CHAPTER X

ORDNANCE DEMOBILIZATION

When the average man speaks of munitions, he means ordnance and, even

more specifically, guns and ammunition. In this he is nearly half

right. Technically, the word “munitions” includes army supplies of

all sorts, even to candy and cigarettes, and in this sense the word

is used in these volumes; but of the total war business transacted

for the Army, the procurement of ordnance supplies constituted 42 per

cent. Ordnance was by far the largest class of munitions. Four thousand

American manufacturing plants worked on ordnance contracts during the

war. Nearly 3,000,000 men labored in these mills.

The mere size of the war ordnance industry would have made the problem

of its demobilization a great one, but it was also complicated with

peculiar difficulties. The production of most ordnance materials

differed radically from that of any articles known in normal American

industry. The Quartermaster Department procured for the Army food,

clothing, shoes, hand tools, and many other supplies which, though

they were frequently of special design, nevertheless were not much

unlike the sorts of commodities with which the contractors were already

familiar. The Engineer Corps used many materials commonly employed in

the peaceful pursuits. Outside of ordnance, the manufacture of aircraft

alone took our industries into virgin fields of endeavor.

Therefore, those factories which were making for the Army products

essentially similar to products consumed by the civilian population,

were ready after the armistice to resume their places in normal

commerce with slight internal adjustment. But the ordnance

factories--they were a different story. In ordnance production the

war had witnessed some factory conversions of the most violent sort.

Manufacturers of printing presses built gun carriages of new and

difficult design; makers of sewing machines and automobiles undertook

the difficult task of producing hydropneumatic recuperators for

absorbing the recoil of field guns; producers of typewriters and water

meters manufactured time fuses for shell; women’s cloak factories sewed

silk powder bags; a phonograph maker produced aërial bomb sights; and

one producer turned from the modern business of making corsets and took

up the ancient occupation of tentmaker. For nearly all these factories

the ordnance contracts virtually implied the physical reëquipment of

their plants for quite different manufacturing processes. For them,

too, demobilization meant a not less severe dislocation of equipment

and processes in changing back again to their former work.

It was the problem of the Ordnance Department after the armistice to

manage the liquidation of its great war business--to halt the work, to

dispose of raw materials and materials left half completed when the

wheels stopped, to do something with the special factories and even

the complete towns built by the Government or for the Government in

the prosecution of the war enterprise, to recoup the millions advanced

to finance the ordnance producers, and finally to settle with cash

the obligations of the Government to the producers incurred when the

contracts were terminated.

Although in size and intricacy this problem was appalling, there was no

hesitation in setting about solving it, no period when the enterprise

hung in neutral, going neither forward nor backward. Ordnance work

was reaching new peaks of production when the Ordnance Department in

Washington took the first steps toward its dismemberment. In late

October, 1918, when the Argonne-Meuse offensive was striking home and

it was becoming evident that the curtain might at any time fall in

the theatre of war, the chief ordnance officers held a secret meeting

one Sunday afternoon in Washington and for the first time considered

the possible demobilization. At this meeting the Chief of Ordnance

appointed a commission to make a rapid study of the organization of the

Ordnance Department to determine whether that organization was fitted

to turn without change to the stoppage of work and the restoration of

the industry to its former basis. This same commission later became

the Ordnance Claims Board, the agency which supervised the entire

demobilization of ordnance industry. It was, of course, like all the

other bureau claims boards, subsidiary to the War Department Claims

Board. The Ordnance Claims Board was formally created by order on

November 2, and thus had been in existence for nine days when the

armistice was signed. Its chief was Brigadier General W. S. Peirce.

Its members were Colonel R. P. Lamont, who was president of the

American Steel Foundries Corporation before and after his military

service in the World War; Colonel G. H. Stewart, an ordnance officer

of the Regular Army; Lieutenant Colonel M. F. Briggs, counselor at

law, New York; Lieutenant Colonel F. R. Ayer, recorder of the Eastern

Manufacturing Company, of Bangor, Maine; and Mr. Waldo H. Marshall,

president of the American Locomotive Company, New York.

This board found an existing organization--the field administrations

of the thirteen ordnance manufacturing districts--admirably adapted to

the work of closing up the war business. The district organizations had

been created to give the Ordnance Department a mechanism by which it

could keep in immediate contact with the process of manufacture without

congesting the headquarters in Washington to the point where competent

management became impossible. They had been likened roughly to the fire

exits of a theatre, distributed to prevent crowding at the front doors.

