Government war contracts

Front matter

Carnegie Endowment for International Peace

DIVISION OF ECONOMICS AND HISTORY

JOHN BATES CLARK, DIRECTOR

Foreword

The subject of contractual relations between government and private concerns in time of war has as yet received comparatively little attention. There are a few books on the legal aspects of war contracting. But neither the economists, with a few exceptions, nor the public officials have given the matter the consideration which it seems to deserve. One fares better in the search for discussions of these matters by going to the files of engineering journals — an ever increasing source of applied economics. Consequently, this inquiry in both its methods and results has something of a pioneering character about it. The field has impressed the author, for many years a teacher of economics, as having much that might be utilized with advantage in the research work of graduate instruction, if not even in the more advanced courses of undergraduate instruction in quasi-public economics. Besides being closely related to engineering, the subject is neighbor to that of accounting. In these three subjects — of government contracting, contract engineering and contractural accounting — we have a group of economic literature representing achievements of which the representatives of scientific economics are bound to take early account if the latter subject is destined to keep abreast of the progress of economic research in closely allied domains of enterprise.

It has been the purpose to keep clear the distinction between the war time and the peace time contracting, because the problems and the conditions afi"ecting their solution are different under the two regimes. It is not always easy to detect where the departures began. But the role of the United States of America, as associated with the Entente Powers in the World War against the Central Empires of Europe, is always the essential viewpoint from which this exposition proceeds. The events cover the better part of three years, 1917-1919. The materials are to be found in the Congres-

vii

Viii FOREWORD

sional proceedings of the period, in military and naval records and reports of the several departments and bureaus concerned with the war, in the hearings and appendices of the several special investigations and reports, in the enactments, resolutions and executive orders and in the current discussions of engineering, aeronautical, maritime and economic organizations among others. Reports and Minutes of the Council of National Defense are valuable. Nor should the contents of the weekly and the daily newspaper press be overlooked. The more reliable issues are helpful in getting a good grasp of conditions and of events which helped to shape contractual terms, systems and policies.

This task has proved to be full of dif^culties and not a few discouragements, owing mainly to the intricate and bewildering complexity of the mass of materials. The lack of ready access to ultimate sources, among other things, added to the burden of maintaining scientific fidelity in a milieu sometimes surcharged with personal or partisan bias. Under these conditions, however, there has been whipped into shape a tentati\'e statement of the working principles in the light of which public policies were formulated and the hydra-headed problems of war worked out as they arose. The major part of this study has consequently had to be descriptive in character; a minor portion could be given to rigid analysis, and a still smaller part to the tempting formulation of the theoretical aspects of government war contracting. The idea has been kept in view that descriptive analysis should always lead to some helpful criticisms, if not to definite conclusions, in order that sounder methods of administration might result from the exposition of the mistakes and the masteries of the past. For, in the wide survey of the entire panorama of this eventful era in history and economics the masteries of governmental problems far outweigh the mistakes; the patriotic fruitage of national fidelity in contracting enterprise far outshines the profiteering exploitation of a war stricken citizenship, and moral worth triumphs in spite of unparalleled material wastefulness.

FOREWORD ix

For courtesies I am indebted to the various bureaus of the War and Navy Departments, to the committees of Congress which had most to do with the war, to the District War Claims Boards and to many contractors communicated with by letter or interview. Commercial organizations have been helpful in getting the business view^point, as have also the officials of the district offices of the Federal Reserve Bank. To the staff of the Free Public Library, East Orange, N. J., I am indebted for more than the usual facilities and courtesies. Use was made of the Endowment's office rooms and library at Washington while collecting public documents. For painstaking care in the preparation of the manuscript, for verification of references and for helpful suggestions I am sure that this monograph owes most to my wife.

Congressional investigations relating to the war contributed the larger volume of information and opinions. From these the following may be mentioned as the more important sources of research material :

Investigation of the War Department: Hearings before the Committee on Military Affairs, United States Senate, 65th Congress, second session, inquiring into progress made in providing for ordnance, small arms, munitions, etc. Begun December 12, 1917, and extending into 1918.

United States Shipping Board Emergency Fleet Corporation: Hearings before the Committee on Commerce, Senate, 65th Congress, second session, on Senate Resolution 170, to investigate matters relating to the building of merchant vessels and report findings. Begun December 21, 1919. Two main volumes indexed. Volume 8, illustrated.

