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MEMO irom the desk of . HARRISON N. HILES Feb. 11/45 i£r. Eccles' seoretary, or the person who opens this letter» Will you kindly bring the attached letter to Mr. Eccles, himself, and let him decide if he would care to reply to Dr. Townsend*8 communication. Thank you so much for your cooperation. Cordially yours, Harr: Assistant to Ur. Townsend o ^ B Y GALL MASON* Printing and Engraving.. .WEBSTER 2324 ïïotpvstetpi |?IU» National Headquarters 450 EAST O H IO STREET CHICAGO 11, ILLINOIS DR. F. E. T O W N S E N I T O W N S E N D NATIO NAL- W E E K L Y . INC. POUNDER AND PRESIDENT Feb. 12, 1945 R . C. TO W N S EN D SEC’Y AND TREAS. T O W N S E N D N A T IO N A L R E C O V E R Y P L A N . IN C. Dear Mr. E c cle s: We should be f la t t e r e d i f we thought you had been in flu en ced at a l l by Townsend Plan propaganda, hut are r e a l i s t i c enough to assume you've never read a piece o f i t in your l i f e . We know your thinking is independent and are happy to see you have a r r iv e d at v ir t u a lly the same conclusions as have we. Enclosed is a te a r-s h e e t from the Feb. 3 issue o f Townsend N ational Y/eekly which bears a report on your t a lk b efore New York employers. We hope you lik e the way we handled i t . A lso enclosed is a summary o f the book-length rep ort on the Townsend P la n 's e f f e c t on our economic system, prepared by Dr. John Donaldson o f George Washington U n iv e rs ity . I have marked a few paragraphs which I hope w i l l catch your in t e r e s t . I f you would ever be in te r e s te d in discussing th is program, I should be happy to c a l l upon you at your o f f i c e . Our t a lk , i f you p re fe rre d i t th at way, could be kept o f f the rec o rd . Thanks fo r your in t e r e s t S in c e re ly yours, Dr. Francis E. Townsend This article is protected by copyright and has been removed. The citation for the original is: Townsend National Weekly, “Marriner S. Eccles Urges Adoption of Plan Principles,” February 25, 1945. BOA RD O F G O V E R N O R S OF THE F E D E RA L RE S ER VE S Y S T E M ^Office Correspondence w Date_Eebruary 15, 191+1?. j _______Mr. Williams______________ SubjectL______________________ From_____Mr« Thurston______________ __________________________________ It is evident that the Chairman's position is being twisted to give approval to the Townsend Plan. He wants to correct this before it gets any further. His recollection is that the Townsend Plan rests on a sales tax theory, which would be the antithesis of what the Chairman, of course, feels is essential in the postwar. In other words, he believes in increasing mass buying power and not taking it away to support the super annuated. Moreover, $200 a month is not a minimum but an absurd maximum. He wondered if you could suggest a reply after looking over the attached brochure on the Townsend Bill. It is a rather clever letter from the Doctor. Attachments 25 February 28, 19U5* Dr. Franois E. Townsend, U50 East Ohio Street, Chicago, Illinois. Dear Dr. Townsend: Your editorial comment on ny recent speech is unfortunately misleading. Tfhile I strongly favor expanding Social Security programs and increasing the responsibility of Government for maintaining full employment, I am unable to accept your program as a practical one for reaching these goals. It seems to roe your program is subject to criticism on three major points: 1. It contemplates expenditures for old age and dis ability benefits too large to bo practicable. 2. The benefits provided to the groups covered are disproportionate to those available to numerous groups whose claims are equally pressing. 3* The method of financing is, in my opinion, un sound. A 3 P®** cent gross income tax, even with a moderate exemption, would tend to reduce consumption about as much &s the benefits paid out increased consumption. Thus, the program would contribute little or nothing to a solution of the major postwar problem of expanding total consumption. Moreover, in such a large-scale shift of consumption from one group to another, long established relationships among industries and occupations might be disturbed so seriously as to Impair the operation of the economy. A re-reading of my speech in the light of these comments will, I think, make it evident that my position is substantially different from the economic analysis underlying your program. Sincerely yours. X. S. Socles, Chairman. / KBW;ET:b This article is protected by copyright and has been removed. The citation for the original is: Bainbridge, Sherman J. “He Says…” Townsend National Weekly, March 31, 1945, p. 4. An editorial cartoon under copyright protection has also been removed. The citation for the original is: “Truth Will Be King.” Townsend National Weekly, March 31, 1945, p. 4. D r . F r a n c i s E. T o w n s e n d FOUNDER OF Th e To w n s e n d P l a n 450 Bast Ohio Street Chicago 11, Illinois March 28, 1945 Mr. M. S. Eccles, Chairman, Board of Governors of the Federal Reserve System Tfeshington 25, D. C. Dear Mr. Eccles: Thank you for your letter, which disclaimed advocacy of the economic program for which we stand. I am afraid you misunder stood my letter, or maybe I did not make myself clear. I did not mean to intimate that you believed in the Townsend Plan, but rather that Townsend Planners believe whole-heartedly in the statements you expressed before the New York employers. As a matter of fact, the things you expressed there — while probably only part of your philosophy — constitute almost the whole of the Townsend Plan philosophy. We believe that the American economy can be stabilized at high levels only by maintaining a constant high stream, of purchasing power; that such purchasing power must be in the form of high wages to the employed and somewhat lower monthly annuities to the disemployed — the aged, blind and disabled; that finances for such annuities must be provided out of income taxes rather than payroll or sales levies which, by reducing available purchasing power, would defeat the whole purpose of the program. That's what we stand for, no more and no less. The Townsend Plan proposes no "set" sum whatever, as annuities to the dis employed; it suggests the distribution of whatever monies can be raised through a monthly levy against 3 percent of the gross incomes of individuals and businesses, with a $1,200 exemption annually on individual incomes. I enclose an editorial answer to your letter, although your name was not used publicly in connection with this answer. I repeat that I believe our thinking is very close to that ex pressed by you in your talk, and that millions of Americans organized into Townsend clubs throughout the nation will one day win enactment of the principles embodied therein. Sincerely yours FET:EP (enc) March 31, 1945 Dr. Francis E. Townsend, 450 East Ohio Street, Chicago 11, Illinois. Dear Dr. Townsend: On behalf of Mr. Eccles who is temporarily out of the city, I wish to thank you for your letter of March 28 enclosing the copy of the Townsend National weekly and the replies to the points made in his letter to you. I know he will De interested in seeing it on his r jtum, and will appreciate the very fair manner in which you have dealt with the views he expressed and your replies thereto. Sincerely yours, Elliott Thurston, Assistant to the Chairman. ET:b
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