JFK speech on N.E. economic problems in 1954; region’s industries very different now!
At the now long-gone Fore River Shipyard, in Quincy, Mass., about the time of this Kennedy speech
Text of remarks by Sen. John F. Kennedy on “The Economic Problems of New England’’ June 3, 1954, in the U.S. Senate
Mr. President: Since my discussion before the Senate exactly one year ago of the economic problems of New England and their alleviation, considerable progress has been made in meeting those problems, including the organization of the twelve New England Senators in response to the call of the senior Senator from Massachusetts (Mr. Saltonstall) and myself. These 12 Senators, regardless of party, have been working faithfully on behalf of New England's needs.
But more effective action by the Executive Branch is necessary. The disappointing failures to meet many of New England's economic needs, too easily overlooked in our drive for psychological confidence, cannot be justified by recent trends. In these twelve months since my Senate speeches, unemployment in New England – which is above the national average – has increased by more than 125%* until insured unemployment has reached approximately 180,000. Manufacturing** has declined in all six New England states for a total loss of 133,000 jobs, highlighted by the 48,000 job decline in the textile industry which is now approximately 60% of its February 1951 strength. Our leather, shoe, rubber, apparel, and other non-durable goods industries have also declined; as have the more publicized machinery, metal and other durable goods industries. New England's steel fabricating mills operated in the first quarter of 1954 at 62% of capacity, 30% less than a year ago. Reports from The New England Council and the Boston Federal Reserve Bank indicate that declining defense orders will increase the difficulties of New England's electronic, aircraft, shipbuilding, and equipment manufacturers.
The battle against recession is now more nationwide in scope than it was one year ago, and it involves many legislative issues to be discussed subsequently on this floor, including taxation, credit and interest, public works, housing, farm income, and world trade, in addition to the items which I shall mention; but permit me to outline those steps which the administration should take promptly in order to help restore prosperity in New England and other similarly situated areas, and in order to complement the effectiveness of the New England members of Congress.
1. Restore bid-matching to Defense Manpower Policy No. 4, the program for channeling defense contracts to labor surplus areas. This program, both widely hailed and condemned when announced six months ago, has had only a negligible effect because of its elimination of the bid-matching features under which New England labor surplus areas had previously obtained $14 million in defense contracts. During the new policy's first full quarter of operation***, not a single contract went to a New England surplus labor area as a result of this preference, and only two "distressed areas" in the rest of the country received contracts totaling only $163,159. Moreover, only two of New England's labor surplus areas received any defense contracts at all in the first quarter; and New England's share of all defense contracts declined instead of increasing.
2. Expand the application of the administration's new policy of tax amortization certificates of necessity for industries in labor surplus areas. The delay in initiating this policy, the restrictions placed upon it, and the fact that it provided only an extra percentage for that declining number of industries already eligible for emergency amortization, have made this program of little value; and as of April 15, only two certificates under this policy had been awarded to one New England community, covering a capital investment of only $250,843. Only ten such certificates were awarded throughout the entire country. During this same period under the regular tax amortization program, the number and value of certificates of necessity awarded to all firms in all New England states continued to lag behind New England's proportionate share and defense contribution.
3. Revitalize and broaden the authority of the Small Business Administration. The establishment of this agency to strengthen the economy by aiding small business was of particular interest in New England, which has a higher proportion of small business than any other region in the United States, and where the rate of business failures is higher this year than last. But as a result of legislative ceilings and administrative delays, the Small Business Administration as of May 13 had approved in its 7½ months of operation only six loans, for a total of only $204,000 in all six New England states. Indeed, as of April 30, SBA had disbursed less than $1.2 million on thirty-seven loans throughout the nation (as compared with administrative expenses on March 30 totaling nearly $2.4 million).
4. Eliminate discrimination and confusion in New England transportation rates. I have previously pointed out examples of such discrimination and confusion in rail, truck, and ocean shipping rates, and this subject is now under review by the New England Senators Conference. ICC decisions during the past twelve months have intensified this situation. Division 2 of the Commission recently denied to New England, and its railroads and ports, the opportunity to enjoy rates on iron ore shipped by rail to the interior steel-producing areas, comparable to the rates enjoyed by the Ports of Philadelphia and Baltimore. In January, a Commission decision denied adequate service in inter-coastal shipping between the Port of Boston and the West Coast. Other recent ICC decisions affecting shipments of New England goods by truck have continued this discrimination.
