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The optical birefringence and dichroism observed in magnetic fluids when subjected to a magnetic field are generally ascribed to orientation of the particles, to anisotropic spatial ordering, or to string formation. Magnitude, concentration- and time dependence of the anisotropies predicted by these mechanisms are compared with the available experimental data. This leads to the conclusion that orientation of small aggregates and secondary aggregation of large aggregates into strings are the most likely cause of the large anisotropies. Orientation of single particles can be responsible for small anisotropies only. Field-induced spatial ordering has, at least optically, not (yet) been observed.
P. C. Scholten (Sat,) studied this question.