Demobilization

When the average man speaks of munitions, he means ordnance and, even more specifically, guns and ammunition. In this he is nearly half right. Technically, the word “munitions” includes army supplies of all sorts, even to candy and cigarettes, and in this sense the word is used in these volumes; but of the total war business transacted for the Army, the procurement of ordnance supplies constituted 42 per cent. Ordnance was by far the largest class of munitions. Four thousand American manufacturing plants worked on ordnance contracts during the war. Nearly 3,000,000 men labored in these mills.

The mere size of the war ordnance industry would have made the problem of its demobilization a great one, but it was also complicated with peculiar difficulties. The production of most ordnance materials differed radically from that of any articles known in normal American industry. The Quartermaster Department procured for the Army food, clothing, shoes, hand tools, and many other supplies which, though they were frequently of special design, nevertheless were not much unlike the sorts of commodities with which the contractors were already familiar. The Engineer Corps used many materials commonly employed in the peaceful pursuits. Outside of ordnance, the manufacture of aircraft alone took our industries into virgin fields of endeavor.

Therefore, those factories which were making for the Army products essentially similar to products consumed by the civilian population, were ready after the armistice to resume their places in normal commerce with slight internal adjustment. But the ordnance factories—they were a different story. In ordnance production the war had witnessed some factory conversions of the most violent sort. Manufacturers of printing presses built gun carriages of new and difficult design; makers of sewing machines and automobiles undertook the difficult task of producing hydropneumatic recuperators for absorbing the recoil of field guns; producers of typewriters and water meters manufactured time fuses for shell; women’s cloak factories sewed silk powder bags; a phonograph maker produced aërial bomb sights; and one producer turned from the modern business of making corsets and took up the ancient occupation of tentmaker. For nearly all these factories the ordnance contracts virtually implied the physical reëquipment of their plants for quite different manufacturing processes. For them, too, demobilization meant a not less severe dislocation of equipment and processes in changing back again to their former work.

It was the problem of the Ordnance Department after the armistice to manage the liquidation of its great war business—to halt the work, to dispose of raw materials and materials left half completed when the wheels stopped, to do something with the special factories and even the complete towns built by the Government or for the Government in the prosecution of the war enterprise, to recoup the millions advanced to finance the ordnance producers, and finally to settle with cash the obligations of the Government to the producers incurred when the contracts were terminated.

Although in size and intricacy this problem was appalling, there was no hesitation in setting about solving it, no period when the enterprise hung in neutral, going neither forward nor backward. Ordnance work was reaching new peaks of production when the Ordnance Department in Washington took the first steps toward its dismemberment. In late October, 1918, when the Argonne-Meuse offensive was striking home and it was becoming evident that the curtain might at any time fall in the theatre of war, the chief ordnance officers held a secret meeting one Sunday afternoon in Washington and for the first time considered the possible demobilization. At this meeting the Chief of Ordnance appointed a commission to make a rapid study of the organization of the Ordnance Department to determine whether that organization was fitted to turn without change to the stoppage of work and the restoration of the industry to its former basis. This same commission later became the Ordnance Claims Board, the agency which supervised the entire demobilization of ordnance industry. It was, of course, like all the other bureau claims boards, subsidiary to the War Department Claims Board. The Ordnance Claims Board was formally created by order on November 2, and thus had been in existence for nine days when the armistice was signed. Its chief was Brigadier General W. S. Peirce. Its members were Colonel R. P. Lamont, who was president of the American Steel Foundries Corporation before and after his military service in the World War; Colonel G. H. Stewart, an ordnance officer of the Regular Army; Lieutenant Colonel M. F. Briggs, counselor at law, New York; Lieutenant Colonel F. R. Ayer, recorder of the Eastern Manufacturing Company, of Bangor, Maine; and Mr. Waldo H. Marshall, president of the American Locomotive Company, New York.

