Simple Plan

In Washington one evening last week a gaunt, kindly old man uprose before a small group of people, including 20-odd Congressmen, and began to talk softly but zealously. "The Depression," said he, "was caused by only one thing -- failure of the country's purchasing power. The solution is simple. Give all the aged a pension and the task of spending it every month, before they could receive more. Purchasing power will be restored. Business will boom. Prices will go up, of course. But what's the difference? Everyone will have plenty of money. There will be no more poverty. Everyone will be working."

On & on for more than an hour rambled the gentle oldster who, having seen much misery and evil in his lifetime as country doctor and health officer, had conceived a Plan to end it all. His Plan would banish crime "because almost all crime comes from, poverty." It would banish bootleggers because it would entail government licensing of all business. In six months, for only $9,600,000,000, it would bring the real relief and recovery which the U. S. had not obtained by spending "$20,000,000,000 on charity, crime and government alphabetical soup relief" in the past six months.

For nearly five years the Congressmen in the audience had been listening to just such well-meaning, naive schemes for ending Depression overnight, insuring Prosperity forever & ever. But none of them laughed at 67-year-old Dr. Francis Everett Townsend. Some of them even joined the Congressmen's Townsend Club which he organized after his speech. For the good doctor's Old Age Revolving Pensions scheme, better known as the Townsend Plan, had by last week become one of the biggest political facts in the U.S. The early California groundswell of sentiment in its favor had grown to a tidal wave, battering at nearly every door in House and Senate Office Buildings.

Three months ago some 2,000,000 citizens had put their names to petitions urging Congress to enact the Plan into law (TIME, Oct. 15). Last week Dr. Townsend claimed 25,000,000 such signatures. The 644 Townsend Clubs of last October had become 25,000. At last week's Washington rally Oregon's Representative William A. Ekwall spoke the mind of many & many a Congressman when he declared: "About 120,000 people in my district have signed a Townsend petition. When I first heard of this I laughed at it. Then I got the smile off my face. It's like a punching bag -- you can't dodge it. If we don't pass it this session we'll have to meet it when we get back home."

Plan. Dr. Townsend proposes to pay every U. S. citizen over 60 (except habitual criminals) a pension of $200 per month, on condition that he or she retire from all gainful work, promise to spend the whole $200 within the month in the U. S. The money -- about $20,000,000,000 per year -- is to be raised by a Federal tax, how large or on what Dr. Townsend seems undecided. At first he proposed a 10% retail sales tax. As late as last week he was talking of a 2% tax on all financial transactions. But when one of his Congressman listeners objected that the Plan would require a 20% tax Dr. Townsend readily agreed. "You're right," smiled he, "but who would care about that?"

Dr. Townsend has been in Washington since mid-December, expects to stay until mid-February when the monster petition being assembled at his headquarters in Long Beach, Calif, should be ready for submission to Congress. A bill embodying the Plan has not yet been drafted. So great is the rivalry among Congressmen for the privilege of introducing such a measure, says Dr. Townsend, that a movement is under way to have it proposed jointly by all favoring Congressmen. Undismayed by the House's new gag rule (see p. 13), California's Representative John Steven McGroarty, who is also his State's "Poet Laureate," last week roared: "We don't give a hoot how many names it takes [to get the bill out of committee]. We'll get the signatures because the members of Congress want to come back to Congress and if they want to come back they'd better get in step. . . ."

Opposition. Manufacturers leap to fight the 30-hr. week. Bankers line up solidly against inflation. Catholics battle birth control. For almost every other economic or social measure there can be found a body of citizens who, through self-interest or principle, will offer organized opposition. But for the Townsend Plan no such body exists. Contemplating a scheme which would alter the whole economic and social structure of the U. S., no individual citizen has yet felt personally & sufficiently aggrieved to organize an anti-Townsend club. Most thinking citizens have ignored the Plan, or dismissed it as too remote or fantastic to be worth worrying about. Congressmen, who know better, have been struck publicly dumb by the hundreds and thousands of letters, telegrams, petitions pouring into their offices. Even President Roosevelt has so far dared to condemn the Plan only by inference when, on the subject of old age pensions, he told the Conference on Social Security in Washington: "Organizations promoting fantastic schemes have aroused hopes which cannot possibly be fulfilled" (TIME, Nov. 26).

