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Meeting of Federal Open Market November 27, Committee 1967 MINUTES OF ACTIONS 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, D. C., on Monday, November 27, 1967, at 9:30 a.m., at the call of Chairman Martin. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. 1/ Martin, Chairman1/ Brimmer Francis Maisel Mitchell Robertson Scanlon Sherrill Swan Wayne 1/ Messrs. Ellis, Hickman, and Galusha, Alternate Members of the Federal Open Market Committee Mr. Irons, President of the Federal Reserve Bank of Dallas Mr. Holland, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Mr. Broida, Assistant Secretary Mr. Hackley, General Counsel Mr. Brill, Economist Messrs. Baughman, Garvy, Hersey, Koch, Partee, and Solomon, Associate Economists Mr. Holmes, Manager, System Open Market Account 1/ Left the meeting at the point indicated. 11/27/67 Mr. Cardon, Legislative Counsel, Board of Governors Mr. Fauver, Assistant to the Board of Governors Mr. Williams, Adviser, Division of Research and Statistics, Board of Governors Mr. Reynolds, Adviser, Division of International Finance, Board of Governors Mr. Axilrod, Associate Adviser, Division of Research and Statistics, Board of Governors Miss Eaton, General Assistant, Office of the Secretary, Board of Governors Miss McWhirter, Analyst, Office of the Secretary, Board of Governors Messrs. Bilby, Eastburn, Mann, Brandt, and Tow, Vice Presidents of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Atlanta, and Kansas City, respectively Mr. MacLaury, Assistant Vice President, Federal Reserve Bank of New York Mr. Deming, Manager, Securities Department, Federal Reserve Bank of New York Mr. Anderson, Financial Economist, Federal Reserve Bank of Boston Mr. Kareken, Consultant, Federal Reserve Bank of Minneapolis By unanimous vote, the System open market transactions in foreign currencies during the period November 14 through 26, 1967, were approved, ratified, and confirmed. By unanimous vote, paragraphs 1B(3) and 1C(3) of the authorization for System foreign currency operations were amended, effective immediately, to read as follows: Sterling purchased on a covered or IB(3). in terms of the dollar, under basis guaranteed agreement with the Bank of England, up to $200 million equivalent. 1C(3). Other forward commitments to deliver foreign currencies, up to $550 million equivalent. 11/27/67 By unanimous vote, the table contained in paragraph 2 of the authorization for System foreign currency operations was amended, effective immediately, to read as follows: Foreign bank Austrian National Bank National Bank of Belgium Bank of Canada National Bank of Denmark Bank of England Bank of France German Federal Bank Bank of Italy Bank of Japan Bank of Mexico Netherlands Bank Bank of Norway Bank of Sweden Swiss National Bank Bank for International Settlements System drawings in Swiss francs System drawings in authorized European currencies other than Swiss francs Amount of Arrangement (millions of dollars equivalent) 100 225 500 100 1,350 100 400 750 450 130 225 100 200 250 250 600 Secretary's note: The effect of the action indicated above was to change the amounts of the reciprocal currency arrangements with (1) the National Bank of Belgium, from $150 million equivalent to $225 million equivalent; (2) the Bank of Italy, from $600 million equivalent to $750 million equivalent; (3) the Netherlands Bank, from $150 million equivalent to $225 million equivalent; (4) the Bank of Sweden, from $100 million equivalent to $200 million equivalent; and (5) the Bank for International Settlements (the arrangement providing for System drawings in authorized European currencies other than Swiss francs) from $300 million equivalent to $600 million equivalent. 11/27/67 By unanimous vote, the table contained in paragraph 2 of the authorization for System foreign currency operations was amended to change (1) the amount of the reciprocal currency arrangement with the Bank of England from $1,350 million equivalent to $1,500 million equivalent; (2) the amount of the arrangement with the German Federal Bank from $400 million equivalent to $750 million equivalent; and (3) the amount of the arrangement with the Bank of Japan from $450 million equivalent to $750 million equivalent, in each case to become effective upon a determination by Chairman Martin that the negotiations looking toward such change had been satisfactorily completed. Secretary's Note: Chairman Martin determined that negotiations had been satisfactorily com pleted with respect to the increases described above in the reciprocal currency arrangements with (1) the Bank of England, on November 28, 1967; (2) the Bank of Japan, on November 28, 1967; and (3) the German Federal Bank, on November 30, 1967. Also on November 30, 1967, Committee members approved a recommendation by the Special Manager that the amount of the reciprocal currency arrangement with the Bank of Canada be increased from $500 million equivalent to $750 million equivalent. Accordingly, the table contained in para graph 2 of the authorization for System foreign currency operations was amended, effective on the indicated dates, to give effect to the indicated increases in the four reciprocal currency arrangements. Mr. Wayne left the meeting. By unanimous vote, the open market transactions in Govern ment securities, agency obligations, and bankers' acceptances during 11/27/67 -5 the period November 14 through 26, 1967, were approved, ratified, and confirmed. By unanimous vote, the Federal Reserve Bank of New York was authorized and directed, until otherwise directed by the Committee, to execute transactions in the System Account in accord ance with the following current economic policy directive: System open market operations until the next meeting of the Committee shall be conducted with a view to facilitating orderly market adjustments to the increase in Federal Reserve discount rates; but operations may be modified as needed to moderate any unusual pressures stemming from international financial uncertainties. Chairman Martin left the meeting in the course of the discussion of the directive, after casting his vote. It was agreed that the next meeting of the Federal Open Market Committee would be held on Tuesday, December 12, 1967, at 9:30 a.m. The meeting adjourned. Secretary
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