This board found an existing organization—the field administrations of the thirteen ordnance manufacturing districts—admirably adapted to the work of closing up the war business. The district organizations had been created to give the Ordnance Department a mechanism by which it could keep in immediate contact with the process of manufacture without congesting the headquarters in Washington to the point where competent management became impossible. They had been likened roughly to the fire exits of a theatre, distributed to prevent crowding at the front doors. In the district organizations were employed 33,000 civilians, uniformed officers, and enlisted men, and through this great force the office in Washington kept in as intimate touch with the work, the trials, and the accomplishments of its producers as if it had been employing the services of but a single factory. The ordnance field men knew the war factories as they knew their own offices. They were acquainted with the contractors, with the subcontractors, with the shop superintendents and foremen, and often with the workmen themselves. Obviously they were qualified to judge at what rate production could be stopped without injury to the industry or its workmen and to determine the settlement adjustments that would be fair to both sides.

It is worth while pausing a moment to examine the thirteen ordnance districts and to note their headquarters cities, their extent, the characteristic sorts of ordnance supplies produced in each, and the chief production officer of each.

Toronto. Embraced the whole of Canada. Produced principally shell machined and ready for loading, particularly 75-millimeter shell. As noted in the preceding chapter, all industrial demobilization in Canada was carried out by the Imperial Munitions Board, two of the members of which were special representatives of the War Department Claims Board, sent to Canada after the armistice for this purpose.

Bridgeport. Included Connecticut and four Massachusetts counties. Primarily the small-arms district, producing all the pistols and revolvers, all the bayonets, all the automatic rifles, more than a million of the service rifles, most of the heavy machine guns, and almost all the small-arms ammunition delivered under war contracts. Mr. Waldo C. Bryant of Bridgeport was chief of the district.

Boston. Included the rest of New England. The chief producer of soldiers’ belts, haversacks, mess kits, and other personal ordnance equipment; produced small-arms ammunition heavily, and produced also boosters and adapters (for shell) and carriages for 155-millimeter howitzers. Mr. Levi H. Greenwood, chief of district.

New York. Included New York City, Long Island, and nine other New York and twelve New Jersey counties. The prime producer of trench-warfare ordnance. Produced much toluol and was a finisher of shell, fuses, and cartridge cases. Loaded more than one-third of all artillery ammunition shipped abroad. Chief, Mr. George J. Roberts, vice-president of the Public Service Corporation of New Jersey.

Philadelphia. Included eastern Pennsylvania, part of New Jersey, and all of Delaware. The chief service-rifle producer and a chief producer of high explosives. Immense shell-loading activities. Chief, Mr. John C. Jones, president of the Harrison Safety Boiler Works.

Baltimore. Included all of Maryland but two western counties, and all of the District of Columbia and the states of Virginia and North and South Carolina. The leading shrapnel-loading district and a great shell-loading area. Contained the largest of the ammonium nitrate plants. Produced all the 37-millimeter guns. Chief, Lieutenant Colonel A. V. Barnes, formerly president of the American Book Company.

Rochester. Embraced all the state of New York not in the New York City district. Chief production was in Lewis machine guns, Enfield rifles, 75-millimeter field guns, shrapnel, picric acid, and optical glass. Chief, Mr. Frank S. Noble, executive officer of the Eastman Kodak Company.

Cleveland. Northern Ohio and three northwestern counties of Pennsylvania. Produced completed big guns, shell fuses, 75-millimeter gun carriages, mounts for railway artillery, and 6-ton tanks. Chief, Mr. Samuel Scovil, former president of the Cleveland Electric Illuminating Company.

Detroit. Included the state of Michigan. Produced gun recoil recuperators, artillery vehicles, large-caliber shell, and trench-mortar shell. Chief, Mr. Fred J. Robinson, president of the Lowery-Robinson Lumber Company.

Chicago. Included northern Illinois and the band of states to the northwest as far as Montana. Produced caterpillar traction for the tanks and artillery, guns, carriages, recuperators, projectiles, and grenades; the district was also saturated with contracts for machinery for the eastern munitions plants. Chief, Mr. E. A. Russell, vice-president of the Otis Elevator Company.

