Evening star., 1938-09-01
By the Associated Press.

SAN FRANCISCO. Sept. Cali
fornia took long step yesterday to-
ward the creation of a new and shin
ing promised land for its great mass
OF economically submerged oldsters-a
realm lined with "self-redeeming
money" for all non-workers over 50.
Disregarding the objections of Pres
ident Roosevelt and an imposing
array of economists. bankers, Com
munists, businessmen, farmers and
labor organizations, its avalanche Of
Democratic voters nominated sena-
torial and gubernatorial champions
and in so doing defeated the veteran
Senator William Gibbs McAdoo.
Conceived in a Los Angeles cafe
bnly last October by Lawrence Allen.
a Hollywood lawyer; his brother Willis
and tWoscore others. the plan cap
tured the fancy of dependent -burdened
youngsters as we'll as those who would
benefit directly.
The plan would require the State to
issue pension warrants" at the rate
Of $50 weekly for every Californian
over so who is neither an employer
nor an employe.
The warrants would be issued in 81
denominations Every Thursday each
outstanding ST warrant in circulation
would have to be validated with a
2-cent redemption stamp purchased
with hard cash from State pension
depots
At the end of a year the warrant
would bear l04 in stamps, signifylng
the payment of that much money into
the State treasury, and would be re-
deemable at the treasury for ST cash.
Thus redeemed, it would 60 out of
existence. The extra cents would
60 to pay administrative costs.
State Would Accept Warrants.
During the year of its life the war
rant would be used as money within
California among all who would accept
It. The State would be required to
accept the properly stamped warrants
At face value for taxes and other
obligations of the individual. Publicly
owned utilities and political subdivi-
sions of the State would have to ac-
cept them. State employees would re-
ceive up to half their salaries in these
warrants.
Estimates by statistical and flnan-
cial sources on the mathematics OF the
scheme varied.
The State Chamber of Commerce
estimated 8l1 900 persons could quail
tfy as pensioners, receiving S2430O, 600
worth of the warrants every week.
Things would move slowly perhaps
at first, because there would be less
than S25,000,O0O worth III circulation
the flrst week, only S48.600,000 the
second week, and so on. But after the
fifty-third week-oh, boy! There would
be $1,265 900 900 worth in circulation
and it would take 25,30o0 900 worth
of stamps to keep them all going for
seven days.
Plan Denounced.
The Chamber of Commerce said the
minimum aggregate turnover if all the
warrants we're kept going all the year
and changed hands once week would
be 7So,oo0000. approximately
equal to the national income. 1t would
cost the State $l,5l6, 100000 of its
stamp money to take up the year S
warrant output.
These figures were placed by the
chamber beside statistics showing the
gross receipts of all California busi-
ness places was s11.79l 100000 in
1885, the last available report. It estl-
mated the 1887 net incomes Of all CAL
Iornians at $4,4l6, 100000.
President Roosevelt denounced the
plan as fantastic. Senator McAdoo
expressed fear the cruel delusion," if
adopted. would ruin" the State, and
Communist leader Earl Browder pro-
nounced the plan unworkable. A whole
platoon of economists denounced the
idea They predicted the value of the
warrants would collapse as thousands
sought to convert them into goods or
services ahead of each Thursday dead
line" for adding the stamps.
But the pension advocates professed
to foresee clear sailing. arguing that
the warrants would create nearly S4,-
O00,oOO000 worth of new business in
the State annually with an expenditure
of only s1,265, 100000 for stamps.
Behind this theory was the supposl-
ton that the warrants would exist as
an incentive to create new business;
that warrants need not be stamped or
circulated except for that purpose,
and hence would aggregate nowhere
near the potential maximum.
These warrants thus would provide
r%4~ l1ero
chain of trade, said the pension advo-
Gates, as long as there was pensioner
demand for goods and services. this