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A meeting of the Federal Open Market Committee was held in the
offices of the Board of Governors of the Federal Reserve System in

Washington on Wednesday, March 18, 1936, at 10:20 a. m.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Eccles
Broderick
Szymczak
McKee
Ransom
Morrison
Harrison

Mr. Fleming

Mr. McKinney
Mr. Hamilton
Mr. Morrill, Secretary of the Board of
Governors of the Federal Reserve System
Mr. Wyatt, General Counsel of the Board of
Governors of the Federal Reserve System
Chairman Eccles stated that this meeting of the Federal Open Market
Committee, which was the first

meeting of the Committee as constituted by

Section 12A of the Federal Reserve Act as amended by the Banking Act of
1935,

had been called for the purposes of organization of the Committee,

the adoption of by-laws,

the adoption of regulations required by Section

12A of the Federal Reserve Act to be issued by the Committee,

and such

other action as might be found to be desirable.
He suggested that the Committee first

elect a temporary chairman,

a temporary secretary, and temporary counsel.
Upon motion duly made and seconded Mr.
Eccles was elected temporary chairman, Mr.
Morrill was elected temporary secretary, and
Mr. Wyatt was elected temporary counsel.
The Committee was informed that certified copies of the records of
the elections of Messrs. Harrison, Fleming, Hamilton and McKinney as
members of the Federal Open Market Committee,

and of Mr. Roy A. Young,

3/18/36
President of the Federal Reserve Bank of Boston, as alternate for Mr.
Harrison, and of Mr. Oscar Newton, President of the Federal Reserve Bank
of Atlanta, as alternate for Mr. McKinney, had been received by the Board
of Governors.

No question was raised by any member of the Committee as

to the election or eligibility of any of the presidents referred to for
service on the Committee in

the respective capacities stated.

The Committee then took up for consideration a tentative draft
of proposed by-laws which was read and discussed paragraph by paragraph.
At the conclusion of the discussion, upon
motion duly made and seconded, and by unanimous
vote, by-laws were adopted in the following forms
"ARTICLE 1.

MEMBERS

"Section 1. Organization - Prior to the first
meeting
of the Committee following March 1 each year, each member
of the Committee representing the Federal Reserve banks and
each alternate elected to serve in the absence of such
member shall forward the record of his election or a certi
fied copy thereof to the Secretary of the Committee; and,
if any question be raised as to the election or eligibility
of such member or alternate, the Committee shall determine
such question before permitting such member or alternate to
participate in the meetings.
Alternates - An alternate shall be entitled
"Section 2.
to attend meetings of the Committee only in the absence from
a meeting of the member for whom such alternate is elected
but in such cases the alternate shall have the same status as
the member for whom he is serving.
"Section 3. Oath - Each member of the Federal Open
Market Committee and each alternate shall take the same oath
of office as that required by the Constitution for officers
of the United States.
"Section 4. Quorum - Seven members (including alternates
present and acting in the absence of members) shall con
stitute a quorum for the transaction of business; but less
than a quorum may adjourn from time to time until a quorum is
in attendance.

-3-

3/18/36

"Section 5. Meetings - The Committee shall meet in
Washington, D. C., at least four times each year and
oftener if deemed necessary. Meetings shall be held upon
the call of the Chairman of the Board of Governors of the
Federal Reserve System or at the request of any three mem
bers of the Committee.
Notices of calls by the Chairman
to other members shall be given by the Secretary. Requests
of any three members for the calling of a meeting shall
state the time therefor and shall be filed in writing or
by telegram with the Secretary who shall forthwith notify
all members of the Committee in writing or by telegram.
When the Secretary shall have sent notices to all members
of the Committee that a meeting has been requested by
three members and of the time therefor, a meeting shall
be deemed to have been called. Whenever any member of the
Committee representing Federal Reserve banks shall find
that he will be unable to attend a meeting of the Committee,
he shall promptly notify his alternate and the Secretary
of the Committee in writing or by telegram.
"Section 6.
Conduct and Deliberations - The proceed
ings, deliberations, discussions and actions of the
Committee, except as required by law and except as author
ized by the Committee, shall be strictly confidential, and
no information shall be released except as authorized by
the Committee and in the annual report required to be made
to Congress by section 10 of the Federal Reserve Act as
amended.
Except as herein provided, no reports on the
meetings of the Committee shall be made to any person or
persons whatsoever.
"Section 7. Order of Business - The following shall
be the order of procedure to be followed at meetings of the
Committee:
The Secretary shall present the minutes
1.
of the last meeting of the Committee and the
minutes of all meetings of the Executive Committee
held since such meeting.
2. The Manager of the System Open Market
Account shall make his report of all operations of
the System Open Market Account occurring since the
preceding meeting.
The Committee Economist shall make his re
5.
port.

4.

The Committee shall then consider open

market policies.
By a majority vote of members present, the Committee may

adopt a different order of business for any particular meeting.

3/18/36

-4"ARTICLE II.