Pittsburg. Included western Pennsylvania except three counties, two counties of western Maryland, two counties of Ohio, and all of West Virginia. The prime subcontract district for the production of raw steel and steel forgings. Herein was located the Neville Island ordnance plant project. Produced optical glass in quantity. Chief, Mr. Ralph M. Dravo, of Dravo Brothers, contractors, Pittsburg.

Cincinnati. Southern Ohio, Indiana, and the South. Was the chief nitrogen-fixation district and the chief producer of smokeless powder. Included Dayton, with 200 factories exclusively engaged in munitions production. Produced tanks, shell, fuses, optical instruments, and machine tools for war factories. District chief, Mr. C. L. Harrison, a Cincinnati capitalist.

St. Louis. Included southern Indiana and sixteen western states. Produced black walnut, toluol, and picric acid. Chief, Mr. Marvin E. Singleton, former president of the East St. Louis Cotton Oil Company.

After the armistice the manufacturing committees in charge of the twelve American ordnance districts became, without essential change in their organization, the ordnance district claims boards. Each board consisted of seven members—business men and at least one lawyer—with such technical assistants as they needed. The first executive act in demobilization for these boards to make was to determine what war contracts were to be terminated immediately, what ones were to be tapered off with a minimum expense to the Government and a minimum disturbance to industry and labor, and what ones were to be carried through to completion.

It was often advantageous to allow the contractors to proceed undisturbed. Some of these ordnance supplies, which would be valuable and essential items of our military equipment for years to come, were only just reaching the stage of production in the factories, after many months of costly experiment and preparation. It was obviously unwise to interrupt these projects with nothing to show for them except heavy bills of expenses. Then, too, it was sometimes of financial advantage to the Government to allow a contract to go through to completion. A contractor in the Chicago district, for example, had nearly completed the manufacture of several large machines for installation in an eastern munitions plant. To cancel the contract would have cost the Government $90,000 in a settlement and left on its hands a quantity of semi-finished materials having only junk value. The Government no longer had use for the finished machines; yet it would cost only $14,000 more to go on and complete them. This was done, and the Ordnance Department was later able to sell the machines to a private buyer for more than $100,000, thus recovering practically all the money it paid to the contractor.

To provide a basis of fact for all such acts of administration in the demobilization, the district boards first took a rapid but thorough inventory of the ordnance industrial situation. This they did by means of questionnaires sent to all the contractors. Each questionnaire, when returned to the district board, showed the status of the contract at the time and how the contractor’s business and his employees would be affected by a termination. The general ordnance policy was to permit contractors (after the first emergency suspension which, it will be remembered, had been requested immediately after the armistice was signed) to continue their work on a diminishing scale for a few weeks, while they made their arrangements to engage once more in commercial work. Some of the contracts, including all the late, standardized ones, provided for the termination of work upon thirty days’ notice. If, however, the enforcement of this provision would create any considerable amount of unemployment, the district boards allowed such contractors to complete an average thirty days’ production, but to spread out the work over a longer period of time.

There were variations of the general policy when it was applied to special classes of ordnance industry. For instance, the many contractors who were machine-finishing the artillery shell were permitted to keep their plants in full operation until January 31, 1919, when the work had to cease abruptly. All source industries—industries, that is, producing rough forgings and other raw and semi-finished materials for ordnance manufacture—were taken from war work forthwith. Then, too, as noted, in various classes of large ordnance, or ordnance of exceedingly difficult manufacture, the orders were greatly reduced and the contractors permitted to go ahead and complete the residue, no matter how long it might take. Such ordnance included gun carriages, recuperators, tanks, optical instruments, and other supplies of the sort. This reduced production continued for more than a year after the general stoppage of war industry. Some of the Mark VIII tanks (the Anglo-American design) were delivered to the Army as late as June 1, 1920.

