. 
— = 
\ 
INTERPRETATION 
To rest the case with the general summary given in the preced- 
ing chapter would leave the study incomplete. Certain phenomena 
have been discovered, measured, and described. To what condi- 
tions are they due? How do they emerge? Are they consistent 
with the facts relating to banking theory and practice, and with 
the services which commercial banks render to business and 
industry? To describe the workings of our economic system 
and the relations of banks to it during the years 1919-1925 for 
the country as a whole, and for certain of these years for the 
First and Second districts, to which special attention is given, is 
obviously impossible in short compass if it is possible at all. No 
such task is here attempted. Economic annals relating not only 
to banking, business, and industry in the country as a whole but 
also to the peculiarities in each district would have to be written 
and interpreted if this colossal task were completed. The materials 
for such an undertaking are not at hand, and if they were it is 
doubtful whether their fullest use would serve unmistakably to 
‘explain’ what has happened during these postwar years. 
While this project is doubtfully possible, the one which is 
germane to the present inquiry is not impossible. If the phe- 
nomena discovered and measured are kept in mind, both the 
economic and banking conditions, out of which a plausible ex- 
planation may be formulated, may be sketched in outline. 
The banking membership of the Federal Reserve system com- 
prehended in 1922, the median year in the period under review, 
0,892 banks. These were geographically distributed over the 
entire United States, the largest number, 1,441, being located in 
District 7 (Chicago) and the smallest number, 433, being found 
in District 1 (Boston). In this year, the total number of mem- 
ber banks represented 33% of the number and 60% of the earn- 
ing assets of all banks in the United States. By and large, these 
banks do a commercial banking business; that is, they currently 
"TAs of June 30. See Table 1. 
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