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Minutes for December 17, 1957 To: Members of the Board From: Office of the Secretary Attached is a copy of the minutes of the Board of Governors of the Federal Reserve System on the above date. It is not proposed to include a statement with respect to any of the entries in this set of minutes in the record of policy actions required to be maintained pursuant to section 10 of the Federal Reserve Act. Should you have any question with regard to the minutes, it will be appreciated if you will advise the Secretary's Office. Otherwise, if you were prebent at the meeting, please initial in column A below to indicate that you approve the minutes. If you were not present, please initial in column B below to indicate that you have seen the minutes. A Chm. Martin Gov. Szymczak Gov. Vardaman 1/ Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson 1/ In accordance with Governor Shepardson's memorandum of March 8, 1957, these minutes are not being sent to Governor Vardaman for initial. A meeting of the Board of Governors of the Federal Reserve System 'Vas held at approximately 1:00 p.m. on Tuesday, December 17) 1957. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Mills Robertson Shepardson Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Thurston, Assistant to the Board Riefler, Assistant to the Chairman Thomas, Economic Adviser to the Board Young, Director, Division of Research and Statistics Marget, Director, Division of International Finance Hackley, General Counsel Solomon, Assistant General Counsel Miller, Chief, Government Finance Section, Division of Research and Statistics This meeting was held immediately following the adjournment of the meeting of the Federal Open Market Committee on December 17, 1957) in addition to the members of the Board and its staff, there were ipreaent 11 Federal Reserve Bank Presidents and 13 members of the staff f the Reserve Banks vho had been in attendance at the meeting of the Pederal Open Market Committee. At the meeting of the Federal Open Market Committee, reference had, been made to a report of the System Committee for the Study of dated December 16, 1957, addressed to "The Members of the Board "G°1rernors and the Presidents of all Federal Reserve Banks." The SYlatill Committee for the Study of Float, which was appointed pursuant to th e discussion at the meeting of the Federal Open Market Committee 12/17/57 on August 7, 1956 (Messrs. Erickson, Johns, and Robertson, Chairman), had previously submitted a report dated May 31, 19570 and that report had been considered by the Conference of Presidents of the Federal Reserve Banks on June 17, 1957. At this meeting Governor Robertson stated that the Committees additional report dated December 16, 1957, vas being distributed by the Secretary of the Federal Open Market Committee in the usual manner and that it recommended (1) that the Open Market Committee determine certain policy questions listed in the report 4441 give the management of the System Open Market Account appropriate directives as to the approach it should take with respect to float; and (2) that the other studies referred to in the program submitted with the e()ramitteets report of May 31, 1957, be made under the direction of the aPPropriate committees of the Presidents,Conference. Governor Robertson lto stated that in a separate report dated November 14, 1957, the 6\11/committee on Float recommended a change in the information telegraphed del* bY the individual Federal Reserve Banks to the Federal Reserve 144k of New York to provide the Open Market Account management with clata on float, reserves, and borrowings. A draft letter embodying such eeotamendations, which letter would supersede the letter from the Board Of Governors to the Federal Reserve Banks dated August 7, 1957, had bee/1 distributed and discussed at the Open Market meeting, and it had bee., 44 agreed that it would be desirable for the Board to send the letter, /lith the understanding that the reporting of figures by the individual 12/17/57 .3... Federal Reserve Banks would be put into effect if practicable beginning with the figures for Thursday, December 261 19571 and in any event not later than January 91 1958. The letter to be addressed to the Presidents of all Federal Reserve Banks except New York, with a copy to that Bank, was approved unanimously in the following form: This letter supersedes the Board's letter of August 71 1957, requesting that preliminary figures of reserve balances, required reserves, and borrowings be telegraphed daily to the Federal Reserve Bank of New York covering selected member banks in reserve cities. The Subcommittee on Study of Float was asked to develop a Irogram whereby earlier figures on float, reserves, and borrowings than are now available would be furnished to the management of the Open Market Account. In a report dated November 14, 19571 a copy of which was recently sent you by Mr. Deming, Chairman of the Subcommittee, the Subcommittee Presented such a program, which was subsequently endorsed bY the parent System Committee for the Study of Float. . Pursuant to those recommendations, the Board requests that a daily telegraphic report be made to the Federal Reserve Bank of New York giving such information in accordance with the attached form. The telegram should be dispatched (over commercial wires, if necessary) in time to reach the Bank by 9:30 a.m., Eastern Time, of the day following that to which the figures relate. In order t° do this, it will be necessary, as the report recognizes, to arrange either for early posting of general ledger accounts or for analysis of entriet; to the accounts to be reported. In some instances, head offices precumably 14111 be able to furnish total district figures while in Other instances separate figures will have to be reported by the head office and each branch. As brought out on page 5 of the Subcommittee report, the Board's Division of Bank Operations now receives the desired data, but these figures are prepared after closing e 12/17/57 of books or are late estimates and are not available until noon or afternoon following the date to which they relate' It will be appreciated if you will furnish the Board with a comparison, covering the first half of February 1958) of the preliminary figures of reserve balances, required reserves, and borrowings telegraphed to New York and the corresponding later figures telegraphed to the Board. Consideration will then be given to the question whether it would serve the Board's purposes to have copies of the preliminary telegrams which will be sent to New York, in lieu of the later data furnished to the Board. It is suggested that the new telegraphic reports to N wrYork be put into effect, if practicable, beginning with figures for Thursday December 26# 1957 Thereupon the meeting adjourned.
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