SERIES CORRELATED WITH EARNING ASSETS 161 
classified percentage deviations, smooth out the peculiarities from 
group to group and define in broader terms the relations between 
the corresponding deviations. For many purposes, they are more 
significant than are those for the percentage groups. 
There are, however, other ways in which the ratios in various 
series may be paired. While district ratios in related series may, 
at the same time, be above or below their respective average 
levels, they may or may not move in the same direction from 
year to year, and the rate of change in one series may bear 
little or no relation to that in another. Let us determine the 
percentage amounts of increase and of decrease from year to 
year in the ratios of loans and discounts to earning assets and, 
in a number of related series, pair each series of deviations with 
those of loans and discounts, year by year and district by dis- 
trict, according to the direction and the amount of change, 
summarize the changes by the use of averages, and observe the 
results secured. Carrying out this series of steps gives the results 
shown in Table 98, from which it is seen that (1) when ratios of 
loans and discounts to earning assets were increasing, the net 
direction of change was an increase in each of the series, except 
demand deposits to total deposits; (2) when they were decreas- 
ing, the net direction of change was a decrease in all series except 
time deposits, salaries and wages, and interest on deposits; (3) 
the greater the increase in ratios of loans and discounts, the 
greater the net change in the same direction, in time deposits, 
gross earnings, net earnings, and interest on borrowed money; 
and (4) the greater the decrease in ratios of loans and discounts, 
the greater the net decrease in gross earnings, net earnings, total 
expense, interest on borrowed money, taxes, and “other 
expenses.” In general, increasing ratios of loans and discounts 
to earning assets are accompanied by increasing ratios in all but 
one of the series with which they are paired; when they are 
decreasing by decreasing ratios in all but three of the series. 
High and low ratios of loans and discounts, relative to district 
levels, and increasing and decreasing ratios of loans and discounts 
from year to year, respectively, are positively correlated with 
high and low and increasing and decreasing ratios of gross 
earnings, of total expense, and of net earnings. This much is 
apparent from material already submitted. Let us see what 
effect increasing and decreasing ratios of loans and discounts