So expeditiously was the work of termination carried on in the other classes of manufacture (and these made up the greater part of the ordnance industry) that by January 1, 1919, nearly all war ordnance production had either been terminated altogether or was dwindling to the vanishing point under specific agreements. After February 1 the only war ordnance factories in operation were the exceptional plants noted in the preceding paragraph.

Even as the ordnance industry was being stopped, the Government was coming to an understanding with the ordnance contractors as to the settlement of their claims. To this end, in most of the manufacturing districts the board members traveled from city to city, addressing large meetings of the contractors and explaining to them the general liquidation policy adopted by the War Department. In its broad outlines, this policy was as follows: The Government would take off the contractor’s hands at cost all materials which he had specifically purchased for his contract, but which he had not used. The Government would reimburse him for all work done on his contract, for all materials used, for all money paid out in wages, and for all legitimate overhead expense, the Government in return taking over all materials in the various stages of their completion. Further, the Government would regard as proper costs whatever it cost the contractor to terminate and settle his subcontracts, and would pay these costs. Finally, in specific instances the Government would pay money in amortization of the cost of machinery and tools bought especially for war use, the sum to be proportioned to the amount of work completed. And whatever else the contractor was out of pocket legitimately, the Government would pay. When the various costs were brought together as a lump, to this sum the Government would add 10 per cent as profit. It would, moreover, allow 6 per cent interest on money which the contractor had invested in materials, reckoning from the average time of purchase to the date of the settlement; but it would not allow 10 per cent profit on this investment in addition.

These terms received widespread acceptance, although they allowed no prospective profits, and thereupon the various districts became scenes of great activity as the ordnance officers worked with the contractors to expedite the presentation of settlement claims by the latter. Inspectors and agents employed by the district boards checked manufacturers’ inventories, and boxed and set aside materials to be delivered to the Government, while district accountants audited the costs statements. Each field agent of a district board was made responsible for a few specific claims. He stood at the contractor’s elbow and helped him rough out his claim into proper form. A spirit of amiability prevailed. For many reasons the contractor wished to make his settlement as quickly as possible, and the district agent was there to tell him what items in his claim were indisputable, and what ones were likely to be contested, thereby holding up the final settlement. When the district agent and the contractor had agreed as to a claim, they submitted it informally to one of the members of the district claims board for his opinion. If he thought his board would be unlikely to allow certain items, the contractor could usually be persuaded to omit such items. Claims prepared under such conditions presented little difficulty to the various claims boards, and most of them went through to settlement without a hitch in the proceedings.

Most contractors were willing to forego their technical rights in order to save the Government from paying for useless production, but a few were obdurate. One man, working under a contract with a thirty-day termination clause, deliberately increased his rate of production five times in order to collect a maximum amount from the Government. When the Ordnance Department discovered his plan, it breached the contract outright and allowed the producer to take his grievance, if he continued to nurse one, into the courts. A rare instance of this sort, however, is cited only to show by contrast the prevalent attitude of industrial coöperation with the Government. Numerous producers omitted from their claims many items the validity of which could probably have been sustained in the future negotiations, but which were, however, subject to close scrutiny and therefore a factor of delay in the settlements.

The wheels of war industry had not ceased to turn before the Government began to make advance payments in settlement of the industrial claims. If the contractors were generous, so was the Government. The first settlement made illustrated the War Department’s attitude right through. A New York contractor had submitted a claim for about $15,000. On January 20, 1919, he informed the New York District Claims Board that two days later he had to meet a note for $10,000, a debt incurred in prosecution of his war contract. A member of the New York Claims Board took this claim in person to Washington and next day secured its approval by the Ordnance Claims Board, together with an authorization to advance $10,000 to the contractor pending the final approval and settlement by the War Department Claims Board. The New York district finance officer paid over the $10,000 in time to save the note from going to protest.

As the weeks went on the New York manufacturer’s plight was duplicated over and over again. The producers of ordnance supplies, after the termination of their contracts, faced enormous financial obligations which they would have to meet long before the machinery of liquidation could act upon their claims. To such producers the system of advance partial payments afforded great relief. The policy of advance payments not only saved numerous concerns from financial ruin, but it stimulated the general commercial reconstruction and resumption of normal business by releasing large sums of money and putting it again into circulation. And, it should not be forgotten, the system greatly aided the Government to secure favorable settlement terms from the contractors by offering the reward of early payments to those whose war business was quickly liquidated.

