The Fight Over Blight

Yankee New England has the nation's worst unemployment problems, partly because it has lost big pieces of its industry to the booming South. Massachusetts' mophaired Freshman Senator John Kennedy, a curious blend of Boston conservatism and New Deal liberalism, is firm in his belief that the Federal Government should do something to slow down this economic migration. Democrat Kennedy has delivered long speeches in the Senate, has written for magazines--and even crossed the Mason-Dixon Line to defend his program. Last week he offered the clearest statement of his argument to date in a 4,000-word article in the Atlantic, aptly subtitled "The Struggle for Industry."

Natural Reasons. "Why do industries move South?" asks Kennedy. One cause, he admits, is "the South's natural advantages," e.g., lots of fresh, pure water, a milder climate, plenty of elbow room. Another is the South's progress toward matching New England's pools of skilled labor, its research services, its markets and facilities. "Perhaps the most important of all, the South has a much larger supply of labor, primarily from the farms . . . thus enabling employers to select the youngest and most adaptable."

Also, the South has cheap power, largely because of "the influence" of federal programs. "The man who wants to start a moderate-size industry," writes Kennedy frankly, "would pay an annual electric bill in Boston of $26,800, but in Chattanooga only $11,000 [for the identical electric consumption]." New England, he points out, has not obtained a single federal hydroelectric project.

Kennedy wants action in the areas where, he says, federal law permits conditions in the South which are "unfair or substandard by any criterion." He snuggles up to the Fair Deal line long enough to blame the Taft-Hartley law for crippling union organization in the South.* He is on far sounder ground when he recommends an increase in the outdated 75-c- an-hour minimum wage (which provides the wage floor in some rural Southern plants) and abolition of the device of "learners' permits," which allow even lower pay. Federal-tax amortization benefits, he says, have been "disproportionately granted to Southern plants." Federally regulated shipping rates "discriminate unduly" against New England (although he admits that New England is badly located to exploit the big new markets of the Southeast and Southwest). And worst evil of all, in Kennedy's book, "one of the most obviously unfair inducements offered to those [industries], considering migration, is the tax-free plant built by a southern community with the proceeds of federally-tax-exempt municipal bonds."

In addition to the minimum-wage increase, Kennedy wants social security equalized and union privileges guaranteed. He wants tax loopholes closed, and "equal consideration given to all areas in ... tax write-offs, transportation rates and Government contracts and projects." He calls for federal help in achieving "the expansion and diversification of industry in our older areas," federal loans to new industry, and tax amortization benefits.

"Creeping Socialism." Last week President Eisenhower took a short step in John Kennedy's direction. During the 1952 campaign, as he swung through depressed Lawrence and Lowell, Mass., Ike had promised to do something about New England. His follow-through came in the form of a memo to the principal defense-procurement agencies, giving his vigorous endorsement to an Office of Defense Mobilization program for stepping up defense spending in blighted areas. The plan's principal features: 1) to set aside from 20% to 30% of major defense contracts for areas of unemployment, providing that plants in the area can meet the lowest competitive bid of plants anywhere else in the U.S., and 2) to offer faster-than-normal tax write-offs for new defense plants locating in the areas of unemployment.

The President's memo did not specify any industries or any regions, but the South was certain that Ike meant New England, and Southern politicos rent the air with cries of alarm. "An invitation to corruption," Georgia's Richard Russell called it. "Creeping socialism," said Arkansas' Bill Fulbright. Georgia's Walter George, ranking Democrat on the Senate Finance Committee, declared that it would be better for the Federal Government to pay unemployment compensation to New England's jobless rather than "to throw the economy of the nation out of kilter" by encouraging the expansion of industry in New England.

California's Bill Knowland, the Senate Majority Leader, rushed in on behalf of the lusty new Far Western industry, assured the Southerners that he thought a 20%-to-30% set-aside too large, and that the whole Eisenhower program was "too wide and [needed] curtailment."

The dustup promised little success for John Kennedy's crusade, since most of Kennedy's recommendations would require action by Congress. But it gave the U.S. a reminder of how fast a region can change its line once it changes its economy: Yankee New England was now openly in the lists for federal help, while the South and West, which used to yell for federal help against the East Coast octopi, now speak in the phrases of laissez-faire.

*Union organization in the South lagged before the Wagner Act was passed and after it was passed; it still lagged after Taft-Hartley replaced the Wagner Act.

This file is automatically generated by a robot program, so reader's discretion is required.