It does not follow, then, that because at given moments capital may be dearer than at other moments, a general rise or a general fall in prices will immediately follow. Neither can we lay it down as an indisputable axiom that a 5 per cent. interest, say, is detrimental to trade, and a 2 per cent. interest is beneficial to trade. But we can say, I think, that a very high rate of interest is harmful to trade, particularly if it be prolonged, and that a constantly fluctuating rate of interest is more unfavourable for trade than a uniform rate, or a rate that varies but slightly. A high rate of interest means dearth of capital, and dearth of capital must affect production and consumption and the output of wealth, just as a dearth of seed must affect the coming harvest. The community, therefore, must necessarily suffer from a dearth of capital, and as the community is largely dependent upon the banks for the supply of capital, then it follows that it is best for the community that the supply should be constant, that it should adjust itself to the demands upon it. If it could do this, then the rate of interest would tend to greater uniformity. At any rate, it would not rise and fall so capriciously as it does do. If it varied it would vary within narrower compass. If this could be accomplished, if the supply of capital were less dependent than it has been and still is, upon extraneous circumstances, we may see steadier prices, and perhaps one happy effect would be less labour difficulties and less strikes. Strikes are, in many instances, the effect of constantly fluctuating prices. But the supply and price of capital would not alone put an end to fluctuating prices. I merely hint that it might help to correct those frequent and extreme fluctuations that cause so much discontentment, and so much envy, and so much misery. It would be interesting to speculate what would happen if the Germans conquered us and took away our colonies and our goldfields. If Germany restricted or cut off the supply of gold to this country, what would happen to our loanable fund? How would it affect what we call the creation of credit? How would it affect the supply of capital? If the law remained as it is, and the banks could get no more gold reserves, then there would be no loanable fund and no supply of capital. But the law being what it is, the supply of capital is dependent upon the supply of gold.