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Federal Reserve Bank of Dallas

March 1982

Fed to Continue Strict Monetary Policy in 1982
The Federal Reserve will remain
committed to its policy of restricting
growth in the money supply during
1982, according to testimony given
before Congress by Paul A. Volcker,
Chairman of the Board of Governors of
the Federal Reserve System. The
report given by Volcker February 10
and 11 outlined the Fed’s target ranges
for growth in the money supply and
discussed the economic outlook for
the coming year.
A written report on the state of the
economy and the course of monetary
policy is required twice a year of the
Federal Reserve Board by the Full
Employment and Balanced Growth Act
of 1978. Volcker’s testimony was given

in conjunction with the submission of
this written report.
“ The Federal Reserve remains com­
mitted to restraint on the growth of
money and credit in order to exert con­
tinuing downward pressure on the rate
of inflation,” the Board’s report said.
“ Such a policy is essential if the
groundwork is to be laid for sustained
economic expansion.”
Volcker explained that inflation can­
not persist over an extended period
unless it is financed by excessive
growth of money. Therefore, a policy of
restraint on the growth of the monetary
aggregates is a key element in an anti­
inflation strategy. Volcker warned,
however, that very large federal

deficits, particularly if expected to con­
tinue at exceptionally high levels in
later years, will adversely influence
current financial market conditions
and place upward pressure on interest
The Federal Reserve Board
acknowledged that there would be
short-term difficulties associated with
this restrictive policy. However,
“ failure to continue on the current path
would mean that the next effort would
be associated with still greater hard­
ship,” the report continued.
The Reserve Board adopted a target
growth range of 2.5 to 5.5 percent for
the monetary aggregate M1 in 1982,
reaffirming the tentative range it set
out in its mid-1981 report. The 1981
target range for M1-B, last year’s com­
parable monetary aggregate, was bet­
ween 3.5 and 6 percent. Other 1982
target growth ranges adopted are 6 to 9
percent for M2, 6.5 to 9.5 percent for
M3, and 6 to 9 percent for commercial
bank credit.
The actual average annual growth of
M1-B during 1981 was 4.7 percent,
compared to 5.9 percent in 1980, 7.7
percent in 1979, and 8.2 percent in

• Monetary Aggregates
• Salary Surveys
• New Directors

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (

Dallas Fed is First to Buy 3081
The Dallas Reserve Bank is the first
financial institution in the state of
Texas, and the first among the Federal
Reserve System District offices nation­
wide, to install IBM’s newest large
system computer.
The high performance 3081 pro­
cessor will accommodate the increas­
ing demand for services the Reserve
Bank currently provides to financial in­
stitutions via online terminal ar­
rangements. During 1981 the number
of in s titu tio n s having such ar­
rangements increased from 92 to 162,
utilizing over 300 terminals. In 1982, the
Dallas Reserve Bank expects that
growth will increase at an even greater

Some of the services accessed us­
ing online arrangements include elec­
tronic transferring of funds and
securities, check collection and clear­
ing, automated clearinghouse (ACH)
services and net settlement. The in­
creased capacity of the processor will
also make provisions for a number of
new services that the Reserve Bank
could offer such as online Treasury
Tax and Loan information and curren­
cy and coin ordering.
The 3081, w ith its advanced
technology and architecture, has
greater performance and flexibility.
This improvement will be used to
enhance the reliability and quality of
service to online users.

1982 FCA Program Extended to Non-Members
The Federal Reserve’s functional
cost analysis program will be ex­
panded in 1982 to include all types of
depository institutions for the first
time. In the past, participation in the
program has been limited to member
banks, according to Jerry Bramlett,
S e n io r
T e c h n ic a l
A s s is ta n c e
Representative in charge of the FCA
program for the Dallas Fed.
Functional cost analysis is a tool
designed to help management
evaluate performance by providing
comparisons of their own data from
year-to-year and comparisons of data
among similar institutions, Bramlett
said. The program enables participants
to compile and analyze income and ex­
pense data to measure the profitability
of principal banking activities, such as
deposit taking, lending and fee-based
services. The analysis includes key
cost units, break-even points, account
size analysis and personnel efficiency
To participate in the FCA program,
an institution submits data to its
regional Federal Reserve Bank under
uniform procedures designed to make
the data comparable. The national
data are compiled at the New York Fed.
Information returned to participants in­

cludes an individual report as well as
comparison averages of institutions
with similar activities or volumes.
Bramlett will send work papers to all
interested member and non-member
banks and pilot thrift institutions this
spring. These institutions will receive
published individual FCA reports in
1982. The reports published in 1983 will

include an expanded group of thrift in­
stitution participants.
Published average reports for the
1981 functional cost program will be
available this summer. Institutions in­
terested in participating in the 1982
FCA program should contact Bramlett
in the Department of Communications,
Financial and Community Affairs.

