Interest is a price which is paid for the use of capital and like other prices it depends upon the supply of capital and the demand for capital. But when we have said this we have not gone very far in an explanation of interest, for the reason that the supply of capital and the demand for capital need in turn to have their origin explained. This explanation will serve, however, to show that the rate of interest does not depend upon the demand for and supply of money, as is popularly supposed. Doubling the amount of money in the country would not lower the rate of interest because with the amount of money doubled prices go up and a larger amount of money is needed to secure the capital which the borrower really desires. It may thus be seen that an increase in the supply of money brings with it a corresponding increase in the demand for money and over a long period of time the two influences cancel each other and do not affect the rate of interest.