In the district organizations were employed 33,000 civilians, uniformed

officers, and enlisted men, and through this great force the office in

Washington kept in as intimate touch with the work, the trials, and

the accomplishments of its producers as if it had been employing the

services of but a single factory. The ordnance field men knew the war

factories as they knew their own offices. They were acquainted with the

contractors, with the subcontractors, with the shop superintendents and

foremen, and often with the workmen themselves. Obviously they were

qualified to judge at what rate production could be stopped without

injury to the industry or its workmen and to determine the settlement

adjustments that would be fair to both sides.

It is worth while pausing a moment to examine the thirteen ordnance

districts and to note their headquarters cities, their extent, the

characteristic sorts of ordnance supplies produced in each, and the

chief production officer of each.

_Toronto._ Embraced the whole of Canada. Produced principally shell

machined and ready for loading, particularly 75-millimeter shell. As

noted in the preceding chapter, all industrial demobilization in Canada

was carried out by the Imperial Munitions Board, two of the members of

which were special representatives of the War Department Claims Board,

sent to Canada after the armistice for this purpose.

_Bridgeport._ Included Connecticut and four Massachusetts counties.

Primarily the small-arms district, producing all the pistols and

revolvers, all the bayonets, all the automatic rifles, more than a

million of the service rifles, most of the heavy machine guns, and

almost all the small-arms ammunition delivered under war contracts. Mr.

Waldo C. Bryant of Bridgeport was chief of the district.

_Boston._ Included the rest of New England. The chief producer of

soldiers’ belts, haversacks, mess kits, and other personal ordnance

equipment; produced small-arms ammunition heavily, and produced also

boosters and adapters (for shell) and carriages for 155-millimeter

howitzers. Mr. Levi H. Greenwood, chief of district.

_New York._ Included New York City, Long Island, and nine other

New York and twelve New Jersey counties. The prime producer of

trench-warfare ordnance. Produced much toluol and was a finisher of

shell, fuses, and cartridge cases. Loaded more than one-third of all

artillery ammunition shipped abroad. Chief, Mr. George J. Roberts,

vice-president of the Public Service Corporation of New Jersey.

_Philadelphia._ Included eastern Pennsylvania, part of New Jersey, and

all of Delaware. The chief service-rifle producer and a chief producer

of high explosives. Immense shell-loading activities. Chief, Mr. John

C. Jones, president of the Harrison Safety Boiler Works.

_Baltimore._ Included all of Maryland but two western counties, and

all of the District of Columbia and the states of Virginia and North

and South Carolina. The leading shrapnel-loading district and a great

shell-loading area. Contained the largest of the ammonium nitrate

plants. Produced all the 37-millimeter guns. Chief, Lieutenant Colonel

A. V. Barnes, formerly president of the American Book Company.

_Rochester._ Embraced all the state of New York not in the New York

City district. Chief production was in Lewis machine guns, Enfield

rifles, 75-millimeter field guns, shrapnel, picric acid, and optical

glass. Chief, Mr. Frank S. Noble, executive officer of the Eastman

Kodak Company.

_Cleveland._ Northern Ohio and three northwestern counties of

Pennsylvania. Produced completed big guns, shell fuses, 75-millimeter

gun carriages, mounts for railway artillery, and 6-ton tanks. Chief,

Mr. Samuel Scovil, former president of the Cleveland Electric

Illuminating Company.

_Detroit._ Included the state of Michigan. Produced gun recoil

recuperators, artillery vehicles, large-caliber shell, and

trench-mortar shell. Chief, Mr. Fred J. Robinson, president of the

Lowery-Robinson Lumber Company.

_Chicago._ Included northern Illinois and the band of states to the

northwest as far as Montana. Produced caterpillar traction for the

tanks and artillery, guns, carriages, recuperators, projectiles,

and grenades; the district was also saturated with contracts for

machinery for the eastern munitions plants. Chief, Mr. E. A. Russell,

vice-president of the Otis Elevator Company.

_Pittsburg._ Included western Pennsylvania except three counties,

two counties of western Maryland, two counties of Ohio, and all of

West Virginia. The prime subcontract district for the production of

raw steel and steel forgings. Herein was located the Neville Island

ordnance plant project. Produced optical glass in quantity. Chief, Mr.

Ralph M. Dravo, of Dravo Brothers, contractors, Pittsburg.

_Cincinnati._ Southern Ohio, Indiana, and the South. Was the chief

nitrogen-fixation district and the chief producer of smokeless powder.

