June 26, 1956 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, June 26, 1956, at 10:00 a.m. PRESENT: Mr. Martin, Chairman Mr. Balderston Mr. Erickson Mr. Johns Mr. Mills Mr. Powell Mr. Shepardson Mr. Szymczak Mr. Vardaman Mr. Fulton, Alternate Mr. Treiber, Alternate Messrs. Bryan, Leedy, and Williams, Alternate Members, Federal Open Market Committee Messrs. Leach, Irons, and Mangels, Presidents of the Federal Reserve Banks of Richmond, Dallas, and San Francisco, respectively Mr. Riefler, Secretary Mr. Thurston, Assistant Secretary Mr. Vest, General Counsel Mr. Solomon, Assistant General Counsel Mr. Thomas, Economist Messrs. Abbott, Willis, and Young, Associate Economists Mr. Rouse, Manager, System Open Market Account Mr. Carpenter, Secretary, Board of Governors Mr. Sherman, Assistant Secretary, Board of Governors Mr. Miller, Chief, Government Finance Section, Division of Research and Statistics, Board of Governors Mr. Larkin, Manager, Securities Department, Federal Reserve Bank of New York Upon motion duly made and seconded, and by unanimous vote, the minutes of the meetings of the Federal Open Market Committee held on June 5, 1956, were approved. May 23 and
Before this meeting there had been distributed to the members of the Committee a report covering open market operations during the period June 5 through June 20, 1956, and at this meeting a supple mentary report covering commitments executed June 21 through June 25, 1956, inclusive, was distributed. Copies of both reports have been placed in the files of the Committee. In commenting on the reports, Mr. Rouse mentioned that net borrowed reserves would tend to rise considerably during the next few days and that he anticipated that repurchase agreements would be made available to take care of this situation. Mr. Mills inquired why repurchase agreements rather than out right purchases of securities for the System account would seem de at this time, when it appeared that additional reserves would sirable period of time. He also observed that be required over a considerable of Treasury bills to run had permitted $51 million the System account the view that if this de the past week, and he expressed off during for the current week to show up in the statement crease were permitted the policy that the Committee as a shift in it might be interpreted in recent weeks. had been following reserves in the with net borrowed responded that Mr. Rouse would not be misunder run off of bills area he felt the $200 million since early this that had taken place of the sharp easing stood in view He also market. Government securities of the and the condition month,
stated that today the System account had purchased $27 million of Treasury bills, having in mind the point that Mr. Mills had mentioned. Mr. Rouse also stated that his thought that repurchase agreements would be a desirable means of meeting part of the increased need for reserves in the next few days was based on the assumption that the Committee would continue at this meeting about the same type of credit policy that it has been following in the past few weeks. He had not had to make a firm decision on the matter pending this meeting. However, he did not feel that some run off in System holdings of securities this week or the possibility that Treasury bill rates might move a little above 2-1/2 per cent would be inconsistent with the policy approved at the meeting of the Open Market Committee early in June, considering continued at 2-3/4 per cent. Mr. Rouse the fact that the discount rate from Mr. Mills, that he would said, in response to a further question in the $200-300 million range in have in mind net borrowed reserves this period. Upon motion duly made and seconded, unanimous vote, the open market and by transactions during the period June 5 June 25, 1956, inclusive, were through approved, ratified, and confirmed. of Governors of for the Board Legislative Counsel Mr. Cherry, room at this point. entered the Reserve System, the Federal June 20, 1956, from to a letter dated Chairman Martin referred on Government of the Committee L. Dawson, Chairman William Congressman
Operations of the House of Representatives, copies of which had been distributed before this meeting. Mr. Dawson's letter requested that in connection with a study by his committee of the operations of the debt management advisory committees utilized by the Treasury, arrange ments be made to have Mr. William Pincus, Associate General Counsel for the Committee on Government Operations, received at the Federal Reserve Bank of New York on July 5 and 6, 1956 in order that the proper officials of the New York Bank and of the Federal Open Market Committee might furnish him with an on-the-spot presentation of the activities conducted at the Bank as they relate directly to the operations of the Government securities market. Mr. Dawson's letter indicated his under standing that the Federal Reserve Banks act as fiscal agent for the Department and that the System also is involved in the opera Treasury market by virtue of the holdings tions of the Government securities in the System open market account. of Government securities request, Mr. Riefler reviewed earlier At Chairman Martin's on Friday, June 15, Mr. Mr. Pincs, stating that discussions with a telephone call from Mr. Pincus of the Board's staff received Miller in the issuance and allot to various technical problems inquiring as the course of the conversation, securities. In ment of Government to come to of the Board's organization Pincus invited members Mr. of these questions. of further discussion office for the purpose his matter to the Board, he, after presenting the Mr. Riefler stated that
