Banking standards under the federal reserve system

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Monograph

Identifikator:: 1762969653

URN:: urn:nbn:de:zbw-retromon-142432

Document type:: Monograph

Title:: Banking standards under the federal reserve system

Place of publication:: Chicago

Publisher:: A. W. Shaw Company

Year of publication:: 1928

Scope:: xxxviii, 420 Seiten

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Correlated series for all Member Banks by districts

Collection:: Economics Books

SERIES CORRELATED WITH DEPOSITS 187 ings and demand deposits and total expense seem to be inde- pendent of the units in which deposits are expressed and of the types of details which are correlated. The general direction of year-to-year changes, between 1919 and 1925, of ratios of demand deposits to total deposits was downward, district by district, this fact already having been noticed in Chapter IV. Of the 72 changes for all districts, 65 were downward, and for districts with ratios moving in this direc- tion, the corresponding net direction of change in ratios of gross earnings, total expense, salaries and wages, of interest on de- posits, and of “other expense,” was upward; for ratios of net earnings and of interest on borrowed money, it was downward, the relations in each of the paired series being identical with those found to obtain when the net deviations from district levels for these series were determined for districts having ratios of demand deposits to total deposits below their respective district levels.’ But what is the net direction of change from year to year for the three series, gross earnings, total expense, and net earnings for districts with ratios of demand deposits to total deposits and of loans and discounts to earning assets, respectively, increasing or decreasing, account being taken of the nature of the changes simultaneously? The results of such an analysis are found in Table 114. Because of the fact that demand deposits relative to total deposits generally decreased from year to year, the lower section of the table, containing the bulk of the instances, is the part which is significant. In this group of districts, ratios of gross earnings and of total expense increase and those of net earnings decrease. For the districts which have decreasing ratios of demand deposits to total deposits and at the same time increas- ing ratios of loans and discounts to earning assets, however, the rates of increase in gross earnings and in total expense are greatly accelerated, and the decrease in net earnings is changed into an increase. Moreover, when ratios both of demand deposits and of loans and discounts decrease, the net results are decreases in all three series, the largest percentage amount applying to net earnings. Ratios of demand deposits to total deposits in each district may be measured with respect to the level for the country as a whole, the differences being expressed by signs and percentage “ESee Table 111, page 182.

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