Synonyms

Townsendiana; Townsendism; Townsendites

Definition

The Townsend Movement (TTM), also called Townsendism, began in Long Beach, CA, in 1933 when Dr. Francis Townsend wrote a letter to his local newspaper protesting the Depression’s deleterious effect on older Americans. In response, Townsend’s letter advocated a guaranteed pension every month for every American over age 60 who ceased work and that, he thought, would also create jobs for the young and jumpstart the economy. The letter garnered wide support, and soon a network of clubs, a newsletter, and political movement were established to pass Townsend’s plan. President Roosevelt, prompted by the support for Townsend, passed the Social Security Act (SSA) (See “Social Security in the United States”). After Social Security passed into law, Townsend and his plan largely disappeared from public and political attention. However, while TTM disappeared after SSA was introduced, Townsend and his movement provided the foundation for changes in social security regarding old-age spending support.

Overview and Origins of the Townsend Movement

Townsend’s attention to the needy began early with his humble origins. Francis Everett Townsend was born to a poor farming family near Fairbury, IL, on January 13, 1867. The family moved to Nebraska, where Francis graduated from Franklin Academy (VCU Libraries 2018). Townsend tried and failed at several careers across several states (e.g., farming, sales, land speculator, manual laborer) before enrolling in Omaha Medical College in 1899 and graduating in 1903 at age 36 (Gordon 2001). He set up practice in South Dakota, where he remained until he entered the WWI Army Medical Corps; he married a nurse, Minnie (nee Bogue) (VCU Libraries 2018). After WWI medical service, he relocated to Long Beach, CA, where he worked as assistant director of the city health department, dabbling in real estate, until Depression Era cutbacks left him, like many older Americans, unemployed and poor at age 66 (Gordon 2001) (See “Economics of Aging”). In the fall of 1933, Townsend saw three older women (some versions say it was two older women) searching garbage cans for food, and it infuriated him enough to send a letter to The Long Beach Press Telegram proposing a monthly pension of $150 (later this would grow to $200) for all Americans over 60 funded by a 2% federally imposed goods and services tax (Friedersdorf 2011; Gordon 2001). At this time, around 50% of older Americans needed some form of aid due to the Depression Era decimation of their pensions (Friedersdorf 2011) (See “Pension Systems”).

In the 1930s California, specifically the Long Beach community, had a disproportionate number of retirees at the time from northern states likely drawn by the area’s warm climate and reasonable housing market (Mason 1954). Townsend’s letter was likely also prompted by the facts that he had faced economic failures in his career, he was anxious about the future, as were those who supported his plan, and he saw that there was no solution being proposed by Roosevelt’s government (Friedersdorf 2011). The Depression prompted other social welfare movements such as former Louisiana Governor and Senator Huey Long’s Share-Our-Wealth movement and Father Coughlin’s National Union for Social Justice (Mason 1954). In response to his plan, letters flooded into the newspaper, petitions were signed in favor of the plan, and Townsend Clubs sprung up over the country (Gordon 2001). Townsend became a national activist and celebrity, eventually appearing on the cover of Newsweek (Friedersdorf 2011).

Rise and Popularity of the Townsend Movement

Townsend had previously worked with real estate agent Robert E. Clements; thus capitalizing on the success of his letter, the two opened an office in Long Beach for the Old Age Revolving Pensions Ltd on January 1, 1934 (later relocated to Los Angeles) (Mason 1954). By January 1935, a half million Americans belonged to Townsend Clubs culminating in one million dollars in dues and donations (Friedersdorf 2011). Minor Townsend Clubs (50 people or less) required purchasing a charter from the state-area manager for $12.50 and while the fee for major Townsend Clubs was $25.00 with fees going to state and then national headquarters (Mason 1954). Clubs collected dues of 10 cents per member, which was also sent to national headquarters with state-area managers and recruiters given a percentage of these dues for their efforts (Mason 1954). Townsend’s network of clubs spread first along the West Coast and then outward receiving the least amount of support in Southern states (Mason 1954).

