Banking standards under the federal reserve system

Bibliographic data

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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part IV. Norms, trends, and correlations of series in the Boston and in the New York districts by Member Banks

Collection:: Economics Books

NET EARNINGS IN DISTRICT I 337 These and other relevant facts are graphically illustrated on Chart 50, which is constructed as follows: The vertical scale provides for the points change in ratios of gross earnings to earn- ing assets between 1924 and 1925, no-change being indicated by the space between the parallel horizontal lines, increases by the distances above, and decreases by those below these lines. The horizontal scale relates to the points change in ratios of total ex- pense to earning assets, no-change being shown by the space between the vertical parallel lines, increases by the distances to the left, and decreases by those to the right of these lines. These no-change areas divide the chart into four quarters or quadrants; the upper left-hand one represents increases in the ratios in both series; the upper right-hand one, increases in gross earnings and decreases in total expense ratios; the lower right-hand one, de- creases in both series; and the lower left-hand one, decreases in gross earnings and increases in total expense ratios. The dots on the surface of the chart indicate, for the 408 member banks in the Boston district, (1) the amounts of change by tenths of a point in their gross earnings and total expense ratios, and (2) the points change in the ratios of net earnings. The diagonal zigzag lines running across the page enclose an area of no-change in net earnings ratios. The part of the chart above these lines is the area of increasing, and that below them the area of decreasing net earnings ratios between 1924 and 1925, the amounts of the increase or of the decrease for the respective banks being indicated by the horizontal distances between the zigzag lines and the several dots. With these facts in mind, the chart may be interpreted as follows: When gross earnings ratios are increasing and total ex- pense ratios are increasing or decreasing, an overwhelming pro- portion of the dots are above the zigzag line, thus indicating increasing net earnings ratios to be the rule. When total expense ratios are decreasing, while a majority of the dots are above this line—the banks thus having increasing net earnings—a consider- able proportion are below. It is these which had decreasing net earnings ratios. Moreover, this number is relatively larger than that falling below the no-change net earnings line for banks having increasing gross earnings. For banks with gross earnings ratios increasing and with total expense ratios decreasing—those in the upper right-hand quar-

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