178 
BANKING STANDARDS 
TABLE 108 
CORRELATION OF YEAR-TO-YEAR PERCENTAGE CHANGES OF DISTRICT 
RATIOS IN PAIRED SERIES 
INDEPENDENT VAriaBLE—Ratios of 
Demand Deposits to Earning Assets 
Amount of Chane- 
Direction 
Percentage 
Groups 
Total............ 
Increase 
6andover............. 
gtob...... oo... 
104... iii tees 
Under2............... 
Decrease 
Jnder z..... 
to 4..... 
4tob...... 
6 and over. .... 
Total. .... 
Average 
Percent- 
age 
2 nT 
Number 
of 
District- 
Years 
DEPENDENT VARIABLES—Net 
Average Percentage Change 
Gross 
Earnings 
to 
Earning 
Assets 
Total , Net 
Expense Earnings 
to to 
Earning Earning 
Assets Assets 
—_e af 
- 
—- 3.12 
+ 1.1§ 
— 8.15 
— 8.24 
- 0.04 
1 
1 97 
TT 
..20 
gross and net earnings and in total expense are attributable alone 
to the relative amounts of demand deposits. It is shown above 
that the amounts of dispersion in these series from their district 
levels are functions of the amounts of loans and discounts. A simi- 
lar functional relationship occurs in the year-to-year changes. 
If the net changes are measured for districts with increasing and 
decreasing ratios of both demand deposits and loans and dis- 
counts, the results shown in Table 109 are secured. 
To illustrate: The net year-to-year changes in ratios of gross 
earnings, of total expense, and of net earnings were downward 
in districts having increasing ratios of demand deposits. But 
for districts which had increasing ratios of demand deposits and 
of loans and discounts, the net change in each of these series 
was upward. On the other hand, while the net change in ratios 
of gross earnings, of total expense, and of net earnings for dis- 
tricts with decreasing ratios of demand deposits was upward, the 
rate of change in each of the series was accelerated in districts 
having decreasing ratios of demand deposits and increasing ratios 
of loans and discounts. Briefly, and in summary of Table 109, it 
is seen that conditions associated with the greatest falls in gross 
earnings, in net earnings, and in total expense are increasing 
demand deposits and decreasing loans and discounts; those