340 
BANKING STANDARDS 
It will be observed that the net increases in ratios of net 
earnings are larger in all cases but one when gross earnings ratios 
are increasing than when total expense ratios are decreasing, this 
fact indicating the dominance of changes in ratios of gross earn- 
ings in producing these results. 
ConNpiTioNs MAKING FOR DECREASES IN NET EARNINGS RATIOS 
Ratios 
Total Expense 
Gross Earnings 
Total Expense 
Gross Earnings 
Total Expense 
Gross Earnings 
Total Expense 
Gross Earnings 
Nature 
of 
Chance 
[ncreasing 
Decreasing 
Increasing 
Decreasing 
Increasing 
Decreasing 
Increasing 
Decreasing 
Position 
Above 
Above 
Above 
Above 
Below 
Below 
Below 
Below 
Ratios 
Gross Earnings 
Total Expense 
Gross Earnings 
Total Expense 
Gross Earnings 
Total Expense 
Gross Earning: 
Total Expense 
Position 
Above | 
Above 
Below 
Below 
Above 
Above 
Below 
Below 
' Net Change 
in Net 
Earnings 
-,16 
~-~.20 
+.24* 
—.43 
-.32 
-.08 
+ .071 
-— AT 
*tFor explanation of the nature of these signs, and size of the amounts, see Appendix I, page 387, Cases 
¢ and 5, respectively. 
It will be seen that, in every case except one, the decreases in 
net earnings ratios for banks having decreasing gross earnings 
ratios are larger than are those for banks having increasing 
ratios of total expense. 
If the net changes between 1924 and 1925 in ratios of net 
earnings are determined for banks with gross earnings and with 
total expense ratios classified by the nature of the change be- 
tween 1924 and 1925 and also by their positions relative to their 
averages in 1924, the results shown in Table 197 are secured. 
The general conclusion to be drawn from the preceding sum- 
mary is that the dominating influence in producing both increases 
and decreases in net earnings ratios between 1924 and 1925 are 
changes in ratios of gross earnings. This finding is fully in 
accord with that secured by a separate analysis developed in 
Appendix I. 
It should be remember that this conclusion refers to the mem- 
ber banks in the Boston Federal Reserve district, the changes in 
the net earnings ratios being those observed between 1924 and 
1925. Lying back and partly in explanation of these changes