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BDARD DF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Office Correspondence To Gov. Secies From T.-ir. T- T,- S m i t h Date ^mary a, Subject: Tentative estimates of open market transactions (excluding redemptions) in the two month period, December I9I4S and January 19^4-9f are shown in the attached table* The material supplements that in the recent memorandum to you dated February 3» Although the turnabout in the market occurred in early November when prices of bank-eligible bonds rose appreciably, December and January are the only recent months in which the Federal Reserve has sold bonds net. The Federal Reserve has sold longer term issues both to commercial banks and other investors* The purchases of longer term bonds by other investors were made partly on the basis of sales of shorter term securities to ccmmercial banks* On balance Federal Reserve net sales to both bank and nonbank investors drained 800 million dollars of reserves and net purchases by nonbank investors drew down bank deposits by about 200 million dollars* Attachment ESTIMATED MARKET TRANSACTIONS DECEMBER 19)48 AND JANUARY (In billions of dollars) Federal Reserve& Federal agencies Net purchases (+) or sales (-) of securities due or callable: Within 5 years After 5 years: Bank-eligible Bank-restricted Total Effect on money supply (excluding Treasury deposits) Com'l banks -.3 -•1 -.1 -.2 -4 -•3 +.2 * +.2 +.3 -.3 -.3 +.6 +.2 -.8 -.3 * Less than 50 m i l l i o n d o l l a r s • GOVERNMENT FINANCE SECTION, BOARD OF GOVERNORS February 8 , I9I4.9
@FedFRASER