Mr. Miller, and Mr. Cherry met with Mr. Pincus and other members of the committee's staff. The discussion did not go to Federal Reserve policy as such. At the conclusion of the discussion, Mr. Pincus sug gested that members of the committee's staff would like to visit the Federal Reserve Bank of New York for the purpose of obtaining on-the spot information as to the fiscal agency activities of the Bank and operations of the Government securities market. Mr. Riefler stated that this request was brought to Chairman Martin's attention, who expressed the view that such a visit should be based on a formal re quest by the Chairman of the Committee on Government Operations, and it was in this manner that Mr. Dawson's letter was received. Chairman Martin stated that he had discussed this request with Treasury officials at a luncheon meeting this past week, feeling that the Treasury should be fully informed of the nature of the request, and that it was his understanding that the Treasury was not opposed to the proposed visit or to furnishing information to the committee along the lines requested. In response to a question from Chairman Martin, Mr. Cherry stated that this request was an outgrowth of the investigation of being conducted by Mr. Dawson's advisory committees to the Treasury has been considerable discussion of fiscal committee in which there the Treasury, methods and techniques of entering sub operations of basis for allotment of of securities, the scriptions to new issues of the Federal Reserve as fiscal such securities, the functioning
agent for the Treasury, and the part played by Government securities dealers in connection with Treasury financings. Mr. Cherry said that it was his understanding that the committee was not exploring monetary relationships as part of its inquiry, and he expressed the view that it would be desirable to cooperate with the committee in so far as that might be feasible. Mr. Treiber stated that while Mr. Dawson's letter did not make the nature of the visit entirely clear, he felt that the System should assist the committee and its representatives in obtaining information as to the operations of the Government securities market and of the functions of the Federal Reserve Bank as fiscal agent. In doing this, Mr. Treiber said it would be his view that System representatives should avoid discussion of such things as directives of the Federal Open Market Committee but, with that exception, they should be as help ful as possible to Mr. Pincus or other members of the committee's staff. Chairman Martin said that Mr. Treiber expressed the views which apply to Mr. Dawson's request. Nothing should be done he felt should the way of the committee, and efforts should to place any road-blocks in in obtaining a better understand be made to assist its representatives the Government securities market. ing of the operations of Johns, Chairman Martin re to a question from Mr. In response Treasury would have no objection his understanding that the iterated proposed but stated that he such as Mr. Dawson's letter to a visit this point before the committee confirm his understanding on would
representatives visited the New York Bank. In response to a question from Mr. Vardaman, Chairman Martin stated that he had in mind informing the Chairmen of both the Senate and House Banking and Currency Committees of the visit proposed by Mr. Dawson. Mr. Treiber stated that he would be glad to send Mr. Dawson a letter regarding the proposed visit of Mr. Pincus and possibly other members of the committee's staff. There was unanimous agreement with the procedure suggested in the foregoing discussion. Mr. Cherry withdrew from the meeting at this point. Chairman Martin called upon Mr. Young, who made a statement with respect to the economic situation substantially as follows: Onset of summer doldrums finds the economy moving for ward on a high and gently rising plateau. Industrial pro duction holds steady within the narrow range it has main tained since last fall, but other areas of output evidence expansive tendency. Credit demands have been showing excep tional strength, but wholesale prices, while firm, have featured little further advance. Stock prices have re bounded some from news of the President's illness, and, reflecting more encouraging news from various economic fronts, business and financial sentiment has a much more confident tone than in the second half of May. Late data flowing in from abroad confirm that expansive trends are being sustained in most foreign industrial countries. With the second quarter approaching a close, pre liminary estimates of the economy's total performance for be made. They indicate a GNP figure of the quarter can $402 billion, up $3-1/2 billion from the first quarter fourth quarter, reflecting in and $5 billion from the level. Personal income is estimated part a higher price billion from the first quarter at $317 billion, up $3 quarter. Disposable from the fourth and $5-1/2 billion