5. Plug tax loopholes which contribute to improper industrial migration. The House Ways and Means Committee, in its deliberation on the tax revision bill, originally decided to plug one of the most flagrant of such loopholes by removing the immunity from "industrial development" bonds issued by states and municipalities in order to build tax-free factories as a lure to industry; but, the Committee reversed this decision and instead voted to deny the use of rentals on such factories as business deductions. The Senate Finance Committee has now voted to eliminate even this substitute, which is ineffective whenever such factories are given or cheaply sold to the migrant industry. I am hopeful that the Senate Committee or the Senate, with the administration's backing, will reinstate at least this modified version before the bill is finally passed, and eliminate this unjustifiable abuse of public credit.
6. Request legislative and administrative action to correct substandard wage competition. It is my hope that the President will reexamine his decision not to seek an increase in the minimum wage or to extend its coverage at this time; that his administration will ask Congress to modify or repeal the Fulbright Amendment to the Walsh-Healey Act which has stymied effective application of adequate nationwide minima on defense contracts; and that the Department of Justice will act more vigorously in pending litigation under the Fulbright Amendment which has delayed the adoption of realistic wage standards for the textile industry. I am particularly hopeful that this year's budget for Labor's Wage and Hour Enforcement Division will rectify last year's error, when this budget was cut 27% below the previous appropriation, thus making it possible to inspect only one out of twenty-two establishments covered by the law, requiring the complete elimination of eight southern regional offices, and making possible the review of wages in Puerto Rico only once in every seven years for each industry.
7. Initiate a program to revive the shipbuilding industry. Such a program, much discussed but not as yet forthcoming, is of particular interest in New England and other areas dependent upon this vital industry. An essential part of such a program would be to make more effective those defense manpower policies applicable to the shipbuilding industry, inasmuch as the third Forrestal-type aircraft carrier was awarded to a shipyard with increasing employment and substantial naval projects, instead of the Fore River shipyard at Quincy, Massachusetts, where employment had already dropped by more than 25%, and where seven out of its ten shipbuilding ways will be idle by this fall.
8. Support the Saltonstall-Kennedy Bill to aid research and market development in the fishing industry. The active opposition by the Department of Agriculture with the approval of the Bureau of the Budget to this measure, which seeks only to allocate to our fishing industry its fair share of tariff receipts, has handicapped its passage without restrictive amendments. I am hopeful that the administration will reverse this position, and support this bill which is of great importance to New England's hundred million dollar fishing industry.
9. Seek more effective social insurance against the ills of unemployment and forced retirement. In order to maintain community purchasing power and individual living standards, New England requires improvements in the existing Social Security Program, which improvements are only partly contained in the recommendations of the President, particularly with respect to our disabled citizens. It is especially important to strengthen our unemployment compensation program by extending coverage, providing federal reinsurance for states with low reserves and by establishing through congressional action – not, as the President asked in vain, through individual state action – minimum standards for unemployment insurance benefits and their duration. As a first step, the administration should withdraw its support, even though it is substantially modified, of the House-passed Reed Bill which would undermine the basic strength of our jobless insurance program. The bill introduced today by myself and several other Senators would far more adequately meet the needs of New England and the nation.
10. Accord equal treatment to New England and all other areas in federal programs, including those for resource development. Last year, the original budget request for the New England-New York Inter-Agency Survey of Water Resources was set at $1,200,000 in order that that survey might be completed by the end of fiscal 1954, inasmuch as its original termination was fiscal 1952. The revised budget, however, when finally enacted into law, cut this figure exactly in half, thus delaying completion by at least another year. This stepchild treatment of New England by a Federal Government which has provided direct grants for the establishment of power facilities in other areas already enjoying cheaper power rates, should be reversed by the present administration, for the recommendations of the Budget Bureau and Army Engineers are generally conclusive on such items. New England's share of the Army Civil Functions Appropriation Bill is less than that received by some two dozen individual states, practically all of whom contribute less in tax revenues than Massachusetts alone; and therefore the request for adequate funds with which to survey our potential resource development is not excessive.
It is my hope, Mr. President, that the administration will take prompt action on the 10-point program which I have outlined above, and that we in Congress – with the assistance of the twelve New England Senators who have indicated their active concern for these problems – will be able to follow through on legislation to restore economic strength and expand employment in New England and all other parts of the country.
* As measured by the average weekly insured unemployment under state programs, May 1953-May 1954.
** March 1953 to March 1954, latest available Bureau of Labor Statistics surveys.
*** Defense Department release based upon contracts of $25,000 value or more, $10,000 for Navy.