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 to 6 per cent. and then from 6 per cent. to 7 per cent. would have been quite ineffective, had not other events caused speculators suddenly to remember that rising prices sometimes stop.

This point of view was very ably put by another eminent American authority, Mr. Albert Strauss, an ex-Member of the Federal Reserve Board. Speaking in May 1922 he said "Booms and depressions are caused by hope of higher and fear of lower prices, whether of commodities or of securities. The hope of higher prices leads to demands for funds for the purpose of purchasing in anticipation of a rise; the fear of lower prices leads to repayments of loans with the proceeds of sale in anticipation of a fall of prices. No rate, however low, will tempt borrowing for the purpose of purchasing a commodity whose price is believed too high—and broadly speaking, no rate, however high will, by reason of its being high, restrain borrowing intended for the purchase of commodities which are believed certain to rise. A high interest rate will often deter borrowers because it is taken as a warning that commodity prices are regarded as too high or that money may become unobtainable at any price. It will serve as a concrete expression of opinion by those best