Senator KENNEDY. My close friend and just about first supporter, Governor Di Salle, Mayor Patterson, who I hope will be the next Congressman from the district [applause], Al Horstman, ladies and gentlemen, this is the first time in 14 years of politics that I have ever heard of a Democratic meeting and the Rotary Club joining together. [Laughter and applause.] I don't know whether it means the Democrats are broadminded or the Rotary Club is broadminded, but I am all for it, because I believe that the kind of people we have in our party, the kind of men who are active in the Rotary Club, have many things in common. They start off by being citizens of the United States. They start off by recognizing that the next President of the United States will face difficult and dangerous burdens, that when he is in trouble the country is in trouble, when he is doing well the country is doing well. So we are all bound together, really, in a very real sense, Republicans and Democrats, Rotary Club members, and those of us in politics, all bound together by common aspirations for our country. We may differ on some occasions as to the means of achieving these goals, and these differences are quite important. We may sometimes differ on the goals. We may certainly differ on what our country may need for the future. We certainly differ between our parties today on the position of our country and the kind of leadership it is going to need in the sixties. But I am confident that when November 9 comes that whoever is elected President of the United States will have the good wishes, support and sympathy and right hand of every American, regardless of their party. [Applause.]
Franklin Roosevelt started his campaign here in Ohio. I don't know what has happened to politics, but whenever I read about the 1932 campaign, Franklin Roosevelt stayed in Albany all winter, spring, sunmer, didn't go to the convention until he was nominated. He then took a boating trip up the coast of Maine with his son, started his campaign late in September, made some speeches and was elected by a tremendous majority. [Laughter.]
It hasn't been quite that way in 1960. I have been on the road since January, and we don't know what is going to happen. But in any case, 1932 is a little different than 1960. But in some ways the problems are the same. That is the basic problem of how a country such as ours can maintain full employment, full employment not only of our people but also of our facilities. There has never been any question in my debates with Mr. Nixon about the economic growth of the United States. There has never been any question, I don't think, in any American's mind, that if we used our facilities, our man-power, our resources, our engineers and our scientists and our governmental influences to the maximum, that the Soviet Union would never catch us, regardless of whether their economic growth may be greater than ours today or not. The question has always been, how do we provide for that full use of our facilities? How do we provide for 100 percent use of our capacity in steel? How do we move ahead in the development of our hydroelectric capacity? How do we move ahead in providing that the atomic force shall be used for peaceful use? How do we provide that our scientists and engineers shall be used to the maximum of their talent? How do we provide all of the skilled personnel that we need?
The question is how in our country with a private enterprise system we can stimulate our economic growth in order to maintain our pace. That is the great question which faces the next President of the United States and the people of this country domestically.
In my judgment, the record of the last 8 years is not satifactory enough. There is no sense in trying to compare it to what might have happened 15 or 20 years before. You have to compare what we are now doing with our needs, with our requirements, with what our adversary is doing. The situation changes continually. Therefore, we must always compare our effort with what needs to be done, not what might have been done before. Therefore, when we increase our economic growth on the average for the last 8 years 2.4 percent, and the Soviet Union's is 7 to 8 percent a year, and Western Germany's is nearly 6 percent a year, and Italy's is nearly 5 percent a year, and France is 5 percent a year, and we had the lowest rate of economic growth last year of any major industrialized society, it is a matter of concern to us all. Economic growth is not a technical term. It goes to the kind of profit which businessmen make. It goes to the question of whether our children will get jobs. It goes to the question of whether there will be full employment here in Dayton. We have to provide 25,000 new jobs every week for the next 10 years if we are going to maintain full employment in the country and we are going to have to do it at a time when machines are taking the jobs of men. This is a tremendously difficult challenge for us all.
Quite obviously, if we don't save it, if we don't maintain our people working, if we waste our facilities, if we provide a gradual paralysis of our economic growth and development, then quite obviously in one particular category our system has failed, and we cannot permit failure in the race of the sixties.
