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370 A meeting of the Federal Reserve Board was held in Washington 011 Tuesday, February 51 19551 at 2:40 p. m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Governor Thomas, Vice Governor Hamlin Miller James Szymczak Mr. Morrill, Secretary Mr. Clayton, Assistant to the Governor Governor Eccles referred to the resolution adopted by the FedOpen Market Committee at its meeting this morning. he He said that IlnA —kk' not discussed the resolution with the Federal Open Market C°14raittee and that the announcement of the action of the Committee at the m eeting of the Committee with the Board this morning was the first advice he had received of the action taken. After discussing the resolution, the Board requested the Secretary to advise the Chairman of the Federal Open Market Committee as follows: "The -Lederal Federal Reserv, . Board has given careful consideration to r oe solution adopted at meeting of Federal Open Market Committee fsj ilebruary 5 and has requested me to advise you that until o-rher order of the Board it authorizes executive committee be.„Federal Open Market Committee to buy, sell or make shifts arlreen maturities of Government securities up to $25010001000 acia4also to buy, sell or make shifts between maturities of an $2501000,000 on telegraphic approval of a majority ".16 Of.l acf:"e open market committee in case ofemergency requiring /4"lon before a meeting of the full committee could be arranged. irlfgranting this authority the Board will expect to be kept arl2rilled currently by the executive committee of its program ap`Lias to any developments in the situation which may affect the 111,4tication of the program. The Board will have the whole advier Of open market policy under constant review, and will ordeee the committee of changes to be made in the program in liater more fully to adjust it to the requirements of the 1°na1 situation." 371 2/5/35 9 At 3:15 p. m. Messrs. Harrison, Norris, Fleming, Seay, Newton, Schaller, Martin, Geery, Hamilton, McKinney and Calkins, Governors of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Rich111°14, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and p rancisco, respectively, Mr. Paddock, Deputy Governor of the Federal Res.. /14;r1rs Bank of Boston, and Mr. Burgess, Secretary of the Federal Open liarket Committee, joined the meeting and Governor Eccles advised them °r th e action taken by the Board upon the resolution adopted by the Fsde ral Open Market Committee. There followed some discussion of the meaning of the last 4111tellce of the Board's action and it was pointed out that that Itence was identical with sentences contained in the action taken by the Board on May 12, 1933, and October 12, 19330 on resolutions adopted bYthe Open Market Policy Conference and the Federal Open Market e°111zitt-eey respectively, and that no situation had arisen which required iriterPretation of that language. In the ensuing discussion the con411848 appeared to be that the question of the correct interpretation "the sentence could well be deferred until some action is taken by the 13°ard which would involve the necessity for an interpretation. At 3:50 p . m. Mr. Coolidge, Under Secretary of the Treasury, 'lltersd the meeting and Governor Eccles informed him of the action tA6 t -4 1°7 the Federal Open Market Committee and by the Federal Reserve 4.1m. 372 _ 2/5As Mr. Coolidge expressed the regret of the Secretary of the ''IrY that he would be unable to be present because of other prior ell°gements. He discussed the proposed issuance by the Treasury of %11)3r bonds" and answered various questions in regard to the details ofthe handling of such bonds. Mr. Coolidge then stated that the Secretary of the Treasury had clecided that it would be the policy in the future to obtain the recom14enclations of the Federal reserve banks with respect to chartering and eTerline, -5 national banks before final action is taken thereon. He said that It had not yet been determined whether this policy should be 41314ed to the opening of branches of national banks or whether the ?ecler I ' a reserve bank or the Federal reserve agent at the Federal reserve bktik "(3111d be asked to make the recannendation. Gavernor Eccles said that while he was in the Treasury Depart- tlftrt as Assistant to the Secretary he had become acquainted with the °f the Treasury Department of requiring reimbursement from other 40k1 4441ent Por mencies for expenses incurred for their account by the the Policy being founded upon the theory that there should be ectiecjiai table accounting by the various agencies of the Government to 41eh oth er, and that he felt that the principle was one which should be ' 4 keri between the Treasury and the Federal reserve banks with eel)eet t0 the reimbursement of the Federal reserve banks for expenses eh they . Incur on account of the activities of the Treasury DepartMr n • -00lidge'agreed that the principle was sound. Mr. C oolidge loft the meeting at 4:25 p. m. 373 2A/t5 -4Governor Eccles outlined his views generally on certain phases f governmental policy affecting the Federal Reserve System and reviewed brieflY the situation as to the legislative program with respect to ben king. He referred to certain features of the program relating to the Federal Reserve Board and the Federal reserve banks and there was a general discussion. Governor Eccles then stated that he felt it would be desirable t° submit to the governors certain suggested topics upon which the 13°41 'd would be glad to have the views of the directors and officers of th4 e-r banks and he referred to a number of the topics which he had 4„ '"u. He suggested that the subjects be discussed upon the return °Ib the governors to their banks and the Federal Reserve Board advised "In thirty days of the views of the directors and officers of the t.eep ective banks, taking= LW each subject separately. After some discussion, it was understood that Governor Eccles would furnish each governor a memorandum setting forth the subjects which he desired to have considered in accordance with his suggestion. The meeting adjourned with the understanding that, with the °)eslot* 1°- of Governor Norris and Deputy Governor Paddock, who stated that it was necessary for them to return to their banks for meetings their boards of directors tomorrow, the governors would meet again ortlea, -LY vath the Federal Reserve Board tomorrow morning at 10:00 a. m. 413Pro Secretary. Governor.
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