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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 Fed eral Reserve System in Washington on Wednesday, September 21, 1938, at 4:10 p.m. PRESENT: Mr. Harrison, Vice Chairman Mr. Szymczak Mr. Davis Mr. Sinclair Mr. Ransom (alternate for Chairman Eccles) Mr. Morrill, Secretary Mr. Carpenter, Assistant Secretary of the Federal Open Market Committee Mr. Mr. Mr. Mr. Wyatt, General Counsel Williams, Associate Economist Dreibelbis, Assistant General Counsel Thurston, Special Assistant to the Chairman of the Board of Governors Mr. Piser, Senior Economist in the Division of Research and Statistics of the Board of Governors Upon motion duly made and seconded, and by unanimous vote, the transactions in the system open market account during the period from Sep tember 15 to September 20, 1938, inclusive, were approved, ratified and confirmed. In a discussion of the authority to be granted by the executive committee to the Federal Reserve Bank of New York to effect transactions in the system open market account it was agreed that in the light of con tinued disturbed conditions the amount to which the System's holdings of bonds may be reduced should be lowered in accordance with the suggestion made by Mr. Harrison at the meeting of the full Committee earlier today. Thereupon, upon motion duly made and seconded, and by unanimous vote, the executive committee directed the Federal Reserve Bank of New York until 9/21/38 -2otherwise directed by the executive committee, (1) To replace maturing securities in the system open market account by purchases of like amounts of Treasury bills or Treasury notes provided such pur chases can be made without paying a premium above a no-yield basis; (2) To make such other shifts of securities in the account (which may be accomplished when desirable through replacement of maturing securities) as may be necessary in the practical administration of the ac count, up to an aggregate of $200,000,000 of purchases and a like amount of sales or redemptions, provided that the total amount of bonds held in the account be not reduced below $700,000,000 and that the total amount of bonds in the account having maturities over five years be not increased above $850,000,000; (3) To increase or decrease temporarily the amount of securities in the account between weekly statement dates by not more than $50,000,000 when necessary in making replacements or shifts pursuant to the above provisions 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 pursuant to the other provisions of this resolution; and (4) Upon approval by a majority of the members of the executive committee, which may be obtained by telephone, telegraph, or mail, to make such other shifts or such purchases or sales (which would include authority to allow maturities to run off without re placement) for the account as may be found to be de sirable within the limits of the authority granted to the executive committee by the Federal Open Market Com mittee. Thereupon the meeting adjourned. Secretary. Approved: Vice Chairman.
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