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Meeting on January 21, 1936.
There were present:
Mr. Harrison, Chairman of the Federal Open Market Committee
and Governor of the Federal Reserve Bank of New York;
Messrs. Young, Norris, Fleming, Seay, Newton, Schaller,
Martin, Geary, Hamilton, McKinney, and Calkins, Governors
of the Federal Reserve Banks of Boston, Philadelphia,
Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco, respectively;
Mr. Burgess, Secretary of the Federal Open Market Committee
and Deputy Governor of the Federal Reserve Bank of New York.
After a review of a preliminary memorandum on credit conditions
submitted by the chairman, and the usual report of operations, and after
an extended discussion of business and credit conditions and the various
courses which the Federal Reserve System might follow in its policy, the
committee, by a vote of nine to three, adopted the following resolution:
The Committee has considered the preliminary
memorandum and has reviewed the credit situation. It
is the sense of the committee that, so far as business,
credit, and banking conditions are concerned, there is
nothing in the present situation to prompt the committee
to change its views as expressed in its resolution
adopted on December 18, which the Committee respectfully
The Committee recognizes that the risks of action are somewhat increased by the present budgetary
situation, but it recognizes also that the longer action
is delayed, the greater are the dangers resulting from
the combination of inordinately large excess reserves and
an unbalanced budgetary position, and the greater will be
the difficulty of taking remedial action.
Viewing the situation as a whole, the Committee
strongly believes that action looking toward a substantial
reduction in excess reserves should be taken as soon as this
may be feasible, in the judgement of the Board of Governors
of the Federal Reserve System, having in mind the advantages
of a coordinated program of recovery.
The vote on this resolution was as follows:

-2Yes No
Governors Harrison Governors Young
Norris Newton
Fleming Martin

After discussion it was agreed that authority voted to the executive committee of the Federal Open Market Committee at three previous
meetings to make shifts of maturities in the System open market account,
should be continued, as necessary in the proper administration of the
account to enable the executive committee to replace maturities from
time to time and to make shifts in maturities to meet changing market
conditions. With respect to the amount of authority which the committee
should have in shifting from shorter maturities to bonds it was agreed
that some limited authority was advisable in order to deal with any market situation that might arise. It was therefore unanimously
VOTED that superseding previous authorizations, the executive committee be authorized to make shifts between maturities of government securities up to $300,000,000, provided
that the amount of securities maturing within two years be
maintained at not less than $1,000,000,000 and that the
amount of bonds be not over $300,000,000.
It was also agreed that authority should be given to the executive
committee to buy or sell (which would include authority to allow maturities
to run off) securities for System account within limits as to amount, in
order that the committee might be in a position to act promptly if circumstances not now foreseen should make action appear desirable before a further meeting of the full committee. It was therefore unanimously


-3VOTED that the executive committee be authorized to
buy or sell up to $250,000,000 of government securities,
subject to telegraphic approval of a majority of the
Federal Open Market Committee and the approval of the
Board of Governors of the Federal Reserve System.