JFK on challenges to the New England economy in 1956

The corner of Blackstone Street and Hanover Street, Boston, in 1956.

—- From Boston Public Library, Leslie Jones Collection

Remarks by U.S. Sen. John F. Kennedy on Oct. 19, 1956

I would like to talk to you at this time about our own economic situation here at home, in this state and in this region – about some of the progress we have made and some of the problems we face. I realize that there are still some in New England who refuse to recognize that a United States Senator, or the Federal Government, has any responsibility in this area. Certainly it is true that no Federal program could ever solve all the problems of the New England economy without action on the state and local level – and particularly without assistance from private organizations, industry and individuals. No bill which you may request Senator {Leverett} Saltonstall {R.-Mass.} or myself to introduce will ever replace community leadership and community spirit as the essential ingredients for maintaining or rebuilding our economic prosperity. No set of Federal subsidies or controls can ever replace responsible attitudes by labor and management, improved educational and scientific achievements, and, above all else, the faith in New England which must be shared and practiced by New Englanders themselves.

However, the proper role of the Federal Government cannot be denied – not in the expenditure of large Federal grants, in the establishment of new bureaucracies, or in special advantages for our area which are contrary to the national interest or discriminate against the needs of other areas – but in obtaining attention on a national level to problems, industries, and communities that are essential to the well-being of the entire country. In many ways, as I have told the Senate on several occasions, the problems of New England are national problems – and we can no longer attempt to solve those problems on a local level only, pouring our tax funds into the economic development of other regions without receiving from the Congress fair consideration of our own needs.

It is not my intention today to prophesy doom and depression. I do not share the exaggerated views of those pessimists who have been talking about the decline of New England for the past thirty years. We are still, in terms of per- capita income and standard of living, one of the more prosperous areas of the country. Our financial institutions have a higher proportion of assets, our workers a higher take-home pay and our families more savings accounts, life insurance, telephones and television sets than their counterparts in any similar area on earth. We have many assets no other region can match – an energetic climate and an intelligent citizenry – world famous educational institutions and industrial research laboratories –- the nation's best record of harmonious industrial relations – and excellent access to capital investment, skilled manpower, new plant sites, and markets.

In addition, we have that all-important factor of unity – the twelve Senators from the New England region meet regularly to further their joint consideration and action on the common needs of our area; our delegations in the House of Representatives, and our Governors in their own six-state conference, provide similar cooperation. In short, New England is not a backward region, an undeveloped area or in the throes of a depression – and we have every reason to be optimistic and little reason to complain.

But at the same time, if we are to continue to move ahead, if we are to take a realistic inventory of our assets and liabilities, we must speak very frankly with respect to the real problems which threaten our prosperity, which have damaged the economic welfare of many of our citizens, and which require action on the Federal level. New England is the oldest regional civilization and economy in the United States – and we must be aware of the ills and problems of old age. We must prevent the dreaded diseases of economic arteriosclerosis and senescence from weakening our cities and industries – and we must attack them promptly and effectively whenever and wherever they occur.

These problems are aggravated by our lack of industrial raw materials – we have no oil, no coal, no huge resource of water power. Our fuel costs are high – and so are our freight and other transportation costs. What resources we do have, such as fisheries and forests, are being depleted. Along with all of the advantages of economic maturity – industrialization, leadership, and the other advantages already mentioned – we witness also the handicaps of old age: the development of markets, industries, and the center of population in other parts of the country – a failure to keep pace with other regions in terms of long-range economic growth, population, and per capita income – and a dependence in too many communities and industries upon the outmoded methods, machinery, and management of the past. The outlook, I repeat, does not call for a gloomy attitude of despair and helplessness – but it does call for action.

The New England Economy Today

Permit me to translate this general statement of our position into the specific facts that confront us today. Our great hope in recent years has been the development of new industries attracted to our state – a new diversification of our economy which it has needed for so many years – a new strength which was gained regretfully only by the loss of our so-called soft goods (such as textiles and leather) which made pools of manpower and plants available. These new industries have increased per capita income in Massachusetts, offset unemployment, and maintained a degree of economic stability we could not otherwise have expected. The dynamic, rapidly growing electronics industry, for example, has been responsible for 20% of the new manufacturing jobs in this region since 1939 and last year spent over $50 million in Massachusetts alone on new plants and equipment.