income and consumption expenditures are both estimated to be up $4 billion over the past two quarters. Personal savings holds at just under a 7 per cent rate, The expansive influences carrying total output to new record levels have been larger consumer spending on non durables and services, larger business spending on plant and equipment, and larger State and local government spend ing. On the more or less neutral side have been Federal Government spending, residential construction investment, and investment in business inventories. Consumer spending for automobiles has been the main contractive influence. Other details of the situation may be briefly reviewed: (1) Industrial production for May is still placed at 142 with the June figure expected to repeat this level. (2) Retail sales for May showed a 1 per cent gain over April. Nondurable sales were responsible for the advance, durable goods sales about holding even. Judging from depart ment store sales, total and by major departments, thus far in June and from the reported marked pick-up in new automobile sales, further advance in retail sales may be registered this month. are estimated to have (3) Instalment credit outstandings shown a $150-$200 million rise on a seasonally adjusted basis in May, a little less than in April. The rise in the past two months has reflected mainly increases in personal loans and consumer goods paper other than automotive. Liberalization of credit terms for new automobile paper, which was brought under late in the fall, has apparently resumed in a moderate check way. accumulation for April amounted (4) Business inventory to about $600 million, mostly at manufacturers and particularly in nondurable goods lines. High retail sales at nondurable goods stores in May suggests that this development was in re sponse to market demands and not a backing up of holdings from retailers to manufacturers. At the distributive level, to June points to an even stock posi scattered information up retailers of diversified consumer hard goods, while tion at from the automobile industry points to current information in June of new car stocks and perhaps some marked liquidation of used car stocks. Over-all the second additional work down rate of inventory ac is expected to show a reduced quarter cumulation from the first quarter. about at or just activity holds (5) Total construction construction down and year ago levels, with residential under construction. Contract award mainly by greater business offset to characterize all major show that strength continues data upward trend of as does also further types of construction, Recent reports on costs and material prices. construction that discounts on estate markets indicate residential real
Federally underwritten mortgages have generally increased in recent weeks, but they also indicate that the reduced number of completed housing units is moving without ex ceptional delays and that the inventory of unsold houses is being held to moderate volume. (6) Total nonfarm employment in May was at a record level of 51.3 million, 1.5 million above a year ago. Un employment at 2.6 was about the same as in April. An in crease in unemployment is usual in June, reflecting the increase of workers in search of summer employment. The work week in May averaged about 40 hours, about an hour below levels at the end of 1955. Reflecting reduced over time work in part, average hourly earnings in May showed no change from April and average weekly earnings were off slightly. In June, workers in a number of major industries receive automatic wage rate increases, and in July a wage rate rise goes into effect in the copper industry. The out come of the steel negotiation is still unknown. (7) Since mid-May, both industrial and agricultural prices have been relatively stable. On the industrial com modity side, prices of materials have strengthened after earlier marked declines and price increases have been fewer for partially fabricated and finished items. Prices of farm products and foods have held close to mid-May levels, but prices of livestock, wheat, and fats and oils have eased somewhat this month. The decline in livestock prices has reflected larger marketings stimulated by the earlier price advance for livestock. countries, output con (8) Abroad in major industrial tinues at high levels, with some irregularity in further of capacity and labor supply limitations. increases because number of these countries, the existence of inflationary In a the upward tilt of their indexes of pressures is shown by average prices. a seasonally adjusted and imports, on (9) U. S. exports in May after a dip in April, basis, showed renewed strength according to preliminary indications. considerably better situation looks the total Altogether, meeting. Observers generally the indications at the last than for the third quarter. The are now raising their sights no prolonged steel by some that, assuming opinion is ventured third quarter, on a performances in the strike, over-all of the well better performance basis, may seasonally adjusted one can at least of the outcome, quarter. Regardless second by the most recent picture indicated say that the composite is not one and prices trade, employment, data on production, poised to recede. or even economy in recession of an
Mr. Thomas pointed out that credit developments, like those in other areas, indicated continued strength in the economy. He said that Treasury operations have recently been of prime interest in financial markets, both mechanically and psychologically. The Treasury cash surplus is likely to be close to $5-1/2 billion for fiscal 1956 and the cash balance, exclusive of gold, will probably be around $5-1/2 billion at the end of June. This balance is about a billion dollars less than was expected earlier, owing largely to Treasury purchases of securities, redemption of Commodity Credit Corporation notes, larger redemptions of savings bonds than had been anticipated, somewhat smaller receipts from income taxes withheld, and somewhat larger expenditures. The heavy turning over of funds and shifts from the maturing tax anticipation securities to other investments had affected money markets and Government securities markets recently, making it difficult to bring out underlying trends. Mr. Thomas referred to the Treasury's borrowing needs during months, concerning which a memorandum dated June 25, the next seven and Statistics was dis Board's Division of Research 1956, from the The prospect is that the Treas earlier during this meeting. tributed during this seven-month around $4-1/2 billion ury will have to borrow might be deferred until January. period, of which $1-1/2 billion or early September. by late August would be needed About $3 billion total around $22 next six months will operations for the Refunding $9 billion of holds over Federal Reserve of which the $23 billion,
