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A meeting of the executive committee of the Federal Open Mar ket Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington on Thursday, September 25, 1952, at 11:35 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Sproul, Vice Chairman Hugh Leach Robertson, Alternate Vardaman Mr. Mr. Mr. Mr. Mr. Mr. Riefler, Secretary Vest, General Counsel Thomas, Economist R. A. Young, Associate Economist Rouse, Manager, System Open Market Account Sherman, Assistant Secretary, Board of Governors Mr. Youngdahl, Assistant Director, Division of Research and Statistics, Board of Governors Mr. R. F. Leach, Acting Chief, Government Finance Section, Division of Research and Statistics, Board of Governors Mr. Willis, Assistant Secretary, Federal Reserve Bank of New York Upon motion duly made and seconded, and by unanimous vote, the minutes of the meeting of the executive committee held in Washington on August 29, 1952 were approved. Upon motion duly made and seconded, and by unanimous vote, the transactions in the System open market account for the period September 15 to September 24, 1952, inclusive, were approved, ratified, and confirmed. Chairman Martin referred to the action of the full at its Committee meeting this morning in approving a procedure whereby special Treasury certificates of indebtedness would be sold direct to, and 9/25/52 -2 carried in the account of, the Federal Reserve Bank of New York, rather than to the System open market account, with the understanding that, when it seemed desirable, the New York Bank would be authorized to issue par ticipations in such certificates to one or more Federal Reserve Banks. He suggested that Mr. Rouse be asked to consider whether any other changes would be required in this connection, such as the possible revision or elimination of the authority approved at the meeting on June 19, 1952, concerning weekend or holiday transactions in special Treasury certifi cates, and to submit for the consideration of the executive committee at its next meeting any additional changes he believed to be necessary or desirable. Chairman Martin's suggestion was approved unanimously with the under standing that the wording of the general direction to be issued to the Federal Reserve Bank of New York at this meeting would be changed to carry out the action approved at the meeting of the full Committee this morning. Mr. Rouse stated in response to a question from Chairman Martin that no change in the limitations contained in the general direction to the Federal Reserve Bank of New York was necessary at this time. Thereupon, upon motion duly made and seconded, the executive committee voted unanimously to direct the Federal Reserve Bank of New York until other wise directed by the executive committee: 9/25/52 -3 (1) To make such purchases, sales, or exchanges (including replacement of maturing securities and allowing maturities 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 current and prospective economic conditions and the general credit situation of the country, with a view of exercising restraint upon inflationary developments, to maintaining orderly conditions in the Govern ment security market, to relating the supply of funds in the market to the needs of commerce and business, and to the prac tical administration of the account; provided that the total amount of securities in the System account (including commit ments for the purchase or sale of securities for the account) at the close of September 25, 1952 shall not be increased or decreased by more than $1 billion 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 account of the Federal Reserve Bank of New York (with discretion, in cases where it seems desirable, to issue participations to one or more Federal Reserve Banks) 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 by the Federal Reserve Banks shall not exceed in the aggregate $1 billion. It was agreed that the next meeting of the executive committee would be held at 10:30 a.m. on Wednesday, October 8, 1952, and that the following meeting of the executive committee would be held at 10:30 a.m. on Friday, October 24, 1952. Thereupon the meeting adjourned. Secretary
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