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■W ^ppp Reproduced from the Unclassified I Declassified Holdings of the National Archives d e c l a s s if ie d Authority E.G. U35fe MINUTES OF THE MEETING OF THE OPEN MARKET INVESTMENT COMMITTEE FOR THE fEEER;*L RESERVE SYSTEM, HELD AT THE FEiERAL RESERVE BOARD in Washington, a p r il 22, 1 9 2 4 . PRESENT; Governors N orris and McDougal Deputy Governor B ullen, representing Governor Harding Deputy Governor Case, representing Governor Strong Mf , D. C. W ills , Chairman, Federal Reserve Bank o f C leveland, representing Governor Pancher Mr. Matteson, Secretary o f the Committee There were a lso p resen t: Honorable D, R. C rissin g e r, Governor o f the Federal Reserve lioard Dr. A, C. M ille r o f the Federal Reserve Board Honorable G, B* Winston, Under Secretary o f the Treasury Mr. Walter W. Stewart, D ire cto r, Bureau o f Research and S ta tis tics ^ Federal Reserve Board Mr. W. R, Burgess, A ssistant Federal Reserve Agent, Federal Reserve Bank o f New York The meeting was c a lle d to order at 11 a . m. and in the absence o f Governor Strong, Chairman, Mr. Case was, on m otion, made Chairman o f the m eeting. The rep ort o f the Secretary reviewing the a c t i v i t i e s o f the Committee sin ce the la s t m eeting t with accompanying statem ents, was thereupon subm itted, (copy h erew ith ). The Chairman sta ted that in accordance with au th oriza tion at Purchases fo r Special the meeting on February 28 purchases fo r the sp e cia l investment account ---------------- ----------------------------- ;____ ;____ -Investment — Account had almost reached the $200,000,000 mark and asked the views o f jfche Committee and others present with regard to further purchases„ general d iscu ssion fo llo w e d . A Whereupoh on motion duly made a**d seconded, i t was V^TED that a d d ition a l purchases fo r the s p e c ia l investment, account o f the Federal Reserve system be authorized up to an amount |no^j exceeding in the aggregate $250,000,000 ■ PI- Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority ,fC - 2 E.6. IBSfe - Mr. Winston stated that the Treasury Department, while in t e r posing no o b je c t io n t o the above plan, f e l t that i t would a s s is t the Treasury in i t s program o f financing i f the Committee should place a d e fin it e lim it on the amount to be acquired fo r the System Special Account. A fter some d iscu ssion i t was agreed that th is question should be placed on the calendar fo r the next m eeting. P o licy Regarding Price Limits The question o f the p rice lim its on purchases o f Government s e c u r it ie s was discussed and i t was the consensus o f opinion th a t, due to the rapid changes in the Government se cu rity market, purchases could be made t o b e tte r advantage i f the Committee was allowed more d is c r e tio n as to p r ic e s . Whereupon, on motion duly made and seconded, i t was VOTED that up t o the $250,000,000 lim it the Committee be authorized to make purchases at i t s d is c r e tio n at current market p r ic e s . Change in B i l l Rates The Chairman read a memorandum (copy attached) from Mr, E. R» Kenzel o f the New York bank, p oin tin g out that authorized buying rates fo r b i l l s were out o f lin e with current market quotations and suggesting a m od ifica tion in buying r a t e s . A fter d iscu ssio n , i t was, on motion VOTED that the Coifmittee authorize a reduction in the minimum buying rates o f the Federal Reserve Banks from 4 l / 8 per ce n t, to 4 per c e n t, fo r long b i l l s , and from 4 per cen t, to 3 7/8 per ce n t, and 3 3/4 per cent, on short b i l l s , the short rates not to be put in to e f f e c t immediately but in the d is c r e tio n o f the Federal Reserve Banks. P o licy Regarding Requests fo r Special Inve stment s The Chairman read a telegram from the Federal Reserve Bank o f Dallas sta tin g that in view o f large m a tu rities they were in need o f a d d itio n a l earni: ■s. This was ca re fu lly considered and i t was the sense o f the meeting that under e x is tin g con d ition s there was no sp e cia l a ctio n which the Committee could take at t h is tim e, as the "W* Reproduced from the Unclassified I Declassified Holdings of the National Archives «p d e c l a s s if ie d Authority E .6 . - 3 - situ a tio n in the Dallas d is t r ic t was no d iffe r e n t than that e x istin g in many of the other d is t r ic t s * A report on Foreign Accounts, with accompanying statement submitted by the New York bank, was presented to- the Committee* 'S ffect of Treasury Operations On Money Market •Mr* Winston brought up fo r d iscu ssion the problems raised by Treasury operation s on March 15, 1924, and t h e ir e f f e c t on the money market. Various means were discussed fo r a v o id in g disturbance to the money market as a re su lt of Treasury operations at times when discounts at reserve banks are small and the suggestion was advanced that Federal reserve banks might at such times tem porarily s e l l short Govern ments to member banks to an amount that would equalize t h e ir excess reserves during the few days pending the c o lle c t io n o f ta x checks* No d e fin it e d ecision , however, was reached. In connection with tempurary accommodations to the Treasury.Mr, Winston stated th a t, in -lin e with a suggestion made by the New York bank, the Treasury favored placing the rate on sp e cia l c e r t i f ic a t e s issued to cover the Treasury overdrafts at one point under the rate on Treasury c e r t i f i c a t e s or notes con cu rren tly issued. On motion the meeting adjourned at 4;00 p, m* (Signed) W* B. MATTSSON Secretary
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