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.

This Administration has saddled upon our nation the costliest policy in our history – a policy which harms the small businessman, the homeowner and the taxpaper alike – a policy which holds back economic development and new construction here in Arizona – the policy of high interest rates and tight money.

Let me cite a few of the costs of this spendthrift policy.

The first is the cost in small business failures.  When money gets tight – when interest rates climb – the small businessman finds that he cannot obtain or cannot afford – the capital he needs to expand, to reinvest, or to meet the current expenses of a struggling new business. As a result, in the last eight years, the rate of small business has grown to twice what it was in 1952 – twice as many hopes broken – twice as many jobs lost – twice as much income erased.

Second is the cost in unbuilt private homes.  Today, if you buy a $20,000 home on a thirty-year mortgage your cost over the thirty-year period will be $43,200. The interest cost is greater than the cost of the house itself – and more than $9,000 of this interest is the direct result of the high interest rate policies of this Administration.

Third is the cost of unbuilt public works.  Every dollar borrowed by a city or a state costs twice as much – in terms of increased interest – as it did in 1952. As a result, we cannot afford to build the hospitals, the schools, the parks, the sewage systems, and the hundreds other public improvements which our exploding and overcrowded cities desperately need.

Fourth is the cost to the Federal Government.  High interest rates are not only paid by citizens and cities – they must be paid by the Federal Government itself. Today we pay $9 ½ billion each year for interest on the national debt – three billion dollars more than we paid in 1952. Instead of using this money to meet our great national needs – it is paid out in high interest alone – building nothing and producing nothing.

Fifth is the cost in slowed down economic growth.  By restricting money – by tightening credit – we keep American business from getting the capital it needs to thrive – to expand – and to create new jobs. There is no reason why new economic policies in 1961 could not increase our economic productivity by $50 billion – cut unemployment in half – and bolster purchasing power.

This costly tight money policy can – and must – be reversed. The techniques are available. They are well known. First, the Federal Reserve Board must overcome its reluctance to increase the supply of money. It can do this by purchasing government bills now held by financial institutions. Second, there is no reason for an inflexible reserve requirement. When we need more credit in the economy let’s permit the banks to expand credit. When we need less, we can increase the reserve requirement. Third, other techniques such as the Federal Reserve rediscount rates and open market operations should be used to control interest rates. Fourth, reduction of the national debt through sound fiscal policies will inevitably be reflected in reduced interest rates.