I have never supported the view that Massachusetts should favor new industry over the old – that we should forget about such old friends as textiles and regard their decline as a blessing. For new industries do not always employ the same people or move into the same locality. The encouraging statistics they present for the state as a whole are likely to conceal individual suffering in Lawrence, Lowell, Fall River, New Bedford, Gardner, Worcester, and most recently in Springfield, Pittsfield, and the western part of the state. Our efforts, in short, must be directed at retaining the old as well as attracting the new. I am happy to say that there is every indication that the movement of our industry to the South and west has passed its peak.

But many economists have been bothered by the question as to what would happen here in Massachusetts when a nationwide economic re-adjustment affected these new durable goods industries. I am very much afraid that their fears are being borne out today. New England lost nearly one hundred thousand manufacturing jobs last year. To be sure, a large part of this decline is due to our still seriously harassed textile industry, which lost more than 23,000 jobs. But employment declined by more than 51,000 workers in our New England durable goods industries – including electrical machinery, metal industries, and other types of machine shops. These are ominous trends which we must make every effort to reverse.

There is every indication that the United States faces an economic recession and that it will be felt more deeply here in Massachusetts than in some other parts of the country. Last year the average work week in this state fell below 40 hours a week. The average weekly earnings of our industrial workers actually declined. We lost some 43,000 manufacturing jobs, nearly half of them in durable goods industries.

Federal Action To Date

With this brief review of our economic situation in mind, recognizing the bright spots as well as the dark, I would like to turn again to the role of the Federal Government concerning these matters and the responsibilities which those of us whom you send to Washington must assume. Much of the progress which I have reported has stemmed directly or indirectly from action on the Federal level – and many of the problems which I have cited still require attention by Congress or the Administration.

To review for a moment our progress thus far, permit me to express my gratification at our achievements to date and my gratitude for the cooperation of our Senior Senator, our House delegation and the other members of our New England delegation – for that cooperation and teamwork, without resort to partisanship, have been largely responsible for those achievements. A new minimum wage and a reinvigoration of the Walsh-Healey Public Contracts Act have helped reduce drastically the wage differentials between New England industries and their Southern competitors. A voluntary quota on Japanese cotton textile exports, a new increase in the tariff on woolen textiles and a greater recognition of New England's higher quality product in the Geneva tariff negotiations have, I am convinced, prevented our traditionally largest industry from going completely down the drain. Meanwhile, we have safeguarded the cost to our mills of raw wool through the new Wool Act, new restrictions on speculation, and the prevention of higher tariff duties.

In our commercial fisheries, the achievements already made possible by the Saltonstall-Kennedy Fishing Research and Market Development Bill, tariff recognition of our new Fish Sticks industry, and a $10 million loan fund have all helped keep a struggling industry on its feet. Our shipbuilders have finally received more contracts and a new Congressional program; our watchmakers received at least a part of the tariff protection they needed; our electric companies received permission and help to build the new Yankee Atomic Power plant; and a new steel mill for New England, a new port pier for Boston, new air service, a new attack on gypsy moths, and new compacts on flood control and higher education have all been among our projects in Washington in recent years. And of both direct and indirect benefit to our region's economy is the record share of Federal funds for hurricane and flood control protection we have finally secured.

This is but a partial listing – all of you whose votes, support and cooperation helped make it all possible may take pride in this record - but this is no time to rest our oars. For weak spots and danger signs remain – our program of needs has not yet been completed – and complacency now could undermine all our earlier gains.

A Program for Federal Action

Many of our current problems are largely state, local, or private in nature – such as the fiscal predicament and tax rates of our municipalities, the adequacy of our rail and other transportation, and the rate of plant investment and modernization. Other problems we face are difficult to solve with a strictly New England approach – such as the aircraft and general defense cutbacks, the twin evils of tight money and inflation, and general weaknesses in our national credit-inflated economy.

