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09 1966 Minutes for September 8, 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 to any of the entries in this set of respect with record of policy actions required to the in minutes 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, please initial below. If you were present at the meeting, your initials will indicate approval of the minutes. If you were not present, your initials will indicate only that you have seen the minutes. Chm. Martin Gov. Robertson Gov. Shepardson Gov. Mitchell Gov. Daane Gov. Maisel Gov. Brimmer Minutes of the Board of Governors of the Federal Reserve System on Thursday, September 8, 1966. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Robertson, Vice Chairman Shepardson Mitchell Daane Maisel Brimmer Mr. Sherman, Secretary Messrs. K. A. Randall, Chairman, and William W. Sherrill, member of the Board of Directors, Federal Deposit Insurance Corporation on This meeting was held for the purpose of exchanging views Deposit several matters of common interest to the Board and the Federal by the posiInsurance Corporation, particularly the question presented tion taken in the Comptroller of the Currency's August 23, 1966, communot the nication to national banks that such banks had the right, if nonmember duty, to absorb exchange charges in the same manner as their bank competition. understood As a result of the discussion at this meeting it was that Messrs. Randall and Sherrill would explore certain possibilities With their staff and that they would meet again with the Board in about a week or ten days. is being A memorandum covering the details of today's meeting Placed in the Board's files. 9/8/66 -2The meeting then recessed and reconvened in the Board Room at 4:00 p.m. with the same members of the Board present and the following staff: Mr. Sherman, Secretary Mr. Kenyon, Assistant Secretary Mr. Young, Senior Adviser to the Board and Director, Division of International Finance Mr. Holland, Adviser to the Board Mr. Solomon, Adviser to the Board Mr. Molony, Assistant to the Board Mr. Fauver, Assistant to the Board Mr. Brill, Director, Division of Research and Statistics Mr. Hexter, Associate General Counsel The White House had released the text of a Presidential message to the Congress setting forth certain fiscal proposals with a view to combating inflationary pressures. Prominent among them was a recommenda- tion that the Congress make inoperative, for a temporary period, special tax incentives for business investment in plant and equipment. The President also announced an intention to reduce or eliminate lowerPriority Federal expenditures and indicated that efforts would be made to ease the inequitable burden of high interest rates and tight money. The question considered was whether the Board should issue a s tatement with reference to the Presidential message. A draft of pos- sible statement had been distributed to the Board members. It was the consensus that a statement should be issued, and several suggestions were made for amendments to the distributed draft. t 9/8/66 -3- At the conclusion of the discussion unanimous approval was given to the issuance of a statement in the form attached as Item No. 1. The meeting then adjourned. Item No. 1 9/8/66 33:49 September 8, 1966. For immediate release. e System today The Board of Governors of the Federal Reserv issued the following statement: President today The program and proposals announced by the are directed towards curbing some of the extraordinary demands for ng up prices and goods, services, and credit that have been pressi interest rates alike. actions it has The Federal Reserve, in the succession of to discount operataken, including its action last week with respect es. tions, has been directing its efforts to the same purpos But the the growth of Federal Reserve's powers are limited to restraining spending that is financed by borrowed money. affecting both The contemplated fiscal policy measures, operate along with the government and private expenditures, should to combat inflation Federal Reserve's actions in the monetary sphere and to foster sustained, healthy economic growth. ssional action of To the extent that Presidential and Congre y, strains this character serve to moderate overall demand in the econom factor in on credit and financial resources, which have been a major the recent rise in interest rates, will be lessened. The Federal inflationary aeserve will continue to be alert to any easing of adjusted accordingly. Pressures in order that monetary policy can be -0-
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