maturing securities. Mr. Thomas stated that during the first half of calendar 1957 debt retirement might be as much as $8 billion. The large amount of funds that will be available for debt retirement should influence the types of securities that might be offered by the Treasury in its cash and refunding offerings, Mr. Thomas noted. By the end of the year, there will be a large concen tration of outstanding issues in the 1-5 year category which would make new issues in that range not particularly appropriate and the market has not been favorable for longer-term issues. Thus, a one year rollover plus optional tax anticipation issues would seem best for the refunding offerings, and tax anticipation issues and bills for the cash offerings. said that the capital markets have continued active, Mr. Thomas issues being offered or in prospect. Cor with a large volume of new with a considerable volume of porate issues are at a high level, are also large. Bank and State and local issues private placements, by corporate income tax pay developments have been affected credit with the past are made said, and while comparisons ments, Mr. Thomas that business loans differences, he indicated because of date difficult probably risen June 20 had three weeks ending banks in the at city in June last year compared with $800 million close to $1.2 billion, have also in Other loans of this year. billion in March and $1.5 of Government to their holdings added some and banks have creased, period last year. in the same contrast to a decrease securities in
Deposits and currency holdings of business and individuals, which declined sharply in May, increased during the first two weeks of June, as is usual prior to a tax date. Changes in the money supply this year to date have been close to seasonal, Mr. Thomas said, with little net growth after adjustment for seasonal factors. Bank reserves have been more freely available in the past month than previously, Mr. Thomas noted, with net borrowed reserves recently around $200 million. The decrease reflected earlier System purchases of securities and a recent sharp increase in float, which more than offset an increase in required reserves. Nevertheless, the money market has not been particularly easy because of the greater liquidity needs that banks have had at this time. The rate for Federal funds has continued close to 2-3/4 per cent; a decline in the bill rate has reflected largely the switching of funds from tax anticipation securities. Mr. Thomas also referred to a sheet containing recent and pro jected reserve changes, stating that perhaps as much as $400 or $500 additional reserves would be needed during the next two million of reserves are to be kept at the $200-$300 mil weeks, if net borrowed increase in borrowing over the lion range. He thought some temporary undesirable. Some of the might occur and would not be July 4 holiday repurchase agreements, which could be supplied through added reserves funds again became in July as reserve retired a little later could be
available, but there will also need to be some outright purchases of securities if the Committee wishes to avoid an increase in pressure in the market during coming weeks. One of the problems to be faced by the Committee in the near future, Mr. Thomas said, was how best to supply the projected reserve needs of around $1.5 billion during the rest of the current year. In addition to purchases of Treasury bills, repurchase agreements and member bank borrowing could be relied upon to cover some of the purely temporary needs. The use of member bank borrowing should depend on the climate of credit demands and the attitude of banks. Mr. Thomas also noted that there had been some discussion in banking circles of a re duction in reserve requirements which would release some of the reserves now used by banks in meeting their requirements. The argument advanced for this device is the need to increase bank liquidity, which is now so low that banks might be reluctant to meet essential seasonal loan demands. Mr. Thomas questioned whether such a measure would be appropriate in a period of very strong loan demands with the economy operating at capacity, Mr. Vardaman inquired of Mr. Thomas whether he believed it un outright purchases of Government securities to meet desirable to make during the next two weeks to an amount the need for additional reserves Thomas responded that if million, to which question Mr. of, say, $00 reserves proved to be correct, outright the staff projections of needed mentioned would make it necessary purchases of as much as Mr. Vardaman shortly after the Fourth of July of the securities to be sold for some