New M1 Replaces Old Aggregates
The Federal Reserve Board has
redefined its most narrow definition of
the money supply used to conduct na­
tional monetary policy. The new
monetary aggregate M1 will replace the
aggregate M1-B which has been used
the past two years. The aggregate M1-A
has been eliminated.
The new M1 is composed of currency,
demand deposits at commercial banks,
traveler’s checks, and other checkable
deposits such as negotiable order of
withdrawal (NOW) accounts, automatic
transfer service (ATS) accounts, and
credit union share draft balances.
Financial developments in the late
1970’s, especially the emergence of
NOW and ATS accounts, reduced the

significance of the old M1 measure
which did not include these types of ac­
counts. In February, 1980, the Board did
away with the old definition of M1 and
replaced it with M1-A, essentially the
same as the old M1, and M1-B, which in­
cluded NOW and ATS accounts. The
new definitions were intended primarily
as transitional measures until the new
types of accounts became fully en­
trenched in the financial payments
Federal Reserve Board authorities
determined that the bulk of the shift to
NOW accounts had occurred by late
1981, and that the M1-A and M1-B defini­
tions were no longer necessary.

Salary Surveys Give District Averages
The average chief executive officer’s
salary was $55,270 in 1981 for those
banks who participated in the Dallas
Fed’s Officers’ Salary Survey, pub­
lished earlier this year. This survey,
along with the Employees’ Salary
Survey, is published each year by the
Department of Com m unications,
Financial and Community Affairs. In
1981, both member and non-member
banks in the Eleventh Federal Reserve
District were given the chance to par­
ticipate in the surveys for the first time,

with over 400 banks responding.
The 1981 surveys provide informa­
tion on the average, maximum and
minimum salaries for 31 official posi­
tions and 28 employee positions. Com­
pensation in addition to salaries is
also reported. The information is com­
piled according to each of nine
geographic areas and according to
each of six deposit size categories, in
addition to averages reported for all
participating banks in the Eleventh

Paying and Receiving Teller Average Salaries
By Total Deposit Size

Total Deposit Size


$100 Million
$200 Million

$50 Million
$100 Million

$20 Million
$50 Million

$10 Million
$20 Million

$10 Million

The Officers’ Salary Survey, for ex­
ample, indicates an average chief ex­
ecutive officer’s salary of $55,270
across the Eleventh District in 1981,
with a minimum of $12,000 and a max­
imum of $175,200. Persons in these
positions had an average 22 years of
banking experience, with eight years in
the chief executive position. These
positions also included an average
bonus of $10,609, average profit shar­
ing of $5,488, average insurance
benefits of $1,196, and average retire­
ment plan benefits of $7,362. In addi­
tion, 334 of the chief executive officer
positions included an automobile and
299 of the positions included a club
membership. The average salaries of
chief executive officers according to
total deposit size of the bank are
shown in a graph accompanying this
In addition to the chief executive of­
ficer position, the Officers’ Salary
Survey provides data on loan officers,
trust officers, controllers and branch
managers among other official posi­
The Employees’ Salary Survey in­
dicates that paying and receiving
tellers had an average salary of $9,029
in 1981, with a minimum of $4,550 and
a maximum of $15,600 reported for this
category. Persons in these positions
had an average four years of banking
experience, an average bonus of $557,
average profit sharing of $446, and
average insurance benefits of $524.
The average salaries of paying and
receiving tellers according to total
deposit size of the bank are shown in a
graph accompanying this article.
In addition to these positions, the
Employees’ Salary Survey provides
data on clerks, machine operators,
bookkeepers, programmers, custo­
dians, and other categories of tellers
and secretaries among others.
Invitations to participate in the 1982
salary surveys will be sent to all banks
in the district this summer. Additional
copies of the 1981 surveys are
available upon request to the Depart­
ment of Communications, Financial
and Community Affairs.

Directors Announced for Dallas and Branches
Newly appointed and reappointed
members have been announced for
1982 for the Federal Reserve Bank of
Dallas Board of Directors and for the
boards of the three branch offices of
the Dallas Fed. The 1982 Chairman and
Deputy Chairman for the Dallas board
and the chairmen and chairmen pro
tern for the branch boards have been
announced also.
The directors of the Federal Reserve
Bank of Dallas and its branches have
responsibilities similar to directors of
financial institutions and, in addition,
are required to represent the broad
business and public interests of the
district. The Dallas board has three
classes of directors, with each class
having three members. Members of
two of these classes are elected by
district member banks, divided by size
into three groups for electoral pur­
poses. Members of the third class are
appointed by the Board of Governors of
the Federal Reserve System.
The boards of the branch offices
consist of seven members each, three
of whom are appointed by the Board of
Governors and four of whom are ap­
pointed by the Dallas board.

