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Federal Reserve Bank of Dallas

March 1983

Fed Announces 1983 Monetary Targets
The Federal Reserve will continue on
a course of monetary discipline
designed to stimulate expansion in
business activity without a resurgance
of inflation, according to Federal
Reserve Chairman Paul A. Volcker. In
testimony before Congress February
16 and 22, Volcker addressed the per­
formance of the economy in 1982 and
discussed the economic outlook for
1983. He said that while the Federal
Open Market Committee will continue
to set target ranges for the monetary
aggregates M1, M2, and M3, expansion
of those ranges is necessary, in some
cases, to compensate for the current
distortions resulting from the creation
of new deposit accounts at financial
institutions. The ongoing process of
deregulation has created unusual
situations which must be accounted
for in calculating money supply
The target growth ranges of 2.5 to
5.5 percent established for M1 in 1982
were expanded to a 4 to 8 percent
range for 1983. Ranges for M2 were
also changed from a 6 to 9 percent
range for 1982 to a 7 to 10 percent
range for 1983. The 6.5 to 9.5 percent
range for M3 was unaltered.
Dallas Fed President Robert H.
Boykin, speaking before the local news
media in connection with Volcker’s
testimony, said allowing money target
ranges to grow “does not signal a
policy change by the Federal Reserve
or a shift into a posture of permitting
money growth to be excessive.” Boykin
emphasized the progress made in cur­

Robert Boykin addresses media members.

tailing inflation and stated that the
new ranges should not re-kindle infla­
tionary pressures on the economy.
Nevertheless, current Fed policy is
consistent with a noticeable improve­
ment in economic activity which will be
evident in 1983.
Evidence of recovery is already pre­
sent in the Texas economy, which has
held up better than the nation as a
whole according to Boykin. He said the

Texas economy has a more favorable
business climate, a more stable in­
dustry mix, and a strong defense sec­
tor which help this part of the country
remain strong during recessionary
times. Even with this area’s relatively
strong economy, Texas may lag behind
the rest of the nation during a recovery
due to the recent energy price declines,
the residual effects of peso devalua­
tions, and the depressed agricultural
sector, Boykin said.
Both Volcker and Boykin expressed
optimism for the economy in 1983.
Volcker stated, “There has been
substantial progress toward restoring
price stability and there is good reason
to believe that further progress can be
achieved even as business activity
picks up.”
The Federal Reserve is required by
the Full Employment and Balanced
Growth Act of 1978 to submit a written
report twice yearly on the state of the
economy and the course of monetary
policy. In conjunction with Volcker’s
address to Congress regarding those
reports, the Dallas Fed holds press
conferences to inform the local media
on Federal Reserve policies.

• Advisory Committee
• Treasury Securities
• Volume Statistics

Advisory Committee Gives Input to Fed
Members of the Advisory Committee
met recently at the Dallas Federal
Reserve to discuss new services in
check processing and collection and
their effects on financial institutions.
The committee, composed of represen­
tatives from the banking, savings and
loan, and credit union industries, was
established by the Dallas Fed to work
in conjunction with the Board of Direc­
tors to bring to the Bank a variety of
backgrounds and experience as input
to policy decisions.
At their meeting, members were
briefed on the new return item pilot
program implemented February 24 and
the effects that program will have on
the pricing of checks services. They
also discussed new proposals for inter­
district transportation of checks and
the elimination of float from the

, .
. . . .
Committee members express their views on checks collection.

Director Chosen
For El Paso
Branch Board

Suspension List Expanded
In January, the Board of Gover­
nors of the Federal Reserve
System granted, for certain Loui­
siana parishes, a temporary
suspension of early time deposit
withdrawal penalties associated
with Regulation Q. As a result of
the severe storms that occured in
December 1982, that order has
been expanded to include the
following parishes: Caldwell,
Franklin, Lincoln, Morehouse,
Richland, and Union. Depositors
who have suffered storm-related
losses may withdraw deposits
without penalty upon presenta­
tion of an officer-approved state­
ment describing the loss.
The penalty suspension was
made retroactive for these
parishes to include deposits
withdrawn on or after January 17,
1983, and remains in effect until
midnight July 11, 1983.

Penalty suspension effective Janu­
ary 11, 1983 through July 11, 1983 for
these parishes screened on the map:


Penalty suspension effective Janu­
ary 17, 1983 through July 11, 1983 for
these parishes outlined on the map:


David L. Stone has been ap­
pointed to the Board of Directors
of the El Paso Branch of the
Federal Reserve Bank of Dallas.
Stone, president of The Portales
National Bank in Portales, New
Mexico, will fill the unexpired por­
tion of a three-year term which
ends December 31, 1983.
A graduate of The University of
Texas at Austin, Stone began his
banking career in Dallas as a
credit analyst for the Texas Bank
and Trust Company. Prior to
being named president of The
Portales National Bank, he was
executive vice president in
charge of lending and business
development of the First National
Bank of Richardson, Texas, and
was senior vice president of the
Promenade National Bank, also
in Richardson.

