Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1918-12-24
DAILY INTERIOR RECEIPTS
Cancelled Contracts
Seriously Embarrass
Many Business Men
BIZ THEODORE TILLER

ELLINGTON, d. c., Dec Ca
Cancellation OF thousands of war
contracts I'M which business men
from Georgia to Maine were interest
ed. has produced a serious situation
mere: The war and treasury depart
ments arc up against a condition to
which congress will probably be
forced to direct attention by enact.
ing legislation making possible fair
adjustments.
Representative Dent, of Alabama.
chairman OF the house military affair
committee, is TO hold a conference
with officials of the war and treas
ufy departments regarding this leg
lslatlon. 1t develops that more than
six thousand verbal and informal
contracts have been construed as not
valid by the comptroller of the
treasury, while numerous other con-
tracts are held unsettled because of
technlcal defects in signatures. This
situation is Independent of contracts
which were formal and regularly
entered into. but which are now cam
ceIled because the government has
no need OF the material ordered.
Business men in all sections of
the country have millions of dollars
or investments on government orders
which must go through the red tape
of adjustment while capital remains
tied up.
Senator Oyerman, North Carolina,
recently directed the senate's atten-
ton to the serious inconvenience
given the business world Dy the sud-
1en cancellation of war contracts.
Men in his state. he said, cotton
manufacturers and others, have been
financially embarrassed by the I'M
certainties of adjustment.
The ruling of the comptroller, it
was suggested, and the general lack
of information regarding compenSa-
ton by the government, left both
large and small business men in an
unenVlabIe position. 1t now develops
the general statement of Senator
Overman hardly scratches the sur
face of business troubles. Not only
are local business interests disturb
ed by the uncertainty and red tape"
incident to contract adjustments, but
in nearly all sections of the coUn-
try, and particularly in the south
east. there is anxiety among business
men. Many are in financial straits.
or near thereto, because of sudden
cancellation of war orders.
Hundreds of business establish
ments, from cotton mills to wagon
shops, went on a wartime basis al
the request of the government and
devoted practically their entire out
puts to the purposes of war. Civil
ian business was not sought, because
it could not be handled, since thu
government requirements came first
Basing their actions upon both tacit
and specific understandings with
government agents, many of these
business establishments put in large
stocks of raw material which were
to be converted into products re-
quired by the United States. 1t -
said there are about 500 verbal
and informal contracts, irrespective
of those formally entered into.
CoInptroller's Ruling
With the signing of the armistice
the government began to cancel con-
tracts because it had no further need
for the material. 1t promised an ad-
JUStment as rapidly as possible, the
assumption being that both the gov
eminent and the contractor wouln
be forced to stand some loss. Now
GENES the comptroller of the treas
ury, however, who says these verbal
contracts have no legal status, ana
that certain contracts signed by sub
ordinate officers, acting in good fiatn
cannot be paid under the regulations
governing the handing out of public
funds. The distress of such a situa-
ton is being brought home every
where. Information has come 20 Sen
ator Overman, for instance, that one
cloth manufacturing concern in his
state has a surplus stock of some
$500 worth of raw materials pur-
chased to handle war orders for the
United States. While this investment
viii not mean eventually a dead
loss, it means that large amounts
Of capital are tied up and civilian
OF ders must now be sought to use
up the material purchassdk for Uncle