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BOARD OF GOVERNORS
OF THE
F E D E R A L RESER VE S Y S TE M
W ASHINGTON 25, D. C.

June 27, 1952
C O N F ID E N T IA L
M r . Allan Sproul, P re s id e n t,
F e d e ra l R e s e r v e Bank of New Y o rk ,
New Yo rk 45, New York*
Dear Sir*
At the m eeting of the F e d e ra l Open M a rk et Com m ittee on
June 19, 1952, the Com m ittee adopted an amendment to Section 8
of the regulation of the F e d e ra l Open M arket C om m ittee in the form
set forth in the recommendations regardin g b a n k ers1 acceptances
adopted at the meeting of the executive com m ittee on A p r il 21, 1952,
a copy of which was sent to you under date of M a y 7, 1952. A copy
of the amendment is enclosed.
The Full Com m ittee also approved the recommendations of
the executive com m ittee to the F e d e ra l Open M a rk et Com m ittee that:




(a) Each F e d e ra l R e s e rv e Bank be authorized to p u r­
chase 'prime elig ib le bankers1 acceptances in the open m a r ­
ket from banks and financially responsible experienced
d ea lers and to hold such acceptances in its own p o rtfo lio .
(b) The minimum buying rate on such p rim e eligib le
b a n k ers’ acceptances shall be fixed by the F e d e r a l Open
M arket Com m ittee at this time atj^-3/4 p er c ent, subject
to change from tim e to time by the Com m ittee in o rd er to
c a r r y out its p o lic ie s .
(c) The e ffective rates at which a F e d e r a l R e s e r v e
Bank may purchase ban kers’ acceptances shall be not less
than the minimum buying rate and shall be sp ecified from
time to time by the Manager of the System Open M arket A c ­
count in the light of m arket conditions and developments
and in accordance with any d ire c tiv e s or lim itations p r e ­
scribed by the full Com m ittee or the executive com m ittee
for the purpose of ca rryin g out the current p o lic ie s of
the F e d e ra l Open M arket Comm ittee * Any change in the e f ­
fective buying rates on bankers' acceptances shall be
p rom ptly reported by the Manager of the Account to the
F e d e r a l Open M ark et C om m ittee.

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At the m eeting of the executive com m ittee o f the F e d e ra l
Open M arket Com m ittee also held on June 19, the executive com m ittee
noted that the F e d e r a l Open M arket Comm ittee in adopting the r e c o m ­
mendations set forth above fixed the minimum buying rate on b a n k ers1
acceptances at one and three quarters per cent, subject to change
from time to tim e by the C om m ittee.
V e r y tr u ly your$
/s/ W in field W. R i e f l e r
W i n f i e l d W. R i e f l e r , S e c r e t a r y ,
F e d e r a l Op en M a r k e t C o m m i t t e e .

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102