Treasury Securities Available From Fed
The Treasury Department, as one of
its responsibilities, provides financing
for the Federal Government. The ma­
jority of funds gathered are raised by
selling marketable securities such as
Treasury bills, notes, and bonds to the
general public. The 12 Federal Reserve
Banks act as an agent for the Treasury
in the selling of these securities, which
may be purchased without charge from
a Reserve Bank, a Reserve Bank
Branch, or from the Treasury directly.
Securities may also be purchased
through fin a n c ia l in s titu tio n s .
Securities are sold on a definitive
(registered) or book-entry basis. Pur­
chase of a definitive security means
the buyer receives a certificate verify­
ing ownership. With the book-entry
method, a purchaser receives a receipt
rather than a certificate as evidence of
Each year, billions of dollars worth
of Treasury securities are bought and
sold. During 1982, the Dallas Federal
Reserve processed over eight million
definitive securities with a dollar value
of over $3 billion. There were also
150,000 book-entry securities handled
with an associated dollar value of over
$226 billion.

1. the offering is announced every
fourth Friday
2. the bills are auctioned the
following Thursday
3. the bills are issued one week
later on Thursday
When purchasing a bill, the full face
value is paid by 12:30 p.m. on the auc­
tion day. The auction will determine an
average selling price for the bills. The
difference between the actual price of
the bills and their face value is called
the “discount.” The discount is re­
turned to individuals on the issue date
and the full face value is paid upon

pay the face value at purchase and
receive interest payments semi­
annually during the life of the note or
bond. Face value is returned at maturi­
ty. Both notes and bonds are offered
quarterly in February, May, August,
and November. In addition, notes are
usually offered once a month or
whenever the Treasury’s needs arise.
Interest earned on bills, notes, and
bonds is exempt from state and local
taxes, but purchasers must pay federal
taxes on them. A form known as a
“tender” or a signed letter must be
submitted as application for these

Notes and Bonds
Treasury notes and bonds are
securities with longer maturities than
bills. Notes have a maturity of not less
than two years or more than 10 years.
Bonds generally have a maturity of
more than 10 years. Both securities are
offered on a definitive or book-entry
basis. Book-entry notes and bonds can
be purchased through financial institu­
tions. Notes and bonds are issued in
$1,000, $5,000, $10,000, $100,000, and
$1 million denominations. Investors

Telephone Numbers for
Periodic Securities
(recorded messages)
(214) 651-6384
Washington, D.C.
(202) 287-4113

Treasury Bills
Treasury b ills are short-term
securities with maturities of 13,26, and
52 weeks respectively. They are sold in
minimum amounts of $10,000 and in
m ultiples of $5,000 above the
minimum. Currently, Treasury bills are
sold only on a book-entry basis. In this
way, a purchaser is protected from
loss, theft, or counterfeiting, and the
processing costs to the Treasury are
reduced. The 13- and 26-week Treasury
bills are offered each week as follows:
1. the offering is announced
on Tuesday
2. the bills are auctioned the
following Monday
3. the bills are issued the
following Thursday
The 52-week bills are offered according
to this schedule:

A new brochure describing the purchase, sale, and redemption of Treasury securities is
available from the Dallas Fed. Please phone (214) 651-6268 for ordering information.

Volume Statistics Announced
For 1982 Operations
Operations at the Federal Reserve
Bank of Dallas experienced an active
year in 1982. The Dallas Fed, along
with its three branches, processed
almost one billion checks during 1982
with an associated dollar value of over
$600 billion. Of these, almost 900
million checks processed were com­
mercial checks with a dollar value of
over $560 billion. Automated clear­
inghouse operations, which process
payments electronically instead of by
paper check, continued to be affected
by the significant growth trend of the
past several years. Commercial ACH
items processed by the Dallas Fed in­
creased approximately 73 percent from
1981 to 1982, growing from 5.5 million
items to 9.5 million items. The dollar
amount associated with commercial

ACH items increased almost 150 per­
cent, growing from $14.6 billion in 1981
to $36.2 billion in 1982. In addition, the
Dallas Fed processed over 15 million
U.S. Government ACH items with an
associated dollar value of $7.5 billion.
In the wire transfer of funds area, close
to five million items were handled dur­
ing the year, with a dollar value of $6.6
The offices of the Dallas Federal
Reserve received and counted almost
600 million pieces of currency and over
one billion pieces of coin during 1982.
Loans to financial institutions pro­
cessed during the year decreased to
667 from 891 processed in 1981, but the
dollar value associated with these
loans increased from almost $7 billion
to over $10 billion.

New Service
Now Available
On February 15, the Federal
Reserve Bank of Dallas expanded
its noncash collection services
offered to financial institutions.
In addition to accepting for col­
lection matured corporate and
municipal coupons on a cash pro­
cessing basis, the Dallas Fed has
begun including matured cor­
porate and municipal bonds
payable in the Eleventh District in
its cash processing procedure.
Under cash processing, credit
will be passed to depositors on a
pre-set time schedule. Any ques­
tions regarding the new service
should be directed to the
Securities Department of the
Dallas Fed.

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