Aircraft Production: Hearings before the Subcommittee of Senate Committee on Military Affairs, 65th Congress, second session. Begun May 29, 191 8. Two volumes.

Report of Senator Charles S. Thomas, from the subcommittee of the Senate Committee on Military Affairs, August 22, 1918, under Senate Resolution of April 30, 1918, 19 pages, pursuant to Sen. Res. 48, on "Aircraft Production in the United States." Senate Report No. 555, 65th Congress, second session.

Ex- Justice Hughes's Report and Recommendations on Aircraft Production Investigation, transmitted to Attorney General Gregory October 25, 1918. Reprinted as Appendix A to The Congressional Record, December 30, 191 8, pp. 883-914. Gives history of government's aircraft administration, analyzes contracts and summarizes causes of delay in production. The best single summary available.

Operations of the U. S. Housing Corporation: Hearings before the Subcommittee of the Senate Committee on Public Buildings and Grounds, 65th Congress, second session, pursuant to Sen. Res. 371, to report on costs, construction, operation,

X FOREWORD

maintenance and future disposition of public buildings, etc. Parts i ff. Begun December 6, 191 8.

Hearings on Public Buildings and Grounds: House Committee hearings on Sen. Res. 194, directing U. S. Housing Corporation to suspend work on buildings where construction is not over 75 per cent completed and to cancel contracts, etc. Begun January 8, 1919.

Relative to Contracts: Hearings before the House Committee on Military Affairs, 65th Congress, third session, on House Bill No. 13,274, to provide relief where formal contracts have not been made in the manner required by law. Begun December 9, 191 8. Pp. 34. Testimony of Crowell, Goethals, etc.

Hearings on Hitchcock Bill, Sen. 5,261, before Senate Committee on Military Affairs, January 7, 1919, on acquiring lands for establishment of mobilization and training fields for artillery and small arms, including testimony of Secretary of War. Pp. 59.

War Expenditures: Hearings before the Select Committee on Expenditures in the War Department, including five subcommittees on Aviation, Camps, Foreign Expenditures, Quartermaster's Corps, and Ordnance. Sixty-sixth Congress, first session. Begun June 23, 1919, and continued during 1919. Published in pamphlet form for distribution, and numbered as Serials and Parts, as "Aviation, Serial i, Part I."

For a large part of the information here presented these several documents have served the author's purpose. The testimony is usually of a first-hand character, by the official in authority on that particular division of service. Easily the most voluminous source is the hearings last mentioned, on war expenditures. In fact, this testimony on the several matters of military interest covers practically every one of the maj'or fields of inquiry relating to the war. It has been practicable to do no more than refer to some of the most informing testimony, owing to the limitations of this monograph. These documents are literally mines of information on war conditions as they affect contract relations, conditions of production, methods of settlement, etc.

From all of these and other documentary sources one thing stands out in bold relief, namely, that Congress exercised its influence on the conduct of the war not on the military side but preeminently on the side of its economics. And in this respect its influence was felt in three main directions:

I. In historic enactments providing for raising revenues and the appropriation of funds on a scale never before undertaken by any government.

FOREWORD XI

2. In promoting the work of equipping the army by prompt investigation of abuses, delays and official inefficiency in business operations, as criticism of these and other conditions were reflected into the legislative branches of government; and in applying correctives where practicable.

3. By investigating conditions at the end of the war, as to the transition to peace and the liquidation of war assets, so as to formulate sound policies and enforce prompt adjustment, along lines of economic sanity and political safety.

John Franklin Crowell.

Part I — War Contract Conditions CHAPTER PAGE

I Distinctive Character of Go\ernment Contracting 3

II Government Contracts in the World War 8

III Principles of Procedure in War Contracting 13

IV Rise and Fall of Extra-Departmental Contracting 27

V Types and Forms of W^ar Contracts 31

VI Commandeering as a Means of Supply Control ... 42

VII Contractual Role of the Council of National Defense 52

Part II — War Contract Operations I Army Supply Orders and Contracts — Quartermas

