THE THEORY OF INTEREST

monthly average of interest rates on prime, two-name,60 to 90 day paper. 27

The theory that interest rates vary with the seasons,rising during the late summer and autumn months andsinking during the winter and early summer months isborne out by Professor W. L. Crum’s article, Cycles of

CHART 40

Indexes of Seasonal Variations in Interest Rates.

Rates on Commercial Paper, 2 * which treats of monthlyfluctuations in commercial paper rates over the period1874 to 1913.

Chart 40 is a reproduction of Professor Crum’s chartshowing monthly deviations of interest rates from theannual average of monthly rates over the period 1874 to

87 The average rates for each month plotted on the chart were com-piled from the daily rates published in The Financial Review.

“The Review of Economic Statistics, January, 1923, pp. 17-27.

[396]