Since the prime contractors’ subcontract settlements were acknowledged costs which the Government was bound to pay in the prime settlements, it was vitally important that the Ordnance Department intervene to obtain for the prime contractors the most favorable terms possible in the settlement of their subcontracts. Every subcontractor, of course, had the legal right to insist upon the full performance of his contract, and he was not to be coerced by the bogey of the Court of Claims and its long-drawn-out procedure. He could go into the state courts and enforce his rights within reasonable time. Therefore, it is indicative of the spirit of war industry that the ordnance district claims boards found little difficulty in settling with the subcontractors on favorable terms. The prime contractors had no such interest in these terms as did the Government, since, whatever the subcontract settlement costs might be, the Government would have to pay them. The agents of the district boards readily persuaded the subcontractors, as a sporting proposition, to surrender their prospective profits voluntarily and accept the profit of 10 per cent on work actually done, even as the prime contractors, who had assumed the chief risk in the first place, had been willing to do. The efforts of the ordnance field agents in this direction saved the Government many millions.

The first complete claim received by the Ordnance Claims Board came from the Detroit district on January 10, 1919. The first claim to go through to final settlement by the Ordnance Claims Board was passed on February 20. The district claims boards sent the bulky and valuable settlement papers to Washington by courier rather than entrust them to the mails. When the system settled into its routine the Ordnance Claims Board passed upon the average claim within a week after its arrival in Washington. On the average the Government paid in the settlement of ordnance contractors’ claims an amount equal to about 12 per cent of the face value of the uncompleted portions of the contracts. The average ordnance contract entailed a government obligation somewhere between $100,000 and $250,000 in amount, but many were much larger. The Marlin-Rockwell Corporation of New Haven, Connecticut, one of the chief producers of machine guns and small arms, presented a claim for nearly $14,000,000. One of the largest war contracts was that with the American Car & Foundry Company, of a face value of over $100,000,000. In contrast, the New York Ordnance District Claims Board, which settled that contract, settled another (a subcontract) for $1.50. The claim of the DuPont Powder Company against the Ordnance Department was for about $3,280,000—this in settlement of contracts with a value of $50,000,000. The New York Air Brake Company presented to the Rochester Ordnance Claims Board claims aggregating $9,000,000. The New York District board settled 206 claims for $1.00 each, the contractors voluntarily refraining from presenting any claims above the statutory dollar which had to be paid to make the settlement legal.

Many were the interesting episodes which occurred during the ordnance liquidation. The St. Louis district was the chief source of black walnut timber secured during the war. Walnut was used in making gunstocks and airplane propellers. In hunting for walnut in this district we discovered that we were gleaning where Germany had reaped before us. The former solid stands of walnut in this district had been cleaned out in recent years, much of the timber having been shipped to Germany via the Gulf ports. Yet our gleaning was successful. Walnut trees, growing as individuals or in small groups, were still to be found along the country lanes, in farm lots, at the edges of orchards, and shading the grounds of the farmsteads. Nowhere were more than thirty trees in a group discovered. Consequently an adequate supply of walnut for the munitions plants depended upon a foot-by-foot search of the entire American countryside in the walnut regions. In this work the Government was assisted by tens of thousands of volunteers aroused to the need by the widespread publicity. The Boy Scouts turned their hikes into walnut-hunting expeditions. The country doctor, the circuit-riding clergyman, the bee hunter, and the muskrat trapper all made it their business to locate and report stands of walnut timber. As a result unexpectedly ample quantities of the wood were secured from regions supposedly denuded of it. On the day of the armistice the timber dealers found themselves stocked up with enough black walnut to meet all commercial demands for five years ahead.

