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Reproduced from the Unclassified I Declassified Holdings of the National Archives
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29* 1935
B y J ^ ^ N A R A . Date^n ' S
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fliu juiuuwing was called to order at 11:10 a* m*» there being present
Governor Harrison, chairman, Governors Young and Fancher, and
Beputy Governors Hutt, M«£ay, and Barge as {secretary) and
Hr, J* H* Williaaas (of the New York bask)
The preliminary memorandum and the report of operations were distributed,
and after discussion accepted#
Governor Harrison reviewed recent open marieet operations carried on under
action of the Open Market Policy Confer one o at its meeting on ipril 22, as modified
.later.
Governor Black entered the meeting at this point.
In a discussion of future policy Governor Harrison indicated that with
the return flow of currency after the July 4 holiday it seemed possible that ex
cess reserves might increase to the neighborhood of $500,000,000,
A situation
would thus be created which would provide some justification from a technical
point of view for tapering off purchases of government securities.
On the other
hand the psychological effect of the continuance or discontinuance of purchases
needed careful consideration, particularly as they might be related to movements
in the foreign exchanges or any steps which might or might not be taken toward
stabilization of the dollar.
The increase in prices and in business activity re
quired some continued support until it became more firmly established.
If the
ispetus which has arisen from the instability of the dollar in foreign exchange
should be removed, it might be desirable to increase purchases of government secur
ities, in accordance with the suggestion made by Governor Black at the meeting on
May 23*
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Reproduced from the Unclassified I Declassified Holdings of the National Archives
DECLASSIFIED
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There ensued a discu ssion o f the d e s ira b le p o lic y to be pursued in the
current week, and at the conclusion o f th is discu ssion i t was moved and ca rried
that purchases o f approxim ately $20,000,000 be made in the current week.
I t was
agreed that th ese purchases should be made fo r d e liv e r y on Thursday and E riday,
June 29 and 30, in order to p ro v id e the market w ith funds which would tend t o o f f set any p o s s ib le strin gen cy over the end o f the h a lf yea r.
I t was a lso agreed
that i t would be unwise to roach any d e fin it e d e c is io n beyond the current week be
cause o f the great u n c e rta in tie s as to the p o s itio n o f the d o lla r and other in
fluences a ffe c t in g business a c t i v i t y .
Governor H arrison then review ed b r i e f l y h is discussions in London and
the present s itu a tio n with resp ect to proposals fo r monetary s t a b iliz a t io n .
There was a lso a discu ssion o f the p o lic y to be pursued in keeping open
licen sed member banks, Governor Black s ta tin g that i t was the A d m in istra tio n ’ s
p o lic y to make th e utmost e f f o r t to keep open a l l licen sed member banks.
The meeting adjourned at 12:15 p . m.
W. E. Burgess,
S ecreta ry .
@FedFRASER