amortization for labor surplus areas, some assistance has been channeled into distressed areas. On July 30, 1955, in a statement on the Senate floor, and in letters to the Secretary of Commerce, the Secretary of Labor, the Director of Defense Mobilization, and the Chairman of the Council of Economic Advisers, I indicated my feeling that these existing programs were not adequate and recommended that they be reviewed. Assurances were received from administration leaders that such a review was being made, and, subsequently, Dr. Arthur Burns announced in Denver in October that the administration would submit a program to the Congress this year to provide for a more concerted attack on the distressed-areas problem. It is my understanding that the administration plan will be submitted to the Congress today, and I should like to take this opportunity to urge this subcommittee give it careful study because I know that it is based on conclusions reached only after a thorough review of the distressed-areas problem.

Senator DOUGLAS. I can assure you that we will give it most careful consideration.

Senator PAYNE. The only major differences of opinion I know of on this matter are in regard to the role the Federal Government should play in alleviating conditions in economically distressed areas. The primary responsibility for industrial development rests with State and local governments and private industry. A Federal program alone, no matter how comprehensive, will not solve the problems of substantial labor surplus areas. Only alert, aggressive State and community industrial development programs with such Federal assistance as may be necessary can alleviate the present problem.

Mr. Chairman, in making that statement, may I say in due modesty that to my knowledge there is no person in the State of Maine who has had a more lengthy, or a more close interest in this particular field than have I. My efforts in this direction started over 22 years ago. Through those efforts, together with those of community leaders and State leaders, we were able to arouse interest at the community level particularly and thereby develop programs that did bring into being a revitalized industry in many of the communities of Maine.

Time does not permit me to go into all of those cases, but I can assure you that they go from the northern section of the State right down through to the southern section of the State. In practically every instance industries brought in and developed during that 22-year period are still in operation and today are still making a remarkable contribution to the prosperity of Maine. They were brought in when the same situation that exists today existed then.

Furthermore, any Federal program should aim at lasting improvement in local conditions rather than at just temporary relief. It should also be designed to create new job opportunities rather than merely transfer job opportunities from one community to another.

In addition to expanding present Federal programs under Defense Manpower Policy No. 4, etc., it is believed that a Federal loan participation program should be developed to assist in bringing new industries into distressed areas, and that there should be an appreciable expansion of Federal technical assistance to local and State industrial development gencies.

I will leave the details of the Federal program to the administration experts, and to the members of this distinguished subcommittee.

You are performing a very great service to people in economically distressed areas with the careful attention you are giving to their problems. I pledge you my support of any reasonable Federal program which may be developed to assist communities with serious unemployment situations.

Mr. Chairman, rather than take up more of the subcommittee's time, I should like to ask permission to insert in the record at the conclusion of my remarks a copy of the statement which I made on the Senate floor on July 30, 1955, together with copies of correspondence I had following that statement with the Director, Office of Defense Mobilization, the Secretary of Commerce, the Secretary of Labor, and the Chairman of the Council of Economic Advisers. It is believed that this correspondence will be of interest to the subcommittee since it underscores the concern of the Eisenhower administration about the problems facing ecoonmically distressed areas.

I should also like to ask permission to insert in the record a copy of a speech I made on November 14, 1955, before the annual meeting of the Maine Social Scientists at Bowdoin College in which I discussed in some detail the role of the Federal Government in the New England economy, and advocated an expansion of assistance to chronically distressed areas as part of an 11-point Federal program to help bolster the New England economy.

Senator DOUGLAS. Thank you very much, Senator. That will be done.

(The material referred to is as follows:)

STATEMENT ON SENATE FLOOR BY SENATOR FREDERICK G. PAYNE CONCERNING FEDERAL ASSISTANCE TO SUBSTANTIAL UNEMPLOYMENT AREAS

Mr. President, one of the most significant economic and political developments of the past decade has been the commitment of the Federal Government to the principle of full employment. It has become one of the accepted responsibilities of the Government to use all of its resources to prevent the human suffering and the economic loss which has marked our Nation's more serious panics and depressions.

No free and rapidly developing economy can ever isolate itself completely from minor fluctuations and adjustments. As long as we retain our private and competitive enterprise system such fluctuations are bound to occur. We know from our experience, however, that in the long run a free-enterprise system, with proper governmental regulations, can bring, as it has brought in the past, a more abundant life for all Americans.

Today the United States is enjoying a period of economic growth and vitality almost without parallel in our history. Ours is a prosperous and optimistic people looking to the future with anticipation and hope. What once appeared to be an almost chronic inflationary problem has been solved, at least for the present. For the past 2 years the Consumer Price Index has remained relatively steady. Unemployment, too, has fallen in the past few months, and at the same time total unemployment has increased at a rate greater than the normal Seasonal rise.

