Pine Bluff daily graphic., 1918-11-30
CANCELLATION Of
 CONTRACTS ON fAlk BASIS

time production and prevent "a break
 Ill their continuous operation anf employment of labor.''
 Comptroller Warwicks decision de. clared that it cannot be assumed. as the proposed contract form, does the contractor anticipate profits from completion his contract. They may be contractors willing to terminate their existing contracts. whether containing termination clauses, or not, on terms more favorable to the government than are contained in the proposed form. It is possible that some may be Willing to terminate existing contracts on the basis of payment for what is delivered before determination.
 Washington, Nov. 23.-The War De- i partment submitted to the Ccmptrol- Ter a form of cancellation agreement i under which it was proposed to
 abandon without unjust los to con- tractors thousands of war supply contracts. He refused to approve the agreement, holding the the Depart ment may not agree with a contrac- tor On an arbitrary sum to cover ] liabilities unless specific authoriza- 1 ton for this is given in a previously existing contract.
 A large proportion Of war orders were given formally by telephone, telegraph or letter. it is stated. Tn such cases the Comptroller held new execution will be necessary to per ,N,sf p,,or collation.
 Secretary Baker issued today a statement of the War Departments general policy in cancelling war sup ply contracts and aiding in the re- storation of industry to a normal ba- sis. He made it clear that the De- partment proposes to do its own can ceiling, instead of leaving the task to the War Industries Board
 The statement was given out just as. Comptroller Warwick's decision was announced. In the confusion and haste of war. many manufacturers proceeded with tremendous orders on telegraphic in- structions of subordinate army off. cers and the termination of hostili-
 
 contract The authority of the Comp troller, who has rendered their posi- tion questionable, grows out of his supervision of all payments by the treasury on order of other depart mentS
 In submitting the tentative form for a standard cancellation contract, Secretary Paker explained that it is important in the interest of labor and the industrial security of the country that these plants (referring mainly to intuition factorie5) be re- turned to commerce work as speed lily as practicable and so far as possi- ble without a break in their continu- Ous operation and employment of labor. /" @:
 Secretary Baker continued
 'The War Department believes that many such contractors are willing to forsgo the prospective profits on the remainder of the work contem- plated by the contract and terminate the existing contract on a basis which would amount substantially to compensation for expenditures for expenses incurred and profits not to exceed ten percent on the cost of the unfinished articles on hand-a basis more favorable to the government than the terms of the contract would permit-if they can secure ? Washington. Nov. 29.-The comp troller also said that "the making o the supplemental agreement and the simple certifying to T minimum. amount by the contracting officer upon the statement an destimates or nor conclusive upon the accounting officers.
 This reerred to the checking of payments made by accounts work ing under the direction of the comp troller of the treasury. He added: ''The supplemental agreement can- not ts permitted to impose a liabili- ty upon the government whereanonc heretofore existed"
 The comptroller then explained that a contract. to be legal, must "be re- duced to writing, with the names of the parties signed at the t1d," and that "a signing by proxy is consid- cred by this office as not permissi- ble" Thousands of contracts have been sibgned in this manner by army off cers duly authorized by the Secretary of War.
 "The department therefore desires to enter into supplementary con- | tracts with such contractors by which a sum we'll within what it is certain would have to be paid by the gov ernment on such basis of adpust- nent will be paid immediate to the contractor and release to the gov l ernment from all its obligations hereunder, the department agreeing to pay substantially such additional sum as the Secretary of War may de- termine will complete payment to the contractors on such basis of ad- 1 justment.'
 Comptroller Warwick held that no devised to cover all cancellations. He blanket for moi contract could be declared that cases involving only l. loI tnv