One of the Ordnance Department’s timber cruisers located a grove of black walnut trees shading the farm home of a woman living in Missouri. She hated to sacrifice her trees, but listened to the appeal of patriotism and accepted an offer of $1,100 for them. Then, when the agent had left with her signed agreement in his pocket, she repented of her bargain and grieved so much at her forthcoming loss that the village minister suggested a remedy. He told her that the anticipated proceeds of the sale would pay for an automobile in which she could ride about the country and, amid the pleasant rural scenes, forget about the devastation soon to be staged in her own front yard. She acted on this suggestion, bought a car for $1,080, and in payment gave a note which she agreed to lift when the Government took the trees and paid her the money. The armistice intervened before the timber cutters appeared, and the Ordnance Department canceled the contract with the timber dealer. That left the woman with a half-used car, a note maturing in the bank to meet which she had no funds, and a clump of walnut trees for which the Government had no use. The St. Louis District Claims Board could not relieve her distress, but a member of the board brought the case to the attention of a meeting of war contractors; and it was arranged for the Missouri lady to keep both her automobile and her walnut trees.

The New York District Claims Board settled for $275,000 the claim of the Wah Chang Trading Corporation, of China, which supplied a large amount of antimony used in making shrapnel bullets. In the New York district also there had been a contract with the Japan Paper Company to supply paper parachutes for carrying floating signal lights. The contract was not a large one; yet in its settlement it was disclosed that there were about 10,000 subcontractors—individual Japanese families working in their own homes in Japan. Under the circumstances the board waived the usual rule that with every prime contract claim must be filed statements of settlement certified by every subcontractor.

Each of the district claims boards maintained in its quarters a progress chart which showed graphically each day the amount of industrial liquidation accomplished and the amount remaining to be done. In eleven of the districts this chart took the form of a thermometer, the rising mercury showing the amount of completed work. In the twelfth—at Cleveland—the chart was a representation of a bottle containing a celebrated beverage that does duty in these dry days for beer, and the task of the board was to empty this container.

On the first anniversary of the armistice the Ordnance Department’s system of industrial demobilization had cleared up a large part of the war business. The district boards had passed upon 94 per cent of all contractors’ claims presented, and the Ordnance Claims Board in Washington had disposed of 73 per cent of the ordnance claims. The settlements at this time had cost the United States nearly $131,000,000, but that sum had settled uncompleted portions of contracts to the value of approximately $1,000,000,000; and, in finding the net cost of the liquidation to the United States, from the sum paid out in these settlements there was still to be subtracted the receipts from the sale of materials taken over in the settlements. By the end of 1919 the district boards had passed 97 per cent of all claims and the Ordnance Claims Board 81 per cent. By that time the total amount approved for payment in adjusting the claims was more than $166,000,000.

In the latter part of 1919, however, a different system of settlement went into effect. By that time about three-fourths of the ordnance claims had been settled, in a spirit essentially of bargain and compromise, the Government yielding points and the contractors yielding them in order to reach swift agreements. Those who did the bargaining for the Government were for the most part the original members of the district organizations, the men who had been in touch with the industry from the start. As the unfinished business diminished in quantity, however, the members of the district claims boards one by one left the government service and returned to their own affairs, until by the autumn of 1919 the boards were made up largely of new members, most of them uniformed army officers who bore no such intimate relationship to the contractors. Within the Government, too, there was a growing spirit of criticism of the bargaining method of settling the contracts, even though the bargains had been highly advantageous to the Government. It was felt that more conventional methods should be employed. The result was a marked slowing down in the rate of industrial demobilization in the Ordnance Department.

It seems fitting here to say a word for the men who manufactured our ordnance during the war. The popular picture of a war contractor is that of a man swollen with new wealth and spending his money in riotous extravagances. This indictment, at any rate, cannot hold against the ordnance maker. Instead of profiting, the average ordnance contractor was glad enough to get out of the enterprise with a whole financial skin. Many were not so fortunate. An impartial investigation made by the Ordnance Department over its entire war manufacturing field showed that not more than one contractor in three or four, when the business was closed up, had anything to show for his war experience except the self-satisfying sense of having served his country.