ter, Engineer and Medical 63

II Emergency Construction Contracts on Cost-Plus

Plan 74

III Why the Cost Plus Percentage Fee was Adopted . . 81

IV Selection of Contracts under the Fee System 86

V Did the Emergency Construction Contracts Make

Good? 92

VI Army Ordnance Contracts 96

VII Analysis of Standard Ordnance Contracts 107

VIII Control of Costs in Ordnance Contracts 116

IX A Typical Ordnance Contract— Service Rifles 121

X Some Notable Features of the Rifle Contracts. ... 130

XI War Contracts W'ithin the Navy 135

XII Navy's Earlier Uses of Cost-Plus Contracts 137

XIII Standard Manufacturing Cost-Plus Contract in the

Navy 144

XIV Navy's Procedure to Forestall Profiteering 150

XV Standard Contracts Adjusted to Changed Conditions 159

XVI W^ar Contracts of the United States Shipping

Board 169

XVII Kinds of Contracts by the Fleet Corporation 183

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XIV

CONTENTS

XVIII Salient Features of Shipbuilding Contracts 189

XIX Compensation in Requisitioned Ship Program ... . 198

XX Contractors' Fees in Fabricated Shipbuilding .... 209

XXI Extent of Subcontracting in Fabricated Ships. . . . 219 XXII Profiteering versus Patriotism in Hog Island

Project 223

XXI II Policy and Practice in VVooden Shipbuilding Con-

tracts 227

XXIV Aircraft Production Contracts 231

XXV Contractual Maladjustment in Aircraft Relations 243

XXVI Essential Aspects of Airplane Spruce Contracts . . . 253

XXMI Government Contracts for Housing War Workers 263

XXVIII Cost Keeping Methods on Housing Projects 275

XXIX Housing Contract Policy As Affected by the

Armistice 284

Part III — Liquidation, Cancelation and Adjustment I Liquidation of Contractual Assets 287

II Cancelations of Orders and Contracts 305

III Postarmistice Methods of Adjusting Disputes. ... 312

IV Summary and Conclusions 333

Index 353

PRELIMINARY ECONOMIC STUDIES OF THE WAR EDITED BY DAVID KINLEY

Professor of Political Economy, University of Illinois Member of Committee of Research of the Endowment

1. Early Economic Effects of the War upon Canada. By Adam Shortt, formerly Commis-

sioner of the Canadian Civil Service, now Chairman, Board of Historical Publications, Canada.

2. Early Effects of the European War upon the Finance, Commerce and Industry of

Chile. By L. S. Rowe, Professor of Political Science, University of Pennsylvania.

3. War .Administration of the Railways in the United States and Great Britain. By

Frank H. Di.xon, Professor of Economics, Dartmouth College, and Julius H. Parmelee, Statistician, Bureau of Railway Economics.

4. Economic Effects of the War upon Women and Children in Great Britian. By Irene

Osgood Andrews, Assistant Secretary of the American Association for Labor Legislation.

5. Direct Costs of the Present War. By Ernest L. Bogart, Professor of Economics. Univer-

sity of Illinois.

6. Effects of the War upon Insurance with Special Reference to the Substitution

OF Insurance for Pensions. By William F. Gephart, Professor of Economics. Washington University, St. Louis.

7. The Financial History of Great Britain, 1914-1918. By Frank L. McVey. President,

8. British War .\dministr.\tion. By John A. Fairlie, Professor of Political Science, Univer-

sity of Illinois.

9. Influence of the Gre.\t War upon Shipping. By J. Russell Smith, Professor of Industry,.

10. War Thrift. By Thomas Nixon Carver, Professor of Political Economy, Harvard Univer-

sity.

11. Effects of the Great War upon Agriculture in the United States and Gre.\t Britain,.

By Benjamin H. Hibbard, Professor of Agricultural Economics, University of Wisconsin.

12. Disabled Soldiers ant) Sailors— Pensions and Training. By Edward T. Devine, Pro-

fessor of Social Economy, Columbia University.

13. Government Control of the Liquor Business in Great Britian and the United States.

By Thomas Ni.xon Carver, Professor of Political Economy, Harvard University.

14. British Labor Conditions and Legislation during the W.\r. By Matthew B. Hammonds

Professor of Economics, Ohio State University.

15. Effects of the War upon Money, Credit and Banking in Fr.\nce .\nd the United

States. By B. M. Anderson, Jr., Ph.D.

16. Negro Migration during the W.\r. By Emmett J. Scott, Secretary-Treasurer. Howard

University, Washington, D. C.

