Demobilization : $b our industrial and military demobilization after the armistice, 1918-1920Crowell, Benedict
History
Demobilization : $b our industrial and military demobilization after the armistice, 1918-1920
Crowell, Benedict
United States. Army. American Expeditionary Forces -- Demobilization; World War, 1914-1918 -- United States
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
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