In the light of the fact that so few of them profited at all and so many incurred actual loss, it is remarkable that they were not more grasping in the demobilization settlements; but the eternal fact remains that they were inclined to ask for less, rather than more, than was coming to them under their legal rights. This attitude was consistent with their whole attitude during the war. In the history of American industry there is no chapter more creditable to it than that of the attitude and accomplishments of the producers of ordnance during the World War. These men entered the undertaking with a zeal unsurpassed in any other part of the war organization. Working under an urgency such as American industry had never before experienced, they accepted the handicaps that had been placed upon the nation by its own peace-loving traditions and worked together as a unit to overcome the handicaps. They transformed their manufacturing plants with never a thought for the business they would one day have to resume. They undertook to produce, in quantities never before even projected, intricate materials of warfare the very names of which were unfamiliar to them. Despite the mounting costs of materials and labor, they managed to hammer down the prices of rifles, machine guns, explosives, shrapnel, and other important commodities, delivering to the Government not only a superior product, but a product costing the Government less than other nations at war paid for the same things. To accomplish this result they threw their normal rivalries on the scrap heap, opened up their trade secrets to each other, and virtually became partners in the single enterprise of supplying the American troops with the best munitions which American industry could produce.

As a rule, the profit-making war contractor was one who supplied commodities essentially like those produced in normal times. But supplies of this sort were almost unknown in the whole range of ordnance. The typical thing was to find on the day of the armistice the ordnance plant which had not yet come into full production under the original contract. This was because of the difficulties encountered in producing the more important items of ordnance. The months of the war had been marked by the heavy expenditure of money in the expansion of plants and the development of processes, and the armistice cut off the development before it had reached the profitable stage.

The producers did not attempt to recoup in the business liquidation that followed. These sentences are not intended to give a clean bill of health to the whole body of ordnance producers—some few of them sought to get more than they were morally entitled to get; some few, like the country horse trader, adopted the age-old procedure of barter by asking more than they expected to get. But where one man held out for the last penny of his rights, there could be found half a dozen others who put in no claims at all for money to which they were justly entitled. The great steel-producing industry, in particular, showed an aristocratic contempt of requiring its full due. Many steel producers pocketed their losses without a word: in fact, the Government settled a surprising number of ordnance contracts for the statutory one dollar apiece and thus saved itself millions for which it was legally liable. When the curious ordnance officers asked some of these contractors why they did not claim their full rights, they responded that the victory over Germany was compensation enough for them. As one of them expressed it, the achievements of the American boys in France had given him his run for his money.

In the Pittsburg district two steel producers had been engaged on contracts for essentially the same sort of material and on about the same scale. One was a small concern which had been kept at its wits’ end most of the time to finance its war enterprise. The other was one of the largest corporations in the United States, with ample financial resources. Into the Ordnance Claims Board came two claims terminating contracts of approximately identical characteristics. One of the claims was several times larger than the other, and naturally the Washington authorities questioned the larger claim. They found that the latter was a just claim in every particular. The discovery was made that the smaller of the two claims had asked for an amount in settlement much below what the producer was entitled to receive. The larger claim had been submitted by the producer whose finances could not stand any loss; the smaller by the great corporation referred to above. Both were allowed in full.

Of the 317 large ordnance contracts in the Pittsburg district, the Government settled 149, involving a total obligation of more than $23,000,000, for $1.00 each. In this and other districts thousands of subcontractors forgave the prime contractors their legal obligations without the transfer of a penny. In the Philadelphia district the prime contractors cleared up thousands of their subcontracts and said nothing about them in their liquidation claims. These instances of generosity were discovered only when the Ordnance Department checked up to find out why the final settlement costs were so much lower than the preliminary estimate of those costs, made in the first hurried days after the armistice.

The record of American ordnance production was not a flawless one—it was too large to be that—but in view of the general attitude of the producers, it is submitted that to have participated in that war industry was a distinguished honor.