17. Early Effects of the War upon the Finance, Commerce and Industry of Peru. By

L. S. Rowe, Professor of Political Science, University of Pennsylvania.

*i8. Govern-ment Control and Operation of Int)ustry in Great Britain and the United States During the World War. By Charles Whiting Baker, Consulting Engineer.

19. Prices and Price Control in Great Britain and the United States during the World War. By Simon Litman, Professor of Economics, University of Illinois.

*20. The Relation of the Economic and Social Conditions in Southe.\stern Europe and in Alsace-Lorraine to Conditions of Peace. Two volumes. By Stephen Pierce Duggan. Professor of Education, College of the City of New York.

*2r. The Germans in South America: A Contribution to the Economic History of the World War. By C. H. Haring, Associate Professor of History, Yale University.

♦22. Effects of the War on Pauperism, Crime and Programs of Social Welfare. By Edith Abbott, Lecturer in Sociology, University of Chicago.

23. Mo.netary Conditions in War Times in India, Mexico and the Philippines. By E. W.

Kemmerer, Professor of Economics and Finance, Princeton University.

24. Direct and Indirect Costs of the Great World War. By Ernest L. Bogart, Professor

of Economics, University of Illinois. (Revised edition of Study No. 5.)

25. Govern.ment War Contracts. By J. Franklin Crowell, Ph.D., LL.D. ♦26. Cooperative Movement in Russia. By E. M. Kayden.

THE CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE

2 JACKSON PLACE, WASHINGTON, D. C. * These numbers have not yet been published.

CHAPTER I Distinctive Character of Government Contracting

Payments arranged by contract, even in ordinary times, comprise a major portion of the annual disbursements of modern governments. In times of peace these pubHc engagements in volume of transactions give to national governments a place of primacy among the purchasers of the products of industry and the services of men and women. When, however, the making of war becomes the main business of the state, the proportionate importance of the government's contractual relations with the business world overshadows every other material consideration. Here we have, on the one hand, the mobilizing of the actual and potential economic resources of the belligerent nation; on the other hand, the military and naval organization and operations in all their complexity. Between them the war contracting relations stand as the bridge by which the man power and the materials are coordinated and converted into the means of public defense and destruction of the public enemy.

This vital role of government war contracts has not been fully enough appreciated in the study of the conditions and causes that lie back of the phenomenon of wars. Failure duly to appraise the contractual relations of governments in times of peace is possibly responsible in the main for the almost total absence of treatment of the subject as related to war. Consequently some introductory reference to the distinctive character of the governmental contract, as distinguished from the commercial contract, is deemed advisable. It will help to define the viewpoint and to disclose the features of this most basic structural relation of modern governments to the economic order of the nation and the world.

General Features of Peace Time Contracting

In the first place, this branch of business relationship is unique in other respects than mere volume or gross value. Even a casual comparison of contractual practices and principles in this field with those in vogue in commercial circles will disclose many inherent peculiarities. These differentiating elements are of such a character as to mark ofif this domain of bargaining as a realm of methods and relations quite unto itself. So much is this the case that one can not go far into the subject under consideration without convincing himself that economics has here a promise of almost untouched research for the student of the future. Government has much to learn, from this source, about business relations; and business concerns should more readily avoid what is unsound in their efforts at private service of public interests.

The distinctiveness of the federal contract arises largely from the fact that its requirements belong to fields of operation in which the government has a monopoly of functions. This applies primarily to the War and Navy Departments, but by no means exclusively so. Generally, the government has its own periods for making its purchases. It follows its own methods of carrying out its agreements, to which the trade must conform. It often buys in quantities quite unlike what commercial purchasers require. In some of its departments the question of reserve supplies enters fundamentally into the contractual program. Furthermore, its standards of both kind and quality are distinctive. It often requires that deliveries be made in sizes and forms and packing conditions after one plan for the army, another for the navy and a third or more for the civil administration.

