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Reproduced from the Unclassified'/ Declassified Holdings of the National Archives-



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FEBRUARY 5, 1935.

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The meeting was called to order at 10;40 a# m., there being present
orris, Flenmng,
Governor Harrison, chairman, Governors Norri
Seay, Newton, Schaller, Martin, Geery , Hamilton^
McKinney, and Calkins
Deputy Governors Paddock and Bargess, secretary.
In accordance with the regulations governing the organization of the
Federal Open Market Committee which provide that the election of chairman,
secretary, and executive committee for the ensuing ye^r should take place at
the first meeting in each calendar year, the following were on motion elected
to these positions:
Chairman, Governor Harrison
Secretary, Deputy Governor Burgess
Members of executive committee, representatives of the
Federal Reserve Banks of Boston, New York, Cleveland,
Richmond, and Chicago.
It was further
VOTED that the chairman of the full committee be chairman
of the executive committee.
After discussion it was
VOTED that the action of the executive committee on January
25 which had been approved by all members of the full committee
by telegraph, and by the Federal Reserve Board, be ratified.
^~There ensued a discussion of the responsibility of the Federal Heserve
System for the status of the government security market in view of the fact that
under recent conditions the government security market had become a dominating
factor in the money market.

There was also discussion of the possible effects

upon the government security market and the money market of different possibilities
Federal Reserve Bank of St. Louis

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Reproduced from the Unclassified I Declassified Holdings of the National Archives




of action by the Supreme Court with respect to gold clause legislation.
In the course of this discussion it was generally agreed that it was
neither possible nor desirable to peg prices of government securities at any point,
but that it might be desirable in certain conditions to ease movements in either
There was also some discussion of the probable results of any reductions
in System holdings of government securities which would appear in the weekly state­
ment, and it was the general opinion that under present conditions the results of
sales might be seriously adverse to the position of the government bond market.
The report of operations and the preliminary memorandum on money market
conditions were distributed and some time was taken for those present to review
the two documents.

It was then

VOTED that the report of operations and the preliminary
memorandum be received and placed on file.
There was a brief general discussion of the formulae which should be
used in determining the participations of the several banks in any purchases or
sales which might be made.

It was thereupon


that the several banks should participate in
sales in accordance with the ratio of their
holdings in the System account to the total
(as shown in Column 3 in Exhibit C of the
report of operations.)


that banks should participate in any pur­
chases in accordance with the ratio of their
requirements for expenses, dividends, and
chargeoffs to the System total.
(as shown under Column C in Exhibit C of the
report on operations.)


Special requirements of individual banks
should be adjusted by the executive committee.


The basis of participation should be recon­
sidered at any time that a change in conditions
appeared to make such reconsideration desirable.

There followed a discussion of future program pending a further meeting
of the full committee, and it was

Reproduced from the Unclassified I Declassified Holdings of the National Archives

d e c l a s s if ie d

Author!ty B c O r d M r m ^ p 1


VOTED that subject to the approval of the Federal Reserve Board,
and superseding previous authorizations, the executive committee
be authorized to buy, sell, or make shifts between maturities of
government securities up to $250,000,000 and that it be further
authorized to buy, sell, or make shifts between maturities of an
additional #250,000,000 on telegraphic approval of a majority of
the open market committee in case of emergency requiring action
before a meeting of the full committee could be arranged.
There ensued an informal general discussion o f banking legislation, in
the course of which Governor Harrison reported the activities of the legislative
commi ttee.
The meeting adjourned at 12; 20 p. m.
The meeting reconvened at 12:30 p. m., the following being present from
the Federal Reserve Board in addition to members of the Federal Open Market
From the Federal Reserve Board
Governor Eccles, and Messrs, Hamlin, Miller, James, Thomas
and Szymczak.
From the Board’s staff
Messrs. Morrill and Clayton.
Governor Harrison reported thevaction of the committee and summarized
briefly their discussions.

After a brief general discussion the meeting adjourned at 1:15 p. m.

W. Randolph Burgess,