January 26, 1937 FOMC Minutes: Full Text
A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington on Tuesday, January 26, 1937, at 10:30 a. m. PRESENT: Mr. Eccles, Chairman Mr. Harrison, Vice Chairman (latter part of meeting) Mr. Broderick Mr. Szymczak Mr. McKee Mr. Ransom Mr. Davis Mr. Fleming Mr. McKinney Mr. Schaller Mr. Hamilton Mr. Morrill, Secretary Mr. Dreibelbis, Assistant General Counsel Mr. Burgess, Manager of the System Open Market Account Mr. Carpenter, Assistant Secretary of the Board of Governors Mr. Thurston, Special Assistant to the Chairman of the Board of Governors Mr. Hamilton suggested that, as it was anticipated that on March 1, 1937, Messrs. John S. Sinclair, William McC. Martin and William A. Day, Presidents of the Federal Reserve Banks of Philadelphia, St. Louis and San Francisco, would succeed Messrs. Fleming, Schaller, and Hamilton, respectively, as members of the Federal Open Market Committee, it would be desirable to invite the three Presidents to attend this meeting in order that they might obtain the benefit of the discussions and thereby become better prepared to take over their new duties. During a discussion, the opinion was expressed that to adopt Mr. Hamilton's suggestion would set a precedent which might be an undesirable one, and one which would be contrary to the existing policy of restricting attendance at meetings of the Committee. It was pointed out that, if the
fact that the three Presidents probably would attend the next meeting of the Committee were regarded as a sufficient reason for inviting them to attend this meeting, the position might be taken also that the alternate members of the Committee should be invited to attend all meetings of the Committee because of the possibility that they might be called upon at any time to attend a meeting of the Committee, whereas the by-laws of the Committee provided that an alternate shall be entitled to attend meetings only in the absence of the member for whom the alternate was elected. Mr. McKee suggested that, instead of inviting the prospective new members of the Committee to attend this meeting, an arrangement be approved under which they would be furnished with copies of the minutes of the meetings of the Committee during the preceding year. Mr. Ransom suggested that a possible answer to the problem would be for the retiring Presidents to turn over their files of minutes to their successors with the understanding that such a procedure would be followed in the future. the further alternative suggestion that it Chairman Eccles made of this meeting that a retiring member of the Committee should be the sense transfer the file maintained by him as a member of the Committee to the a retiring member of the Committee did not new member, and, in the event Secretary of the Federal Open Market Committee turn over his file, the member with a copy of the minutes authorized to furnish the new would be Committee for the preceding year. of the meetings of the of inviting all alternate that he was in favor Mr. Hamilton stated of the Committee and that, Committee to attend the meetings members of the
as it was anticipated that the three Presidents referred to by him would be the new members of the Committee after March 1, 1937, he felt they should be invited into this meeting. Thereupon, Mr. Hamilton moved that Messrs. Sinclair, Martin and Day be invited to attend this meeting. The motion, after being duly seconded, was put by the chair and lost, the members voting as follows: "Aye" - Messrs. Fleming, Hamilton and McKinney; "No" Messrs. Eccles, Broderick, Szymczak, Ransom, McKee, Davis and Schaller. Mr. Broderick stated that he had voted "no" on the above motion for the reason that he believed that to invite Presidents who were not members of the Committee to attend meetings of the Committee would set an undesirable precedent, and that he felt the question raised by Mr. Hamilton could be met by giving the new members of the Committee access to the minutes of the Committee so that they might inform themselves with respect to actions of the Committee which were taken prior to March 1, 1937. Vice Chairman Harrison, who had been at a conference in the Treasury, joined the meeting during a discussion of the alternative suggestions made by Messrs. McKee, Ransom and Eccles. While the discussion was in progress, Mr. Fleming moved that the Secretary of the Federal Open Market Committee be authorized, in the event a retiring member over the records maintained by him as a does not turn member of the Committee to his successor, to furnish to the new member, upon request, copies of the minutes of the meetings of the Committee for the previous year. This motion was duly seconded. Mr. McKee moved as a substitute for Mr. Fleming's by each member of the that the records maintained motion be regarded as the records of the group of Committee districts from which the member is Federal reserve made available to the member serving at elected and be the time as a member of the Committee. motion was not seconded. Mr. McKee's Federal Open Market Committee, Economist of the Mr. Goldenweiser, just returned from a conference at entered the room at this point, having
the Treasury. Mr. Szymczak moved as a substitute for Mr. Fleming's motion that, in the event a retiring member of the Committee does not turn over the records maintained by him as a member of the Com mittee to his successor, the Secretary of the Fed eral Open Market Committee be authorized to give the new member access to the records of the Secre tary. Mr. Szymczak's substitute motion, having been duly seconded, was put by the chair and lost, the members voting as follows: "Aye" - Messrs. Szymczak, Broderick and Schaller; "No" - Messrs. Eccles, Harrison, Ransom, McKee, Davis, Fleming, McKinney and Hamilton. Mr. Fleming's motion was then put by the chair and carried, the members voting as follows: "Aye" Messrs. Eccles, Harrison, Ransom, Davis, Fleming, McKinney, Schaller and Hamilton; "No" - Messrs. Broderick, Szymczak and McKee. adjourned to afford the executive committee Thereupon the meeting Federal Open Market Committee an opportunity to hold a session of the to the consideration of other matters by the full Committee. prior Approved Chairman.
Also: Record of Policy Actions·Minutes of the Executive Committee, December 21, 1936·Minutes of the Executive Committee, January 26, 1937·Minutes of the Executive Committee, January 26, 1937