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Meeting of Federal Open Market Committee September 10, 1968 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 Tuesday, September 10, 1968, at 9:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Hayes, Vice Chairman Brimmer Daane Galusha Hickman Kimbrel Maisel Mitchell Morris Robertson Sherrill Messrs. Bopp, Clay, Coldwell, Scanlon, and Treiber, Alternate Members of the Federal Open Market Committee Messrs. Heflin, Francis, and Swan, Presidents of the Federal Reserve Banks of Richmond, St. Louis, and San Francisco, respectively Mr. Holland, Secretary Mr. Kenyon, Assistant Secretary Mr. Broida, Assistant Secretary Mr. Molony, Assistant Secretary Mr. Hackley, General Counsel Messrs. Axilrod, Hersey, Kareken, Reynolds, Solomon, and Taylor, Associate Economists Mr. Coombs, Special Manager, System Open Market Account Mr. Cardon, Assistant to the Board of Governors Mr. Williams, Adviser, Division of Research and Statistics, Board of Governors -2 9/10/68 Mr. Keir, Assistant Adviser, Division of Research and Statistics, Board of Governors Mr. Bernard, Special Assistant, Office of the Secretary, Board of Governors Miss Eaton, Open Market Secretariat Assistant, Office of the Secretary, Board of Governors Messrs. Eisenmenger, Sternlight, Eastburn, Parthemos, Baughman, Jones, Tow, Green, and Craven, Vice Presidents of the Federal Reserve Banks of Boston, New York, Philadelphia, Richmond, Chicago, St. Louis, Kansas City, Dallas, and San Francisco, respectively Mr. Garvy, Economic Adviser, Federal Reserve Bank of New York Mr. Geng, Assistant Vice President, Federal Reserve Bank of New York Mr. Shotwell, Senior Economist, Federal Reserve Bank of Cleveland By unanimous vote, the minutes of actions taken at the meetings of the Federal Open Market Committee held on August 13 and 19, 1968, were approved. The memoranda of discussion for the meetings of the Federal Open Market Committee held on August 13 and 19, 1968, were accepted. By unanimous vote, the System open market transactions in foreign currencies during the period August 13 through September 9, 1968, were approved, ratified, and confirmed. By unanimous vote, renewal for a period of up to one year of the $700 million swap arrangement with Bank of France, maturing September 27, 1968, was approved. 9/10/68 By unanimous vote, the open market transactions in Govern ment securities, agency obligations, and bankers' acceptances during the period August 13 through September 9, 1968, 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: The information reviewed at this meeting suggests that, although consumer demands have been strong this summer, reduced rates of inventory accumulation and tapering growth of Government expenditures are being reflected in a slowing of expansion in over-all activity. Industrial prices have been increasing less rapidly in recent months, but consumer prices have continued to rise substantially and wage pressures remain strong. Most market interest rates have changed little on balance following reductions in Federal Reserve Bank discount rates. Growth in bank credit and time and savings deposits has been rapid this summer; growth in the money supply slowed in August as U.S. Government deposits were built up following an extended decline. The earlier improvement in the U.S. balance of payments was not maintained in August, according to preliminary indications, and the foreign trade balance and under lying payments position continue to be matters of serious concern. In this situation, it is the policy of the Federal Open Market Committee to foster financial conditions conducive to sustainable economic growth, continued resistance to inflationary pressures, and attainment of reasonable equilibrium in the country's balance of payments. System open market operations until the next meeting of the Committee shall be conducted with a view to main taining about the prevailing conditions in money and short-term credit markets; provided, however, that 9/10/68 -4 operations shall be modified if bank credit appears to be deviating significantly from current projections. It was agreed the next meeting of the Committee would be held on Tuesday, October 8, 1968, at 9:30 a.m. The meeting adjourned. Secretary
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