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Show worm ORDERS MADE DOUBTFUL . Many Contracts Were Not - Properly Executed, Is Assertion. m By Assoclsted Press. WASHINGTON. Nov. 19. r.ovrrn- ment war contracts Involving. hundreds of millions of dollars were rendered doubtful In statu today hy a derision of Comptroller Warwick of the treasury treas-ury that orders have not been legally executed aniens actually signed hy responsible re-sponsible aovernment contracting agents and the rontractor. I Th war ilcpartment submitted to I the comptroller a form of cancellation ! agreement under which It ws pr-posed pr-posed to abandon without unjust loss lo contractors thousands of war. supply sup-ply contracts. He refused to approve the (crewmen t, holding that the department de-partment may not agree with con trartor on an arbitrary sum to cover liabilities unless specific authorization for this Is (riven In a previously existing exist-ing agreement. A large proportion of war orders were given Informally by telephone, telegraph or letter. It is said. In such -- rmi ir irr I. II n 1 - tinn will be neretutrv to jrnitt framing fram-ing of agreements for cancellation. ORDERED BY WIRE. in the confustm end- hste -of wr-.-manv manufacturers proceeded m it h tremendous orders, on tergraph Instructions In-structions of stibord:n-ii nrniv nfi"i- jeers, and the trimtuntinn of hostilities found them unprotected by legal con-! con-! tract. I The authority of the comptroller. I who has' rendered their position oes-I oes-I tlonable, grows nut of bis supervision ' 'f all pavments by the treasury on or- Her of other departments. BAKER EXPLAINS. I In submitting the tentative form for a standard cancellation contract. Sec- j i retary Baker explained that It ''is Im- : porta nt. In the interest of labor iind ! the Industrial security of the country, j that these plants (referring mainly to I munition factories) be returned to com-i com-i merchtl work ys sieedity as practicu- ble and. so far as possible, without, a i break in their continuousjeperatlon and j employment of labor." J Secretary Baker continued: -"The war department believes that many such contractors are willing to ' forego the prospective profits on th J remainder of the work contemplated by the contract and terminate the exiM- Ing contract on a basis which would I amount substantially to compensation I for expenditures Incurred and profits ; not to exceed 10 per cent on the cost ; of the ui.fmiHhed articles on naml u j basis more favorable to the govern - ment than the. terms of the contract 1 would permit if they can secure promptly a substantial portion of this sum so aa to release their working capital for switchlug back to commercial commer-cial work. I EQUITY IS OBJECT. I "The department, therefore, desires to enter into supplementary contracts with such contractors, by which a sum j well within that . it is certain would have to be ald the government on i such a basis of adjustment will be paid ; immediately to the contractor uion his consent to a termination of the oni- nal contract and a release to the gov-, eminent from all Its obligations thereunder, there-under, the department agreeing to pay substantially such additional sum as the secretary of war may determine will complete payment to the contractor contrac-tor on such basis of adjustment." fomptroller Warwick held that no blanket form of contract could be devised de-vised to' cover all cancellations, . .. . POLICY DEFINED. Secretary Baker Issued a statement of the war department's general pulley In canceling war supply contracts. He made It clear that the department pro- poses to do Its own canceling Instead j of leaving the task to the war indus-trles- board. "When it becomes necessary In the , public Interest lo discontinue the pro-i duction of supplies or material which are no longer needed by the army." Secretary Hker said, "negotiations for) nmm r.i .ttiltmni of contracts w iTT be: undertaken by the war department in a spirit of fairness and hopefulness to all concerned. COOPERATION URGED. "It Is expected that contractors on their part will undertake to f urnish definite statements which will facilitate facili-tate prompt pa ment of the ohliga -tlons of the government. "An erroneous impression prevails that the responsibility of reduction or cancellation of contracts rests rn tne war Industries board. This is not the case. Ths war department is the principal prin-cipal In the matter of Its adjustments, I though it may, when It seems advlsa-! advlsa-! ble, advise with the war Industries j board or other governmental agencies on matters of gen-rsl policy, j "To prevent too violent dislocation of industry, accumulation by the war department of either- raw material or finished product will tx distributed when and where liquidation of such ; supplies will least interfere w it It the , return of Industry to normal condl- I tions." |