OFFICERS

"Section 1. Chairman and Vice Chairman of the Committee
At its first meeting after March 1 of each year the Committee
shall elect a Chairman and a Vice Chairman to serve until the
first meeting after March 1 of the next year. The Chairman
of the Committee shall preside at all meetings thereof and
shall perform such other duties as the Committee may require.
The Vice Chairman shall perform the duties of the Chairman in
the absence of the Chairman,
"Section 2. Secretary - The Secretary of the Board of
Governors of the Federal Reserve System shall be the Secretary
of the Committee. It shall be his duty to keep minutes of all
meetings of the Committee and a complete record of the action
taken by the Committee upon all questions of policy relating
to open-market operations and shall record the votes taken in
connection with the determination of open-market policies and
the underlying reasons assigned therefor. He shall have
custody of such minutes and records and shall perform such
other duties as the Committee may require. In the absence of
the Secretary an Assistant Secretary of the Board of Governors
of the Federal Reserve System shall act as Secretary pro tem.
"Section 3. Economist and Associate Economists - At its
first meeting after March 1 of each year, the Committee shall
meeting after
elect an Economist to serve until the first
The Committee shall also from time
March 1 of the next year.
to time, as it may decide, elect one or more Associate
Economists. The Economist shall prepare for the use of the
Committee and present to it such information about business
and credit conditions as will assist the Committee in the
determination of open-market policies, and shall perform such
other duties as the Committee may require.
"Section 4. General Counsel - At its first meeting
after March 1 of each year the Committee shall elect a
General Counsel and an Assistant General Counsel to serve
meeting after March 1 of the next year. It
until the first
shall be the duty of the General Counsel to furnish such legal
In the absence of the
advice as the Committee may require.
General Counsel, the Assistant General Counsel shall act as
General Counsel pro tem.
"Section 5. Manager of System Open Market Account - The
Committee shall select a Federal Reserve bank to execute trans
actions for the System Open Market Account. Such bank shall
select a Manager of the System Open Market Account who shall
be satisfactory to the Committee. He shall serve at the
pleasure of the Committee and shall attend all meetings of
both the Committee and the Executive Committee.

3/18/36
"Section 6. Filling Vacancies - At any meeting the
Committee may fill any vacancy in the office of Chairman,
Vice Chairman, Economist, General Counsel or Assistant
General Counsel.
ARTICLE III.

EXECUTIVE COMMITTEE

"Section 1. how constituted - The Committee at its
first meeting after March 1 of each calendar year shall
select from its own members an Executive Committee of five
members, including the Chairman of the Committee who shall
be Chairman of the Executive Committee.
The Executive
Committee shall consist of three members of the Board of
Governors of the Federal Reserve System and two representa
tives of the Federal Reserve banks.
At any duly called
meeting, a majority of the Executive Committee shall con
stitute a quorum for the transaction of business. Three
alternates to serve in the absence of members of the Board
and two to serve in the absence of representatives of the
Federal Reserve banks shall be selected at the same time
and in the same manner as members of the Executive Committee
and they shall serve during such absences in the order pre
scribed at the time of their selection.
Secretary - The Secretary of the Federal
"Section 2.
Open Market Committee shall act as the Secretary of the
Executive Committee and it shall be his duty to keep minutes
of all meetings of the Executive Committee, furnish copies
thereof to the members of the Executive Committee, and per
In the absence
form such other duties as may be required.
the Board of
of
Secretary
Assistant
an
Secretary,
the
of
act as Secre
shall
System
Reserve
Federal
of
the
Governors
tary pro tem.
"Section 3. General Counsel - The General Counsel of
the Committee shall be the General Counsel of the Executive
Committee and it shall be his duty to furnish such legal
advice as the Committee may require. In the absence of the
General Counsel, the Assistant General Counsel of the
Committee shall act as General Counsel pro tem.
"Section 4. Meetings - The Executive Committee shall
meet on the call of the Chairman thereof or upon the request
of any two members filed with the Secretary. Notices of all
such calls shall be given by the Secretary.
Powers and duties - The Executive Committee
"Section 5.
shall perform the duties prescribed for it in the regulations
of the Committee and such other functions and duties as may
be assigned to it from time to time by the Committee.

-6

3/18/36

"ARTICLE IV.

AMENDMENTS

"These by-laws may be amended at any meeting of the
Committee by a majority vote of the entire Committee."
The meeting then recessed and reconvened at 2:40 p. m. with the
same attendance as at the morning session.
The form of oath of office required by Section 5 of Article 1
of the by-laws was executed by each member of the Federal Open Market
Committee present and filed with the Secretary.
Upon motions duly made and seconded, and
by unanimous votes, the following officers of
the Federal Open Market Committee were elected
to serve until the first meeting of the
Committee after March 1, 1937:
Marriner S. Eccles
George L. Harrison
E. A. Goldenweiser

Chairman
Vice Chairman
Economist

John H. Williams

Associate Economist

Walter Wyatt
J. P. Dreibelbis

General Counsel
Assistant General Counsel

Upon motion duly made and seconded, and
by unanimous vote, the Federal Reserve Bank
of New York was selected to execute trans
actions for the System open market account.
President Harrison indicated that he would recommend that the
Federal Reserve Bank of New York select Mr. W. R. Burgess, Vice President
of the bank, who had managed the System open market account under the
direction of the old Federal Open Market Committee, as manager of the
System open market account.

President Harrison stated that as a matter

of practice it would be necessary, of course, for the New York Bank in
executing transactions for the committee to act as a bank through its
other regularly assigned officers as well.

Upon motion duly made and seconded, and
by unanimous vote, it was decided that the
selection of Mr. Burgess by the New York Bank
as manager of the account would be satisfactory
to the Committee.
A tentative draft of a proposed regulation to be adopted by the
Committee with regard to open market operations by Federal reserve banks
was then taken up, read, and discussed paragraph by paragraph.
Mr. Fleming raised a question as to the adequacy of existing
bonds carried by the Federal reserve banks to cover losses that might
be suffered by the banks through defalcations in

connection with the

System open market account and during the course of the discussion Mr.
Harrison suggested that the question be considered by the Presidents'
Conference.
At the conclusion of the discussion the meeting adjourned with
the understanding that the Committee would meet again at 10:15 a. m.
tomorrow.

Secretary.

Approved:

Chairman.