Termination of War Contracts

Report Outline
Problems of war contract termination
Liquidation of World War I Contracts
Liquidation of World War Ii Contracts
Special Focus

Problems of war contract termination

The war contracts termination bill now awaiting action by the House is the most important legislation affecting American industry to come before Congress at its 1944 session. Because war production at present forms so large a part of the nation's economic activity, the effects of the contract-termination policies finally adopted will be felt far beyond the war plants themselves and long after the war has come to a close.

The need for early action by Congress was stressed in the Baruch-Hancock report on reconversion policies. In the opinion of John M. Hancock, co-author of the report, the problem of contract termination dominates all others that will confront the country with the cessation of hostilities. “I am not thinking of an early end of the war,” he said, “but no matter when it comes, we are not going to be ready.”

A contract termination bill sponsored by Sen. George (D., Ga.) and Sen. Murray (D., Mont.) was given quick approval by the Senate, May 4, and is at present pending before the Judiciary Committee of the House. It would provide machinery for dealing with claims arising out of present production cutbacks as well as the much larger volume of claims to be created by cancellation of contracts at the end of the war. The desirability of final enactment of legislation to govern termination of war contracts before the congressional recess in June is indicated by the fact that changes in military requirements have already resulted in orders for the liquidation of government commitments aggregating some $13 billion. A report by the War Contracts Subcommittee of the Senate Military Affairs Committee, May 12, said contracts were now being terminated at the rate of $1 billion a month and sales of surplus war materials were averaging about $15 million a month.