Not only have the general provisions regulating contracts in this sphere of business differed for each department, but within the same department of government the different bureaus have had an extraordinary liberty of specification, even for the identical commodity. In fact, some bureaus have had so wide a scope of specialized requirements as to .give to their contracting system a still more attenuated variety of bargaining units under divisional if not sectional contracting officers. Compared with commercial contracting, these governmental agencies are prone to require far more elaborate details in specification. As they operate in ordinary times, they insist on stressing the standards of inspection much more rigidly. So, too, they enforce more exactly the penalties for nonfulfilment. As the final appeal, outside of the Court of Claims, is generally to the second party to the contract, the two members in the agreement are by no means on an equal footing in final adjustment of disputed points. Owing in large part to these and other conditions, dealings with the government on this basis have tended to become a more or less specialized branch of contractual undertaking. Although accompanied with its inviting lump sum awards, it is on the contrary beset with some of the more forbidding business hazards. Even though banking credit is usually responsive to advances on hypothecation of a public contract, the hazards involved in acceptable execution are by no means lacking in speculative quality. It is not, therefore, surprising that the enterprise of filling government contracts and orders, whether in the fields of construction, of manufacturing or of merchandising, should tend in times of peace to fall into the hands of a comparatively limited class and coterie of competitive bidders. ^ It is common knowledge in business circles that this group of successful contracting concerns is not as a rule fairly representative of the better types in the industries and trades directly concerned. As a rule, the conditions of award have been too divergent from the prevailing commercial standards to encourage wide competition. The exactions of compliance have been too prone to emphasize incidentals at the expense of essentials to make it worth while for many of the most capably equipped to share in the bidding. The terms of compensation have been beset with too many routine reports and too much "red tape" to attract and hold that type of business firm which places

' Investigation of the War Department, Hearings before Committee on Military Affairs, U. S. Senate, 65th Cong., 2d Sess., pp. 3, 1453, 1603. Testimony of John P. Wood and Lincoln Cromwell.

probity and fidelity to the public interests above the amount and rate of pecuniary profits. ^ Consequently, government contracting, to a far larger extent than is for the public welfare, had gravitated in some of its more vital relations with business into the hands of subaverage grades of business standing. Hence, the net effect of the policy and practices in the official attitude was not only to narrow down the contracting interest in governmental needs to a limited, specializing class of concerns; but also to exclude in times of peace, from that group on which the government had to depend in an emergency, the more capable, competent and public spirited of concerns in their respective fields of business.

Basic Factors in War Time Contracting

Against this rather narrow background of peace time experience, a new chapter in contracting history opens. With amazing rapidity the shadow of the European War was lengthening in the direction of America. Almost before we had recovered from the shock of the collapse of international relations on the older basis, we suddenly discovered that we had become the arsenal for the waging of a world war. That situation proved to be a boon of inestimable value as a preparation for national defense in the business of war contract work. Probably the most valuable lesson which came out of the two years of American service as the neutral reservoir of war materials and munitions was that of the necessity for the reconstruction of the war contract itself.

That was accomplished by three definite acts of Congress. One of the reconstructive measures was the Act of National Defense of June 3, 1916,2 ten months before the United States entered the war as a belligerent. A second enactment bearing on the business of war contract relations was the act creating the Council of National Defense with its Advisory Commission. That act was approved August 26, 191 6, so that both of these reconstructive provisions became laws

^ The Engineering Record, May 24, 191 7, p. 428. ' Public, No. 85, 64th Cong. (H. R. 12,766).

before the outbreak of war on our part. A widespread and overruling demand on the part of public sentiment for a better state of preparedness insisted on profiting by European experience. Under the terms of these two acts the United States finally entered the war against the Central Empires. We were not long in discovering at appalling costs that neither the commandeering of the war contractor, nor the voluntary mobilization of the industrial and the commercial agencies and resources of the nation could win the war, without reorganization within the War Department itself in its methods and systems of handling contracts. Congressional investigations disclosed newer methods emerging and not always within the limits of the law.

That much belated remedy was expedited by the Overman Act of May 20, 1918. It applied especially to the coordination of departmental agencies. Its purposes were to eliminate the abuses of disjointed competition of the government against itself, to consolidate the agencies and to concentrate the aims of military and naval power on the one thing — the winning of the war against Germany. At one fell sweep, this act enabled the war authorities to centralize contracting operations upon a scale that promised to meet with reasonable promptness the needs of the preparing process at home and those of the Expeditionary Forces abroad. Although the Overman Act came six months after the actual reorganization of the contracting machinery of the department had begun, it had the virtue of heading the government in the right direction in what proved to be the home stretch of the war. The era of unreconstructed contracting had given the country three examples of how not to do things. These appeared in the bargaining operations of the Quartermaster General's office, in the delays and difficulties of the Ordnance Department and in the misleading prophesies of the aviation program of the Signal Corps. All of these preceded the passage of the Overman Act. As the last link in the series of contract reorganizing enactments, however, it had a basic relation to both what had gone before and what followed it.

