572 AGRICULTURAL RELIEF Mi. SExAUER. I agree with that. But I do not believe that they have gone quite far enough back in that discussion to arrive at the basic things which have caused those. I would think that the things which caused increased cost of distribution are mostly costs of labor and costs of material; which, again, are costs of labor; and costs of labor, perhaps, are brought about by competitive conditions in labor; and then you can trace back, as did the Business Men’s Commission, to certain immigration laws, which were passed for Americanization purposes, that artificially stimulated the demand for labor or de- creased the supply of labor in this country; and, consequently, those costs have increased farmers’ costs. Probably certain other legisla- tion which has been passed for the purpose of protecting other branches of industry have also added to the cost, if not directly, at least indirectly. Mr. Kercaam. Labor, as I understand your statement, is the very largest factor in the situation. At the present time the labor index is 228. Mr. SExAUER. Is what? Mr. Kercaam. The idex is 228 for labor. Mr. SExaUER. I make this statement that the largest portion of the cost of anything, except basic raw materials, when you finally analyze it back to the final point, is labor. The cost of machinery is plus the cost of every part of machinery, plus cost of mining it, plus all the other labor costs, which extend back through all of its I piilextions is not the only factor which may cause the high cost of abor. Mr. Kercaam. I am not interested particularly in naming the measures, excepting I wanted to get, if I could, the principal factors in your own mind that cause the present farm situations Mr. SExavERr. I agree that increased taxes, etc., do make farmers’ costs higher. But I think that the things which cause those things which Warren, Faris, and Burnett I refer to, and who also state that the taxes are pretty much all labor. So it traces back to things which are more fundamental than thoes rather superficial things as taxes. Mr. Kercaam. If I recall the figures of Warren and Pearson they run something like this, in expressing the ratio of these various factors that enter into the high farm costs: They place interest as 1, they put local taxes as 2. But they put the costs of distribution at 6; in that same ratio, calling interest 1, taxes 2, and costs of distribution in which index, labor is an important factor, they put costs of distribu- tion as 6-6, 2 and 1 express the index among various items that they put into their explanation as to high costs. Mr. SExaUER. The increased costs of interest comes about there, again, because by fundamental debts which have created other indebtedness. So that, again, is not fundamental. It is a factor which appears at the present time, but there is something back of that which has caused that increased cost of interest. For instance, if a man owned a farm free and clear, and because of agricultural depression found it necessary to put a mortgage on it to pay taxes and pay for his living, his interest costs would be increased, but his costs would not be increased because of interest, but because of some other factors back of that which caused his interest costs to be increased.