holiday. It was for this reason and as a means of avoiding unneces sary churning in the Government securities market that he (Mr. Thomas) felt it would be desirable to meet part of the demand through the use of repurchase agreements. Mr. Rouse said that he agreed with the views expressed by Mr. Thomas, feeling that some use of repurchase agreements would facilitate operations, particularly in view of the Treasury financing that is ex pected shortly and of the desirability of maintaining an "even keel" during the period prior to the Treasury's announcement. Chairman Martin said that he anticipated that the next meeting of the Open Market Committee would be held on Tuesday, July 17. The on Government Borrowing would be meeting on Treasury's Committee it was his view that the problems connected July 11, he noted, and Mr. Rouse had referred, should Treasury's financing, to which with the that as always there would Chairman Martin said be considered today. and in dealing with tone, maintaining an "even keel" be difficulty in called upon Mr. Treiber in the market. He then color, and other factors made a statement substantially as follows: who to move sidewise aggregate continues economy in the The no new soft spots, and There have been at a high level. soft spots. In no acceleration of existing there has been adjustment that a satisfactory evidence indicates deed, the strength in the to be more on. There appears is going Production, employment, was a month ago. economy than there are at very and capital expenditures consumer purchases, slowed down. has Inventory accumulation high levels. to firm; industrial prices continue prices, farm As for spite of ahead in to be inching prices appear raw material in April and May. individual commodities for some declines
Prices are likely to rise at a gradual rate. The steel wage negotiations are coming down the home stretch. It is apparent that the price of steel will rise; the only question is, how much? The demand for bank credit continues high. The June 15 tax period demand was very high, by past standards, although not as high as in mid-March. In the generally balanced cur rent situation, price inflation is still a threat and further relaxation of restraint is not called for. It looks as if the Treasury will announce the terms of its refunding financing about the middle of July and that it will undertake cash financing of a couple of billion dollars a few weeks later. The money market has been under less pressure in recent weeks. In a period when there is customarily a great deal of churning in the market, the System has made it clear that needed credit will be available. While the rate on Federal funds has continued at 2-3/4 per cent, the rate on Treasury bills is now a bit below 2-1/2 per cent, and the rate on bankers acceptances has recently been reduced to 2-1/2 per cent. The sharp drop in the rate on Treasury bills in the last week or so apparently reflected a temporary distortion in anticipation of the reinvestment of the proceeds of the tax anticipation certificates which matured Friday. That demand having been met, the disparity between bill rates and the discount rate has narrowed again. Observers have been conscious of the System's desire to prevent mid-June technical factors from causing strain. They are watching to see whether recent System action is directed primarily to the technical situation or whether it foreshadows an easier credit policy. We should continue to make reserves available to meet the basic needs of growth and to meet seasonal needs, such as the midyear currency demand. Since the Treasury will be announcing its financing arrangements before, or at about the time of, the next meeting of the Committee, we should to the maintenance of an "even keel" in the market. contribute We should avoid, however, indicating a basically easier policy. The contraction of float and the outflow of currency cur rently going on have withdrawn reserves from the banking system somewhat. This should net borrowed reserves and have increased in Treasury bill yields correct the present distortion help purchases of Treasury bills. the System begins outright before of the reserves needed over the early part of July Since part should be repurchase agreements be temporary in nature, will by outright purchases first instance, supplemented used in the to supply reserves needed more permanently. has been pursued conditions which toward easier The trend useful purpose. The purpose weeks has served a highly in recent
having been accomplished, we should now seek to stabilize money market conditions. We should pay particular atten tion to the Treasury bill rate and the tone in the market. Recognizing that "net borrowed reserves" are but one of many factors indicating the tightness of the money market, we could stand a higher range of net borrowed reserves than we have had in the last two weeks; net borrowed reserves amounting to something over $200 million--perhaps in such a wide range as $200 to $400 million--would seem appro priate. The officers of the Federal Reserve Bank of New York believe that there should be no change at this time in the Bank's discount rate. Mr. Johns said that he had nothing significant to report by way of data from the Eighth District. He had no reason to disagree with general conditions presented by Mr. Young, although he the summary of regarding the general employment picture be might have some question for unemployment compensation claims to cause of a seeming tendency apparent state of the economy declines. In view of the present resist people and consumers as well, apparent expectations of business and the and credit re relaxation of monetary said that no further Mr. Johns question was whether at the moment. The strictions was indicated as to indicate business picture a change in the had been such there not sure whether said he was Mr. Johns for greater restraint. a need or whether at business picture in the had been a turn-around there but at the signs, may have misread the Committee earlier period an was greater restraint believe that to not inclined he was the moment net borrowed to maintain he would undertake Therefore, indicated. although he of $300 million in the neighborhood reserves somewhere He hoped this figure. from by fluctuations not be disturbed would
