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MINUTES O TH M
F
E EETING O TH O
F
E PEN M R E INVESTMENT COM ITTEE
AKT
M
FO TH FEDERAL RESERVE SYSTEM, HELD AT TH FEDERAL
R
E
E
___________ RESERVE BANK O N
F EW YORK. JANUARY 9. 1925_____________

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PRESENT:
Governors Strong, McDougal, Fancher, Norris and Harding
Mr. J . H, Case, Deputy Governor, Federal Reserve Bank of
New York
Mr. ’ W B. Matte son, Secretary of the Com it tee
,
There were also present
Honorable D. R. Crissinger, Governor of the Federal Reserve Board
Honorable Edm
und Platt, Vice Governor of the Federal Reserve Board
Mr* Walter W Stewart, Director, Division of Research and Statistics,
.
Federal Reserve Board
Mr. W. R* Burgess, Assistant Federal Reserve Agent, Federal Reserve
Bank of New York

The meeting was called to order at 10:45 a. m by Governor Strong,
.
Chairman*
A report was submitted by the Secretary of the Committee reviewing
the operations of the Open Market Investment Committee since the last meeting,
with accompanying statements and data.
There was also submitted a report on foreign accounts which the
Federal Reserve Bank of New York had just transmitted to the tanks participat­
ing in these accounts.
The Chairman discussed b rie fly the activities of the Committee since
the last meeting, as set forth in the Secretary's report, and the movements of
money coincident with the fir s t of the year transactions.
A discussion followed which was participated in by a ll present with
respect to further changes in the Special Account.

It was on motion, duly

m
ade and seconded,




VOTED that the Committee stand ready to m
ake such further sales of

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2 s e c u r it ie s as seemed necessary from time to time in view of changing money
co n d itio n s to prevent undue ease in the money market.
This was also concurred in by a l l the members of the Federal Reserve Board
presen t.
Mr. Case re fe rre d t o the acquirement by the Treasury, in connection
with the recent fin a n cin g, of $35,000,000 new 4% bonds of 1944-54 fo r account
of the Alien Property Custodian and which the Treasury was d esirous of re p la c­
ing by March 15, 1925 or September 15, 1925 c e r t i f ic a t e s of indebtedness*
Sales of these new 4s to the market have re su lte d in the Treasury being in the
market fo r short-term c e r t i f ic a t e s of indebtedness and the Committee has con­
sequently sold i t d ir e c t $17,709,500 - 4$ c e r t i f i c a t e s due next March, being
a l l that were held in the S p ecial Account,

I t was agreed that tra n sa ction s

of th is nature had p r a c t ic a lly the same e f f e c t as sa les made d ir e c t to the
market, and the Committee thereupon unanimously voted in favor of Treasury
tra n sa ction s of th is ch a ra cter, with re sp e ct to our September 15 c e r t i f i c a t e s .
Mr. Case brought to the a tten tion of the Committee an opportunity
which had been o ffe re d through one of the dealers fo r the sale of some
Government s e c u r it ie s maturing in 1925, the amount involved being $40,000,000,
025, 000, 000 in Junes and $15,000, 000 in Septembers.

He stated that recen t

sa les amounting to $27,000,000 of September 1925 c e r t i f i c a t e s had been made
with the understanding that a l l or any part could be repurchased i f d e sired ;
th e re fo re , i f $15,000,000 of the la t t e r amount were made a permanent sa le , the
fu rth er sale of $25,000,000 June 1925 notes at 2#60$ b a sis le s s l/3 2 com­
m ission (a very good market p rice and one which would represent a f a ir p r o f i t ) ,
would only r e s u lt in a net reduction in the account of $13,000,000.




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O motion, duly made and seconded, i t was
n
VOTED

that the sale be made with the understanding that d e liv ery

would be made at our option between now and January 22, in lo t s of § 5, 00 0 ,0 0 0
or 110,000,000, such d e liv e r ie s to be made with due regard to the e f f e c t on
the market, and that s im ila rly the $12, 000, 000 now in dealers* hands might
be returned t o us at our op tion .
I t was the consensus of opinion that the operations of the Committee
having to do with the sale of Government s e c u r it ie s could be handled more ad­
vantageously and with le s s d isorg a n iza tion to the market i f sa les were cen­
tr a liz e d in New York, except in unusual cases where there might be an oppor­
tu n ity to dispose of s e c u r itie s to advantage in other markets.
There follow ed a short d iscu ssion with regard to the e f f e c t on the
market of the recent change in ra te on b i l l s purchased which had re su lted in
a resa le to the market of a l l b i l l s held under repurchase agreement and a
considerable reduction in the p o r t fo l io of the New York bank.




O motion the meeting adjourned at 1 p. m.
n
(Signed)

W B. M
.
ATTESON
Secretary


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102