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A meeting of the executive committee of the Federal Open
Market Committee was held in the offices of the Board of Governors
of the Federal Reserve System in Washington on Saturday, September
4, 1937, at 9:30 a. m.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

Harrison, Vice Chairman
Broderick
Ransom (alternate for Chairman Eccles)
Szymczak (alternate for Mr. McKee)
Sinclair
Mr.
Mr.
Mr.
Mr.

Carpenter, Secretary pro tem
Wyatt, General Counsel
Williams, Associate Economist
Burgess, Manager of the System Open
Market Account
Mr. Thomas, Assistant Director of the
Division of Research and Statistics of
the Board of Governors
Mr. Piser, Senior Economist in the Division
of Research and Statistics of the Board
of Governors
Upon
unanimous
executive
Committee

motion duly made and seconded, and by
vote, the minutes of the meeting of the
committee of the Federal Open Market
held on August 18, 1937, were approved.

Mr. Burgess outlined the transactions which had been carried out
by the Federal Reserve Bank of New York for the System open market account
since the meeting of the executive committee on August 18, 1937,

as set

forth in the weekly reports sent by the New York bank to the members of
the executive committee.

He also reported the transactions which had been

effected since September 1, the last weekly report date.
Upon motion duly made and seconded, and by
unanimous vote, the transactions in the account
since the period covered by similar action taken

by the executive committee at its meeting on
August 18, 1937, up to and including September 3,
1937, were approved, ratified and confirmed.

9/4/37

-2
Mr.

Burgess then reviewed developments in the money and securities

markets since the last meeting of the executive comnittee as well as pres
ent conditions in

the markets.

Mr. Burgess'

statement was followed by a

discussion of the authority to be granted to the New York bank to effect
transactions in

the System open market account during the period before

another meeting of the committee.

Consideration was given to the question

whether the committee should issue instructions to the New York bank to carry
out transactions in the account designed to meet substantial reductions in
excess reserves of member banks, particularly in

the New York market.

It

was agreed that such instructions were not necessary at the present time
and that the present situation would be met adequately by a renewal of the
authority granted at the meeting of the executive committee on August 18,

1937,

except that the authority to make shifts of securities in the account

should be increased to $150,000,000 to enable the New York bank to effect
(in addition to such other transactions as may be necessary in the practical
administration of the account) the replacement of the approximately
$71,000,000 of Treasury notes held in the account which mature on Septem
ber 15, 1937.

It was pointed out that such additional authority was neces

sary in view of the fact that one of the issues of securities to be offered
in exchange for the maturing notes would undoubtedly have a maturity in
excess of two years.
Upon motion duly made and seconded, and by unani
mous vote, the executive committee directed the Federal
Reserve Bank of New York, until the adjournment of the
next meeting of the executive committee and superseding
all previous directions and authorizations,
(1) To replace maturing securities in the System
open market account by purchases of like amounts of
Treasury bills or Treasury notes maturing within two
years;

9/4/37
(2) To make such shifts of securities in the account
(which may be accomplished when desirable through replace
ment of maturing securities) as may be necessary in the
practical administration of the account, up to an aggre
gate of $150,000,000 of purchases and a like amount of
sales or redemptions;
(3) To increase or decrease temporarily the amount
of securities in the account between weekly statement
dates by not more than $25,000,000 when necessary in mak
ing replacements or shifts pursuant to the above provi
sions of this
resolution, provided that the amount of
securities in the account as of any weekly statement date
shall not be changed from that of the preceding weekly
statement date except in accordance with the following
clause of this resolution; and
(A) Upon approval by a majority of the members of
the executive committee, which may be obtained by tele
phone, telegraph, or mail, to make such other shifts or
such purchases or sales (which would include authority
to allow maturities to run off without replacement) for
the account as may be found to be desirable within the
limits of the authority granted to the executive commit
tee by the Federal Open Market Committee.
The above resolution was adopted with the
understanding that should any member of the com
mittee feel at any time that a meeting of the
executive committee should be held for the pur
pose of considering action to be taken to meet
fluctuations in excess reserves of member banks,
such a meeting would be called.
Mr.

Ransom stated that the Secretary of the Treasury had requested

that the members of the executive committee meet with him at 11:00 a. m.
this morning for the purpose of discussing the Treasury financing program.
There ensued a discussion of the suggestions which had been made as to pos
sible maturities and rates of the securities to be issued by the Treasury
to replace the issue of Treasury notes maturing on September 15,

1937.

At the conclusion of the discussion the meeting adjourned.

Secretary pro tem.
Approved:
Vice Chairman.