Evening star., 1935-04-14
FAILURE ADMITTED
BY TOWNSEND|TES
Friends in House Say Pro-
qram Is UnWorkabIe.
To Draft Changes.
(Copyrieht. 1850

The Townsend plan bubble for a
quickly spent old-age pension of 5000
a month blew up in the House of
Representatives yesterday when its
friends were forced to admit that the
program, as popularized, was not
workable.
Even if the four point tax levy on
transactions, incomes, estates and
gifts, provided in the revised Nc
Groarty bill, should live up to the
most rosy of revenue estimates, they
ruefully acknowledged. the first-year
pensions could not exceed $50 a
month. The highest estimate of ini-
tial revenue was S4,000,000 and the
prospective pensioners would number
between 100000 and 100000 per-
sons.
The admission came as Representa-
tive James w. Mott, Republican, Of
Oregon, who favors more liberal old
age pensions than provided in the
administrators social security bill,
explained that the new McGroarty
bill, which may be offered as an
amendment to the security measure,
is not the original scheme of DR.. F. E.
Townsend.
AS a friend of any program liberal
izing the $15-a-month old-age pension
of the security bill. Mott said he
wanted the members of the House to
know that it was the revised Nc
Groary bill that probably would be
offered. He said he thought members
of the Townsend Clubs and others
ought to know the difference made by
the revisions incorporated in the bill.
It could not, he added, provide more
than $50 month.
Changes Admitted.
Questioned by Representative Frank
N. Buck, Democrat, of California, and
John K. Martin, Democrat, of Colo
RADIO, brought out the figures, and 1t
remained for Representative Isabella
Greenway, Democrat, of Arizona,
strong supporter of the Townsend
plan. to explain that the changed sit
uation had been discussed fully for
TownSendites in the clubs publica-
ton issued under date of April 8.
To many members of the House,
the news was a revelation, and may
serve to make votes for the compro-
mise despite the heavy tax levy the
plan contemplates.
Again Representative John S. Nc
Groarty, Democrat, of California, au-
thor of the first and second Townsend
plan bills, indicated that he had little
hope for action in the present Con-
gress. Regretfully he said:
I'VE will take what we can get for
a starter We are anticipating a re-
lection at this session. We are al
ready laying our lines for the Seventy
fifth Congress and organizing Town.
send Clubs in every congressional dis
trict.
Our first bill was crude. This
revised bill is scientific and states
n1anlike and is not being jeered at
any more. None will be able to say it
is unworkable."
Four Taxes Proposed.
AS revised, the McGroarty bill pro-
vides for four separate taxes to raise
the fund necessary to pay pensions
to all over go years, not to exceed
5000 month, and to be spent within
the month paid. 1t does not, as in
the first instance, authorize the pay
ment of 5000, but as much of it as
can be paid out of the fund raised
by the taxes.
AS explained by McGroarty. the
taxes should provide a fund sufficient
to pay $50 a month for the first year.
with 500 at the end of the second
year. At the end of the third year
the spending procedure provided would
bring recovery sufficient to pay s125
to $3.50 monthly in the old-age pen
sions, and by the end of the fifth
year the amount should reach the
limit. None would get more than
S2,400 year.
Chief among the taxes proposed is
the transaction" tax, newly named
for the old sales tax. but wider in its
application. The tax section of the
revised bill, from which experts said
that not more than $4,000 900 900
could be raised at first, follows:
Section 2. (A) There is hereby
levied a tax of 2 per centum upon the
fair gross dollar value of each trans
action done within the United States
and territories; also, in addition to all
other taxes, a tax equal to one-tenth
of the tax levied upon all incomes
under the provisions of the revenue
act of 1884 or any amendment there
to; also, in addition to all other taxes,
tax of 2 per centum upon the fair
dollar value of all transfers of prop
erty by devise, bequeSt, or other testa-
mentary disposition or legal descent
and distribution of property, as now or
hereafter taxable under the provisions
of the revenue act of 1884 or any
amendment thereto, and also, in ad-
dition to all other taxes. a tax of 2
per centum upon the gross dollar value
of every gift in excess of the fair
value of $780,"