Townsend, in an April 1935 message to his clubs, argued their purpose was to pass the Townsend Bill into law and defend the US democracy, and thus his clubs should be run democratically with no one telling members how to vote or think (Townsend 1943). Townsend Club meetings typically began with a prayer, then singing, a speech from a local figure, closing songs, and a final prayer (Mason 1954). Others note how club meetings began with a Pledge of Allegiance and ended with a rewritten “Battle Hymn of the Republic” that equated passing the Townsend plan with the second coming (Amenta and Zylan 1991). A speakers’ bureau of clergymen was used to recruit Townsendites, so converts to Townsendism came more often via the clubs than by speeches (Mason 1954).

TTM also secured revenue sales of various products and books from his organization’s weekly newspaper (Mason 1954). In 1936, membership in Townsend Clubs exceeded 2.1 million people, and The Townsend National Weekly was earning roughly a quarter-million dollars a year in advertising fees for products for older Americans (Friedersdorf 2011). Regarding New York Times coverage, the Townsend Plan was the eighth-most publicized US social movement organization (Friedersdorf 2011). At one point in 1936, Townsend was able to deliver petitions to Congress containing 10 million signatures in support of the Townsend Plan. Public opinion surveys in 1935 found that 56% of Americans favored the adoption of the Townsend Plan (VCU Libraries 2018).

Townsend’s Weekly National had a four to one ratio of with four fifths of the stories about the program and the final fifth divided between advertisements (e.g., cure-alls, balms for older consumers) and current news events. Roosevelt’s efforts were seldom criticized in the paper, though his social security advocacy would be leading some to argue that Townsend and his followers were in favor of the New Deal policies (Mason 1954). Others go further, arguing that Townsend viewed his plan as an extension of the New Deal (Mitchell 2001). Most agree that Townsend presented as antiestablishment such as his contemporaries Senator Long and Father Coughlin, but unlike these individuals, he did not tend to demonize the political and economic elites (Gordon 2001). Supporters for TTM included Franklin D. Roosevelt’s Democrats and Upton Sinclair socialists, though the fact that Townsend clubs tended to support Republican candidates leads some historians to liken Townsendites to contemporary right-wing populists (Friedersdorf 2011). TTM grew in popularity, and California Republican Gubernatorial incumbent Merriam won his reelection, after stepping in for deceased governor Rolf, in 1934 by supporting the Townsend plan (Mason 1954).

Under Townsend’s plan, all Americans 60 years of age and older would be given $200 at the start of each month if they refrained from work and the need to spend all of the $200 by the month’s end (Amenta and Zylan 1991). Called Old Age Revolving Pensions, the thinking was that the money would ease older American’s financial burdens, free up jobs for young, ambitious Americans, and take the US economy out of recession (Amenta and Zylan 1991). Habitual criminals could not benefit from Townsend’s plan (Mason 1954). The funds would come from a tax of 2% on all gross business transactions, a tax equal to one-tenth of the tax levied upon all income under the provisions of the Revenue Act of 1934, a tax of 2% on transfers of property (e.g., inheritance), and a tax of 2% on the gross value of every gift over $500 (Mason 1954). In 1933 Townsend’s plan would mean paying nearly $22.8 billion to an estimated 11.4 million older Americans (Gordon 2001). This was 13 times the then US government revenues or nearly half of the then $55.6 gross domestic product (Gordon 2001). In 1933 the average per capita income was $374, and $3,000 was a middle-class yearly income in contrast to the $4,800 yearly Townsend’s plan proposed for an older couple (Gordon 2001).

In 1935, newly elected congressman John Steven McGroarty from Los Angeles came to Washington, DC, with plans to implement Townsend’s plan as what came to be known as the McGroarty Bill. In response, the political left disliked what it thought was a regressive tax, the political right disliked the amount of spending the bill required, and the political middle disliked that President Roosevelt’s focus was being shifted at a time when their insurance and assistance proposals were finally being supported (Amenta and Zylan 1991). The McGroarty Bill was amended to only pay as much tax as it collected, but it was still defeated in the house (Amenta and Zylan 1991). When a modified Townsend Bill came before Congress in 1939, the results were similar, and while it was introduced in Congress through the 1940s, it never again got out of committee (Amenta and Zylan 1991).

