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Federal Reserve Bank of Dallas

June 1985

D a lla s Fed Fo rm s A d viso ry C o u n c ils
The Dallas Federal Reserve Bank
has announced the formation of two
advisory councils. The Advisory Coun­
cil of Financial Institutions is being
chaired by A. W. Riter Jr., chairman and
chief executive officer of InterFirst
Bank Tyler, N.A. The Advisory Council
of Small Business and Agriculture is
being chaired by J. Wayland Bennett,
the Charles C. Thompson Professor of
Agricultural Finance and associate
dean of the College of Agricultural
Sciences at Texas Tech University in
Each of the 12 Federal Reserve
Banks is establishing one or more ad­
visory councils for small business,
agriculture, financial institutions and
other groups, depending on existing ar­
rangements and economic characteris­
tics of their respective Federal Reserve
Districts. The councils will provide
Reserve Banks with information useful
in their analysis, evaluation and
research of regional and national
economic activity, and business and
banking conditions.

The councils will provide
Reserve Banks with infor­
mation useful in their
analysis, evaluation and
research of regional and
national economic activity,
and business and banking

The councils will meet at least twice
a year with senior management of the
Reserve Banks. Council chairmen will
meet annually with the Board of Gover­
nors in Washington, D.C.
Advisory Council of Small Business
and Agriculture
The Dallas Fed’s councils recently
held their first meetings. On May 29,
the A dvisory C ouncil of Small
Business and Agriculture reviewed re­
cent national economic trends and
regional business activities. In com­
menting on small business conditions,
the council noted that hidden business
costs such as insurance and employ­
ment benefits are jeopardizing the sur­
vival of small enterprises. Second, the
council reported some small busi­
nesses are having difficulty financing
accounts receivables and suggested
that the banking industry might
establish national standards as to
credit policy relating to receivables.
Third, the econom y along the
U.S.-Mexican border was regarded as
significant because of the many
manufacturing operations being at­
tracted to the region by the less costly
labor market.
Regarding agriculture, the council
was concerned over evidence of a con­
tinuing decline in margins, earnings
and export markets that is pervading
the industry. Interest costs, which
represent 30 to 40 percent of agricul­
tural operating costs, and poor
marketing were targeted for improve­
ment. The council noted that livestock
has remained a viable part of the in­

dustry and attributed its vitality to less
government interference and the abil­
ity of producers to rapidly adjust sup­
ply to demand. Finally, the council
discussed the importance of the Small
Business Administration’s role in the
financing of agriculture.
The council agreed that a sharper
focus of national policy and its objec­
tives in both agriculture and small
business could play a constructive role
attracting investors and new markets
and would assist in developing the
creditability with producers and small
business enterprises necessary to sus­
tain efficient operations and enhance
Advisory Council of
Financial Institutions
The Advisory Council of Financial In­
stitutions met on May 30. Topics of
(continued on page 2)


Councils, continued
discussion included business and
banking conditions. The council
discussed commercial and residential
construction, reporting that recent
regulations affecting the growth of
savings and loan institutions would
not stem the pace of construction, but
feeling some concern over the high in­
ventory of commercial office space in
Dallas, Houston and Austin.
The agricultural situation, particu­
larly the loss of export markets, was
cause for concern among council
members. Some members expressed
the view that the agricultural industry,
in general, may be suffering from a
lack of information credibility with the
marketplace, the business industry
and others.

The council agreed that a
sharper focus of national
policy and its objectives in
both agriculture and small
business could play a constructive role attracting in­
vestors and new markets...
The energy sector—and, particu­
larly, the petrochemical industry on the
Gulf Coast—was reported to be de­
pressed due to a surplus of oil and,
more importantly, the number of new
plants, refining and processing capac­
ity that has been transferred to foreign
shores, where higher efficiency and
lower labor costs have made these ac­
tivities more attractive.
In regard to the financial industry,
it was noted that almost half of all
de novo national banks chartered in
1984 were located in Texas, which
could create earnings difficulties for
some banks. Credit union represen­
tatives reported their industry was in
good condition in the Eleventh Federal
Reserve District. Lastly, the council
was desirous of ways to answer the
criticism being levied regarding funds
availability and lifeline accounts. The
council felt that the industry has a
highly creditable record in this regard.

Members of the Dallas Federal Reserve Bank’s
Advisory Council of Financial Institutions
William E. Brady, President
Denton Savings
Denton, TX.
Kenneth L. Burgess, Vice
Chairman of the Board
First State Bank
Abilene, Tx.
Paul Mitchell, President
Food Industries Credit Union
Houston, Tx.
Gary Owen, President
First Federal Savings Bank
of New Mexico
Roswell, N. M.
Ronald Brown, Chairman and
Chief Executive Officer
RepublicBank Houston
Houston, Tx.
H. O. Bursum III, Chief
Executive Officer and
Executive Vice President
First State Bank
Socorro, N.M.

Marvin H. Hancock Jr., President
and Chief Executive Officer
Capital Bank
Dallas, Tx.
T. D. Wallace, President
Louisiana Credit Union League
Shreveport, La.
James A. Altick, President and
Chief Executive Officer
Central Bank
Monroe, La.
John H. Dalton, Chairman and
Chief Executive Officer
Freedom Capital Corp.
San Antonio, Tx.
Charles T. Doyle, Chairman and
Texas Independent Bancshares
Texas City, Tx.
A. W. Riter Jr., Chairman and
Chief Executive Officer
InterFirst Bank Tyler, N.A.
Tyler Tx.

