This is a transcription of this speech made for the convenience of readers and researchers. A copy of the text of this speech exists in the Senate Speech file of the John F. Kennedy Pre-Presidential Papers here at the John F. Kennedy Library.
Twenty-eight years ago, here in Ohio, Franklin Roosevelt launched the campaign that swept the nation in 1932.
At that time the banks were closing and the soup kitchens were opening; the bread lines were forming and the dirt was being blown off the farms. Franklin Roosevelt put forward one of the programs that ended hard times -- the program for a securities exchange commission, and he said: "Our industrial and economic system is made for individual men and women… not individual men and women for the system."
I come to you today as the Democratic candidate for president in 1960. I think we are going to win in Ohio and in the nation, the kind of victory Roosevelt won in 1932 -- a victory for the principle that people are more important than the system.
For in 1960, as in 1932, people are in trouble. There may not be mass unemployment, but there is creeping unemployment -- in steel, in textiles, in coal, in housing. There may not be soup kitchens, but there are depressed areas in Buffalo and Pittsburgh and West Virginia and Kentucky. There may not be dirt blowing off the land, but the small farmer is being blown off the farms by the thousand. There may not be Herbert Hoover, but there is Richard Nixon. And sometimes I wish it were Mr. Hoover instead. For at least Mr. Hoover cared, at least he was concerned, at least he tried to do something. But Mr. Nixon says he's satisfied. He says we've never had it so good.
I'm not satisfied. I think we can do better. I think we can do better in making America strong militarily. I think we can do better in raising our prestige abroad. I think we can do better in having friends, not foes, in Cuba, only 90 miles away. I think we can do better in practicing what we preach about equality before the law without regard to race, creed or color. I think we can do better in improving and expanding our schools. And I think we can do better in the matter that Franklin Roosevelt touched here in Columbus twenty-eight years ago -- in the matter of monetary policy.
For eight years -- in season and out, in recession and out, in times of balanced budget and out -- this administration has maintained a policy of high interest rates. It has raised the rate on prime business loans by 76 percent. It has raised the rate on FHA loans by 34 percent. It has raised the rate on Treasury bills by 95 percent. It has raised the rate on long-term government bonds by 52 percent. It has raised the rate on municipal bonds -- including bonds for building schools -- by 45 percent. It has raised the rate on everything but the air we breathe.
And these are not just numbers -- they are people. High interest may help the system. The banks in the Federal Reserve System increased their earnings by 81 percent between 1952 and 1959. They fared well. But what I want to know is how fared the farmer? How fared the small business man? How fared the home-owner? How fared the student, and the teacher, and the parent? And I think the answer is pretty plain. They fared badly. They have been hurt.
Take the case of the farmer. He has to pay 6 and 7 percent (on his notes). With that money he could buy new equipment, or more land, or more feed. But instead he's paying off old debts. That is why farm income sank $3.5 million in the past seven years. That's why 700,000 farm units -- mostly family farms -- were liquidated in the past seven years. That's why in western Ohio almost every day, the rural papers announce forced sales of farmland.
Take the case of the small businessman; he has to compete with giant corporations. He needs funds for modernization and expansion. But he can't raise funds himself, and he doesn't get credit at the prime rate. He has to go to the bank and pay five and six percent for it. That's why small business is in bad straits across the country. That's why small business profits have been cut in half by since 1947. That's why there were three times as many business failures in 1959 as there were in 1947.
Take the case of the home owner. He needs a loan to build a house, But the rise in interest -- tiny as it may seem -- adds thousands of dollars to his costs. The interest a man would have to pay on a $10,000 house with a 30-year mortgage rose by only 1½ percent but that means $3,000 more in his costs. And that's why housing starts are off by 20 percent this year. That's why there is so much unemployment in the lumber yards, and in the companies that make lamps and refrigerators and cabinets and glass, and everything that goes into homes.
Take the case of the student, the teacher and parent. In 1952, a typical school district wanting to build a million-dollar high school faced interest payments of $328,000. Now it has to face charges of $628,000. I know of a school district in Hempstead, New York, which 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 $1.3 million -- enough to build a school for 900 people. But the high interest rate is in effect. And that is why it costs so much to get started on new schools. And that is why so many of our schools are over-crowded, and so many of our teachers over-worked.
Mr. Nixon may be satisfied, But I say that what hurts the farmer, the small businessman, the home owner, and the school teacher hurts the country. I say that the rigid interest rates of the past seven years have slowed up the economic growth of the whole nation. I say that they worked to deepen the recessions of 1954 and 1958. I say that they have cost the taxpayers billions in added interest charges. And I say that I am not satisfied with that.
I believe in sound finance. I believe in the balanced budget. I believe in an independent federal reserve. But I oppose rigid management of the money system in any special interest. I believe that in the management of our monetary system there must be a balance between many interests.
First, account must be taken of the national interest in economic growth. For economic growth is the spring from which there flow high living standards and all public services, including defense. And an interest rate which slows down economic growth ill serves the cause of America and of freedom.
Second, account must be taken of the national interest in a sound dollar. Inflation robs every man, but especially the pensioner and the Civil servant on fixed incomes, of the fruits of hard work. An interest rate that precipitates inflation is no friend of America and cause of freedom either.
Third, account must be taken of the national interest in a stable economy. The economic roller-coaster of the past eight years -- the starts and stops and ups and downs -- has slowed down our over-all rate of growth, and done great harm to thousands of individuals caught on the upswing or the downswing. A satisfactory monetary policy is one that would aim at a steady prosperity.
Fourth, account must be taken of the national interest in a balance of foreign payments. Low interest rates can cause a flight from the dollar with a resultant drain on our gold reserves. String as our economy is at bottom, we cannot afford indefinitely a gold drain. Thus our monetary policy must be geared with our production policies and our foreign policies to assure an over-all balance of payments over the long run.
I believe a wholesome balance can be struck between these competing requirements. I do not say it will be easy, and I do not seek the Presidency because it is an easy job. I think the balance can be struck because I have faith in the American people -- faith in their good sense, faith in their energy, faith in their willingness to make sacrifice for the national interest.
The men who first settled this section of the country were known as the men of the western waters, meaning they were free as the waters to seek their own destiny. I say that we are still free to write our own destiny. I say, as Franklin Roosevelt said here in 1932, that “the future is ours to conquer and to hold”.