SERIES CORRELATED WITH EXPENSES 231
192 5—the following other series are high or low: loans and dis-
counts to earning assets, time deposits to total deposits, time de-
posits to earning assets, gross earnings to earning assets, and
total expense to gross earnings. In general, similar direct rela-
tions were found between these series when the dependent variable
was total expense and the independent variables were each of the
above series.! (2) In years and districts in which ratios of total
expense to earning assets are high or low, ratios of investments to
earning assets are low or high. A similar relation was found be-
tween these series when ratios of total expense to earning assets
were the dependent variables and ratios of investments to earn-
ing assets were the independent variables. (3) The relations
between variable ratios of total expense to earning assets and
variable ratios of net earnings to earning assets are neither mark-
edly direct nor inverse—they are mixed.2 (4) Large deviations
in the ratios in each of the series tend to be associated with large
deviations in those of total expense, irrespective of the nature of
the association—positive or negative—between the series with
respect to signs of deviation. To this rule, there are some doubt-
ful cases, as shown in Table 138.
The reader should remember that it is the net position and
percentage deviation in each of the series which is measured for
variable amounts of deviation in total expense. The averages
shown in Table 138 should not be taken as indicating, for in-
stance, for the 13 district-years in which the ratios of total expense
to earning assets were between 5% and 10% above their respec-
tive district averages for the period 1919-1925, that all of them
had ratios of investments to earning assets below their respective
district averages. The net percentage amount of dispersion,
- 8.99, indicates that the general tendency measured in this man-
ner is for the ratios to be below the district levels. The same
line of reasoning applies to each of the other dispersion classes,
the amounts in the columns of Table 1 38, relating to ratios of
investments to earning assets, of gross earnings to earning assets,
and so on, summarizing the net tendency for all dispersion classes.
In order that the full meaning of such figures shall be thoroughly
1See Tables 97, 116, 121, and 131.
2 For a measurement of the net deviations in total expense associated with vari-
able amounts of net earnings for member banks in District I, see Table 183.