So I address myself to that problem and I feel very strongly about it. I think I disagreed with Mr. Nixon on it. He states that he is satisfied with what we are now doing. He referred to the term "growthmanship," somewhat disparagingly. I think it is a very important matter, because it goes to the future of our position around the world. Now the question is what can we do to stimulate our growth.
One of the things which this administration has relied on in the fight against inflation, which has not been a particularly successful fight, has been, of course, a policy of high-interest rates. This is a rather technical subject but everyone of you in this room is involved in it. It has raised the rates as a result of relying on a high-interest rate policy, it has raised the rate on prime business loans in the last 8 years by 76 percent. That involves every businessman in this room. It has raised the rate on FHA, that is housing loans, by 34 percent. It has raised the rate on Treasury bills, that is the financing of the Government debt, 95 percent. It has raised the rate on long-term Government bonds by 52 percent. The result is that we are paying nearly $3 billion more in carrying charges on our Government debt, interest on our debt, than we did a decade ago. It has raised the rate on municipal bonds, in everything that you build for the community of Dayton. It has raised them, including building schools, by 45 percent. It has raised the rate on everything.
These are not mimbers. These are just people. They are involved very definitely in our home commitment and in life. The banks in the Federal Reserve System increased their earnings by 81 percent between 1952 and 1959. But what happened to the farmers who have to rely on credit to survive? What happened to the small businessman who must go into the open market for his financing? What happened to the homeowner who buys his home with a mortgage? How fared the student and the teacher and the parent? And I think the answer is plain; they did not fare as well as they should have.
Take the case of a farmer. He has to pay 6 to 7 percent now on his notes, maybe 8. With that money, he could buy new equipment or more land or more feed or new machinery. But instead he is paying off old debts. That is one of the reasons why farm income sagged nearly $4 billion in the last 7 years. That is why 700,000 family farm units have been liquidated in the last 7 years.
Take the case of the small businessman. He has to compete with the gigantic corporation. The gigantic corporations have no difficulty getting credit. They are prime borrowers. They can borrow out of their own funds or they can go to the bank and stand at the head of the line. The smaller businessman who is not as good a credit risk, who must finance his expansion out of loans, he is hit when he has to pay 5 or 6 percent instead of 4 percent. That is one reason why small business profits have been cut in half since 1947. That is why there were three times as many small business failures in 1959 as in 1947.
Take the case of a homeowner. The interest a man would have to pay on a $10,000 house with a 30-year mortgage rose by only 1 1/2 percent. That does not sound like much. But that means $3,000 more he pays for that house before he pays off his mortgage, and that is one reason why housing starts are off 20 percent this year, even though our population is increasing by 3 million a year. That is why there is unemployment in lumberyards and that is why some of our mills in Oregon are closing down.
In 1952, a typical school district wanting to build a million-dollar school faced interest on their bonds of $328,000. Now it would have to face charges of $628,000 in the short space of 8 years. I know of a school district in Hempstead, N.Y., that recently floated a $5 million school bond at an interest of 4.3 percent. If the 1952 rate had been in effect, that district would have saved $1,300,000, enough to build a school for 900 people. But the high interest rate was in effect, and it cost so much more to get started on your schools, and it costs so much more to provide for your State financing in the State of Ohio.
Mr. Nixon may be satisfied with what we are now doing. I am not. This is a subject which does not command great interest, but it should, because it is a factor in providing stimulation to our economic growth or providing limitation on our economic growth, and to concentration by the administration on monetary policy which has included high interest rates, in my opinion contributed to the recession of 1954, intensified the recession of 1958. Every businessman here knows that in the fall of 1957 the Federal Reserve with deflation coming on and recession coming on, instead of relaxing credit, intensified credit in September 1957, which intensified the recession of 1958. I do not say that monetary policy is the entire answer. There are other problems which go to economic growth. But I must say that I do not believe we have been so successful in our fight against an increase in the cost of living to warrant the reliance on this policy in the next 4 years. I feel that by a suitable adjustment of monetary and fiscal policies, particularly a fiscal policy which goes to the government obligations per year, our surplus on our expenditures and all the rest, I believe it is possible, to maintain a greater stimulation to our economy and at the same time provide a reasonable control over increase in inflation.
