RECOVERY: 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?"