MONEY IS "ONLY THE FIGURE"

Evening Post, Volume CXXI, Issue 78, 1 April 1936, Page 10

MONEY IS "ONLY THE FIGURE"

Years ago economists thought that nearly everything had been said about old age pensions, whether based (like New Zealand's) on taxpayer revenue, or wholly or partly contributory. But Dr. Townsend, of California, picking up the idea of time-limited money and hitching it to old age pensions, started a new turn of the wheel in the form of Old Age Revolving Pensions, or the "Townsend Plan." The Plan is to pay all persons over sixty years of age a monthly pension (maximum j 200 dollars, say £50) provided the pensioner spends each monthly cheque within thirty days of receipt; the money to be raised by a 2 per cent, tax on all transactions. It will hardly be denied that a 2 per cent, tax, if considered in itself, is a burden falling mainly on wageearners. But supporters of the Townsend Plan say that while the transactions tax is being taxed out of people's pockels at the one end, at the other end of the machine a stream of spending, by pensioners, of time-limited money is pouring forth, enriching all the founts of industry, oiling all the machinery of production, and lubricating the mechanism of human good will. Thus, they say, the Revolving Pensions will give back to all people at the rear end more than it takes from most people at the front end. The United States will grow gr.eat by virtue of its spendful grandpapas. But critics see the revolving fund piling up a growing snowball of inflation. . They do not value velocity of circulation obtained in this way, and cannot see that anybody, old or young, will receive more goods, or services if money values are altered by the Townsend revolution. It is possible to see, at any rate approximately, what is to go in at the front end of the machine; and the critics state: The taxes required under the Townsend Plan amount to nearly half the total national income, more than half of all wages and salaries, eight times as much as all dividends, and more than three times the gross income of all farms. Unfortunately it is not possible to see as clearly, or to foresee, what will come out at the benefit end of the machine, and consequently Old Age Revolving Pensions, Ltd., replies to the above calculation with a piece of conjecture: "Money is only the figure of the Townsend Plan; the wealth will come from the means of production." Shortly, then,: the question is whether the circulation of money that an old age pensioner is compelled to spend within thirty days of receipt will give production benefits not nullified by inflation. It may be added that a leading antiTownsend Plan member of the House of Representatives is Mr. C. J. Bell, a supporter of old age pensions. So many people have been attracted by the Townsend idea that they have subscribed widely and have put the promoters heavily in funds. Recently in the United States it has been alleged that the promoters, in their activities, have been spending subscribed money too freely; and questions pointed.in that direction, addressed to leading Townsendites, have figured in the proceedings of the Congressional inquiry. Today it is cabled that the latest quarter shows a marked fall in subscriptions to Old Age Revolving Pensions, Ltd. It is of course not in order to anticipate the report to Congress, but it should prove an important document to subscribers, to people on whom the 2 per cent, tax would fall, and to political party managers who stand in fear, in this election year, of a bolt by individual Democrats and individual Republicans to the Townsend. banner as a pure votecatcher. Finally, it seems that the Townsend leaders have broken with Congressman McGroarty, who introduced a Bill to promote the Plan, only to find that they and he do not in fact agree.