TOWNSEND PLAN

Evening Post, Volume CXX, Issue 148, 19 December 1935, Page 9

TOWNSEND PLAN

OLD AGE PENSIONS

SUCCESS IN AMERICAN ELECTION

A POLITICAL SHOCK

United Press Association—By Electric Tele-

grupli—Copyright;

WASHINGTON, December 17.

. Partisan politicians, both Republican and Democratic, received a shock tonight when the returns from a special Congressional election in Michigan revealed that an advocate of the Townsend old age pension plan had defeated his Democratic opponent by almost a two-to-one majority. The successful candidate, Mr. Vernier Main, a Republican, drew . tremendous support from rural sections, where not only in Michigan but throughout the nation Townsend advocates appear to be effecting strong "organisations.

The pension plan, which has been the subject of much agitation during the past few years without receiving any substantial support in Congress, would grant 200 dollars a month to all individuals over the age of sixty regardless of their need, at an estimated cost to the Government of over 8000 million dollars a year. Recently Dr. Townsend, the founder of the movement, declared that he had thirty million followers, and that they would .demand support from every Congressional candidate in the 1936 elections on a threat to exert their political power against any refusing. , Many political observers, while believing Dr. Townsend's strength is over-estimated, say the ; movement is spreading like wildfire throughout the W.est, and may elect a sizeable bloc in the next Congress.

The Townsend Plan, conceived by Dr. Francis E. Townsend, was announced at Long Beach/ California, in the summer of 1934, and is one of a series of inflationary and long-range projects of which the EPIC plan of Upton Sinclair and the "Share our Wealth" movement of the late Senator Huey Long are the others best known. The Townsend Plan, later supported by organisations inlforty-seven States land urged on the President by the signatures of 3,000,000 people, according to the announcement of its originator, is very simple. It proposes a 2 per cent, tax on "all financial and business transactions," a proceeding which would raise, it is calculated, about 20,000,000,000 dollars (£4,000,000,000) a year. This money will ■ be used to provide pensions to all wage and salary earners, who will be compulsorily retired from gainful pursuits at the age of 60 and thus make way for the absorption of the \ unemployed. Were this carried out today, Dr. Townsend asserts, there would be 4,000,000 jobs immediately available for those out of work. The, retired, workers would then receive a standard pension of 200 dollars a month (£4O), which must be spent in the same month. Ultimately, the doctor calculates, the plan would remove 8,000,000 people from active work. In order to start the plan the Government would have to furnish the first month's pensions; after that the sales tax would provide the 'finance. In this way, the doctor argues, there would be an enormous addition to the national spending power and all industries would be extended to the utmost, in order to provide the* necessary goods. The future, as Dr. Townsend sees it, would be a perpetual boom. Latterly he has sometimes referred to the possibility of a 10 per cent, sales tax instead of -2 per- cent., arguing that the great expansion of business would in effect reduce this higher figure very greatly. Governor Merriam of California has been one of the supporters of the plan, and when a vote was.taken in the House of Representatives 54 members revealed themsejves in favour of- the scheme. In the nation, Dr. Townsend has said, there are between 20,000,000 and 25,000,000 people who are behind his project.- ■