The fact of the matter is inflation would be far more apparent if it had not been for the sharp decline in farm income. Actually those of us who may be in business know that industrial costs have gone up nearly 30 percent in the last 8 years; some due to labor costs, some due to other reasons, but one of the reasons has been the monetary policy of this administration. It is one of the issues which separates Mr. Nixon and myself. And I believe that in attempting to make a judgment on what this country must do we consider our obligations at home and abroad, we consider the needs of our time, we consider the kind of judgment which has been rendered on the great questions which face our country, we consider what the candidates' view is of our peril and our opportunities, and I must say that in my opinion, after having been on the Foreign Relations Committee for a number of years and serving in the Congress, there is no doubt in my mind that the judgment reached by bipartisan committees of the best talents we have in the last 3 years, the Gaither committee, the Rockefeller Brothers report, Governor Rockefeller's own speeches, General Gavin, General Taylor, Ridgway and all the others, have held the view that the peril of the United States is increasing, and, therefore, any American who does not agree with that, who feels that the kind of leadership which we now have should be maintained, who feels that candidates who looking at the world around them are reassured - in my opinion the choice is between not merely the Republicans and the Democrats. It is between the concerned and the comfortable. [Applause.] I believe that this is not merely a contest, if I may say so, between Mr. Nixon and myself. It is a contest between a whole group of people on both sides. I hope that if we are successful in this campaign it will be possible for us to bring to governmental service the best talent we have in America, the best kind of talent we have in both parties, the kind of talent which is concerned about our position in the world, which looks to the future, that believes that the United States is due for another great surge forward.
I must say that the problems that we will face in the next 10 years are far more complex than any that Franklin Roosevelt or Harry Truman faced, particularly in the field of foreign policy. What has happened in the last 2 years in the field of foreign policy indicates a whole technique of subversion and infiltration which will be extremely hard to counter. The threat that Franklin Roosevelt faced and Harry Truman faced was the threat of military action across national boundaries, the kind of action taken by Hitler in Poland, the kind of action taken by the Japanese at Pearl Harbor. That was a formidable challenge, but it represented a simple kind of challenge in the sense that it required us to mobilize our resources and go to work.
The same really was true at the time of the Truman doctrine, the same was true at the time of NATO and even the Marshall plan. Now, however, the experience of Cuba, the experience of Laos, the increasing Communist influence in Ghana, and Guinea the turmoil in the Congo, indicates the situation - the situation in Tibet - all of that indicates a technique of conquest which does not rely on direct military intervention across national boundaries. It relies in part on the threat of that intervention but not the reality. But instead relies on building cells within those countries, playing on the hostility to us, playing in some cases on our indifference to the problems of the people, playing on their poverty and disease and ignorance, playing on our wealth, playing on our sense of comfort, playing on the inadequacy on occasion of our representatives abroad, playing on the image of America as no longer a vital, vigorous, moving society, and, therefore, young men on the make turn often in many of those countries to the far left for aid and comfort, and what is true in Cuba is going to be a struggle all over Latin America. Every politician who is out, who seeks power, will decide whether the future lies with us or with the Castros and their running mates. Therefore, in my judgment, to fight that kind of intervention will require - that kind of conquest, will require a far greater subtlety, far more constant vigilance, far greater personnel, far greater foresight than we have ever shown before.
We spent more money in Laos than any other country. We have been paying the army of Laos for years. Yet according to the headlines of the last 2 or 3 days, Laos may slip behind the Bamboo Curtain. Three hundred million dollars went into Laos in the last few years, mostly in surplus military equipment, and yet when a captain of the paratroopers made his determinations, it may mean that Laos, which holds the key to much of Southeast Asia, may be lost. When a minor general of the Iraqui Army made his decision for power and seized control of Iraq against the forces of the West, it changed the whole balance of power in the Middle East. A bomb which might go off in Jordan ki]ling the King might change the whole balance of power in Jordan. So hazard is going to be our companion, and those who can find reassurance in present events in my opinion should not hold power in the 1960's. Thank you. [Applause.]