EXPENSES IN DISTRICTS I AND II 3090 
bank ratios in the New York and Boston districts, but also 
for district ratios for the country as a whole. Whatever method 
of manipulating the data is used, essentially the same results are 
secured—results seemingly inherent in the economic processes 
and conditions under which banking is carried on, and about 
which considerable will be said later. 
Table 182 summarizes, according to the “Points difference” 
method,'* the nature and amounts of regression to type for the 
individual banks in the Boston and in the New York districts, 
combined, the effect of consolidating the experience being to 
sharpen the outline of the regression pattern. 
3. SERIES CORRELATED WITH RATIOS OF TOTAL EXPENSE TO 
EARNING ASSETS—MEMBER BANKS IN DISTRICT I—BOSTON 
In Chapter XV it was shown, for the entire banking member- 
ship and for classified banks in the First district, that ratios of 
total expense and of net earnings are positively correlated with 
ratios of gross earnings. Table 159 contains the frequencies of 
the paired variables for gross earnings and for total expense ratios, 
as well as regression measures for ratios of total expense on 
gross earnings and of gross earnings on total expense. From 
this table it is apparent that the higher or lower the ratios of 
gross earnings, the higher or lower those of total expense; and 
that the higher or lower the ratios of total expense, the higher 
or lower those of gross earnings. Viewed in either way, a clearly 
defined functional relationship obtains. 
But in what way are net earnings ratios related to ratios of 
total expense? If high or low ratios of total expense and of net 
earnings accompany high or low ratios, respectively, of gross 
earnings, and if high or low ratios of gross earnings accompany 
high or low ratios, respectively, of total expense, then it would 
appear, other things being equal, that high or low ratios of total 
expense should be found with high or low ratios, respectively, 
of net earnings. But the other things are not equal, as is indicated 
in Table 183, which shows negative correlation to obtain between 
these series. That is, in general, and other things being equal, 
if ratios of total expense are high or low, ratios of net earnings 
14 That used in securing the details in Tables 170 and 180.