(viii) On tariff policy, great care must be exercised not to hurt further depressed industries and labor surplus areas. The New England textile industry has lost more than 200,000 jobs in recent years. It is irresponsible policy to put the burden of solving the Japanese problem on New England textiles.

This is not an argument against freer trade. But it is an argument for improved distribution of the costs of trade liberalization (more on growing industries) and a suggestion that alternative policies be considered.

(ix) Under unemployment insurance, minimum rates should be set so that the range of differential costs would be narrowed.

(x) The encouragement of mergers by Federal tax policies should be ended.

(xi) Subsidies to foreign competitors, through raising prices of raw ma terials for our textile industry and through a two-price system, should be discouraged.

(xii) A flood-insurance program and an adequate flood-control program should be invoked as soon as possible.

(The appended tables referred to by Mr. Harris are as follows:)

Mr. HARRIS. I think Governor Herter's suggestion that it probably isn't a good idea to call these depressed areas is probably a good one. Probably "distressed areas" is just as bad. Perhaps "surplus labor areas," might be one that doesn't have quite the same connotation, and has a certain amount of support in the language of the country.

Let me just first explain why it is that we have difficulties. I think Governor Herter is quite right when he says there has been a great improvement in Lawrence, but one must not forget that this is the top of a boom-the top of a boom, the like of which we probably have never had before-and that one must not draw conclusions about the situation in December 1955 in terms of the long-run picture.

One can even be fairly optimistic and yet expect some reduction in economic activity in 1956 and 1957. In that kind of a situation, the surplus labor areas tend to have a multiple decline, compared to the average of the country. This has generally happened.

If you look at the picture over the last 5 years you will find that on the whole these surplus labor areas in New England have had a considerable amount of trouble, as I shall point out in a minute. So I think we ought to be grateful for the great advances that have been made in all the textile and shoe towns particularly.

But when you take a longer look over 5 years, it does seem as though it is very important to do some planning on this issue, and particularly when the situation has improved to a substantial degree.

This is the time when it really pays off to do something. Therefore I am very grateful that this bill has come out.

Let me just suggest the nature of the problem. I think textiles are particularly interesting to me. Let me point out that the textile industry and the apparel industry, and one or two other soft goods industries, are relatively 40 percent as important to the manufacturing economy of the Nation as they were 50 years ago. This is a good part of our problem, that we have those industries that don't tend to grow as rapidly, or even decline in employment.

The situation is particularly bad since 1947. For example, in textiles, from 1939 to 1947, our total share of the Nation's jobs dropped from 28 to 26 percent. But from 1947 to 1953, they dropped from 24 to 18 percent, a much larger percentage decline per year than we have had in the earlier years. This is largely explained by the great decline in woolens.

Among other interesting points-of course you have a great deal of interest in all these economic problems, and I hope you will put this in your reservoir of economic knowledge and support-I was very much impressed the other day by looking at the problem of consumer credit and how this affects textiles. You know, since the end of 1952, housing and consumer credit have risen three times as fast as the national income. That is a rate of increase which is rather dangerous in my opinion.

But I am not raising that point. What I am trying to say here is, if you look at the last few years, and look at the increase of employment, or the increase of consumption in different areas, you will find that for transportation, which is largely automobiles, in a period of 2 years you have an increase of consumption of 15 percent; of housing, of 16 percent; and of clothing, 1 percent.

This is partly the result of this very marked increase in the use of consumer credit, which tends to change the whole pattern of the

consumption of the Nation, and works to the disadvantage of New England because we are primarily a clothing area, not an automobile

area.

This has certain political implications that I don't want to go into, but I think the consumer credit situation ought to be watched in any case, and I think from our own regional viewpoint, Senator Kennedy, this is particularly important.

I read your book. In fact, one of my friends gave me an advance copy of it, and I was very much impressed by the general idea you had in this book-for example, discussing President (then Congressman) John Adams, that here was a chap who on the whole said that, "To hell with the region, what is good for the nation is good for the region." He suffered politically as a result of taking this attitude he was a man of great courage who did this.

I was also impressed, if I may say so, by your action on the St. Lawrence seaway, though I have always myself argued that the St. Lawrence seaway is good for New England as well as the Nation. But even if a program is slightly bad for New England, and really much good for the Nation, there is a lot to be said for voting for it. But I also think, Senator Kennedy, that we have to take into account the regional aspects of national policies. I am very much pleased that you have been one of the leaders in getting the New England— and I hope ultimately the northern Senators-united on economic issues, because my own feeling is that we have been losing ground, partly because the southern Senators have been so well organized. Therefore when you look at these regional problems you can't say, "Well now, it is good for the country, and therefore I am going to vote for it, even if it is very bad for New England."

If you do that, and if you have another group, say the southern Senators who are well organized and look at these problems from the southern viewpoint, then of course we take a very bad beating.

So I think to me it seems that the correct approach in all these problems is that of course the national interest comes first, but you can't neglect the New England problems, because if you do, you are going to take a terrific beating from some of the other regions, and probably the not result would be, if we have a depressed area here, that this in turn may not be very good for the rest of the regions and for the country

So I think this is a very important general problem, and I have myself tried as often as I could to needle Congressmen into realizing that this is an important issue and I must say in the last few years I have had a dedure feeling that the New England Congressmen are doing a good job in becoming aware of this problem.

I think in na samall part this is due to your leadership.

Let me say a word about this problem of the industries. If you compare Massachweis Whale sind, and Connecticut, for example, you fond in the bass fur Svars this sort of a stamthon Massachusetts has Theem having a good deal of everbia and I think the major factor here has been the witwettere koss in woolen textiles. But she has profited 4/4s vies, maeneobarky in the electronics

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