NET EARNINGS IN DISTRICT I 341
TABLE 197
DoMINANT FAcTOR IN PRODUCING NET CHANGES IN RATIOS OF NET
EARNINGS TO EARNING ASSETS, 1924-1925, FOR MEMBER
Banks. BostoN FEDERAL RESERVE DISTRICT

Nature of
Changes in
Ratios of
Gross Earnings
and of
Total Expense
0 Earning Assets,
1024-102%

_ Both
increasing

Both
Decreasing

|

Position of Ratios with Respect to
Their Averages, 1024

Gross Earnings |
to
Earning Assets

Total Expense
to
Earning Assets

Above
Jelow

Above
Below

Above
Below

Below
Above

Above
Below

Above or Below
Above or Below

\bove or Below
ihave or Ralaw

Above
RalAaw

Above
Below

ibove
Below
Below
Above
“bove or Below
t.ave or Below

Above
Below

Above
Relow

\bove or Below
Above or Below

Shave
R alow

Net Change in
Ratios of
Net Earnings
to
Earning Assets,
[024-102%

Rise
Rise

Rise

Fall®

Rise
Rise

Rise
Dies

Fall
Tall

Fall
Fall

“11
A

Al
~all

Dominant Factor—
Ratios to
Earning Assets

Gross Earnings
Gross Earnings

Gross Earnings
Gross Earnings
Gross Earnings

Total
Expense

Gross Earnings
rose Farninge

JT0SS Larnink:
Gross Earnings

Gross Earnings
Gross Earnings
Gross Earnings
Gross Earnings

Gross Earnings
(Gross Earnings

*Clight. See note. p. 136-are

 the regression tendencies of the gross earnings and of the
total expense ratios of these same banks, the first being observed
between 1924 and 1925; and the second, for each pair of years between
 1922 and 1925. Whether the dominant factor controlling
the size of ratios of net earnings at a given time or the nature of
their changes in time would be found to be gross earnings, if other
periods were under review, is, of course, an open question. No
data of the types needed are available for this purpose. It is
of interest, however, to remember that the conclusion stated above
agrees with that formulated in Chapter XIII,*® in which, with
respect to district ratios of net earnings for the years 1919-1925,
it was said that the probable causal order leading to high or to
low ratios of net earnings runs from gross earnings rather than
from total expense ratios.
This discussion closes the analysis of the ratios themselves. To
summarize briefly the more important conclusions to which it
43 Pape 228.