170
BANKING STANDARDS
series being treated in the same manner—it seems unnecessary
to include tables showing such relations. Indeed, the net average
percentage deviation of ratios of gross earnings to earning assets,
for instance—the base being the respective seven-year district
averages—is precisely the same when they are paired with ratios
of investments to earning assets below or above the district
levels as when they are paired with ratios of loans and discounts
to earning assets above or below the same relative positions.
Similar conditions obtain for the other series. Table 101 summarizes
the types of correlation found to obtain.
TABLE 101
NATURE OF CORRELATION OF PERCENTAGE DIFFERENCES AND CHANGES
FROM YEAR TO YEAR OF RATIOS IN PAIRED
SERIES, 1919-1025
NATURE OF MEASUREMEN1
Independenf
Variable
Loans
and
Discounts
to
Earn:
ing
Assets(3
SERIES CORRELATED
(Expressed as Ratios)
Differences from
District Averages
Changes from Year
to Year
Differences from
Country’s Yearly
Averages
Dependent Variables
Direction
Amount
Direction
| Amount
il 1 Amount
Demand Deposits to
Total Deposits
Time Deposits to
Total Deposits
Gross Earnings to
Earning Assets
Total Expense to
Earning Assets
Lo —
Net Earnings to
Earning Assets
Salaries and Wages to
Earning Assets
Interest on Deposits to
Earning Assets
Interest and Discounts on
Borrowed Money to
Earning Assets
Taxes to
Earning Assets
——
“Other Expense” to . .
Earning Assets | Positive | (x) | Positive
(1)
| @
(2)
Positive ! (x)
Positive
Positive
Positive
Positive
Positive
®
@
o
(2)
(oo! i. (2)
| @ 2)
(x)
Ww wo @
Positive | (2) |
(1] Doubtful.
(2) Not computed.
{3) For each of the series correlated with ratios of investments to earning assets, the nature of the
correlation, so far as direction of deviation is concerned, is inverse to that found for the same
series correlated with ratios of loans and discounts to earning assets. As to the amount of
deviation, the type of correlation of each of these series with investments is the same as that
found for them when they are correlated with ratios of loans and discounts to earning assets.
