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The meeting of the executive committee of the Federal Open Mar ket Committee was reconvened in the offices of the Board of Governors of the Federal Reserve System in Washington on Friday, June 6, 1947, at 4:45 p.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Sproul, Vice Chairman Draper Davis Szymczak (alternate for Mr. Vardaman) Mr. Mr. Mr. Mr. Morrill, Secretary Carpenter, Assistant Secretary Vest, General Counsel Thomas, Economist Mr. Rouse, Manager of the System Open Market Account Messrs. Musgrave, Chief, and Smith, Economist, Government Finance Sec tion, Division of Research and Statistics, Board of Governors It was the unanimous view of the members of the committee that the direction to the Federal Reserve Bank of New York to execute trans actions for the System account pending another meeting of the committee should authorize an increase or decrease of $500 million in the total amount of securities in sive of maturing bills the account at the close of this date, exclu transferred to the System account, bills purchased outright in the market at the posted rate, bills redeemed or exchanged at maturity, and special short-term certificates of indebtedness purchased for the temporary accommodation of the Treasury. Upon motion duly made and seconded, and by unanimous vote, the executive com mittee directed the Federal Reserve Bank of New York until otherwise directed by the executive committee, 6/6/47 -2- (1) To make such purchases, sales, or exchanges (includ ing replacement of maturing securities and allowing maturi ties to run off without replacement) for the System account, either in the open market or directly from, to, or with the Treasury, as may be necessary in the practical administration of the account or for the purpose of maintaining an orderly market in Treasury securities and a general level of prices and yields of Government securities which will support the Treasury issuing rates of 7/8 per cent for one-year certifi cates and 2-1/2 per cent for 27-year bonds restricted as to ownership; provided (a) that the total amount of securities in the account at the close of this date shall not be in creased or decreased by more than $500,000,000 [exclusive of maturing bills transferred to the System account from the option accounts of the Federal Reserve Banks pursuant to the direction issued by the Federal Open Market Committee on May 5, 1947, bills purchased outright in the market on a discount basis at the rate of 3/8 per cent per annum, bills redeemed or exchanged at maturity, bills taken in exchange for maturing bills, and special short-term certificates of indebtedness purchased for the temporary accommodation of the Treasury pursuant to paragraph (2) of this direction], and (b) that this paragraph shall not limit the amount of Treasury bills purchased pursuant to the directions of the Federal Open Mar ket Committee issued under dates of March 1, 1945, and April 24, 1947, or the redemption of such bills; (2) To purchase direct from the Treasury for the System open market account such amounts of special short-term certifi cates of indebtedness as may be necessary from time to time for the temporary accommodation of the Treasury; provided that the total amount of such certificates held in the account at any one time shall not exceed $750,000,000; and (3) Upon approval by a majority of the members of the ex ecutive committee, which may be obtained by telephone, tele graph, or mail, to make such other purchases, sales, or exchanges 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. In taking this action it was under stood that the limitation contained in the direction included commitments for purchases and sales of securities for the System account. 6/6/47 -3Thereupon the meeting adjourned. Secretary. Approved: Chairman.
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