BANKING STANDARDS
is true for the paired districts as a whole tends, generally, to be
true of them individually.

192

3. SERIES CORRELATED WITH RATIOS OF TIME DEPOSITS

Section 2 of this chapter was concerned with an analysis of
the relations between the ratios in various series of bank data
and demand deposits expressed, first, as percentages of earning
assets, and second, as proportionate parts of total deposits. Section
 3 pertains to the interrelation of certain of these series with
time deposits, use being made not only of data for all member
banks as a unit in each district, but also of groups of banks in
the Boston district.

(1) Ratios of Time Deposits to Earning Assets

In Chapter IV, section 4, the norms and trends of ratios of
time deposits to earning assets and to total deposits were developed
 in detail. While there is no occasion for repeating even
in summary what has already been said in this connection, the
major conclusions are germane to the present discussion. Our
purpose now is to determine the type and amount of correlation
between different banking series and time deposits, by the use
of methods similar to or identical with those already employed.
The first approach to this problem is to classify into suitable
groups the percentage differences, plus and minus, of the district
ratios of time deposits to earning assets from their respective
seven-year district levels, and for each group, as classified, to
determine the net percentage deviations of other ratios from their
district averages, the districts and years in all cases being paired.
The results secured for three series of data, as given in Table
116, indicate the following relations: (1) high and low ratios of
gross and of net earnings are associated, respectively, with low
and high ratios of time deposits—that is, the correlation is inverse;
 (2) high ratios of total expense in terms of earning assets
and of gross earnings are associated with high ratios of time
deposits, and low ratios of total expense with low ratios of time
deposits—that is, the correlation is direct; and (3) the larger
the variations of time deposits from the district levels, the larger
the variations, direct or inverse, in the other series, such relations
being particularly systematic for ratios of total expense to gross