Decline and Displacement of the Townsend Movement

President Roosevelt began working on his own Second New Deal social program to counter Townsend’s vast popularity. Roosevelt denounced Townsend’s plan and positioned himself as a staunch opponent and grouped Townsendism along with Communism, Longism, and Coughlinism as forces he opposed (Gordon 2001). Roosevelt charged Secretary of Labor Frances Perkins, the first female cabinet member, with crafting his old-age insurance program to be self-financed by workers (Gordon 2001). Making this plan self-financing was a challenge as it would take time to build a principal for making payouts, but the political pressure of the Townsend plan meant the plan had to be in effect as soon as possible (Gordon 2001). Roosevelt’s proposed Social Security Act (SSA) initially excluded the most vulnerable workers in need of protection (e.g., farm laborers, domestic servants, employees of workplaces with fewer than ten employees) (Gordon 2001). Roosevelt promoted SSA as a more moderate version of Townsend’s plan (Friedersdorf 2011) (See “Social Security: History and Operations”).

Roosevelt’s opposition represented a formidable but, by no means the only, challenge to TTM. The House Committee on Ways and Means and the Senate Finance Committee held hearings in the spring of 1935 into old-age pension plans. Townsend appeared, and many were surprised by his inability to explain the economic effect of his tax plan to fund his pension program yet one of Townsend’s experts suggested the tax would yield $15 billion less than needed to make his plan work (Mason 1954). Townsend claimed making pensioners spend all their pensions under his plan would create the multiplier effect (i.e., multiply the impact of the actual money spent, thus spurring growth), but this only worked when introducing new money into the economy and not moving money already in the economy from worker to pensioner (VCU Libraries 2018). Critics also pointed to the Depression as it took more workers out of circulation than Townsend’s retirement plan but did not create economic growth; plus, the Depression showed that putting people back to work was a key to growth (Lippmann 1935). So, while Townsend Club revenues hit their peak in 1939–1940 (Amenta and Zylan 1991), a 1936 US Congressional investigation found that while the movement had over two million members and 7000 clubs in 1936, those regularly paying dues were around a million people (Amenta and Zylan 1991).

This Congressional investigation held Townsend in contempt for walking out while being questioned and revealed that the Prosperity Publishing Company he ran with partner Clements (i.e., his newsletter publisher) was making a considerable profit (Amenta and Zylan 1991). Clements thought he would remove steam from the investigation by stepping down, but Congress continued unheeded (Mason 1954). Townsend was sentenced to a month in jail for contempt, but President Franklin Roosevelt provided a pardon fearing that jailing Townsend would increase his popularity (VCU Libraries 2018). The number of members in Townsend’s organization was ultimately questioned as families would enroll all their members into the club (Amenta and Zylan 1991). The strongest concentration of Townsend Clubs was in Oregon, Wyoming, Colorado, and Washington. and the weakest presence was in N. Carolina, Rhode Island, Virginia, and S. Carolina (Amenta and Zylan 1991).

In addition to political pressure, criticisms mounted against Townsend’s bill well before the defeat of McGroarty Bill. In 1934 23 states already had pensions, and the Dill-Connery Bill allowed for matching funds up to $15 per person per month for these pensions (Amenta et al. 1992). Critics disliked that Townsend’s plan did not require people to pay taxes or work and did not prohibit the wealthy from a pension (VCU Libraries 2018). Others noted that determining whether pensioners spent all their money would be hard administratively as would licensing business in order to tax them (Witte 1935). Others felt Townsendism had hidden political or religious agendas (Amenta and Zylan 1991). Congressman Frank Buck of California despite mounting pressure from voters ridiculed the plan, and former National Director Frank Peterson claimed TTM was a moneymaking scheme and attempted to form his own organization (Mason 1954).

