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A meeting of the executive committee of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington on March 8, 1951, at 3:30 p.m. PRESENT: Mr. Mr. Mr. Mr. Mr. McCabe, Chairman Sproul, Vice Chairman Eccles Szymczak A. H. Williams Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Vest, General Counsel Thomas, Economist Thurston, Assistant to the Board of Governors Mr. Riefler, Assistant to the Chairman, Board of Governors Mr. R. A. Young, Director, Division of Research and Statistics, Board of Governors Mr. Youngdahl, Chief, Government Finance Section, Division of Research and Statistics, Board of Governors Upon motion duly made and seconded, and by unanimous vote, the transactions in the System open market account as reported to the members of the committee for the period February 14 to March 7, 1951, inclu sive, were approved, ratified, and confirmed. Mr. Eccles suggested that the authority to the Federal Reserve Bank of New York contained in the first paragraph of the direction to be issued by the executive committee, be reduced from $1 billion to $500 million. Thereupon, upon motion duly made and seconded, the executive committee voted unanimously to direct the Federal Reserve Bank of New York until otherwise directed by the executive committee: 3/8/51 -2- (1) To make such purchases, sales, or exchanges (includ ing replacement of maturing securities and allowing maturities 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 light of current and prospective economic conditions and the general credit situation of the country, with a view to exercising restraint upon inflationary developments, to maintaining orderly conditions in the Govern ment security market, to relating the supply of funds in the market to the needs of commerce and business, and to the practical administration of the account; provided that the total amount of securities in the account at the close of March 8, 1951, shall not be increased or decreased by more than $500 million exclusive of special short-term certificates of indebtedness purchased for the temporary accommodation of the Treasury pursuant to paragraph (2) of this direction; (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 certificiates held in the account at any one time shall not exceed $750 million In taking this action it was under stood that the limitations contained in the direction include commitments for pur chases and sales of securities for the System account. Thereupon the meeting adjourned. Secretary.
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