The South: The Nation's New Economic Frontier

5920 CONGRESSIONAL RECORD — SENATE 5921 manufacturing wages in the South has kept pace with that in the rest of the country—see table 4. Sixth. The financial and credit institutions are not developed as efficiently as similar institutions in the more industrialized parts of the country. RECENT ECONOMIC GROWTH OF THE SOUTH All these facts sound rather grim, but they hide the story of the remarkable growth and progress that the South has achieved during the past few decades. Per capita income in the South has risen to two and a half times the 1929 average, while for the whole country it rose only one and a half times. In the past 15 years alone the per capita income in m United States it tripled. Another over-all measurement of economic progress is the rise in total non-agricultural employment. Here, too, the South's growth has been more rapid than in the rest of the Nation. Between 1939 and 1954 electric energy output in the South grew more than one a half times as fast as it did in the Nation as a whole. In this respect I am happy to point out to Arkansas, whose electric output in the last 15 year increased twenty-eight fold. A recent survey of southern electric utilities showed that total installed generating capacity doubled in the past 5 years, and it is expected that it will double electric capacity. Economic growth and expansion require investments, and the southern share of manufacturers' expenditures for new plants and equipment has increased over the years even more than has the phenomenal rise in industry nationwide. In 1939 the South accounted for 12.4 percent of the total; this share ran to 13.8 percent in 1947 and 15.5 per- cent in 1953, the latest year for which data are available. Here again, I am to note that manufacturers' expenditures for new plant and equipment rose relatively more than 50 percent faster in Arkansas than in the Nation as a whole-- see table 6. Yes, the South is the Nation's new economic frontier, but its potential is still far from being a reality. The area is ideal both for work and play. Its recreational facilities are unexcelled, its climate delightful, and its investment opportunities abundant. The climate pays off not only in year-round recreation and sunshine, but also in dollars and cents. Investors in the South find that a dollar invested in southern plant goes further, because the mild climate precludes the necessity of winterized building. Similarly, available data indicate that a dollar invested in agricultural development— particularly raising livestock—in the South goes further than in the rest of the country. But let me hasten to add that, as any frontier, our economic problems are still far from being solved, and we must not and do not intend to rest on the laurels of past achievements. Thus far, the per capita income of even the richest State in the South is still below the national average. So we must continue to strive to improve our eoonomic conditions to reach the national level, and, I hope, even forge ahead of the national average. The people of the South have made sacrifices to achieve economic progress. During the 15-year period between 1939 and 1954 State taxes in the South have increased threefold, while the comparable incerase for the rest of the country was less than double—see table 7. In this connection, the increased expenditures for education are particularly significant. We know that there is a direct relationship between levels of education achieved by persons and their income. Comparable data on educational attainment and income show that the differentials in income between the South and the rest of the country decrease with the increased level of education—see table 8. It can be expected, therefore, that increased expenditures for education in the South would be rewarded in cultural enrichment as well as in rising income. The expenditures made for education is a good gage for measuring educational progress. In this respect, too, the South is also catching up with the rest of the Nation. Between 1939-40 and 1953-54 the South enlarged its expenditures per pupil in public elementary and secondary education by 306 percent. During the same period, the Nation as a whole increased its spending per pupil by 235 percent—see table 9. THE NEED FOR INTENSIFIED INDUSTRIALIZATION On the economic front we must concentrate our energies on accelerating the development of our industries. The South still does not have its appropriate share of manufacturing, and a considerable proportion of its limited manufacturing is concentrated in the relatively less efficient industries. The census of manufacturing divides American industries into 20 major groups. The value added per employee by those industries varied in 1953 between a high of $12,200 in the chemical industry to a low of $4,400 in apparel. More than half of the manufacturing employees in the South were employed in 1953 in the five industries which rank lowest according to the value added per employee. The same industries accounted for less than a fifth of the workers in the rest of the United States. These industries were apparel, leather, textiles, lumber, and furniture. The top five industries according to value added per employee— peroleum, chemicals, tobacco, primary metals, and paper—accounted for a fifth of the total employees in the South as well as in the other regions of the United States. The value added by manufacturing per employee averaged $7,100 in 1953 in the country, as compared with $5,800 for the South. Moreover, between 1947 and 1953, the value added per employee rose more sharply in the rest of the United States than in the South. Apparently the higher concentration of lower ranking productive industries in the South accounted for the fact that its industry trailed behind the rest of the Nation in terms of value added—this despite the fact that the number of manufacturing employees had increased at about the same rate in the South as it had in the rest of the country—see table 10. TO HIM THAT HATH But again I am optimistic as to the future. The South is blessed with richness of resources, both human and natural, that are needed in the most rapidly growing United States industries, including petroleum, chemicals, and paper. And the old practice of shipping the raw materials for processing and manufacturing to other areas is slowly but surely disappearing. This growth has in turn attracted the location of new industry, though not in sufficient quantity. The automobile industry serves as an excellent illustration. Motor vehicle registration in the Southern States has increased more rapidly in the South than in the rest of the country. The automobile manufacturers have responded to this rise by building new assembly lines. Each new assembly plant, in turn, attracts associated industries: tire plants, producers of fabricated metal parts, chemicals, and others. The experience of Arkansas, if I may turn again to my favorite State, illustrates this point. Barely 6 years ago lumber, which in terms of value added per employee is the least productive industry group in Arkansas, accounted for 40 percent of the production workers in manufacturing. Since then employment in lumber has declined by 25 percent, but the slack in employment has been taken up by relatively more productive industries, such as metals, chemicals, and petroleum. POSITIVE POLICIES ACCOUNTING FOR GROWTH I am also counting on the competitive factors to benefit the South. The southern advantages in resources will continue to spur the establishment and expansion of new industry. It is on this basis that I oppose the distortion of the Walsh-Healey Act which the Secretary of Labor has used as a basis for setting uniform nationwide minimum rates for establishments bidding on Government contracts. A realistic policy should take cognizance of the fact that labor costs, as well as other costs, may vary from market to market and region to region. Now, lest I be misunderstood, I do not favor that industries move to the South solely because of its lower wages. I fully expect and hope that the wages and salaries of the working people in the South will rise to the national average with further increase of industrialization. But I am equally opposed to the Government favoring one region over the other in awarding contracts. A positive Government policy to stimulate competition calls for Government recognition of the need to encourage small and new business. In this connection, I have introduced recently a bill on behalf of myself and a majority of the distinguished members of the Committee on Banking and Currency, represent