View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

A meeting of the executive committee of the Federal Open Market
Committee was held in the offices of the Board of Governors of the Federal

Reserve System in Washington on Tuesday, August 2, 1938, at 10:25 a.m.
PRESENT:

Mr. Eccles, Chairman
Mr.
Mr.
Mr.
Mr.

Harrison, Vice Chairman
Szymczak
Davis
Sinclair

Messrs. McKee, Ransom, Draper, Newton,
Schaller and Peyton, Members of the
Federal Open Market Committee
Mr. Morrill, Secretary
Mr. Carpenter, Assistant Secretary of the
Federal Open Market Committee
Mr. Wyatt, General Counsel
Mr. Williams, Associate Economist
Mr. Dreibelbis, Assistant General Counsel
Mr. Thomas, Assistant Director of the
Division of Research and Statistics of
the Board of Governors of the Federal
Reserve System

Mr. Thurston, Special Assistant to the
Chairman of the Board of Governors of
the Federal Reserve System
Upon motion duly made and seconded, and
by unanimous vote, the minutes of the meeting
of the executive committee of the Federal Open
Market Committee held on May 31, 1938, were
approved.
Reference was made to the action of the members of the executive
committee on June 8, 1938, in granting to the Federal Reserve Bank of New
York authority to make such shifts of securities in the system account as
were necessary in connection with the exchange of system holdings of June
15 and September 15 notes for new securities offered by the Treasury, and
it was stated that in accordance with this authority $173,705,000 of such

-2

8/2/38

notes were exchanged for $86,852,500 of 1 1/8% Treasury notes due on
June 15, 1943, and $86,852,500 of 2 3/4% Treasury bonds of 1958-63.
Upon motion duly made and seconded, and
by unanimous vote, the action of the members
of the executive committee in granting the
additional authority to the Federal Reserve
Bank of New York was approved, ratified, and
confirmed.
Mr. Harrison outlined the transactions which had taken place
in the system open market account since the meeting of the executive
committee on May 31,

1938, and up to and including August 1, 1938.

Upon motion duly made and seconded, and
by unanimous vote, the transactions in the
account during the period from May 31 to Aug
ust 1, 1938, inclusive, were approved, rati
fied and confirmed.
Thereupon the meeting recessed and reconvened at 4:15 p.m. follow
ing the meeting of the Federal Open Market Committee, with Messrs. Eccles,
Harrison, Szymczak, Davis, Sinclair, Morrill, Carpenter, Williams and
Thomas in attendance.
It was agreed that since the Federal Open Market Committee at its
meeting today had directed the executive committee to replace maturing
bills in the system open market account with Treasury bills or notes of
any maturity to the extent that they could be purchased without paying
a premium over a no-yield basis, the executive committee should issue sim
ilar directions to the Federal Reserve Bank of New York with respect to
the replacement of maturing securities.

8/2/38
Thereupon, upon motion duly made and seconded, and
by unanimous vote, the executive committee directed the
Federal Reserve Bank of New York until otherwise direct
ed by the executive committee,
(1) To replace maturing securities in the system
open market account by purchases of like amounts of
Treasury bills or Treasury notes provided such purchases
can be made without paying a premium above a no-yield
basis;
(2)
To make such other shifts of securities in the
account (which may be accomplished when desirable through
replacement of maturing securities) as may be necessary
in the practical administration of the account, up to an
aggregate of $200,000,000 of purchases and a like amount
of sales or redemptions, provided that the total amount
of bonds held in the account be not reduced;
(3) To increase or decrease temporarily the amount
of securities in the account between weekly statement
dates by not more than $50,000,000 when necessary in mak
ing replacements or shifts pursuant to the above provi
sions of this resolution, provided that the amount of
securities in the account as of any weekly statement
date shall not be changed from that of the preceding
weekly statement date except pursuant to the other pro
visions of this resolution; and
(4) Upon approval by a majority of the members of
the executive committee, which may be obtained by tele
phone, telegraph, or mail, to make such other shifts or
such purchases or sales (which would include authority to
allow maturities to run off without replacement) for the
account as may be found to be desirable within the limits
of the authority granted to the executive committee by
the Federal Open Market Committee.

Thereupon the meeting adjourned.

Secretary.

Approved: