Although under the circumstances the cost-plus contract was a necessity and its advantages were many, nevertheless the form was endowed with an inherent weakness (from the Government’s standpoint) most difficult to overcome. In a lump-sum contract the profit of the contractor increased according as he was able to keep down his costs. If his costs ran too high, he faced actual loss. In the cost-plus contract of the simplest form--cost of production, plus a percentage of the cost as profit--it was just the other way. The higher a producer’s costs, the greater his profit; and though a producer might not deliberately seek to augment his costs, yet if he were relieved of the necessity of maintaining a normal business wariness, bargaining for his raw materials, and resisting wage advances, the best interests of the Government might not be served. There is no question that the elementary form of cost-plus war contract in the early months of the war added considerable impetus to the procession of higher costs of living, higher wages, and higher costs again in the vicious circle. It was to retard this tendency, to add an inducement to the producer to control and keep down his costs, that the Government evolved the many modifications and refinements of the cost-plus contract. At several points in these narratives we have called attention to the train of evils which followed the attempt of the War Department in 1917 to conduct its enterprise in the production of munitions with an organization feudal in character and, one might almost say, in antiquity. Five virtually independent bureaus--the Ordnance Department, the Quartermaster Department, the Corps of Engineers, the Signal Corps, and the Medical Department--and, later, after the creation of the Construction Division, the Air Service, and the Chemical Warfare Service, eight, set forth to procure their own war supplies as competitors, each determined to attain its own ends at the expense, if necessary, of the others. This plan of operation soon drew up near the edge of disaster, as factories and the more accessible industrial districts were overloaded with war contracts by the undirected distribution of the Government’s business, and transportation both on rail and ocean was nearly throttled by the congestions of freight at various seaboard and inland terminals.