Experts argue that Townsend’s plan, while admirable in its support of older Americans, was highly impractical and that ultimately weakened its viability. The 2% goods, services, transfer, and gift taxes Townsend proposed to fund his plan would fall significantly short of the money needed (Mason 1954). Additionally, the $200 per month, per person, offered under Townsend’s plan meant that older American couples would earn 60% more than the average middle-class yearly income of $3,000 (Gordon 2001) (See “Socioeconomic Status”). The multiplier effect that Townsend claimed would happen by requiring pensioners to spend all their money (i.e., multiply the impact of the actual money spent thus spurring growth) only worked when introducing new, not existing, money into the economy (VCU Libraries 2018). In short, raising the money and enforcing that pensioners would spend their pensions under the Townsend plan seemed to be improbable if not impossible tasks and economics theory did not support the economic boom that Townsend anticipated (DeWitt 2001).

Future Directions of Research

When Republicans failed to back Townsend’s plan Townsend banded together, unsuccessfully, with Coughlin and Long’s organizations to support Representative William Lemke of North Dakota for President in 1936 on a Union Party ticket (Amenta and Zylan 1991; Mason 1954). Despite Townsend’s support of Lemke, Roosevelt rode to victory in 1936; this was completely unexpected, despite being a landslide win, as political polling, as it is known today, did not exist and pre-election information was anecdotal at best (Mitchell 2001). In fact, to gage Townsend’s public support, Roosevelt’s White House had the postal service report on the amount of mail Townsend’s organization received (Mitchell 2001). Experts argue that the pressure placed by TTM on Congress and the President was pivotal in getting the SSA passed even before Canada had passed their own federal legislation (i.e., Employment and Social Insurance Act) that was initially less comprehensive than the SSA (Gordon 2001; Mason 1954; Beland and Waddan 2017).

Historians also argue that support for the Workers’ Bill (TWB), a failed first unemployment insurance plan, helped to facilitate the easy passage of the SSA (Wright 2018). The SSA was not meant to begin paying out benefits until January 1, 1942, but Congress’s desire to maintain public support led it to begin expanding the act’s benefits once the SSA became law on August 14, 1935 (Gordon 2001). Townsendites were most active in lobbying for higher benefits in the months after the SSA was enacted (VCU Libraries 2018) (See “Politics of Aging and Interest Groups”). Labor historians argue that the sudden rise and subsequent decline of populist movements, as some deem TTM, based around an individual persona (i.e., Francis Townsend) are common (Mitchell 2001). Another aspect of TTM legacy of interest to social history and economics scholars is that the movement’s popularity speaks to the broad appeal of social welfare projects in the Depression Era in the 1930s (See “Political Activism”). Membership in Townsend clubs continued to exist but dwindled significantly into the early 1950s. After the decline of TTM, the US would see the birth of modern-day advocacy movements for older-Americans in the1950’s (Conway and Rork 2012).

Summary

TTM, despite its early and wide appeal, faced formidable opposition as President Roosevelt viewed the man and his popular plan as threatening and Townsend was politically naïve (Mitchell 2001). In addition, Townsend lacked basic knowledge regarding economics. However, TTM reflects how well-organized, single-issue voters are heard to ignore even today (e.g., gun control, the abortion debate) (Mitchell 2001). Interestingly, some scholars note how the Tea Party movement was treated better in the media than the Townsend Plan (Amenta and Tierney 2011). Francis Everett Townsend lived the rest of his years in obscurity after the passage of the SSA, dying in Los Angeles on Sept. 1, 1960, at 93 years old (Gordon 2001; VCU Libraries 2018). Townsend never stopped advocating for his plan, yet the social prosperity following WWII and enrichment of private, state, and federal pension benefits detracted from his message (VCU Libraries 2018). The greatest legacy of TTM is that it provided the impetus for Roosevelt to extend his New Deal agenda to protect the livelihoods of older Americans.

Cross-References