The Birmingham age-herald., 1918-11-30
ORDERS PLACED BY
 WIRE NOT LEGALLY \. BINDING, IS VIEW HELD BY WARWICK
Cancellation Plans Thrown Into Confusion by De-
 cision of Comptroller
MANY MILLIONS IN CONTRACTS INVOLVED IN THE NEGOTIATIONS
Baker Announces War Department Will Direct Own Cancelling of Contracts in Spirit of Fair
 ness and Hopefulness

SOhtA avs At RFAAss VI
 ness and Hopefulness
 Washington, November 20. The governments maturing programme for cancelling war orders with the minimum dis turbance to business conditions was thrown into confusion to- day by a decision of Comptrol- Ter Warwick of the treasury, that thousands of orders placed by telegram, telephone or mail are not legally binding, and that consequently they may not be recognized through the ne7 gotiation of terminating con- tracts without special legisla- ton by Congress. Officials esti- mated that hundreds of mil lions of dollars in contracts are involved.
 At the same time Secretary Baker an nounced that the war department will direct it's own cancelling of contracts in spirit of fairness and hopefulness to all concerned
 
 GREGORY'S OPINION SOUGHT
 Attorney General Gregory will be asked to pass or this apparent conflict between the law, as strictly interpreted by Comp troller Warwick, whose authority grows out of his supervision of payments from the treasury, and the desire of the war department to terminate contracts-both those backed up by formally signed doc uments and those undertaken on informal agreements-by making some sort of a lump sum payment to the contractor.
 If legislation is found to be necessary 1t is expected that an attempt will be mediately in order to avoid holding up the governments great industrial demo- bilization and readjustment plans.
 BAKER PROPOSED PLAN
 Secretary Baker had proposed form of terminating contract--a supplementary agreement-by which the government would be released, by the contractor from the. original contract and in return would pay the contractor for expenses in cured" in carrying out the agreement, and an additional allowance for profit limited to 10 per cent of the cost of the unfinished articles on hand. The war department had further proposed to pay the manufacturer immediately 75 per cent of the minimum due on this basis, as determined by contracting officer of the government. and the balance after time had been allowed for careful deter imitation of the final amount due.
 This method Secretary Baker said. would give plants which have devoted their reconversion to peace-time produc- tion and prevent break in their con tinuous operation and employment of labor
 ANTICIPATE NO PROFIT
 Comptroller Warwick's decision de- cihTeu tndl il tdilllOt Dc dSSulncdt dn the proposed contract form does, that the contractor anticipates profits from completing his contract, There may be contractors willing to terminate their existing contract whether containing terminal clauses or not. on terms moro 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 of what is delivered before termination"
 The comptroller also said that 'the making of the supplemental agreement and the simple certifying to minimum amount by the contracting officer upon the statement and estimate of the con tractor will not be sufficient nor con elusive upon the accounting officers. ? This referred to the checking of pay ments made by accountants working un- der the direction of the comptroller of the treasury. He added: The supple mental agreement cannot be permitted to impose liability upon the govern ment where none heretofore existed
 MUST BE WRITTEN
 The comptroller then explained that a contract, to be legal. must "be reduced to writing with the names of the parties signed at the end and that "a signing by proxy is considered by this office as not permissible. Thousands of contracts have been signed in this manner by proxies of tha army officers duly authorized by the Secretary of War. The name of the of ficer in these cases was typewriter at the end of the contract. and minor officer actually signed on behalf of the authorized contracting officer. The only document many manufacturers have to support their contracts consist of letters instructing them to proceed with cer- tain orders for war materials. at certain prices. or on the basis of a percentage of profit. bearing the signature of sub ordinate officer beneath the typed name of the real contracting officer. It was explained that in the rush of war prep aration this system was necessary in the interest of speed.
 The comptroller also found other faults with the proposed contract, inasmucll as it failed to reserve to the govern ment rights, to recover overpayments. or to credit the value of materials re. maining property of the contractor.