Included Dayton, with 200 factories exclusively engaged in munitions

production. Produced tanks, shell, fuses, optical instruments, and

machine tools for war factories. District chief, Mr. C. L. Harrison, a

Cincinnati capitalist.

_St. Louis._ Included southern Indiana and sixteen western states.

Produced black walnut, toluol, and picric acid. Chief, Mr. Marvin E.

Singleton, former president of the East St. Louis Cotton Oil Company.

After the armistice the manufacturing committees in charge of the

twelve American ordnance districts became, without essential change in

their organization, the ordnance district claims boards. Each board

consisted of seven members--business men and at least one lawyer--with

such technical assistants as they needed. The first executive act in

demobilization for these boards to make was to determine what war

contracts were to be terminated immediately, what ones were to be

tapered off with a minimum expense to the Government and a minimum

disturbance to industry and labor, and what ones were to be carried

through to completion.

It was often advantageous to allow the contractors to proceed

undisturbed. Some of these ordnance supplies, which would be valuable

and essential items of our military equipment for years to come, were

only just reaching the stage of production in the factories, after many

months of costly experiment and preparation. It was obviously unwise

to interrupt these projects with nothing to show for them except heavy

bills of expenses. Then, too, it was sometimes of financial advantage

to the Government to allow a contract to go through to completion. A

contractor in the Chicago district, for example, had nearly completed

the manufacture of several large machines for installation in an

eastern munitions plant. To cancel the contract would have cost the

Government $90,000 in a settlement and left on its hands a quantity

of semi-finished materials having only junk value. The Government

no longer had use for the finished machines; yet it would cost only

$14,000 more to go on and complete them. This was done, and the

Ordnance Department was later able to sell the machines to a private

buyer for more than $100,000, thus recovering practically all the money

it paid to the contractor.

To provide a basis of fact for all such acts of administration in the

demobilization, the district boards first took a rapid but thorough

inventory of the ordnance industrial situation. This they did by means

of questionnaires sent to all the contractors. Each questionnaire, when

returned to the district board, showed the status of the contract at

the time and how the contractor’s business and his employees would be

affected by a termination. The general ordnance policy was to permit

contractors (after the first emergency suspension which, it will be

remembered, had been requested immediately after the armistice was

signed) to continue their work on a diminishing scale for a few weeks,

while they made their arrangements to engage once more in commercial

work. Some of the contracts, including all the late, standardized

ones, provided for the termination of work upon thirty days’ notice.

If, however, the enforcement of this provision would create any

considerable amount of unemployment, the district boards allowed such

contractors to complete an average thirty days’ production, but to

spread out the work over a longer period of time.

There were variations of the general policy when it was applied

to special classes of ordnance industry. For instance, the many

contractors who were machine-finishing the artillery shell were

permitted to keep their plants in full operation until January

31, 1919, when the work had to cease abruptly. All source

industries--industries, that is, producing rough forgings and other raw

and semi-finished materials for ordnance manufacture--were taken from

war work forthwith. Then, too, as noted, in various classes of large

ordnance, or ordnance of exceedingly difficult manufacture, the orders

were greatly reduced and the contractors permitted to go ahead and

complete the residue, no matter how long it might take. Such ordnance

included gun carriages, recuperators, tanks, optical instruments, and

other supplies of the sort. This reduced production continued for more

than a year after the general stoppage of war industry. Some of the

Mark VIII tanks (the Anglo-American design) were delivered to the Army

as late as June 1, 1920.

So expeditiously was the work of termination carried on in the other

classes of manufacture (and these made up the greater part of the

ordnance industry) that by January 1, 1919, nearly all war ordnance

production had either been terminated altogether or was dwindling to

the vanishing point under specific agreements. After February 1 the

only war ordnance factories in operation were the exceptional plants

noted in the preceding paragraph.

Even as the ordnance industry was being stopped, the Government was

coming to an understanding with the ordnance contractors as to the

settlement of their claims. To this end, in most of the manufacturing

districts the board members traveled from city to city, addressing

large meetings of the contractors and explaining to them the general

liquidation policy adopted by the War Department. In its broad

outlines, this policy was as follows: The Government would take off

the contractor’s hands at cost all materials which he had specifically

purchased for his contract, but which he had not used. The Government

would reimburse him for all work done on his contract, for all

materials used, for all money paid out in wages, and for all legitimate

overhead expense, the Government in return taking over all materials in

the various stages of their completion. Further, the Government would

regard as proper costs whatever it cost the contractor to terminate

and settle his subcontracts, and would pay these costs. Finally, in

specific instances the Government would pay money in amortization of

the cost of machinery and tools bought especially for war use, the sum

to be proportioned to the amount of work completed. And whatever else

the contractor was out of pocket legitimately, the Government would

pay. When the various costs were brought together as a lump, to this

sum the Government would add 10 per cent as profit. It would, moreover,

allow 6 per cent interest on money which the contractor had invested

in materials, reckoning from the average time of purchase to the date

of the settlement; but it would not allow 10 per cent profit on this

investment in addition.

