In the preceding discussion we have confined our attention to short-time transactions in which the effects of price fluctuation may be difficult to see. Let us now turn, merely for illustrative purposes, to its effects on long-time transactions. Suppose one man loaned another in 1900 the sum of $1000 payable in eighteen years. When the loan was made, the $1000 possessed a certain purchasing power, which may be designated by 4 x. Gradually, as is well known, the general price level rose, until in 1918 it was about twice as high as it had been eighteen years previously. When the loan is repaid the lender finds that its purchasing power has been decreased by half, to 2 x. In other words, he cannot derive from it the same satisfaction which he could have derived when he loaned it. He finds that it requires more money to buy the same amounts of food, of clothing, and of other goods. The significance of this loss of purchasing power appears strikingly in the case of a savings-bank deposit, which bears a low rate of interest. Let us assume that such a deposit was made in 1905, remaining ten years and earning three per cent interest compounded annually. One hundred dollars deposited under these circumstances equaled $134.39 in 1915. Yet the rise in prices during that period more than offset the interest earnings. In short, the depositor, as far as the gratification of desires was concerned, was in a poorer situation when he withdrew his deposit than he had been when he made it. Depreciation in the value of money (rise of the price level) works a similar hardship on debtors. Thus, a dollar which is repaid after a period of falling prices has a much greater command over commodities than it had at the time the loan was made.