The air service contracts outstanding on the first day of the armistice obligated the Government to accept completed materials to the value of $767,423,308.50. Completed materials and raw and semi-finished materials accepted by the Government in the settlement with the contractors after the armistice reached a value of $259,733,874.30. Thus the contracts and parts of contracts terminated in the liquidation accounted for a cancellation of work to the value of $509,689,434.20. In addition to accepting and paying for the materials, the Government paid in cash to the producers in settlement of their claims the sum of $94,013,776.51. Hundreds of contractors accepted the statutory $1.00 and relieved the Government of all financial obligation. For the sole or leading purpose of creating reserves for future use by the Army, there was little or no production of air supplies after the armistice. Leaving aside all questions of the obsolescence of design, no major class of military supplies is less durable in storage than aircraft materials. Like an egg, an airplane or a balloon cannot be slightly bad and still be usable. It must be 100-per-cent perfect, or it is dangerous. The life of rubber is short even under the most favorable conditions. The rubber in balloon fabric does not escape this swift impairment. The rubber tires of airplanes deteriorate with equal rapidity. The laminated and glued joints of the wooden wing beams of airplanes expand, contract, and work loose in the varying humidity of the surrounding air and are soon weakened below the safety point. Propellers are also highly sensitive to changes in humidity and temperature. Storage batteries, when stacked together in storage, wear out in a few months, each cell apparently working upon and adversely affecting its neighbors. Bolted wing cloth, when left folded, becomes weak along the creases. Of all aviation supplies, engines are the least susceptible to deterioration in storage. In view of these considerations, such production of aircraft and aviation supplies as was permitted after the armistice was undertaken almost solely in the interest of the contractors and their employees. Most of the factories were allowed to continue in operation under war contracts only until they had used up materials in process of manufacture when the armistice was signed. Even this operation was conducted at a reduced rate. The airplane contracts had called for a delivery of 27,000 planes in all. The production under these contracts, in exact figures, amounted to 11,754 planes before the armistice and 1,732 afterwards, a total of 13,486 airplanes produced by the American factories. Contract terminations canceled the production of about an equal number.