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NOVEMBER 27, 1934.

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The meeting was called to order at 10:40 a. m., in the offices of the
Federal Reserve Board, the following bei*g present;
Governors Young, Norris, Fancher, and Schaller, and
Deputy Governor Burgess#
Governor Black was also present.
In the absence of Governor Harrison, Governor Fancher was elected
chairman pro tern.
The report of operations was distributed and reviewed, and there was a
preliminary discussion of the problema-presented by December 15 financing,

At 11 o*clock the committee left the offices of the Federal Reserve Board

,, end met with the Secretary and Under Secretary of the Treasury at the Treasury
Department, Governor Eccles also being present*

There ensued an extended dis­

cussion of the problem of Treasury financing in December,and various proposals
were explored^

At 12:45 the meeting left the Secretary*s office and met briefly

with the Under Secretary in his office where the discussion was continued.
The meeting adjourned at .1:10.
The meeting reconvened at 2i00 in the offices of the Federal Reserve
Board, there being present the above mentioned members of the executive committee*
After discussion of the position which the Federal Reserve Banks should
take with respect to December 15 operations, the committee

VOTED to telegraph all members of the Federal Open Market
Committee requesting approval for exchanging the maturing
issues in System Account either by exchange subscription or
by operations in the market, the policy of the committee in
carrying out exchanges to be detennined by the needs of the
market as related to the Treasury program and the maintenance
of a proper distribution of securities in the System Account*

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The committee also
VOTED to request approval for effecting exchanges between
maturities in the System Account up to a total of $100,000,000'
if it appears desirable in furtherance of the purposes noted
above, with the understanding that there would be no increase
in the total portfolio other than a temporary one.
There then ensued a discussion of the disposition of the reserves of
$4,112,611 set up by the Federal reserve banks at the close of 1933 against depre­
ciation in government securities in System Account, and the disposition of
|6,600,000 of realized profits on sales of government securities during 1934 now
held in suspense account.

In view of the very large holdings of government secur­

ities in the Federal Reserve System, many of which are entered on the books at
relatively high prices, and in view of the possibility at some time of losses on
sales of government securities, the committee
VOTED That if a satisfactory accounting procedure could be
arranged it did not favor distribution to the different
Reserve banks of profits realized on sales of government
securities this year, and now held in suspense account, and
that it favored continuing as reserves the amounts set aside
at the end of 1933 as reserves against depreciation.
At 2:45 Governor Black and Under Secretary Coolidge and later Governor
Eccles entered the meeting and there ensued a further discussion of the Treasury
financing program*
At 3:30 those present, with the exception of Governor Norris, adjourned
to the Treasury Department where discussions of Treasury financing problems were
continued with Secretary Morgenthau.
At 4:15 the committee returned to the Federal Reserve Board offices and
the members of the committee discussed informally with Dr. Goldenweiser and Mr.
Stark the program of the System committee on legislation.

The meeting adjourned at 4:45 p. m.

W. Randolph Burgess,