NORMS AND TRENDS IN NET EARNINGS 137
tion and percentage amounts of variation of the district ratios
each year from the seven-year district levels, and (3) the per-
centage amounts and nature, plus or minus, by which the ratios
in each district differ from those for the country taken as a whole.
Summarizing the relations according to these criteria, it is seen
that (1) for the country as a unit, net earnings increased between
1919 and 1921 and decreased between 1921 and 1925, the rate of
increase being largest between 1919 and 1920, and the rate of
decrease greatest between 1922 and 1923; between 1923 and 1925
there was a gradual decline, the rate being less between 1924 and
1925 than between 1923 and 1924; and (2) while, with minor
differences, the direction of change from year to year, and over
the whole period, typical of the country as a whole, was followed
by New York, Philadelphia, Chicago and St. Louis, it was
deviated from by Minneapolis, Kansas City, Dallas, and San
Francisco.
Other features of this chart will receive attention after the
norms and trends characterizing net earnings expressed in terms
of gross earnings have been considered.
3. THE RELATION OF NET EARNINGS TO GROSS EARNINGS
The gross earnings of member banks consist of interest and of
“other income,” the former, it will be recalled, constituting 87%
to 90% of the total.® The average amount of net earnings per
unit of earning assets for all member banks for the period 1919
to 1925, was 1.99%. What are the relations between the net
and the gross earnings for the banks in the respective districts for
the years to which this study applies? Moreover, what are the
norms and tendencies characteristic of the ratios? To answer
these questions, first, for all member banks, and second, for na-
tional and for state bank and trust company members, is the
purpose of the following discussion. In this analysis, as in that
which has preceded it, the ratios refer to the banks in the respec-
tive districts taken as a single institution.
(1) All Member Banks
Out of each $100 of gross earnings received by all member
8 See Table 40, page 71.
