximately $2,000,000, which operated at 100 per cent capacity during March, 1927, to produce 5000 tons of sheets, this same paper continues:

"The total output was shipped on contracts. These contractg were closed on current quotations.

"The loss for the month of March stands in red in excess of $18.000.

"Today the plant is closed. Not a wheel is turning; no fires are burning.

"The cost of shutting down was $8,000. But the saving for the month of April, as compared with March, will be at least $10,000."

Unethical Buyrng Habite

The "purchasing profiteers" place their orders at cut-throat prices for materials and products to be produced under quantity-production methods. The contract continues for a month or two with deliveries specified in quantity. Then with little or no advance notice, further deliveries are ordered suspended, or so greatly reduced in volume that there is no chance to produce at quantityproduction costs.

Even materials produced prior to the hold-up notice, and actualty in transit for delivery are rejected and returned to the producer's plant. Equally as suddenly and peremptorily, deliveries are later ordered resumed immediately. And all deliveries must be made at the contracted, cut-throat price which was based upon expected ecohomies from quantity production.

The company practicing the art of the "purchasing profiteer" changes the model of its product. All deliveries on the contract for materials are suspended. Does the shrewd buyer take off the hands of the producer the raw, semi-finished and finished materials applying to his contract of purchase? Perhapsl

But not if he is a trained "purchasing profiteer." In that case he lets the producer charge such stock off to inventory losses, and likely as not in the case of certain materials may ship back to thc producer such surplus as the purchaser may have, expecting full credit for .the returned goods.

A mild protest from the producer brings the inevitable rejoinder, "If you don't like our business enough to cooperate with us when we change models, tell us so, and we will buy elsewhere."

In buying machinery and equipment, opportunities to display skill in coercive purchasing are generously provided by overcapacity and destructive competition. Strangely enough, the president of a steel company (suffering from the thumb screws of "purchasing profiteers" who buys his steel to make automobiles), while condemning as uneconomic and unfair the purchasing practices to which he must submit, fails .to recognize, or actually condones, the same coercive practices employed by his company when buying machineiy and equipment.

It is equally true of many railroads. You seldom take a meal in a dining car without finding upon the table some printed propaganda intended to encourage fair treatment of the railroads by our legislative bodies and by the public, and appealing as an economic right f-or rates that will produce an equitable return on investment'

But how do these same railroads buy their machinery and equipment? They pay good salaries to the best engineers that can be secured to spend weeks in determining the merits of various machines. Then, regardless of engineering judgment, the railroads. insist that the engineers' recommendation must specify at least three different makes of machines, any one of which must be acceptable if chosen by the purchasing department.

Sliding Down Prices

Thus is the purchasing agent enabled to earn for his railroad the title of "purchasing profiteer." He advises the representative of the X Company that, although his price is high, the engineers prefer his machine, and he would like to give them their

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