Members of the Dallas Federal Reserve Bank’s
Advisory Council of Small Business and Agriculture
Robert M. Carter, Farmer
Plainview, Tx.
John O. Chapman, Rancher
Corpus Christi, Tx.
Lloyd E. Cline, Farmer
Lamesa, Tx.
Sharon Jobe, Chief Financial
TCP Industries Inc.
Dallas, Tx.
Carolyn Draper, President
3-D Distribution Systems Inc.
Dallas, Tx.
Robert W. Philip, Partner
Arthur Andersen & Co.
Dallas, Tx.
Dan Pustejovsky, Farmer
Hillsboro, Tx.

James Washington, President
Focus Communications Group
Dallas, Tx.
J. Wayland Bennett, Charles C.
Thompson Professor of
Agricultural Finance and
Associate Dean
College of Agricultural
Texas Tech University
Lubbock, Tx.
J. B. Cooper, Farmer
Roscoe, Tx.
William P. Stephens, Director
New Mexico Department of
Las Cruces, N. M.
Carlos A. Zuniga, Owner
Laredo Freight Services Inc.
Laredo, Tx.

Book-Entry Securities Fees Approved
A new fee schedule for book-entry
U.S. Treasury securities will become
effective Oct. 1, 1985. The new
schedule will reduce fees for bookentry transfers and eliminate monthly
account maintenance fees.
The new fees stem from a recent rul­
ing by the Treasury Department stating
that secondary market book-entry
securities transfers provided by
Federal Reserve Banks should be
treated as a fiscal agency activity per­
formed on behalf of the Treasury and
not as part of the regular priced ser­
vices Reserve Banks offer to financial
institutions. As a result, the Treasury
determined the following:

1. Any fees charged by
Reserve Banks in conjunc­
tion with Treasury book-entry
activities should be clearly
identified and collected as
Treasury fees.
2. The Treasury will con­
tinue to impose a fee for
transfers of book-entry
securities between accounts
held at the same or different
Federal Reserve Banks.
3. All fees previously im­
posed for account mainte­
nance will be eliminated.
A book-entry securities transfer
generally is comprised of two com­
ponents—the securities transfer and
the accompanying funds settlement.
The Treasury determined that the
funds settlement portion of the
transfer is not a fiscal agency activity
and, therefore, a separate price will be
charged for it by Reserve Banks. The
fee for funds settlement will be 75
cents to cover the direct, support,
overhead and float costs associated
with the funds settlement activity.
Prices established for book-entry
securities transfers are $1.50 per trans­
action for on-line transfers and $6.25
per tra n s a c tio n
fo r
o ff-lin e
transfers—whether sent or received.
These prices are in addition to the 75
cents charged for funds settlement.

In a d d itio n , the Treasury is
eliminating all charges for account
maintenance. Previously the monthly
fees for this were 50 cents per issue
and $15.00 per account.
Reserve Banks have been instructed
to assess these charges to financial in­
stitutions on a daily basis. Therefore,
the fees for book-entry securities
transfers and the related funds settle-

ment will be collected daily by direct
charges to reserve or clearing ac­
counts, and not as part of priced ser­
vice billings. It should also be noted
that clearing account earnings credits
cannot be applied.
Current prices for non-Treasury
book-entry securities services will re­
main unchanged.

Treasury Securities Fee Structure
Current Prices

New Fees

On-line Transfers
Funds Settlement

$ 3.00


Off-line Transfers
Sent or Received
Funds Settlement


Monthly Account Maintenance
Per issue
Per Account


$ 0.50

Nominations Sought
for Consumer Advisory Council
The Federal Reserve Board is seek­
ing nominations for 11 appointments
to its Consumer Advisory Council to
replace members whose terms expire
Dec. 31, 1985. Nominations must be
received by August 9, 1985.
The council was established by Con­
gress in 1976 to advise the Board on
consumer financial protection laws
and other topics of consumer interest.
Members serve three-year terms and
meet in Washington, D.C. three times a
Coucil members whose terms are ex­
piring this year include Chairman
Timothy D. Marrinan, senior corporate
counsel, First Bank System, Inc., Min-

neapolis and Vice Chairman Thomas L.
Clark, Jr., deputy superintendent of
banks, New York State Banking
Nominations should be submitted in
writing to Dolores S. Smith, Assistant
Director, Division of Consumer and
Community Affairs, Board of Gover­
nors of the Federal Reserve System,
W a sh in g to n , D.C. 20551. The
nominee’s address and telephone
number should be included, along with
information about past and present
positions held and special knowledge
or interests related to consumer credit
or other consumer financial services.

Discount Rate
The Federal Reserve Bank of Dallas
lowered the discount rate to 7.5 per­
cent from 8 percent effective May 20,
The rate is at its lowest level since
August 1978 when it was 7.25 percent.
The discount rate is the interest rate
the Fed charges on loans to other
financial institutions.
With the exception of the rate in­
creasing a half of a percent in April
1984, the discount rate has been on a
gradual decline since its record high of
14 percent in the spring of 1981.
For additional information on the
discount rate or other interest rates
regarding government securities, call
the Dallas Fed recorded message at
(214) 651-6177 or metro number (214)



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