[1936 Ap. 5, IV, 12:1]

Factional Break-Up Seen as
Possible Now for the
Townsend Plan.

  WASHINGTON, April 4.—Indications of a possible factional break-up of the Townsend Old-Age Revolving Pension movement are clearly apparent here as a result of the second weeks' developments in the hearings on the organization's management poli cies and financial affairs being conducted by a House of Representatives investigation committee headed by Congressman C. Jasper Bell of Missouri.
  So far the committee's earlier intimations of sensational internal scandals in OARP administration have borne little or nothing in the way of positive results. On the other hand, committee members politically unfriendly to the movement or skeptica l of the sincerity and "chemical purity" of motives in its high command are insisting confidently today that the investigation is having even more damaging effects on the Townsend progress than violently scandalous revelations could be expected to produce .
  The tensions of the investigation already, in fact, have forced a complete reorganization of the managing personnel of the national OARP organization and, ostensibly at least, a drastic revision in its salary scales and system of compensation for organizers and employes [sic] in charge of the vital membership recruiting campaign.
Row Among Leaders
  Moreover, while the OARP is adjusting itself to these basic changes, it has become, for the time being, the focus of a violent quarrel between leaders and ex-leaders and their nation-wide set of partisans.
  Hearings in the investigation were resumed last Wednesday. During the days in which they have proceeded Dr. Francis E. Townsend, founder and remaining head of the OARP, between his tasks of organizing an almost complete new national executive staf f and putting it to work, has been not only busy issuing hot explanations of various implied criticisms of his activities in Townsend management made by Robert Earl Clements, recently resigned secretary-treasurer and co-founder of the movement, on the com mittee's witness stand, but equally energetic in hurling devastating replies to the more direct charges of political mismanagement and bungling made by Representative John Steven McGroarty of California, original sponsor of OARP legislation in Congress.
  So hot has the situation become on these factional fronts that it is an "open secret" that tips on potentially damaging explorations of Townsend affairs have been "fed" to committee members this week through the agency of the conflicting Townsend factions.
  Further developments in the crisis provoked by the hearing have even cast doubt from the viewpoint of many neutral Congressmen in Washington, on the question of what the Townsend plan really is at the present writing.
Bonds or Taxes?
  The McGroarty bill, which ostensibly expresses the movement's legislative program, proposes to raise revenue for paying the OARP pensions of $200 a month—or as near the $200 figure as possible—for all Americans over the age of 60, from a transactions tax. But in his controversy with Representative McGroarty this week, it was brought out that Dr. Townsend had recently expressed favor of a $10,000,000 bond issue plan for pension financing proposed by Sheridan Downey, EPIC candidate for the California Lieutenant-Governorship in 1934, who recently has become a power in the movement as Dr. Townsend's personal attorney.
  Yet, after the OARP founder's attitude toward the bond program had been cited from a preface which he contributed to a recently published book of Downey's, Dr. Townsend countered McGroarty's charges of inconsistency by declaring that intimations o f his having abandoned the transactions tax "were totally in error."
  As to the investigation's actual progress, the Bell committee members feel that they have made at lest three important disclosures: (1) that while Dr. Townsend and Mr. Clements were representing their income from the movement as $50 a week plus tr aveling expenses, they were actually living in comparative luxury and Mr. and Mrs. Clements, with a $14,000 income drawn entirely from OARP sources, also had practically all their living expenses met out of the movement's fund; (2) that the longevity and old age "vitality" advertisements for patent remedies accepted by the Townsend-Clements-owned Townsend Weekly were in some case of a type refused by provisions of minimum ethical standards, and that consideration at least had been given from time to time to projects for using the OARP movement to float sales promotion projects for remedies and articles likely to interest the aged; (3) that the $1,000,000-odd contributions paid into the Townsend treasury, mainly in the dimes and quarters of pension-seekers , were subject to virtually unlimited control of Townsend, Clements and Dr. Townsend's brother, Walter Townsend, the OARP movement's original incorporators.
Control of Finances
  Since Mr. Clements's resignation, this is still, according to the implications of the committee's disclosures, substantially the status of Townsend affairs except for the fact that the ownership emphasis has been transferred to Dr. Townsend and hi s brother. In result, the reorganization accomplished in the OARP executive staff this week is strictly a Townsend process.
  What Dr. Townsend has done has been to appoint a board of directors, all of whom are strictly responsible to himself as president and founder rather than to any vote or selective process carried on through the rank and file of the Townsend clubs.
  The new directorate includes Gomer Smith, Oklahoma politician expected to oppose United State Senator Thomas P. Gore as a Townsend candidate in the Democratic primaries, Gilmore Young of San Francisco, recognized in OARP affairs as a spokesman for Edward J. Margett, San Francisco area organizer for the movement who large membership commissions and previous indictments while a member of the Seattle police force have been a subject of the committee's inquires; Frank Arbuckle, former California State Senator understood to represent Mr. Downey's interests on the board; the Rev. Dr. Clinton Wunder, organizer of liberal con-sectarian churches in numerous communities; J. B. Kiefer of Chicago and Nathan J. Roberts of Florida, Townsend partisans in Clements's resi gnation difficulties, and the Rev. Dr. Alfred J. Wright of Cleveland, said to be the only member of the board on friendly terms with the Clements-McGroarty faction.
National Convention
  In appointing the board, however, Dr. Townsend has agreed to call a national convention of the movement between now and the national major party conventions, to clarify the OARP organization's 1936 political program and to devise a method of repre sentation on the executive staff by which the rank and file of the pension following may have a larger share in the movement's management. He also has given orders that regional, State and area recruiting organizers and mangers be paid "straight salary" i n the future rather than commissions.