Yet we have not been without our prophets of gloom and doom. Frankly, I welcome their suggestion that all may not be right with our economy. Their warnings serve to put us on guard against smugness and to avoid relaxing from the job we must constantly do in trying to prevent economic imbalances and to correct them where they may already exist.

No political party, however, has a monopoly on the concern for and interest in the health of the economy and the welfare of our people. Both parties believe that America should remain prosperous and that all Americans should share in that prosperity.

As a Republican and as a strong and consistent supporter of the Eisenhower administration, I know that my party, while having confidence in our basic economic strength, will never be complacent as long as one man who wants a job cannot find a job.

consensus is that Government procurement is no real cure for an area which, because of changing technological conditions or for other reasons beyond its control, is not participating in the general prosperity of the Nation's economy. Also the restrictions in the Armed Services Procurement Act relative to price differentials for the relief of economic dislocation sharply reduce its effectiveness as an emergency aid measure.

Very close liaison is continuously maintained with the Area Development Division of the Department of Commerce and the Bureau of Employment Service of the Department of Labor, as well as with the staff of the President's Advisory Board on Economic Growth and Stability. All of these agencies are assisting local communities in whatever manner possible within their respective legislative and budgetary limitations.

As you are aware, the rapid tax amortization program is concerned exclusively with the mobilization base requirements and, as you pointed out, the award of these contracts depends on application by the industry.

I do not wish to intimate that simply because these programs have been reviewed nothing more can or will be done. I simply wanted you to be acquainted with the contribution that we have tried to make to the achievement of the objective in which you are interested. I can assure you that, along with the other departments to which you refer, we will be on the alert constantly for new items that may make it possible to proceed more rapidly toward the achievement of the objective.

Sincerely yours,

ARTHUR S. FLEMMING,

Director, Office of Defense Mobilization.

AUGUST 4, 1955.

DEAR SENATOR PAYNE: Thank you for your letter of July 29 concerning the need for the improvement of Federal programs for assisting spot labor and surplus areas.

We are aware of this need and have acted to improve the development services rendered by my department to local and State development agencies. Early in 1954 the program of the Area Development Division, with which you are familiar. was expanded. The Division was assigned the responsibility of serving as a focal point and clearinghouse in the Federal Government for area groups and delegations seeking advice and assistance on problems of local unemployment. Since that time the Division has operated as a central clearinghouse on labor surplus problems very successfully and has attempted to keep local groups informed of available Federal assistance. The attached Available Federal Assistance for Community Development is an example of a recent publication prepared for labor surplus area groups which may be of particular interest to you.

The Economic Report of the President for 1955 recommended a still further strengthening of the area development program. As a result of this interest and because of the increased demands upon the small staff available to the Division, I submitted a supplemental budget request to the present Congress in the amount of $250,000. It was our plan to use these funds to increase on-thespot assistance to labor surplus areas by stationing area development specialists in the field and undertaking the various activities outlined in the attached testimoney of Mr. Victor Roterus before the Joint Committee on the Economic Report. Further, it was our plan to give continuing study to the problem of how Federal programs for assisting labor surplus areas might be strengthened and improved. Unfortunately, this supplemental budget request was disapproved by the Congress.

As suggested in your letter we will continue to give serious consideration to how Federal programs of assistance might be made more effective. This is being done through the participation of my Department on several established interdepartmental committees on which the Department of Labor and the Office of Defense Mobilization are also represented.

Sincerely yours,

SINCLAIR WEEKS, Secretary of Commerce.

AUGUST 17, 1955.

DEAR SENATOR PAYNE: Thank you for your letter of July 29 enclosing a copy of a statement you presented on the Senate floor concerning Federal assistance to areas of substantial unemployment.

Responsible agencies of Government are at work studying the problem of persistent area unemployment. These studies include an evaluation of existing Government programs and actions which might be taken to strengthen these programs. The suggestions in your letter will be helpful to us.

The Department of Labor is giving special attention to this problem. This is being done because of our concern about the problem and also in order that we may make the maximum contribution to deliberations by the responsible agencies of Government.

Sincerely yours,

JAMES P. MITCHELL,

Secretary of Labor.
AUGUST 29, 1955.

Dr. ARTHUR F. BURNS,

Chairman, Council of Economic Advisers,

Executive Office Building, Washington, D. C.

DEAR DR. BURNS: It has come to my attention that the Council of Economic Advisers now has under review the Federal Government's program to assist areas of spot unemployment.

As a Senator from a State which has local unemployment problems, I have been most interested in this matter and late in July spoke in the Senate, urging a thorough review of the problems presented in these distressed areas. Enclosed is a copy of that statement which I thought you might be interested in seeing.

You may be sure that I appreciate very much your work on this problem and would be happy if you could let me know of any conclusions you have come to regarding methods to better coordinate and, perhaps, expand Federal assistance to distressed areas.

With very best wishes.
Sincerely yours,

FREDERICK G. PAYNE,
United States Senator.

SEPTEMBER 6, 1955.

