Evening star., 1936-06-18
ECONOMIST RAPS
TOWNSEND PLAN
Transactions Tax Would
Bankrupt Business,
Probers Told.
BY JOHN c. HENRY.

NolAby PCA NClAI Va AIdll business
would be In bankruptcy within cne
year under the Townsend old-age
pension plan unless the transactions
tax proposed in the plan were passed
on Immediately to the consumer. the
special House Investigating Commit
tee was told today by Robert R. Doane,
New York economist.
Administrative costs for collecting
the proposed tax and disbursing the
pensions would amount to 81 600 O00.-
600 in a years tournover of $4,000
600, 900, Doane said. The admin
istrative problem would be worse than
in the bootlegging era, he said.
Unless the profit rate nsUch busi-
ness as security sales should be mag
nified greatly. Doane continued, this
business would dry up completely In
illustration, he declared the brokers
profits on sale OF 100000 Government
bonds is about $40, but a per cent
tax on the transaction would be
$4,000.
Such a circumstance, he said, would
jeopardize Government financing.
Doane's testimony featured the clos
ing of the House committees personal
appearance program. as it was an
nounced that no further hearings
would be held.
Cites Misrepresentation"
In opening his testimony the econo-
mist charged that the Townsend
Weekly is persisting in "misquoting and
misrepresenting" him as supporting
the economics Of the plan.
Raymond Manning, tax expert at the
Congressional Library, followed Dosne
on the stand and submitted a num-
Der Of tables on transactions tax re-
ceipts in foreign countries.
Selecting France and Germany as
countries having levies similar to that
proposed in the Townsend plan. Man.
ming said receipts had been disappoint-
ingly small in each case.
Before the committee met. Repre-
sentative Hoffman, Republican, of
Michigan. had filed his own report on
the committees investigation, accusing
DR.. Francis z. Townsend of having
"delusions Of grandeur" and presiden-
tial ambitions.
The full committee report is now in
preparation, with permission being
granted yesterday by the House for The
printing of 200 900 copies The House
also sanctioned the printing of 10000
copies Of the hearings Ordinarily,
only about 1000 copies of committee
hearings and reports are printed, but
in order that the findings of the In
vestigating Committee might be widely
circulated for campaign use. the au-
thority to print the extra volume was
sought.
In his advance report. Represent
ative Hoffman charges that Townsend
did not even originate his pension
plan, "cribbing" 1t from one c. Stewart
McCord
Conclusions Set Forth.
The conclusions set forth by Hoff- >
mans report follow in part:
That the plan had been used by Dr.
Townsends organizations =" to COL
lect more than s1,000.O0O from men,
bers of local clubs and that this sum
has been used in large part for .he
enrichment of DR.. Townsend and his
associates, who in turn have inspired
false hopes in the hearts of millions of
elderly, needy people. '''
That DR.. Townsend has de-
lusions Of grandeur and sees himself
as presidential candidate
The record further discloses that
the so-called Townsend plan is an
economic impossibility.
To tbs end Congress should -
give the necessary assistance to the
States in solving the problem. Legls-
lation should be enacted requiring the
Federal Government to give to each
State. if the States cannot make COM
pletely adequate provision from their
own funds, an amount equal to that
appropriated by the States for the re-
lief of the citizens of the State All
relief funds should be administered
through local agencies to those who
are in need and in accordance with
their need
Such legislation should at all times
haNC al fIllIlu bIlc IdCI lIldl WOIhbTS
are to be protected in their earnings:
that home owners and laborers are not
TO have their property or their earnings
taken from them except as the gen.
eral welfare may require that they
contribute portion of their income to
relieve actual distress and want: that
no one should be permitted to go hun
CRY or cold or without suitable CLOTH
ing; but that, on the other hand. no
one physically able to work should b.
permitted to loaf. to live in idleness
at the expense Of the thrifty and the
industrious.
Under no circumstances should
want, suffering or hardship. dependent
old age, be exploited to obtain political
support"