336 
BANKING STANDARDS 
tion of total expense ratios in 1924 and of the type of change 
between 1924 and 1925, increasing gross earnings ratios invari- 
ably*? result in net increases, and decreasing gross earnings ratios 
in net decreases in net earnings ratios; (2) increasing and de- 
creasing total expense ratios sometimes produce net increases and 
sometimes net decreases in net earnings ratios; (3) when in- 
creases occurred in gross earnings ratios and also in ratios of 
total expense, net earnings ratios increased, thus indicating the 
dominant influence of gross earnings; (4) when decreases oc- 
curred in gross earnings ratios and also in total expense ratios, 
net earnings ratios decreased, thus demonstrating the greater 
influence of changes in gross earnings ratios in producing the 
results; and (5) on the average, increasing ratios of gross earn- 
ings and decreasing ratios of total expense increase net earnings 
ratios by the same amount as they are decreased by decreasing 
ratios of gross earnings and by increasing ratios of total expense. 
While these are some of the general conclusions which may be 
drawn from Table 196, the detail are illuminating in other re- 
spects. 
Let us compare the net changes in net earnings ratios for banks 
with gross earnings and with total expense ratios differently placed 
with respect to the 1924 averages, and observe the relative effect 
upon such changes of the regression tendencies in the two series. 
Position of Ratios 
in the Two Series 
Both above 
Both below 
Regression 
Tendencv 
Net Change in Net 
Earnings Ratios 
To decrease | A fall* 
To increase A rise 
Dominant Factor in 
Producing the Result 
Gross Earnings ratios 
Gross Earnings ratios 
* Slight. 
If the net changes in net earnings ratios are determined for 
banks with both gross earnings and total expense ratios changing, 
the following results are secured: 
Nature of Change : Net Change in 
in Both Series Net Earnings 
Dominant Factor in 
Producing the Result 
i 
Both increasing 
Both decreasing 
A rise 
A fall 
Gross Earnings ratios 
Gross Earnings ratios 
2 One slight exception—a decrease of .01 of a point. For explanation of this 
decrease. see Case 1. Appendix I, page 386. 
—————