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.