NORMS AND TRENDS IN NET EARNINGS 145 
2. When net earnings in terms of earnings assets and of gross 
earnings are high or low in a given year, relative to their own 
district level, the year-to-year trend is, respectively, downward 
or upward, the net percentage amounts of change varying directly 
with the percentage amounts of dispersion from normal. That 
is, measured in both units. net earnings tend to regress to type. 
(2) National Banks, and State Bank and Trust Company 
Members 
Sections 2 and 3(r) of this chapter had to do with compari- 
sons of the amounts of net earnings in all member banks, by dis- 
tricts, expressed in units of earning assets and of gross earnings. 
Section 2 (2) of Chapter VI was concerned with a comparative an- 
alysis of the ratios of total expense to gross earnings for national 
banks and for state bank and trust company members, the treat- 
ment of the district ratios relating to their variations year by year 
from the district and the country levels, and to the direction and 
percentage amounts of change from year to year. If the ratios 
of net earnings expressed as percentages of gross earnings were 
similarly treated, the actual amounts would be the complements 
of the operating expenses, and the nature of the variations from 
the district and country average levels and the directions of 
change from year to year would be of the inverse type. That is, 
whenever a plus (+4) or a minus (-) sign was encountered 
with respect to operating expenses, a minus (-) or plus (+) 
sign would be found for net earnings. It is unnecessary, there- 
fore, to discuss the nature of the directions of change from 
year to year of net earnings for the two groups of banks. If the 
reader is interested in making such comparisons, he may consult 
the respective tables for operating expenses in terms of gross 
earnings, and reverse the signs. 
While the signs for operating expenses and for net earnings 
for the respective groups of banks—national and state mem- 
bers—in terms of gross earnings are opposite in every case, the 
percentage amounts of change are different. Accordingly, atten- 
tion is given primarily to the rates of change for the two groups 
of banks, and for this purpose a graphic representation will most 
fully serve our purpose. Before considering the chart on which 
the rates are indicated, it is well to present both the actual ratios