But I would respectfully suggest to you at this time ten areas of Federal action on which we in New England might concentrate in this session of Congress – ten items I might review for you now in only the briefest fashion.

First, the economy of our entire state and region would receive a shot in the arm if we could eliminate the rail freight rate differentials that discriminate against Port of Boston traffic in favor of South Atlantic Ocean cargoes. After an initial setback in an earlier case involving only iron ore, we have succeeded in reopening the entire question in hearings now being conducted before the ICC. Success will bring new business to our port and railroads, new jobs and purchasing power for our state – and above all an end to an outmoded, inequitable handicap to our area's growth, a handicap that was originally imposed as a balance to our natural advantage in ocean freight rates and which continues now years after that advantage has been taken from us.

Secondly, our hopes for the future are closely tied to the development of low cost, competitive atomic power, bringing new energy to our industries, new industries to our state and new benefits to our people. Already we are seeking additional private nuclear projects, a large share of those planned for the entire nation – and our leadership in research and development in this field will someday cut our electric bills, our dependence on fossil fuels and our current disadvantage in competing with low-cost power regions of the South, Northwest, and elsewhere.

Third, the nature of our business community, more dependent upon small business than any other region, makes essential to our well-being a revision of Federal small business policies – particularly its tax structure and credit programs. Tight money, high interest and credit restriction policies have hit the smaller businessman much harder than they have his larger competitor, who has access to other sources of capital for modernization and expansion. A more selective credit policy which permits expansion of certain segments of the economy and with greater credit available from the Small Business Administration, is needed. Present tax laws also unnecessarily discriminate against small businessmen by not permitting the accumulation of earnings which normally would be plowed back into their businesses – also giving an unfair advantage to larger producers who have greater access to equity capital markets. We shall try again to secure passage of the Internal Revenue Code Amendment which recognizes the different needs and status of small business without any loss of net revenue.

Fourth, we must prevent any undue restriction on a maximum flow of oil imports into New England. Our businessmen and home-owners are dependent in large measure upon oil from Venezuela and other nations. We cannot afford to pay further price increases, to be restricted to domestic oil, or to convert to coal. Yet those are the ultimate objectives of those now pushing for further limitations on these imports – and the Administration's present program to restrict crude oil imports bears our most careful and constant attention.

Fifth and Sixth on our agenda are two related needs of our still vital textile industry – import protection and cheaper raw cotton. The new restrictions on woolen and on Japanese cotton textile imports which I previously mentioned must be watched, maintained and strengthened – and additional measures sought as needed. We must particularly concern ourselves with imports produced with our own surplus cotton sold abroad at cut-rate prices, under a farm program that at the same time artificially increases its cost to our own mills. Fortunately both cotton farmers and processors are now nearing agreement on a solution comparable to that earlier provided for wool –and I am hopeful that this issue will receive major attention in this Congress.

Seventh, we must continue to provide appropriate action on certain needs of our fishing industry which that industry cannot be expected to meet on its own – including the financing of vessel construction, loans to processing plants and the promulgation of vessel and individual insurance. We cannot imagine New England without its fishing fleet, its bustling fish piers and markets, its traditions of the sea – but they will require action, not veneration, in view of their current problems of price and import competition.

Eighth and Ninth, finally, involve problems of unemployment – a program of realistic aid to our labor surplus areas; and nation-wide standards of unemployment benefits, to eliminate any tax disadvantages suffered by a high-standard state like Massachusetts that acts on these problems with a social conscience and a heart. We are all too familiar in this state with the problems of communities suffering from a chronic labor surplus – the one-industry towns, the former textile towns, and others – but we have as yet failed to get effective action by either Congress or the Administration to help those communities, their businessmen and their workers help themselves to a better future.

There are no magic solutions in this list – no quick and easy answers – no way to avoid the hard burdens which our state and local governments, and all our citizens, must bear. But there, at any rate, is a program for action on the Federal level: action to meet the economic problems that confront us, action to secure a better life for every Massachusetts businessman, worker and his family. I know the members of this organization will join with me in seeking such action, to do more for Massachusetts, to build a better state and nation, and to enable ourselves and our children to look forward to the future with confidence and with hope.