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The meeting of the Federal Open Market Committee was recon
vened in the offices of the Board of Governors of the Federal Reserve
System in Washington on December 1,



at 2:30 p.m.

Eccles, Chairman
Harrison, Vice Chairman

Morrill, Secretary
Wyatt, General Counsel
Goldenweiser, Economist
Williams, Associate Economist
Dreibelbis, Assistant General Counsel
Burgess, Manager of the System Open
Market Account
Mr. Carpenter, Assistant Secretary of the
Board of Governors of the Federal Re
serve System
Mr. Thurston, Special Assistant to the
Chairman of the Board of Governors of
the Federal Reserve System
There was presented for consideration by the full Committee
the recommendation of the executive committee of the Federal Open Mar
ket Committee that, in view of the fact that circumstances had changed
very considerably since the meeting of the Federal Open Market Commit
tee on June 9, 1937, when the executive committee was requested to
study the proposed plan for purchases of Treasury bills by Federal re
serve banks,

the entire matter be laid on the table.
Upon motion duly made and seconded, and
by unanimous vote, the recommendation of the
executive committee was approved.


At this point Mr. Piser, Senior Economist in the Division of

Research and Statistics of the Board of Governors of the Federal Re
serve System, entered the room.
In view of the discussions which had taken place during the
meeting the Committee agreed unanimously upon the following statement
for the minutes:
The Committee gave full consideration to general business and
credit developments which had taken place since its
September, 1937,

last meeting in

and to the reviews of the economic situation pre

sented by Dr. Williams and Dr. Goldenweiser.

The Committee also dis

cussed the effects of the various actions taken under authority of the
Committee and by the Board of Governors during this period.

was the general opinion in the Committee that the existing

volume of excess reserves and of supplies of private capital is


dant at this time at low rates for continuance of easy credit condi
tions and for meeting all credit requirements of commerce, business and
In the light of existing business and credit conditions, the
Committee felt that effective action to meet and overcome the present
business recession should be taken outside the field of the System's
various monetary powers and that the System could best contribute to
the furtherance of economic recovery by being prepared to meet promptly
any developments in the credit situation which might require a further
exercise of its


In order to place the System in position to meet such develop
ments in business and credit conditions as might require further

open-market operations in accordance with the System's policy during
the period before another meeting of the full Committee,


was de

cided to continue the authority of the executive committee to engage
in open-market operations.
Accordingly, upon motion duly made and
seconded, the following resolution was adopted
by unanimous vote:
RESOLVED, That, until the adjournment of the
next meeting of the Committee, the executive com
mittee is authorized to direct the purchase in the
open market from time to time of sufficient amounts
of Treasury bills or other short-term Treasury ob
ligations to provide funds to meet seasonal with
drawals of currency from the banks and other re
quirements of commerce, business and agriculture by
keepinp at member banks an aggregate volume of ex
cess reserves adequate for the continuation of the
System's policy of maintaining credit conditions
conducive to economic recovery; and the executive
committee is authorized from time to time to direct
a reduction of the holdings of such obligations to
the extent that their retention is found to be un
necessary for the purposes of this resolution. It
is understood that the executive committee, in the
exercise of this authority, shall not increase or
decrease by more than $300,000,000 the amount of
securities now in the System open market account.
Upon motion duly made and seconded, it was
agreed unanimously that a meeting of the Federal
Open Market Committee should be held in Washington
on January 10-11, 1938.
The members of the Committee agreed that the authority granted
to the executive committee at the last meeting of the full Committee
to replace maturing securities and to make shifts in the System open
market account should be continued for the same reasons as prompted
the existing authority.
Upon motion duly made and seconded, and by
unanimous vote, the Committee instructed the ex
ecutive committee to direct the replacement of


-4maturing securities in the System open market ac
count with other Government securities and to make
such shifts between maturities in the account as
may be necessary in the proper administration of
the account, provided that the amount of securi
maturing within two years be maintained at
not less than $1,000,000,000 and that the amount
of bonds having maturities in excess of five years
be not over $850,000,000 nor less than $500,000,000.

Thereupon the meeting adjourned.