Loss & Profits

Since the Townsend Plan burgeoned some 18 months ago, editors, columnists, economists and a few brave politicians have devoted thousands upon thousands of words to denouncing it, ridiculing it, exposing its fallacies. Except to advertise it, all this has had no effect whatever on the Plan. Terrifying to Congressmen, the ranks of Old Age Revolving Pensions, Ltd. have swelled & swelled as oldsters from coast to coast planked down their 10-c--per-month dues in the happy faith that they would soon be getting back $200 per month from the Government. Last week the Townsend legion fell victim to the disaster which has humbled many a proud army in the past--dissension at the top.

Not good, grey Dr. Francis Everett Townsend but shrewd, dynamic Co-Founder and National Secretary Robert Earl Clements is the man who has marshaled the Townsend hordes into a potent and profitable political army. In Washington last week, day after he was summoned to appear before the House investigating committee set up to destroy the Townsend threat (TIME, March 2), this 41-year-old onetime Long Beach, Calif, real estate broker announced his resignation from Old Age Revolving Pensions. His stated reason: "Differences with Dr. Townsend over fundamental policies."

Commented Dr. Townsend in Los Angeles: "Mr. Clements' statement meets with my hearty approval."

Agog at this sensational split in the Townsend high command, Washington newshawks began to spout "real reasons" for the break. It was variously reported that Co-Founder Clements had quit because: 1) Dr. Townsend had upset his political plans by endorsing Senator Borah for President; 2) Dr. Townsend had seized control of the organization by packing its board of directors; 3) Dr. Townsend's attorney, Sheridan Downey, EPIC candidate for Lieutenant Governor of California in 1934, had weaned the gentle oldster away from his partner in order to further his own ambitions for California's governorship; 4) Dr. Townsend's clique, fearful lest the Congressional investigation disclose some shady Townsend financing, had ousted Secretary Clements in order to have a convenient scapegoat; 5) Dr. Townsend wanted a Townsend third party, while Secretary Clements did not; 6) Secretary Clements wanted a Townsend third party, while Dr. Townsend did not.

The story which Mr. Clements told his friends was reported by Scripps-Howard's Washington Columnist Raymond Clapper as follows: "Although young Clements had occasionally to 'correct' some of the ill-advised political statements of Dr. Townsend, they went along fairly well until last November, when TIME magazine printed an article picturing Mr. Clements as the real brains of the Townsend movement and Dr. Townsend as his 'stooge' [TIME, Nov. 4], This publication, according to the story current here, infuriated Dr. Townsend. From then on he and Mr. Clements were at swords' points."

In Chicago last October an official auditor told Townsendites assembled in their first national convention that Dr. Townsend and Mr. Clements each received a salary of $50 a week, plus "about $74 a week" for expenses. Last week, appearing calm and self-possessed before the House investigating committee, Mr. Clements testified that he had actually drawn from Old Age Revolving Pensions in 1935 a salary of $100 per week. He had also received $7,035 in dividends from Prosperity Publishing Co., owned jointly by himself and Dr. Townsend, plus a $350 salary from that company's chief publication, National Townsend Weekly. To that total of $12,585 was added a salary of $1,475 for Mrs. Clements as her husband's secretary. The Townsend Plan had also paid the rent on a $130-per-month Washington apartment, their grocery bills, their maid's wages, all his traveling expenses. A sample traveling expense account averaged about $33 per day.

Total Townsend receipts to date, testified Mr. Clements, are about $952,000.

Dr. Townsend announced last week that his board of directors had bought Mr. Clements' share in Prosperity Publishing Co. for $50,000.

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