While the tendency was all toward the cost-plus-fixed-profit form of contract, when it came to the production of materials entirely new and strange to our industry the War Department could not escape the cost-plus-percentage form. The Government’s powder-bag-loading plants were operating on the basis of the payment of operating costs, plus 14 per cent. Several of the shell-loading plants worked under contracts providing for the payment of costs, plus 10 per cent. Silk cartridge cloth was manufactured at cost, plus 10 per cent as profit. This profit, as the skill of the cloth weavers increased, was gradually stepped down to 3 per cent. The Modified Enfield rifles were made at cost, plus 10 per cent. When the War Department commandeered plants, it engaged operating companies to run them on a basis of costs paid, plus a fixed monthly remuneration. Certain patriotic contractors built large munitions plants for the Government at cost, plus the statutory $1 as profit. Then there was the combination contract, adopted for work new to our industrial experience--a cost-plus form graduating into a fixed-profit form as the actual work developed what the costs would be. The Browning machine guns were produced under contracts of this sort. Contracts for the production of aircraft were not brought under the centralized administration of war department contracts. The aircraft contracts provided for the payment of costs by the Government, plus fixed profits, with bonuses for the producers if they kept under the estimated costs. CHAPTER IX THE SETTLEMENT OF THE WAR CONTRACTS In the preceding chapter we have been discussing chiefly the written, formal contract, the tangible, visible document, duly signed and witnessed, which could be submitted to any court as prima-facie evidence of the obligations of both the producer and the Government. If, however, the impression has been given that all the war business was conducted under the authority of such instruments, let it now be dispelled; because thousands of manufacturers did war work for the Government, and the Government itself became involved for hundreds of millions of dollars, under another set of arrangements, which became known, after the armistice, as the informal, or “Bevo,” contracts. These agreements, while embodying the same terms as those of the formal contracts, were drawn with no such attention to the niceties of federal procedure, without which the law says that a government contract is not enforcible. The informal contracts were a product of the hurry and rush to get things done. There were several sorts of them, some being formal in type but defective in detail, others existing in written records, such as correspondence, but not in formal contracts, and still others being merely oral agreements between the producers and the agents of the Government as to what work had to be done.