DEAR SENATOR PAYNE: I appreciate your writing to me about the local unemployment problem and sending me the statement on this subject, enclosed with your letter of August 29.

For several months, the Council has been working on a coordinated Federal approach to community assistance. At present, a plan developed by an interagency technical committee is being studied by the heads of interested Federal agencies. I hope soon to be able to place a definite program before the President. If the final program eventuates in a legislative proposal, I am sure that you will find it compatible with the spirit of your July 30 statement.

Sincerely yours,

ARTHUR F. BURNS,

Chairman, Council of Economic Advisers.

THE FEDERAL GOVERNMENT AND THE NEW ENGLAND ECONOMY

Address by Senator Frederick G. Payne (Republican, Maine), before annual meeting of Maine Social Scientists at Bowdoin College, Brunswick, Maine, Monday, November 14, 1955

It is indeed an honor and a privilege to speak before this meeting of Maine Social Scientists and to have an opportunity to renew old acquaintances and make new friends among one of Maine's most distinguished groups of educational leaders. The contribution which you are making in training our young men and women as future leaders is one of the most important undertakings in our Nation today. As civilization advances, the need for enlightened leadership increases. Without a firm indoctrination in the liberal arts with the resulting appreciation of the cultural values of western civilization, the leaders of tomorrow, be they governmental, industrial, or scientific, will be unable to cope adequately with our increasingly complex life. In the training and inspiring of your students you are presented with a task and a challenge too often unappreciated and inadequately rewarded by society in general. I salute you with deep admiration for the outstanding contributions you are making toward a better future for mankind.

This afternoon I should like to set forth some of my thoughts on the New England economy. In doing this, I know that many of you are far more conversant than I on some aspects of this subject. In particular, therefore, I want to focus your attention today on the role of the Federal Government in the New England economy from the point of view of a United States Senator.

Since the end of World War II, the United States in general has experienced one of the greatest economic booms in its history. By almost whatever economie standard you choose, the vast majority of Americans are better off today than ever before in history, and many signs point to a continued upward trend in prosperity. But in spite of the general prosperity some difficult problems remain to be faced and solved. Economic growth means change and, while change may bring benefits to some areas and industries, it may also strike harsh blows at the very heart of others.

Taking the economic pulse of New England today in terms of per capita income or standard of living, the figures show that it is one of the more prosperous areas of the country. With only 2.1 percent of the Nation's land area and 6.1 percent of its population, New England in 1954 had 6.6 percent of the Nation's personal income or a per capita personal income of $1,935 as compared to $1,770 for the country as a whole. It should be kept in mind, however, that regional statistics do not reveal the prosperity or suffering of individual communities. The economic situation today varies appreciably within the New England area and within the individual States.

While New England is generally prosperous, we must remember that in relation to other regions New England's relative share of the Nation's employment and wealth has been declining. But so long as the trend does not reach the point where New England cannot provide, as other areas are doing, a gradually rising standard of living for her people, there is no reason for serious alarm. An older, highly developed region cannot be expected to grow as rapidly in population, income, and jobs as a more recently developed region. The fact that the industrial face of the United States today is rapidly changing means that unless we are alert to the developments taking place, New England can lose materially in the process.

I have no patience, however, with those who view the situation with an excess of alarm and despair. True, New England has economic disadvantages and there exist, as a result, pockets of severe hardship scattered throughout the area. But not one of our economic problems taken by itself is so serious that it could sap New England of her great reserves of economic strength. It is only when these problems are piled one on top of the other that we become aware of the need for corrective action.

What are the causes of New England's economic problems? Why is New England having difficulty maintaining its competitive position within the American economy? The reasons are legion, but basically they stem from the fact that New England has the oldest regional economy in the United States. To generalize further, we are deficient in many of the raw materials of modern industry. Our transportation costs, power costs, labor costs, and taxes are higher than those in several other areas of the Nation. Much of our plant and equipment is old and needs modernization. The center of national population has long since shifted to more distant areas of the country.

The greatest strength of New England, however, is and has always been its people a people noted for their independence, their self-reliance, and their energy, a people with a high level of education and skill. Out of this region has come the strength in inventive genius, finance, and industry that has developed many of the other areas of the Nation. In many fields we have shown inspiring leadership. In some of these fields, we now find ourselves playing second fiddle, either because of economic conditions over which we have little control or because of a tendency to grow soft and feel we can rest on the laurels of the past.

There is nothing so disastrous to a people as to become complacent, and complacency has taken hold in New England much more than is good for us. There is still no substitute for faith, courage, and a progressive spirit. Just because we have enjoyed a strong economy in the past in our textile, shoe, and other industries is no reason we should sit idly by and just wonder why, with all the glory of the past, we should now be losing some of these industries to other regions with the resulting loss of jobs for our people.

The situation is not so serious, however, that it cannot be solved by the same kind of alert and intelligent leadership that has enabled New England throughout her long history to adapt herself to changes in international and national economic patterns.