U.S. History 2

ECONOMICSECURITY ACT

FRIDAY, FEBRUARY 1,1935

HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS,

Washington, D. C. The committee met at 10 a. m., Hon. Robert L. Doughton (chair-

man) presiding. The CHAIRMAN. The committee will be in order. The first witness on our calendar this morning is Dr. F. E. Town-

send, of Long Beach, Calif. Doctor, will you please give your full name and address and the

capacity in wlvch you appear as a wit,ness on the bill we are con­ sidering, H. R. 4120?

STATEMENT OF DR. F. E. TOWNSEND, LONG BEACH, CALIF.

Dr. TOW&SEND. Gentlerned, my name is Dr. Francis E. Townsend, of Long Beach, Calif.

The CHAIRMAN. Doctor, about how much time do you think you will require to make your main statement?

Dr. TOWNSEND. Ten to 12 minutes, Mr. Chairman. The CHAIRMAN. You.have the privilege of making your main state­

ment without mterruptlon, if you prefer, after which it is customary for the mtness to yield to questions by members of the committee, if that will be satisfactory to you.

Dr. TOWNSEND. Yes. Mr. HILL. Mr. Chairma?, we have been operatin under the

5-minute rule. I ask unammous consent that Dr. rf ownfiend be permitted to proceed for 20 minutes without interruption, if that much time is required to make his main statement.

The CHAIRMAN. Without objection, the request made by Mr. Hill will be granted.

Dr. TOWNSEND. Thank you. Mr. Chairman and gentlemen of the committee., I have prepared a written statement covering the testi­ mony I wish to present to you this morning. This statement will take approximately 10 minutes to read. If it meets with your ap­ proval, I would like to read this statement at this time.

The CHAIRMAN. That is entirely satisfactory, Doctor. You may proceed.

Dr. TOWNSEND. Mr. Chairman and gentlemen of the committee, I wish to thank you for the courtesy you have extended me in allow­ ing me to appear before your honorable body in connection with these hearings on the subject of social security. I have been informed that this committee has been very broa.d m its interpretation of the kinds of testimony which should be heard before it in relation bo the particular bill upon which these hearings are being held. I have been told that that particular piece of social-security legislation which is

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nearest to my heart, namely, the McGroarty bill, has been the subject, of the testimony of several of the witnesses who have appeared before you, including some of the highest public officials in the land.

I, therefore, presume that this honorable committee will permit me to select, as the subject of my testimony, the proposals made in the McGroarty bill, with the understanding that it is my recommenda­ tion that the McGoarty bill be substituted for that part of House Res lution No. 4120 which pertains to the subject of old-age pensions.

Much has been said and written of the proposal which has come to be known as the “Townsend old-age revolving pensions plan.” Much which has been said and written concerning it has been false and misleading, including certain testimony which has been given before this committee. I refer in particular to the characterization before this committee of my plan as “cock-eyed.” Surely a plan which has aroused’ the intense interest of millions of people of this country cannot be dismissed by the mere characterization of it as ‘( cock-eyed “.; not unless the utterer of that phrase wished to go on record as believing these millions of people also to be “cock-eyed.”

For the past 5 years the people of the United States have been living in depression. They have been starving in the midst of plenty. They have seen experiment after experiment tried out; experiments which bore the recommendation and hearty approval of men we call “economists.” Experiment after experiment has failed. According to statistics released 10 days ago by the International Labor Bureau at Geneva, Switzerland, we now have more unemployed than we did a year ago. Income-tax returns released 6 weeks ago showed that even now, m depressed times, the rich are growing richer and the poor are growing poorer. More than half of our national wealth is now con- trolled by less than half a million people. From October 1933, to October 1934, real wages of the workers of our country have declined by 2 percent. Yet, in that same period, dividends of the corpora­ tions of the country have increased 17 percent.

I have said to the people of America that it is time we tried a new experiment; an experiment which has not had the blessing of the so- called “economists ” and is therefore dubbed “fantastic” by them. I say to you gentlemen that every time an economist says this pro­ posal is “lunacy” the people react by sending additional thousands of letters to their representatives in Congress saying, in effect, that the denunciation of the economists is another reason why they insist that their Congressmen and Senators vote for the McGroarty bill. I now submit this proposal to you and beg you, in the name of mil- lions of citizens of the United States, to recommend to the Congress that it be enacted into law. My proposal is as follows:

[Il. R. 3977,74th Gong., 1st sess.]