These terms received widespread acceptance, although they allowed

no prospective profits, and thereupon the various districts became

scenes of great activity as the ordnance officers worked with the

contractors to expedite the presentation of settlement claims by the

latter. Inspectors and agents employed by the district boards checked

manufacturers’ inventories, and boxed and set aside materials to

be delivered to the Government, while district accountants audited

the costs statements. Each field agent of a district board was made

responsible for a few specific claims. He stood at the contractor’s

elbow and helped him rough out his claim into proper form. A spirit of

amiability prevailed. For many reasons the contractor wished to make

his settlement as quickly as possible, and the district agent was there

to tell him what items in his claim were indisputable, and what ones

were likely to be contested, thereby holding up the final settlement.

When the district agent and the contractor had agreed as to a claim,

they submitted it informally to one of the members of the district

claims board for his opinion. If he thought his board would be unlikely

to allow certain items, the contractor could usually be persuaded to

omit such items. Claims prepared under such conditions presented little

difficulty to the various claims boards, and most of them went through

to settlement without a hitch in the proceedings.

Most contractors were willing to forego their technical rights in order

to save the Government from paying for useless production, but a few

were obdurate. One man, working under a contract with a thirty-day

termination clause, deliberately increased his rate of production

five times in order to collect a maximum amount from the Government.

When the Ordnance Department discovered his plan, it breached the

contract outright and allowed the producer to take his grievance, if he

continued to nurse one, into the courts. A rare instance of this sort,

however, is cited only to show by contrast the prevalent attitude of

industrial coöperation with the Government. Numerous producers omitted

from their claims many items the validity of which could probably have

been sustained in the future negotiations, but which were, however,

subject to close scrutiny and therefore a factor of delay in the

settlements.

The wheels of war industry had not ceased to turn before the Government

began to make advance payments in settlement of the industrial claims.

If the contractors were generous, so was the Government. The first

settlement made illustrated the War Department’s attitude right

through. A New York contractor had submitted a claim for about $15,000.

On January 20, 1919, he informed the New York District Claims Board

that two days later he had to meet a note for $10,000, a debt incurred

in prosecution of his war contract. A member of the New York Claims

Board took this claim in person to Washington and next day secured its

approval by the Ordnance Claims Board, together with an authorization

to advance $10,000 to the contractor pending the final approval and

settlement by the War Department Claims Board. The New York district

finance officer paid over the $10,000 in time to save the note from

going to protest.

As the weeks went on the New York manufacturer’s plight was duplicated

over and over again. The producers of ordnance supplies, after the

termination of their contracts, faced enormous financial obligations

which they would have to meet long before the machinery of liquidation

could act upon their claims. To such producers the system of advance

partial payments afforded great relief. The policy of advance payments

not only saved numerous concerns from financial ruin, but it

stimulated the general commercial reconstruction and resumption of

normal business by releasing large sums of money and putting it again

into circulation. And, it should not be forgotten, the system greatly

aided the Government to secure favorable settlement terms from the

contractors by offering the reward of early payments to those whose war

business was quickly liquidated.

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

each, the contractors voluntarily refraining from presenting any claims

above the statutory dollar which had to be paid to make the settlement

legal.

Many were the interesting episodes which occurred during the ordnance

liquidation. The St. Louis district was the chief source of black

walnut timber secured during the war. Walnut was used in making

gunstocks and airplane propellers. In hunting for walnut in this

district we discovered that we were gleaning where Germany had reaped

before us. The former solid stands of walnut in this district had been

cleaned out in recent years, much of the timber having been shipped to

Germany _via_ the Gulf ports. Yet our gleaning was successful. Walnut

trees, growing as individuals or in small groups, were still to be

found along the country lanes, in farm lots, at the edges of orchards,

and shading the grounds of the farmsteads. Nowhere were more than

thirty trees in a group discovered. Consequently an adequate supply of

walnut for the munitions plants depended upon a foot-by-foot search

of the entire American countryside in the walnut regions. In this

work the Government was assisted by tens of thousands of volunteers

aroused to the need by the widespread publicity. The Boy Scouts turned

their hikes into walnut-hunting expeditions. The country doctor, the

circuit-riding clergyman, the bee hunter, and the muskrat trapper all

made it their business to locate and report stands of walnut timber.

