Where in Admin Panel do you increase private message by member

[dismas]

After having re-read your initial post, I think I might have misinterpreted your question. If you want to just give all your current members more space for PMs, you can just edit the "Registered Members" usergroup and bump their max allowed messages to whatever value that you'd like. You would do that here:
AdminCP > Usergroups > Usergroup Manager > Edit the Registered Members usergroup > Private Message Permissions > Max Stored Messages

If you want to create an entirely new usergroup then you would go to:
Usergroups > Add New Usergroup > select the drop down menu at the very top "Create Usergroup Based off of Usergroup:" > Choose a usergroup > "Go" > edit the new usergroup to allow them to do whatever else you like such as have more PM storage.

Oh, and then to move members to this new usergroup, you'd go to:
AdminCP > Users > Prune/Move Users