Harry A. Wheeler to Woodrow Wilson

The War Service Executive Committee of the Chamber of Commerce of the United States has been in session here this week giving special consideration to questions which are coming from business interests in every direction, as to the cancellation of war contracts and the transfer from war to peace conditions. It has learned with much satisfaction of the thought which is being given to this problem and the plans you have in mind for maintaining centralized control, during the period of readjustment.

As you are doubtless aware, the cancellation of contracts by some government agencies during the last ten days has caused a great deal of apprehension and disturbance, the extent of which, fortunately, has not attracted public attention because the war news has so greatly overshadowed it. The developments incident to the cancellations referred to indicate the difficulties we will have to face unless the transition is gradual and the vast labor and financial interests involved are most carefully safeguarded. The stoppage of work in the small number of instances where steps have already been taken is causing uneasiness among the banks which in almost every case are extending credit to the contractors, and is likewise affecting the credit of large numbers of sub-contractors who are supplying materials to the principals.

The alarm apparent in other industries is, however, the most serious incident of the matter as indicated by the information reaching our Committee from various business interests. The statements of plans proposed to deal with these difficulties now being made public will have a tendency to allay this apprehension, but our Committee desires to suggest the advantage of the earliest possible announcement of a comprehensive scheme for meeting the emergency and preventing the possibility of panic.

In creating new machinery, or adjusting that now in existence, full consideration will no doubt be given to the necessity of harmonizing the policies of the various departments engaged in war work in their action on the cancellation of contracts and the matters affected thereby.

It seems to us that it is possible to work out certain common principles which should obtain in all government departments in affecting settlements on contracts now to be stopped and adjusting them on a fair basis. We realize, of course, that no policy can be fixed which will apply in all cases. Nevertheless, we believe that the principles recognized in all departments should be consistent so far as possible. If one bureau, or department, follows its own ideas and another pursues a different course it seems to us that it will lead to endless controversy and confusion. For this reason we believe the agencies set up in the various bureaus and departments to deal with the question should be controlled by some common authority in order to prevent great difficulty.

Pending the development of an adequate organization, we earnestly hope that a clearance committee may be appointed at once to which will be referred all proposals to cancel contracts, with instructions to all departments that cancellations shall not be made without the approval of this committee, in order that raw materials which will be released by the stoppage of war production may be allocated to industries able to use them immediately for peace-time needs. We are of the opinion that war contracts should not be canceled until provision is made for the absorption of these raw materials.

Another serious situation is that involving the protection of values in stocks of raw materials on hand, which a very large number of manufacturers engaged on government work purchased at the high prices which have prevailed and are now carrying. If, through sudden cancellations, these stocks are now freed and no arrangement is made for their utilization in some other direction, there is likely to be a very great decline in prices temporarily at least, until demands in other directions assert themselves.

We are sure from the statements already made public that most of these matters are receiving earnest consideration, but the inquiries made of our Committee have been so general and insistent that by direction of the Committee I am venturing to convey to you thoughts concerning some phases of the problem which are causing general concern among business men just now.