i68 Proceedings of the 



of three circles ; the first containing the single saw 

 mill ; a larger circle including hundreds of small ones — 

 the mills producing one kind of lumber ; and the third, 

 one which includes both the others, and its area em- 

 braces all the other lumber mills in the United States. 



In studying the annual report, one of the directors 

 notices that the amount of lumber on hand is much 

 larger than in. former years, and because the profits 

 are still in lumber and not in cash, he asks the reason 

 for the increase. To answer this, and if possible 

 justify the condition, the manager must get figures 

 outside the circle of his plant, and show how much 

 other mills have. 



Foreseeing such a question, and realizing that it 

 would be difficult for each mill to gather information 

 systematically from all the other mills cutting a similar 

 kind of lumber, the manager has already called his 

 neighbors together and formed an association to gather 

 statistics regarding stocks on hand. By consulting the 

 figures furnished him from the headquarters of this 

 association, he finds the mills in the "second" circle 

 have more lumber than a year ago, and a summary 

 of their stocks on hand shows a total increase of 

 200,000,000 feet. The sales agent for the company 

 is present, and is asked what effect this increase of 

 stock on hand will have on values. He has not only 

 studied the situation in the second circle, but has looked 

 beyond into the third circle, and has discovered that 

 the statistics of competitive woods, so far as he can 

 learn, show a similar situation existing, and reports 

 values in general, weak and declining. 



When the information resulting from statistics is 

 revealed to the directors, its importance and value is 

 recognized, a basis for intelligent action is secured, 

 and instead of increasing their output, as originally 



