The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
3894 A, meeting of the Federal Reserve Board -with the Federal °Pell tlarket Committee was held in Washington on Monday, December 17, 1934, at 11:00 a. PRESENT: Mr. Er. Er. Er. Er. Eccles, Governor Thomas, Vice Governor Hamlin James Szymczak Mr. Morrill, Secretary Er. Bethea, Assistant Secretary Er. Carpenter, Assistant Secretary Mr. Wyatt, General Counsel Er. Smead, Chief of the Division of Bank Operations Er. Goldenmeiser, Director of the Division of Research and Statistics ALSO PRESENT: Messrs. Young, Norris, Fancher, Seay, Martin, and Geery, Governors of the Federal Reserve Banks of Boston, Philadelphia, Cleveland, Richmond, St. Louis, and Minneapolis, respectively. Mr. Burgess, Deputy Governor of the Federal Reserve Bftnk of New York, and Secretary of the Federal Open Market Committee. Messrs. Johns and McKay, Deputy Governors of the Federal Reserve Banks of Atlanta and Chicago, respectively. Governor Eccles stated that there was no particular neces4itY Or rckr calling this meeting except the statutory requirement that zosetings of the committee be held each year, and, as only three bleetiliZe had been held previously during the year, it was felt that there no choice other than to call the meeting. ttlacilie referred to the rapidly changing conditions in the fincn- eoonazie situation in the United States, and stated his IL'414' 44 to the functions of the Federal Reserve System under present 3895 12/17/34 -2conditions. tion His statement included the suggestion that considera- might be given to the advisability of including in the Federal reserve banks' holdings of Government securities a larger proportion °f1021g term securities in order that the Federal reserve banks may take the leadership in indicating confidence in the Government market. He also suggested that consideration might be given to the advisability of making a public announcement of the policy " 16 Federal reserve banks of lending to member banks on Govern11164 securities at par, and stated that he felt it was necessary the.t. the e ligibility provisions of the Federal Reserve Act be delled so that eligible paper mould not be restricted to short term _ 'elf-liquidating obligations. thinp. UPcn inquiry from Governor Young as to whether he had anysuggest in regard to how the Federal reserve banks could 04fectively cooperate with the Treasury Department, Governor 4o1 es stated that he had nothing specific to suggest, but felt that, illettaa c't malting for the Treasury Department to make requests, the Pederc reser— ve banks should study the problems of Government financg credit and be prepared to advise the Treasury Department with retttrcl thereto. After a discussion of certain of the matters referred to by "1117°3r Eccles, Governor Young stated that, at a meeting of the Pea411.41 ()Pea Is!arket Committee this morning, motions were adopted kith 4)rizint he executive committee to make such exchanges in the 3896 12/17/34 -3- SYste/a's holdings of Government securities up to 0_00,000,000 as will -Pit into the Government program, and, in addition, to replace securities held in the System account. Governor ._]ccles stated thIA it should be understood that in statement at this meeting he was not making any recommendations to the committee, but was speaking in very general terms in order thtlt the Governors might be familiar with his attitude on the vari()11 subjects discussed. Governor Young said that the Federal Open L:arket IJommittee 44e°hsidered at its meeting -L,his morning the advisability of author.z lng the executive committee to increase the System's portfolio Of -0Verriment securities, but had decided that such action would not 'be" Ped sable at this time particularly as another meeting of the Gr41 Open Larket Committee could be called at any time in the ()f a situation arising wIlich -would make it desirable to conicler the th,4 Purchase of additional securities. Further discussion indicated agreement omong those present the Provisions of section 10(b) of the Federal Reserve Act shetacit e made a permanent part of the 1 .4 the conclusion of the discussion, the meeting adjourned. 4Prn O tiValqs)!„, Governor. CrOLk 9( ecretary.
@FedFRASER