Horatio, a small toy rabbit, has trouble sleeping and seeks advice from his friend, James, a cream-colored teddy bear wearing one red sock. James offers to draw Horatio a bed since he doesn't have one. Absorbed in his art, the bear draws bed after bed, all of which look terribly uncomfortable to Horatio.
While waiting for the perfect resting place, Horatio explores his friend's ``Useful Box,'' and finds his missing sock. James takes exception to his friend's foray into his box, stops drawing, and begins to put his scattered treasures carefully away. When finished, he finds Horatio fast asleep in his new bed--the sock.
