Naturally the armistice found France, principally, and the other nations of western Europe to a slighter extent, liberally sprinkled with A. E. F. contracts for the production of quartermaster supplies. Sixty-six French factories, for instance, were working exclusively for the Americans in producing bread, biscuits, macaroni, and candy. The question immediately arose as to the best method of stopping all European production for the A. E. F. The expedition’s warehouses and depots were crammed to their capacities, and additional supplies were on the ocean in transports bound for France. A month, even a week, earlier it had not seemed possible that the industries of America and Europe put together, could produce an oversupply of these munitions, for the A. E. F. was looking forward to a strength of 4,500,000 men in 1919. But with the sudden armistice the expedition found itself with a stock of supplies on hand which it could not possibly consume. For that reason its European war industry was terminated abruptly. There was little of the tapering-off of production that was characteristic of the demobilization in the United States. The military authorities were not nearly so considerate of the welfare of their foreign contractors as they were of those at home. The American business abroad was so small, compared with the whole war industry of the countries of the Allies, that the outright abrogation of the American contracts could not cause a general industrial slump. But there were other considerations. The War Department could make use of much of the domestic post-armistice production, either as war reserves or as goods for sale. In Europe every pound of quartermaster supplies produced after the armistice was likely to prove a dead loss to the United States. Such supplies were not needed for military reserves, of which there was an abundance already within the United States. They could not be sold advantageously abroad, because there was no market for them, with the Allied armies dumping their enormous surpluses on that same market. They could not be shipped in reasonable time to the United States for sale, because of the lack of ocean tonnage. Consequently, whereas it was the policy within the United States to terminate war industry gradually, the keynote of our industrial demobilization abroad was outright cancellation. It was cheaper to pay cancellation indemnities than to accept the supplies that would otherwise have been produced; and this was the general policy adopted in terminating all our foreign contracts, with such exceptions, notably in some of the airplane and artillery contracts, as are noted elsewhere in this volume.