The directors announced for Dallas
are J. Wayland Bennett, Charles C.
Thompson Professor and Associate
Dean of the College of Agricultural
Sciences at Texas Tech University in
Lubbock; Lewis H. Bond, Chairman
and Chief Executive Officer of Texas
American Bancshares Inc. in Fort
Worth; and Gerald D. Hines, Owner of
Gerald D. Hines Interests in Houston.
Gerald D. Hines was designated
Chairman of the Board for Dallas in
1982, and John V. James, Chairman of
Dresser Industries Inc. in Dallas, was
designated Deputy Chairman. T. C.
Frost, Chairman of Cullen/Frost
Bankers Inc. in San Antonio, was ap­
pointed Federal Advisory Council
Other directors for Dallas are Kent
Gilbreath, Associate Dean of the

Hankamer School of Business at
Baylor University in Waco; John P.
Gilliam, President and Chief Executive
Officer of the First National Bank in
Valley Mills; Robert D. Rogers, Presi­
dent of Texas Industries Inc. in Dallas;
Margaret S. Wilson, Chairman and
Chief Executive Officer of Scarbroughs
Stores in Austin; and Miles D. Wilson,
Chairman and President of The First
National Bank of Bellville.

El Paso
The directors announced for El Paso
are Mary Carmen Saucedo, Associate
Superintendent of the Central Area El
Paso Independent School District;
Ernest M. Schur, Chairman of the Ex­
ecutive Committee of The First Na­
tional Bank of Odessa; and Gerald W.
Thomas, President of New Mexico
State University in Las Cruces, New
A. J. Losee, Shareholder of Losee,
Carson & Dickerson, P.A. in Artesia,
New Mexico, was designated Chair­
man for El Paso in 1982. Chester J.
Kesey, of C. J. Kesey Enterprises in
Pecos, was designated Chairman Pro
Other directors for El Paso are
Stanley J. Jarmiolowski, Chairman and
President of the First International
Bank in El Paso, N.A.; and Claude E.
Leyendecker, President of the Mimbres
Valley Bank in Deming, New Mexico.

The d ire c to rs announced for
Houston are Ralph E. David, President
of the First Freeport National Bank;
Thomas B. McDade, Vice Chairman of
Texas Commerce Bancshares Inc. in
Houston; and George V. Smith, Sr.,
President of Smith Pipe & Supply Inc.
in Houston.
Jerome L. Howard, Chairman and
Chief Executive Officer of Mortgage
and Trust Inc. in Houston, was
designated Chairman for Houston in
1982. Paul N. Howell, Chairman of
Howell Corporation in Houston, was

designated Chairman Pro Tern.
Other directors for Houston are Ray­
mond L. Britton, Labor Arbitrator and
Professor of Law at the University of
Houston; and Will E. Wilson, Chairman
and Chief Executive Officer of the First
Security Bank of Beaumont, N.A.

San Antonio
The directors announced for San An­
tonio are Joe D. Barbee, President and
Chief Executive Officer of BarbeeNeuhaus Implement Company in
Weslaco; Charles E. Cheever, Jr., Presi­
dent of Broadway National Bank in
San Antonio; and Carlos A. Zuniga, of
Zuniga Freight Services Inc. in Laredo.
Pat Legan, Owner of Legan Proper­
ties in San Antonio, was designated
Chairman for San Antonio in 1982.
Lawrence L. Crum, Professor of Bank­
ing and Finance at The University of
Texas at Austin, was designated Chair­
man Pro Tern.
Other directors for San Antonio are
George Brannies, Chairman and Presi­
dent of The Mason National Bank; and
John H. Garner, President and Chief
Executive Officer of Corpus Christi Na­
tional Bank.

Federal Reserve Bank of Dallas
Station K
Dallas, Texas 75222
This is the first issue of Roundup, a
new public information newsletter
published for members of the
financial community and the general
Roundup is published monthly by the
Federal Reserve Bank of Dallas and
its Branches at El Paso, Houston,
and San Antonio. Additional copies
of most issues are available from the
Department of Communications,
Financial and Community Affairs,
Federal Reserve Bank of Dallas,
Station K, Dallas, Texas 75222.