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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 >
man pro t r .
The preliminary memorandum and report of the operations were distributed.
There ensued a discussion of t e maturities of securities held in the
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 »
considered a precedent to be followed
nearby maturities in the account,


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

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,