[1936 Ap. 12, 6:1]

Pension Plan Is Strengthened,
He Says, by Withdrawal of
Clements and McGroarty.

Thousands Are 'Converted' Each
Day, Founder Asserts in
Address on Radio.
  Dr. Francis E. Townsend, author of the Townsend old-age-pension plan, declared last night that the movement had been strengthened by the withdrawal of R. E. Clements, co-founder of the organization, and Representative John S. McGroarty of California, Congressional sponsor of proposed Townsend plan legislation.
  Dr. Townsend's speech was broadcast from Station WMCA over the New England network and from Station WIP, Philadelphia.
  "Let me tell you that our movement has been so strengthened by the reorganization now proceeding that we are prepared to go forward with new courage and powers," he said. "Everywhere in the East there is talk of the Townsend plan and every day thousands are converted to the cause. Last year our movement capture the West. Next year it will prevail in the East. Never doubt that.
Says Politics Is Involved
  Dr. Townsend said that Mr. McGroarty had resigned because the Townsend organization refused to support his "Presidential aspirations" in the California primary election.
  He explained Mr. Clements's withdrawal by saying that the latter believed the profits of The Townsend Weekly, which exceed $50,000 last year, should be divided between him and Dr. Townsend personally, while Dr. Townsend insisted that they should go to the Townsend movement. Dr. Townsend also said that Mr. Clements had objected to his efforts to "democratize" the Townsend organization by placing the management in the hands of a large directorate.
  Dr. Townsend disclosed that Mr. Clements had obtained $50,000 for his half interest in The Townsend Weekly and that in the future the Townsend organization would get 90 percent of the profits of the publication. The other 10 per cent, he added he would keep himself.
Details of Transaction
  "You will be interested in learning the exact details of the newspaper transaction," Dr. Townsend said. "The paper is owned by the Prosperity Publishing Company. This company has twenty shares of stock. Ten of these were owned by Mr. Clements, ten by myself. The company also had $50,000 in money. We declared a dividend in this amount, $25,000 going to Mr. Clements and $25,000 going to me. I thereupon relinquished my $25,000 to him, so that he took the entire $50,000.
  "Mr. Clements's shares were transferred to me, and I immediately transferred nine of these shares to the O. A. R. P. (Old Age Revolving Pension Fund) without any payment to myself or any cost to the Townsend organization. This left me with eleven of the twenty shares of stock.
  "I have now signed an agreement giving all profits on this stock to the O. A. R. P. except for a sum equal to 10 percent of the total net profits received from the paper. And I can assure you that any profits accruing on this 10 percent beyond a decent living for my family and myself will be devoted in some way to the Townsend cause."
  In charging that the desertion of Mr. McGroarty was caused by the refusal of the Townsend organization to back him in the California Presidential primaries. Dr. Townsend said that Mr. McGroarty was in the hands of the professional politicians who promoted the "Al Smith" movement in 1932 in California to defeat the Roosevelt candidates for delegates and elect those favorable to Vice President Garner.