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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 September 12, 1937, at 1:45 p. m. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Harrison, Vice Chairman Broderick McKee Sinclair Messrs. Ransom, Davis, Szymczak, McKinney, Martin and Day, Members of the Federal Open Market Committee Mr. Morrill, Secretary Mr. Wyatt, General Counsel Mr. Goldenweiser, Economist Mr. Williams, Associate Economist Mr. Dreibelbis, Assistant General Counsel Mr. Burgess, Manager of the System Open Market Account Mr. Carpenter, Assistant Secretary of the Board of Governors of the Federal Reserve System Mr. Thurston, Special Assistant to the Chairman of the Board of Governors of the Federal Reserve System Consideration was given, in the light of the actions taken by the Federal Open Market Committee at its meeting today, to the instructions to be issued by the executive committee to the Federal Reserve Bank of New York to execute transactions in the System open market account during the period before another meeting of the full Committee. It was agreed that the usual authority should be renewed and that inasmuch as it was not contemplated that ection would be taken by the executive committee to direct the purchase or sale of 9/12/37 securities for the System account, in accordance with the first reso lution adopted by the full Committee, until after the completion of the desterilization by the Treasury of $300,000,000 of gold, there was no necessity for the issuance of additional directions to the New York bank at the present time; it being understood that, if action in ac cordance with the resolution became necessary before another meeting of the executive committee, it in could be taken in the manner provided the paragraph numbered (4) of the directions set forth below. Thereupon, upon motion duly made and seconded, and by unanimous vote, the executive committee di rected 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 matur ing within two years; (2) To make such other shifts of securities in the account (which may be accomplished when de sirable through replacement of maturing securities) as may be necessary in the practical administration of the account, up to an aggregate of $100,000,000 of purchases and a like amount of sales or redemp tions; (3) To increase or decrease temporarily the amount of securities in the account between week ly statement dates by not more than $25,000,000 when necessary in making replacements or shifts pursuant to the above provisions of this resolu tion, 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 fol lowing clause of this resolution; and (4) Upon approval by a majority of the mem bers of the executive committee, which may be ob tained by telephone, telegraph, or mail, to make such other shifts or such purchases or sales (which 9/12/37 -3 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 com mittee by the Federal Open Market Committee. Mr. Morrill reviewed briefly the status of the study of the proposed plan for purchases of Treasury bills by the Federal reserve banks, which was discussed at the meeting of the Federal Open Market Committee on June 9, 1937, and Mr. Broderick suggested that action on the matter be deferred until the next meeting of the committee. This suggestion was approved unanimously. Thereupon the meeting adjourned. Secretary. Approved: Chairman.
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