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Reproduced from the Unclassified I Declassified Holdings of the National Archives
DECLASSIFIED
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QONFIDEOTIAL
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MINUTES OF THE MEETING OF THE EXECUTIVE: COMMITTEE
OF THE FEDERAL OPEN MARKET COMMITTEE
HELD AT WASHINGTON, D. 0.
FEBRUARY 27, 1935.
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The meeting was called to order at 10:30 a# m * , there being present
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Governor Harrison, chairman, Governors Seay and Schaller, and
Deputy Governors Paddock and Burgess, secretary.
r^Governor Harrison raised the question whether it was wise for the Treasury
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to continue the procedure of having the Under Secretary visit New York immediately
before a new issue.
He pointed out the danger that the Treasury might be criticized
for unavoidably giving scan© informat ion concerning the forthcoming issue to those
few people who participated in the interviews in advance of a general announcement.
There was an informal discussion of this and related quest ionj|J
At eleven o fclock the meeting adjourned to the office of the Secretary of
the Treasury there being present, in addition to the committee,
Secretary Morgenthau, Governor Eccles, Under Secretary Coolidge,
and Messrs. Bell, Haas, and Upham of the Treasury Department.
The Secretary of the Treasury indicated that the Treasury proposed to
increase the amount of #10 silver certificates to be issued, because it had not
been possible to put into circulation the full amount of currency required by silver
purchases without going beyond the #1 and $5 denominations#
There ensued a detailed discussion of proposals for the forthcoming
Treasury issue with respect to the character of the offerings* their maturity, and
rate •
r I n the course of this discussion Governor Harrison pointed out that governs
ment securities had been rising in price with great rapidity to a record high in
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spite of an enormous Treasury deficit.
As a result the present position might be
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Reproduced from the Unclassified I Declassified Holdings of the National Archives
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considered in some measure vulnerable and interfered somewhat with the distribution
of new issues*
He said he had no detailed suggestion to make just now, but be
lieved from time to time consideration should be given to plans which might prevent
too rapid increases of prices in brief periods of time and which might insure a
more health^ state of the market
! There was also discussion of the desirability of the Under Secretary
visiting New York inanedietely before the issue, and it was agreed that for the
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future it might be desirable to avoid visits just at these times, with the under
standing that the governors of the Reserve banks represented on the committee would
be of all possible assistance to the Treasury in exploring market conditions*j
At 12?15 p. m* the cOnmittee left the Treasury for the offices of the
Board, and at 12:50 p* m* reconvened there*
Governor Harrison reported briefly upon the status of the Banking Act of
1935*
The secretary of the cosanittee reported that the results of the first
month of operation in 1935 showed that several of the Reserve banks were operating
at a deficit oj* at a very small surplus.
He indicated that a request for a
further allotment of government securities had been received from the Richmond bask
and might be expected from other banks.
It was understood that adjustments be
tween banks would be made when requested on the general basis of the computed
figures as to the requirements of the several banks for expenses,' dividends, and
chargeoffs.
The meeting adjourned at Is15 p* m*
W. Randolph Burgess
Secretary
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