As a result unexpectedly ample quantities of the wood were secured

from regions supposedly denuded of it. On the day of the armistice the

timber dealers found themselves stocked up with enough black walnut to

meet all commercial demands for five years ahead.

One of the Ordnance Department’s timber cruisers located a grove of

black walnut trees shading the farm home of a woman living in Missouri.

She hated to sacrifice her trees, but listened to the appeal of

patriotism and accepted an offer of $1,100 for them. Then, when the

agent had left with her signed agreement in his pocket, she repented

of her bargain and grieved so much at her forthcoming loss that the

village minister suggested a remedy. He told her that the anticipated

proceeds of the sale would pay for an automobile in which she could

ride about the country and, amid the pleasant rural scenes, forget

about the devastation soon to be staged in her own front yard. She

acted on this suggestion, bought a car for $1,080, and in payment gave

a note which she agreed to lift when the Government took the trees

and paid her the money. The armistice intervened before the timber

cutters appeared, and the Ordnance Department canceled the contract

with the timber dealer. That left the woman with a half-used car, a

note maturing in the bank to meet which she had no funds, and a clump

of walnut trees for which the Government had no use. The St. Louis

District Claims Board could not relieve her distress, but a member

of the board brought the case to the attention of a meeting of war

contractors; and it was arranged for the Missouri lady to keep both her

automobile and her walnut trees.

The New York District Claims Board settled for $275,000 the claim of

the Wah Chang Trading Corporation, of China, which supplied a large

amount of antimony used in making shrapnel bullets. In the New York

district also there had been a contract with the Japan Paper Company

to supply paper parachutes for carrying floating signal lights. The

contract was not a large one; yet in its settlement it was disclosed

that there were about 10,000 subcontractors--individual Japanese

families working in their own homes in Japan. Under the circumstances

the board waived the usual rule that with every prime contract claim

must be filed statements of settlement certified by every subcontractor.

Each of the district claims boards maintained in its quarters a

progress chart which showed graphically each day the amount of

industrial liquidation accomplished and the amount remaining to

be done. In eleven of the districts this chart took the form of a

thermometer, the rising mercury showing the amount of completed work.

In the twelfth--at Cleveland--the chart was a representation of a

bottle containing a celebrated beverage that does duty in these dry

days for beer, and the task of the board was to empty this container.

On the first anniversary of the armistice the Ordnance Department’s

system of industrial demobilization had cleared up a large part of

the war business. The district boards had passed upon 94 per cent

of all contractors’ claims presented, and the Ordnance Claims Board

in Washington had disposed of 73 per cent of the ordnance claims.

The settlements at this time had cost the United States nearly

$131,000,000, but that sum had settled uncompleted portions of

contracts to the value of approximately $1,000,000,000; and, in finding

the net cost of the liquidation to the United States, from the sum

paid out in these settlements there was still to be subtracted the

receipts from the sale of materials taken over in the settlements.

By the end of 1919 the district boards had passed 97 per cent of all

claims and the Ordnance Claims Board 81 per cent. By that time the

total amount approved for payment in adjusting the claims was more than

$166,000,000.

In the latter part of 1919, however, a different system of settlement

went into effect. By that time about three-fourths of the ordnance

claims had been settled, in a spirit essentially of bargain and

compromise, the Government yielding points and the contractors yielding

them in order to reach swift agreements. Those who did the bargaining

for the Government were for the most part the original members of the

district organizations, the men who had been in touch with the industry

from the start. As the unfinished business diminished in quantity,

however, the members of the district claims boards one by one left the

government service and returned to their own affairs, until by the

autumn of 1919 the boards were made up largely of new members, most of

them uniformed army officers who bore no such intimate relationship to

the contractors. Within the Government, too, there was a growing spirit

of criticism of the bargaining method of settling the contracts, even

though the bargains had been highly advantageous to the Government. It

was felt that more conventional methods should be employed. The result

was a marked slowing down in the rate of industrial demobilization in

the Ordnance Department.

It seems fitting here to say a word for the men who manufactured our

ordnance during the war. The popular picture of a war contractor is

that of a man swollen with new wealth and spending his money in riotous

extravagances. This indictment, at any rate, cannot hold against the

ordnance maker. Instead of profiting, the average ordnance contractor

was glad enough to get out of the enterprise with a whole financial

skin. Many were not so fortunate. An impartial investigation made by

the Ordnance Department over its entire war manufacturing field showed

that not more than one contractor in three or four, when the business

was closed up, had anything to show for his war experience except the

self-satisfying sense of having served his country.

In the light of the fact that so few of them profited at all and so

many incurred actual loss, it is remarkable that they were not more

grasping in the demobilization settlements; but the eternal fact

remains that they were inclined to ask for less, rather than more,

than was coming to them under their legal rights. This attitude was

consistent with their whole attitude during the war. In the history

of American industry there is no chapter more creditable to it than

that of the attitude and accomplishments of the producers of ordnance

during the World War. These men entered the undertaking with a zeal

unsurpassed in any other part of the war organization. Working under an

urgency such as American industry had never before experienced, they

accepted the handicaps that had been placed upon the nation by its

own peace-loving traditions and worked together as a unit to overcome

the handicaps. They transformed their manufacturing plants with never

a thought for the business they would one day have to resume. They

undertook to produce, in quantities never before even projected,

intricate materials of warfare the very names of which were unfamiliar

to them. Despite the mounting costs of materials and labor, they

managed to hammer down the prices of rifles, machine guns, explosives,

shrapnel, and other important commodities, delivering to the Government

not only a superior product, but a product costing the Government less

than other nations at war paid for the same things. To accomplish this

result they threw their normal rivalries on the scrap heap, opened up

their trade secrets to each other, and virtually became partners in

the single enterprise of supplying the American troops with the best

munitions which American industry could produce.

As a rule, the profit-making war contractor was one who supplied

commodities essentially like those produced in normal times. But

supplies of this sort were almost unknown in the whole range of

ordnance. The typical thing was to find on the day of the armistice the

ordnance plant which had not yet come into full production under the

original contract. This was because of the difficulties encountered in

producing the more important items of ordnance. The months of the war

had been marked by the heavy expenditure of money in the expansion of

plants and the development of processes, and the armistice cut off the

development before it had reached the profitable stage.

The producers did not attempt to recoup in the business liquidation

that followed. These sentences are not intended to give a clean bill

of health to the whole body of ordnance producers--some few of them

sought to get more than they were morally entitled to get; some few,

like the country horse trader, adopted the age-old procedure of barter

by asking more than they expected to get. But where one man held out

for the last penny of his rights, there could be found half a dozen

others who put in no claims at all for money to which they were justly

entitled. The great steel-producing industry, in particular, showed an

aristocratic contempt of requiring its full due. Many steel producers

pocketed their losses without a word: in fact, the Government settled

a surprising number of ordnance contracts for the statutory one dollar

apiece and thus saved itself millions for which it was legally liable.

When the curious ordnance officers asked some of these contractors why

they did not claim their full rights, they responded that the victory

over Germany was compensation enough for them. As one of them expressed

it, the achievements of the American boys in France had given him his

run for his money.

In the Pittsburg district two steel producers had been engaged on

contracts for essentially the same sort of material and on about the

same scale. One was a small concern which had been kept at its wits’

end most of the time to finance its war enterprise. The other was one

of the largest corporations in the United States, with ample financial

resources. Into the Ordnance Claims Board came two claims terminating

contracts of approximately identical characteristics. One of the claims

was several times larger than the other, and naturally the Washington

authorities questioned the larger claim. They found that the latter

was a just claim in every particular. The discovery was made that the

smaller of the two claims had asked for an amount in settlement much

below what the producer was entitled to receive. The larger claim had

been submitted by the producer whose finances could not stand any

loss; the smaller by the great corporation referred to above. Both were

allowed in full.

Of the 317 large ordnance contracts in the Pittsburg district, the

Government settled 149, involving a total obligation of more than

$23,000,000, for $1.00 each. In this and other districts thousands of

subcontractors forgave the prime contractors their legal obligations

without the transfer of a penny. In the Philadelphia district the

prime contractors cleared up thousands of their subcontracts and said

nothing about them in their liquidation claims. These instances of

generosity were discovered only when the Ordnance Department checked

up to find out why the final settlement costs were so much lower than

the preliminary estimate of those costs, made in the first hurried days

after the armistice.

The record of American ordnance production was not a flawless one--it

was too large to be that--but in view of the general attitude of the

producers, it is submitted that to have participated in that war

industry was a distinguished honor.

Demobilization · 第 10 / 19 章