The Director of Purchase, Storage, and Traffic, however, had many duties other than those of directing the demobilization, though none more important. It was realized that the system needed a controlling head, the sole function of which would be to administer the entire liquidation of war industry. Therefore, late in January, 1919, the Secretary of War created the War Department Claims Board, into which were to focus, through the bureau boards, all the field activities in industrial demobilization. The Assistant Secretary of War became the president of this board. Mr. G. H. Dorr, who was also the assistant Director of Munitions, and Brigadier General (later Major General) George W. Burr, who had succeeded General G. W. Goethals as Director of Purchase, Storage, and Traffic, were the first regular members of the War Department Claims Board. There were also three special members and a recorder, and as time went on the Board was expanded by the creation of subcommittees of experts in various legal and industrial subjects. The process of liquidation, therefore, originated with the district boards. In settling with a contractor, the district board appraised all the articles completed under the contract. It examined the expenditures which the contractor had made and the obligations he had incurred looking toward the finished production. Under the demobilization policy adopted, the Government was responsible for both of these costs. It paid for completed supplies (the price including the contractor’s profit), for raw materials purchased for the contract but not used, for semi-finished materials, for the contractor’s obligations to his subcontractors (including the costs of canceling the subcontracts), and, finally, for all general operating costs, including the contractor’s “overhead” expenses, factory and machine depreciation costs, and the amortization of new facilities built at the Government’s behest. To the most important production costs (but not including depreciation or amortization costs or interest on money invested in materials) the claims boards were authorized to add 10 per cent of the sum as the contractor’s profit. The Government paid no prospective profits, but only a fair remuneration for work actually done.