Banking standards under the federal reserve system

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Monograph

Identifikator:: 1782566376

URN:: urn:nbn:de:zbw-retromon-169787

Document type:: Monograph

Author:: Rörig, Fritz http://d-nb.info/gnd/116593113

Title:: Hansische Beiträge zur deutschen Wirtschaftsgeschichte

Place of publication:: Breslau

Publisher:: Hirt

Year of publication:: 1928

Scope:: 284 S.; Kt.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: V. Die Hanse und die nordischen Länder

Collection:: Economics Books

V. qi 1 NORMS AND TRENDS IN NET EARNINGS I. INTRODUCTION THaE Federal Reserve Board publishes the net earnings of all member banks by years and by districts for years ending June 30. It is these amounts which constitute the basic data for the fol- lowing analysis. But to study the amounts alone is unsatisfactory for our purpose, because of the changing number of banks in the respective districts over the period 1919 to 1925, and further because of the fact that the data in this form do not meet our needs. Accordingly, the amounts are expressed as ratios (1) of earning assets,! and (2) of gross earnings. In this form the ratios are comparable from year to year and from district to district, and may be analyzed in any way thought desirable. Net earnings, as reported by the Board, are the differences be- tween gross earnings and operating expenses. They are distin- guished from “net addition to profits,” the latter expression being net earnings less “net losses.”? While, undoubtedly, some of the banks in the respective districts experienced gross losses—that is, had higher operating expenses than gross earnings—this is not, of course. the case for member banks as a whole. 2. THE RELATION OF NET EARNINGS TO EARNING ASSETS The average net earnings for all member banks, for the years 1919 to 1925 taken as a unit, was 1.99% of their earning assets. That is, for every $100 of earning assets during this seven-year period, member banks earned $2 over and above their operating expenses. For the combined districts, the lowest percentage was 1.81, in 1925; the highest 2.25, in 1921. When the individual dis- tricts for the period 1919 to 1925 are considered, the lowest per- 1 For the manner of securing the earning assets, see discussion, page 13. 2¢Total losses less recoveries on assets previously charged off.” Zz

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