Left to breast the tidal wave publicly have been journalists. Minute is the editorial writer's audience, compared with the multitudes whom Townsend propagandists reach by word of mouth, pamphlets, speeches, club meetings. But last week three of the best & best-read columnists in the land jabbed at the rosily glittering Townsend bubble.

Wrote Pundit Mark Sullivan of the New York Herald Tribune: "The zeal of those promoting the plan is evangelical, almost fanatic. The pressure on Congress is much greater than was ever brought by veterans for the bonus. . . . Promoters of the bill say it is supported by 10,000,000 persons over 60,10,000,000 more who have dependents over 60, and 20,000,000 more who expect to become 60 some time --and to whom the plan looks good. That would be about all the voters there are....

"Reasoning with the Townsend Plan advocates does no good. Showing them that the plan would consume $24,000,000,000 a year, while the total national income is only $48,000,000,000, does no good. The thing is not in the world of reasoning or of statistics. It is in the world of mysticism. . . .

"Let us assume, for the sake of illustration, that the plan is pushed to actual enactment by the sheer zeal and determination of its believers. ... In the end, I suspect, there would be violent inflation -- a marking up of prices of everything to figures at which the business turnover could stand a tax of $24,000,000,000 a year. At that point, the folk over 60 might be getting their $200 a month -- but they would find they could not buy the automobiles they now think they could. A haircut would cost say $2 ; a sexagenarian meal of bread and milk would cost $5."

Wrote Scripps-Howard's tart, smart Westbrook Pegler: "There is a sentimental, silver-threads-among-the-gold tradition that people of 60 years and up are uniformly wise and sweet and kind, and also pathetic. There is a conspiracy to write off all the laziness, incompetence, wastefulness and all-around uselessness of which they may have been guilty . . . while they were putting in their time. The Townsend Plan makes no discrimination. It would pension, at the rate of $200 a month, a vast number of itchy old loafers who never were willing to pack their own weight and earn their room on earth at any time in their lives. . . . For a President to admit, however, that such a thought had crossed his mind would be to arouse the phony fury of all the mammy singers in the country and bring down upon himself the accusation of slandering every man's dear old mother and dad. The opposition, "If there were any truth whatever in the theory. . . ." therefore, must deny itself the use of a very important point in the argument. . . .

"If the scheme is adopted there should be one important amendment in the interests of another class of citizens also generally held to be pathetic. These are the unfortunate orphans. The term poor orphan is generally held to mean only juvenile orphans, but the Townsend Plan would work a serious injustice to many poor orphans of mature years.

"Under the Townsend Plan a diligent shirker with a living mother and father, both 60 years old or more, would be able to retire permanently and support his own rising brood of government guests on the monthly income of his old parents, which would amount to $100 a week. His wife, too, might have living parents also receiving their $400, and on $800 a month the old people would be able to do very well for themselves, their children and their grandchildren. . . ."

Wrote Pundit Walter Lippmann of the New York Herald Tribune: "This sum [for pensions] has to be raised by a general sales tax. Retail sales this year have been about $30,000,000,000. So the Townsend Plan would have meant that for every dollar anyone spent in a store this year he would have had to pay an additional 70-c- tax. . . . Anyone can figure out for himself the minimum that the Townsend Plan would cost him; he has only to subtract about two-fifths from his expenditures. . . .

"Dr. Townsend's error lies in forgetting the simple truth that someone must produce the wealth which is consumed by the nonproducers, be they infants, old people, sick people, the unemployed, the idle rich, or the criminal classes. If Dr. Townsend's medicine were a good remedy, the more people the country could find to support in idleness the better off it would be.

"Dr. Townsend is in my opinion a public benefactor. He has succeeded in inventing a conundrum which reduces to absurdity a whole mass of ideas that have had great vogue during the depression. . . . They all derive from the same notation, spent which is more that they if would people be richer. worked . . less . The depression itself is the most drastic limitation of production ever experienced. The population on relief is the largest number of people ever supported in idleness. If there were any truth whatever in the theory that a nation can become prosperous by not producing, then the depression itself should have made us roaring rich."

In Washington, Dr. Townsend disposed of Pundit Lippmann's argument with ease. "A very careless job of rationalizing," said he. "My plan is too simple to be comprehended mann's." by great minds like Mr. Lipp

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