Now this settlement system was able to render an important service to American industry during the demobilization. Many of the contractors had gone to the limit of their resources in procuring buildings, machinery, materials, and work in the prosecution of their contracts. As long as production was continuing, the Government could finance the expansion by making advance payments to the cost-plus contractors and by advancing money to others through the War Credits Board. But when the contracts were terminated, the Government could no longer follow this financing system, and the contractors faced a period of months or even years before they could conclude their settlements with the Government. During all that time their invested money would be tied up. Some of the more deeply involved--and large concerns they were, too--were perilously near actual bankruptcy as a result. For the relief of such producers the War Department continued in demobilization its plan of advance payments, with, of course, a difference. Before the armistice the Government, in making advance payments, paid a percentage of the cost of work actually done. After the armistice no work to speak of was being done; yet in practically all the settlements there were numerous items of cost admittedly legitimate and about which there was no dispute. These were such items as materials in sight, appraised, and invoiced to the War Department, and such items as the contractor’s obligations to his subcontractors. The War Department adopted the policy of making payments in advance of final settlement up to 75 per cent of its admitted obligations. These payments, amounting in all to more than $143,000,000, enabled the producers to tide over the period between the termination of work and the final settlement with the Government. The practice of maintaining officers of the Finance Service as members of the district claims boards facilitated the prompt payment of these advances. In the final settlements, of course, the Government subtracted from the amounts due from it to the producers all advances made to them.