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The meeting of the executive committee of the Federal Open Market Committee was reconvened in the offices of the Board of Gover nors of the Federal Reserve System in Washington on Monday, October 4, 1948, at 3:40 p.m. PRESENT: Mr. Mr. Mr. Mr. Mr. McCabe, Chairman Sproul, Vice Chairman Eccles Szymczak Williams Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr, Mr. Morrill, Secretary Carpenter, Assistant Secretary Vest, General Counsel Thomas, Economist Rouse, Manager, System Open Market Account Thurston, Assistant to the Board of Governors Riefler, Assistant to the Chairman, Board of Governors Sherman, Assistant Secretary, Board of Governors Smith, Chief, Government Finance Section, Division of Research and Statistics, Board of Governors Arthur Willis, Special Assistant, Securities Department, Federal Re serve Bank of New York In response to an inquiry, Mr. Rouse stated that an authority to the Federal Reserve Bank of New York to increase or decrease the holdings in the System account by not more than $1 billion probably would be adequate pending another meeting of the executive committee. Thereupon, upon motion duly made and seconded, the executive committee voted unanimously to direct the Federal Re serve Bank of New York until otherwise directed by the executive committee: 10/4/48 -2- (1) To make such purchases, sales, or exchanges (in cluding replacement of maturing securities and allowing ma turities 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 the general credit situation of the country, for the practical administration of the account, for the maintenance of stable and orderly conditions in the Government security market, and for the purpose of relating the supply of funds in the market to the needs of commerce and business; provided that the total amount of securities in the account at the close of this date shall not be increased or decreased by more than $1,000,000,000 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 Sys tem open market account such amounts of special short-term certificates of indebtedness as may be necessary from time to time for the temporary accommodation of the Treasury; provided that the total amount of such certificates held in the account at any one time shall not exceed $750,000,000. In taking this action it was understood that the limitation contained in the direc tion included commitments for purchases and sales of securities for the System account. There was a discussion of the date for the next meeting of the executive committee and it was agreed that no date should be set pend ing the outcome of discussions with the Treasury of the program ap proved at the meeting of the full Committee held earlier today. Thereupon the meeting adjourned. Secretary. Approved: Chairman.
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