A BILL To promote the general welfare, to assurepermanent employmmt and social security for all, and to stabilize bushlessconditions through an assureddefinite and constant circulation of money and credit by the Nntional Government, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act shall be cited as the “Townsend Old-Age Revolving Pension Act.”

SEC. 2. That every citizen of the United States, sixty years of age and over, or who shall attain the age of sixty years after the passage of this Act, while actually residing in the United States, shall be entitled to receive, upon application and qualification, a pension in the sum of $200 per month during the life of the pensioner: Provided, That (a) the pensioner shall discontinue and refrain from all gainful competitive pursuits or salaried positions of any kind; (b) the pensioner

ECONOMIC SECURITY ACT 679

shall covenant and agree that he or she will within thirty days of receipt of said pension expend all of the same for goods, commodities, or services within the jurisdiction of the United States; (c) proof of age and citizenship shall be according to the law and procedure of the State of residence of the pensioner; and (d) this pension shall be wholly exempt from attachment, garnishment, or execution.

SEC. 3. There is hereby levied a tax of 2 per centum on the gross dollar value of each business, commercial, and/or financial transaction done within the United States. The President of the United States is hereby empowered by Executive order to increase or decrease the 2 per centum tax by not more than 50 per centum, when in his discretion he deems it advisable, in order to adequately finance the said pension roll. This tax shall be levied in addition to any other Federal tax on goods or commodities. This tax so levied shall be paid by the seller once each calendar month, calculated on the seller’s aggregate gross sales, in accordance with rules and regulations to be promulgated by the Secretary of the Treasu?y of the United States.

(a) It is herebv provided in order to facilitate the collection of this tax that all sellers of goods,” commodities, and commercial things. of value shall obtain a license upon payment of a fee, the amount thereof to be fixed by the Secretary of the Treasury, who is empowered with full authority to use his discretion as to methods and means of collecting this tax.

SEC. 4. Any qualified pensioner who, for any justifiable reason, has failed to legally receive and disburse said pension, may, upon proper proof, be reinstated and thereafter receive the pension.

(a) All pensioners under this Act shall be permitted to expend not more than 15 per centum of each monthly pension for charity, church, and fraternal organizations.

(b) Pensioners under this Act shall receive no other pension from the United States nor from any State nor any political subdivision thereof, except all disabled war veterans now -receiving or who may receive disability allowance, compensa­ tion, or pension from the United States Government.

(c) The benefits of this Act shall not accrue to any person while an inmate of an insane asylum, eleemosynary institution, or while under penal sentence in any jail or penitentiary.

SEC. 5. Immediately after the passa e of this Act, the Secretary of the Treas­ ury shall authorize all National and 8tate banks, members of the Federal In­ surance Deposit Corporation, to credit each properly identified pensioner the first day of each calendar month in the sum of $200, and said banks shall be reimbursed by the United States Treasury for the ‘amounts so credited to pen­ sioner or pensioners.

SEC. 6. All salaries for individual services are hereby exempted from the tax provisions of this Act.

SEC. 7. Pensions under this Act shall be forfeited or discontinued for the follow­ ing reasons:

(a) Any person who has been duly convicted of a felony shall be ineligible for this pension for a period of ten years following the completion of his sentence.

(b) Any pension under this Act who is convicted of a felony shall immediately forfeit his said pension.

(c) Any pensioner who violates the conditions imposed by (a) and (b) of section 2 of this Act may be deprived of the said pension.

SEC. 8. The Secretary of the Treasury shall appoint pension boards of three members, who shall constitute a district pension board. No two members of this board may belong to the same political party. Such boards may appoint deputies within their districts. All members of the board shall serve without com­ pensation other than their pensions. Such boards shall have supervision of the administration of this Act in their respective districts and shall be governed by rules and regulations promulgated by the Secretary of the Treasury. A pension board shall be so set up for each county in the United States other the areas of metropolitan cities wherein boards shall be created in each ward or similar political subdivision.

SEC. 9. Any and all oaths or affirmations required under the provisions of this Act may be administered by any officer authorized by the law of any State to take acknowledgements for the conveyance of real property or by any member of a duly constituted pension board as herein provided.

SEC. It shall be a felony and punishable as such for any pensioner or seller as herein described to misrepresent or make a false statement with regard to any

rovisions of this Act, with intent to defraud the Government of the United 1 tates under penalty cif a fine of not more than $1,000 or imprisonment for not, more than two years, or both.