The applicability of sum-coincidence measurements of two-step cascade \ensuremath{\gamma}-ray spectra for the determination of photon strength functions is discussed. The method is sensitive, not only to primary transitions, but also to secondary transitions proceeding from states of intermediate excitation. An experiment based on thermal neutron capture in a Nd target was undertaken at the Brookhaven National Laboratory High Flux Beam Reactor to test various hypotheses of E1 and M1 photon strength function in the $^{144}\mathrm{Nd}$ nucleus. The results were compared to a series of model calculations, in which the back-shifted Fermi gas model is used to represent the level density. Models derived from the Fermi theory of liquids are strongly preferred.