354 BANKING STANDARDS
Moreover,
Bank debits of different cities
tend to fluctuate together;’
City bank debits tend to fluctuate
 with city business
conditions;
Business conditions in cities
tend to fluctuate together.

TABLE 199

YEARS IN WaICH BANK DEBITS ARE
ABOVE OR BELOW THE SEVEN-YEAR
 AVERAGE, 1919-1025

Total Bank
Debits
'Y4T cities)

Percentage of Cities
with Bank Debits
on Same Side of Their
Averages as the Total
for vax Cities

But
City bank debits tend to fluctuate
 with district bank
debits;
District banking resources
tend to fluctuate with district
 bank debits;
City bank resources tend to fluctuate with city bank debits.
The following conclusions, in summary, have now been reached:
First: National, district, and local business conditions tend to fluctuate
 together; and
Second: Such business fluctuations tend systematically to be reflected
 in fluctuations in bank debits and banking resources.

*In this year the bank debits of New York City
run against the prevailing tendency.

By and large, commercial banks wherever situated render
similar service to business. Moreover, this service is rendered
competitively. Banks are daily brought into relation through
the granting of loans, in the investment of surplus funds, in competing
 for deposits, and in rendering a large number of other
services. Their lending and investment areas overlap. “The extent
 to which any bank may loan is dependent in part upon the
extent to which other banks are loaning. And when the reserves
 of any particular bank are low there are numerous means
by which it may increase its loaning power at the expense of,
or through the permission of, its competitors.”® ¢, . . . Individual
 banks cannot escape relations with other banks, their own
prosperity and safety being fundamentally linked with that of
the system as a whole. . . .”® Moreover, they are subject to
much the same type of government regulation and inspection,

"See Table 108.
8 Harold G. Moulton, Principles of Money and Banking (The University of Chicago
 Press, 1916), Part II, p. 04.
® Ibid., Part II, p. 197.