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m Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority £ ^ > 1 ^ I Q t l 5 l c \ MINUTES OF Uffi MEETING OT THE IBIERAI, OPEN MAHCJT COMMITTEE 3 / J/ ' ' HELD AT SASHIN3TON, D. C., MARCH 5, 1934 The meeting was called to order at 4:00 p. m., there being present; Governors Young» Norris, Seay, Schaller, Martin, Geery, Hamilton, McKinney, and Calkins* Acting Governor Johns, and Deputy Governors Homing and Burgess, secretary. In the absence of Governor Harrison, Governor Calkins was elected ch£ i > i* man pro t r . en The preliminary memorandum and report of the operations were distributed. There ensued a discussion of t e maturities of securities held in the fa System Account• It was pointed out that approximately $150*000>000 of the holding® would mature an March 15» and that at that time the Treasury would probably issue in exehenge a Treasury note of several years* maturity.*^ was further pointed out that in view of the scarcity of short tena Treasury obligations available in the market it would be very difficult to replace any considerable amount of the maturity with short term securities from the market without disturbing the market question was therefore raised whether the System &>uld be prepared to reduce its holdings of nearby maturities by exchanging the maturing issue for the new notes. It was noted in this connection that nearby holdings had been built upto an unusually large figure in view of the uncertain ties of the recent period.y In the eours© of this discussion the opinion was ex pressed by a number of those present that the exchange suggested should not b » f considered a precedent to be followed nearby maturities in the account, 90 far as to reduce below a round amount the It was agreed that it would be desirable to continue to M i n tain a large amount of very short issues, so as to be prepared R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N a tional A rchives d e c l a s s if ie d 2 to dispose of securities rapidly if the occasion shoulc. arise, jln view of market conditions end with the understanding that no precedent was created} it was then VOTED to convert the whole or any part, as might be determined by the executive committee, of the $150*000,000 of March maturities into any new note offering which mi ?ht be offered by the Treasury. It was then pointed out that the System held $59,000*000 of Fourth 4 1/4 Liberty bonds which had been called for redemption on April 15 nexti and in view of the possibility that a bond issue might be offered by the Treasury in replacement ol these maturing bonds the System*s policy with respect to maintaining its bond holdings might be considered. After discussion it was VOTED that the executive conmittee be given authority to replace the whole or any part of the Fourth 4 l/4s called for redemption on April 15 with securities of such maturities as the conmittee may determine. The secretary reported that* in view of considerable difficulty that was being experienced in replacing current maturities of Treasury bills with short obligations, the executive committee had agreed when necessary to replace a small portion of the maturities with longer term issues. In view of the fact that the amount of holdings in the System Account had not been changed for some weeks and in view of the very large and increasing excess of reserves of member banks question was raised as to continuation of authority for purchases remaining in the hands of the executive conmittee, and after consideration it was VOTED that the authorization to the executive committee for the purchase of government securities, renewed last on October 10 * be reduced to $100,000,000. The meeting adjourned at 5«00 p. m, W. Randolph Burgess, Secretary*