PREFACE 
Tis is a research study: it is intended to be consulted and used 
rather than to be casually read. It was undertaken on the basis 
of certain hypotheses and was developed for the purpose of deter- 
mining their truth or error. It was assumed that out of the 
experiences of member banks over a period of years it would be 
possible by detailed analyses to discover norms, trends, and corre- 
lations—not evident on the surface—which could be measured 
and stated as tendencies, and that these would have both a prac- 
tical and a theoretical value. Practical in the sense that, if they 
were general and pervasive, banks could use them as bases for 
determining questions of policy; theoretical in the sense that they 
would relate banking experience to other phases of economic 
activity, and serve to make clearer the results of the working of 
competitive effort in a competitive system. 
Looking at the subject matter broadly, there appeared to be no 
reason why the results of banking operations could not be meas- 
ured and the prevailing uniformities quantitatively -expressed. 
Moreover, there appeared to be no reason for expecting them to 
be markedly different from those characterizing other lines of 
business activity carried on under competition. The processes 
obviously vary from trade to trade, but if, for the most part, 
competitive effort characterizes our economic order, do not its 
consequences reveal themselves in much the same way wherever 
observed? The belief that they do determined our methods of 
approach and conditioned our forms of analysis. Indeed, it is this 
belief which prompted not only this but other studies completed 
and in process. 
This analysis is exploratory. Not all of the results are “pay 
dirt,” but enough of them are of this type to warrant the con- 
clusions, among others, that there are “master facts” associated 
with banking, and that, quantitatively expressed, they summarize 
the prevailing and repetitive tendencies found in such enterprise. 
Those discovered are expressed as norms, trends, and correla- 
tions. They are not regarded as “laws” in an absolute and 
mechanistic sense: neither are they intentionally given an applica- 
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