BANKING STANDARDS
earnings level, the years which were high as well as those which
were low were in general the same in all districts.

Bo

Norms

1. While the typical or modal ratios of gross earnings to earning
assets for all districts for the years 1919 to 1925 fell within the
group 6.25-6.75, the weighted arithmetic mean ratio was 6.58.
The range extended from 5.44 for Philadelphia in 1919 to 8.85 for
Dallas in 1921, but 69% of the ratios fell between 5.75 and 7.25.
2. The ratios were generally low, relative to the respective district
 averages for the seven years, in 1919, 1920, 1923, 1924, and
1925; they were universally high, measured in the same manner,
in 1921 and 1922.
Trends

1. Ratios of gross earnings for all member banks in each district
 and in all districts tended to increase between 1919 and 1921
and to decrease between 1921 and 1925. To this generalization
there are exceptions in 1924, as compared with 1923, for the
country as a whole, and in several pairs of years for individual
districts. In spite of these exceptions, however, the trend is unmistakable.


2. From year to year and over the period 1919-1925, the rates
of change in the ratios in the various districts, while differing from
district to district, are much alike. The greatest rise came between
 1920 and 1921 for all but three districts; the year of greatest
 fall for ten of the twelve districts came between 1922 and
1923.
3. District ratios which are high in a given year, relative to
the respective district levels established by the seven-year period,
tend in the following year to fall, and those which are low tend to
rise, the net percentage amounts of change varying directly with
the percentage amounts of dispersion in the first year. Regression
 to type is general, and probably finds its explanation in the
fluidity of capital, banks individually and collectively being free,
within certain common restrictions, to distribute their assets between
 loans and investments in keeping with the demand for
and supply of funds and the consequent ruling interest rates.