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
Percentage
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 similar
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 discounts,
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 districts
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