CHAPTER II Government Contracts in the World War

Government war contracts as here considered refer to that period included within the years of 1917, 1918 and 1919. During most of this period a state of hostihties existed between the United States and the Central Empires of Europe.

The scope and character of this inquiry is not, however, limited strictly to the war contract expenditures on the part of the two federal departments which bore the brunt of military and naval enterprise. It also includes other departmental and special branches of government. These, although under civilian auspices, nevertheless supplemented and effectively fortified the two regular military establishments. Such were the United States Shipping Board, the United States Housing Corporation, the National Council of Defense. All of these and some others figured in a more or less direct way in the contractual experience of the government under conditions of war. No treatment of the subject would, therefore, be adequate which failed to take into account the contribution of each of these elements to the situation. Each in its own way throws some essential light on the process of contractual development. And it is only by consulting this wide and richly equipped range of governmental experience that we can hope to answer profitably the questions of what policies were followed, what problems arose and what principles best served the people and their government through this era.

Enormous Volume of Contract Operations

The size of the task thus proposed is by no means a modest one. It involves a body of information which has as yet had almost no attention on the part of research. Its scope is rapidly expanding with the economic powers of government. And the business contract in general, as well as that between government and private enterprise, is one of the oldest as well as one of the most fundamental instruments in the evolution of modern economic life. Under this form of pecuniary agreement by far the larger proportion of war expenditures was disbursed on the stupendous scale of outlay which characterized the prosecution of the world's war. The director of finance of our War Department indicates only part of the problem, when, in his capacity as one of the government's principal contracting officers, he reports disbursements of $14,544,610,213.65 for the War Department alone, from April 6, 1917, to June i, 1919.^

Probably no exhibit of contractual operations could be more illuminating in this connection than that which shows along what lines the aggregate just quoted found its way through the channels of military disbursements into the possession of the people. According to the official statement of the Director of Finance the thirteen different departments, corps or bureaus in the War Department expended during the period above indicated $12,704,822,224.49 within the limits of the United States, and $1,839,787,989.16 through the disbursing officers of the American Expeditionary Forces abroad. This division of outlay is amplified in the table following:

TOTAL SUM CREDITED TO WAR DEPARTMENT DISBURSING OFFICERS FROM APRIL 6, 1917, TO JUNE i, 1919

(Office of Director of Finance, War Department)

Expended by

Department Expended in American Expe- Total

or Corps United States ditionary Forces Expenditures

Judge Advocate Gen. None None

Chemical Warfare

1 Hearings before the Select Committee on Expenditures in the War Department, House of Representatives, 66th Cong., ist Sess., Ser. I, part i, p. 40.

It thus appears that the distribution of disbursements on a geographical basis gives the domestic field 87.3 per cent of the total, leaving 12.7 per cent as the proportion for disposal in foreign lands. But of far greater import is the distribution among the se\cral divisions of the departmental service. This analysis brings into clear relief the fact that it is the contracting for supplies and munitions that makes war expensive. The Quartermaster Corps, the main supply agency of the department, and the Munitions Department, both of whose functions are now consolidated in the Purchase, Storage and Traffic Division under the General Staff, had combined disbursement credits of $12,408,189,225.76, or 85.3 per cent of the 'department's entire outlay. Of this proportion 56.8 per cent, or more than one-half of the departmental expenditure, reached the market through the Quartermaster Corps; and 24.8 per cent for the production and distribution of munitions. Outlays for supplies were just twice as large as those for ordnance account, and the two together account for almost seven-eighths of the expenditures of the War Department.

Dynamic Import and Scope of War Contracts

War contracts have a dynamic aspect of tremendous economic import. In the transition from the peace time era to the war contracting regime there is a sudden enhancement of governmental purchasing power. For instance, the regular and deficiency appropriation for the service of the entire military establishment (army) for the year ending June 30, 191 7, was only $384,496,086. Prior to 19 14 it averaged about $100,000,000 a year. For the year 191 8 it rose to $9,016,688,201, and for 1919 to $15,416,440,084.

To this grand total of $14,544,610,213.65 of army disbursements must be added $4,324,279,754 for the corresponding three years of naval appropriations; also the amount of $2,732,786,821 on account of Shipping Board contracts, and of $150,000,000 for the Housing Corporation under the Department of Labor. The Department of the Interior figured to