Townsend, << TOWN zuhnd, >> Plan is an old-age pension plan proposed in 1934 by Dr. Francis E. Townsend of Long Beach, Calif. It provided that all U.S. citizens over 60 years of age be paid $200 a month. The widespread popularity of the Townsend Plan helped persuade theU. S. Congress to pass the Social Security Act of 1935. But that act provided retirement benefits for certain workers at age 65, and the pensions were much smaller than those proposed in the Townsend Plan. The funds for the Townsend Plan were to come from a 2 per cent tax on the transfer or sale of goods. However, many experts believed that such a tax would not provide nearly enough money to finance the plan. Supporters of the Townsend Plan believed that the plan would stabilize American prosperity, because those receiving pensions would be obligated to spend the money within a month. A modified version of the Townsend Plan was presented to the U.S. House of Representatives on June 1, 1939, but it was voted down.