that the Treasury bill rate would be at or slightly above 2-1/2 per cent. As to the discount rate, Mr. Johns said that he did not be lieve the rate at the St. Louis Bank (now 2-3/ per cent) needed to be changed at the present time. Mr. Johns said that he was glad that the use of a reduction in reserve requirements as a possible means of meeting some of the need for reserves later this year had been mentioned. He recalled that Chairman Martin had stated recently before a Congressional Com mittee (Subcommittee on Economic Stabilization of the Joint Committee of the Economic Report) that present reserve requirements are probably too high. Mr. Johns said that it seemed to him that the System should be searching for opportunities to reduce reserve requirements rather than for reasons not to reduce them. He recognized that there was a problem of public relations if reserve requirements were reduced at a time monetary policy was restrictive, but he felt this would be the same time there was a considerable seasonal need mitigated if at funds which the System needed to supply and for additional reserve would be supplied. Mr. Johns noted which the Committee had indicated been referred to as a blunt in reserve requirements had that changes policy. However, he as a meat-axe approach to monetary instrument, supply some of the the System could to explore whether felt it time in reserve requirements needed by a reduction that would be reserves per cent in of 1/2 that a reduction year. He suggested later this would release approximately across the board reserve requirements
$700 million in reserves and, while this might not be desirable now, later in the summer or autumn consideration might well be given to release of around $500 million by lowering reserve requirements. He thought that by telling why the reduction was being made, it would be possible to offset undesirable public relations that otherwise might result from such action. Mr. Bryan said that the economic situation in the Sixth District seemed to be relatively stable. Mortgage credit apparently is becoming very scarce, and discounts on mortgages are increasing in the Atlanta area. He would not now recommend a change in the policy the Committee has been following. While he had fear of a policy action that would seem to be dramatic, at the same time he had a great deal of sympathy for the view Mr. Johns had expressed regarding reserve requirements. referred to the figure of $400-$500 million of added reserves Mr. Bryan being needed during the next Thomas had mentioned as probably that Mr. were to be maintained at the $200 two weeks if net borrowed reserves against time and he suggested that requirements $300 million level, per cent as a means of from 5 per cent to 4 deposits might be reduced free in the neighborhood demand since it would meeting much of this of $400 million. from Mr. Vardaman as to timing, Commenting further on a question reserves averag indicated net borrowed noted that projections Mr. Bryan during the week ending July 4. ing over $700 million
Mr. Thomas commented that if $400 million were released through a reduction in reserve requirements early in July, it probably would be necessary to sell some $200 million of securi ties from the System account soon after July 4 as currency returned from circulation. Mr. Williams said that the economy of the Philadelphia District was continuing to move sidewise. Psychologically there was more opti mism than three weeks ago. He presented comparative figures showing that new automobile sales in the district had been relatively better this year than in most other areas, and he cited comparisons of de partment store sales as well as strong demands for credit as evidences that upward pressures were likely to continue. Mr. Williams noted a growing tendency on the part of small business concerns to use term loans at commercial banks on the grounds that pressures are likely to continue to force them into plant and equipment expenditures in order to remain competitive, and that they do not have available obtaining funds for that purpose except at the com facilities for mercial banks. Mr. Williams also noted that national concerns were of credit at Philadelphia banks. In summing up, activating lines no need for any further relaxa said that he could see Mr. Williams he felt the discount rate should stay tion in credit policy, that permitted to reserves might be and that net borrowed where it is, last couple of for the that have prevailed around the levels range weeks.
Mr. Fulton said that it now appeared quite likely that there would be a steel strike. Even a limited strike period would be felt severely in the Fourth District, but it would furnish an impetus to a very high level of steel production during the fourth quarter of the year. Other activities such as machine tool and paper production were continuing at a very high rate. Mr. Fulton said he would not favor any further relaxation in open market policy at this time and, in fact, the present policy may have produced more relaxation than was needed to take care of seasonal needs. He suggested that net borrowed reserves of $350 million or more would be quite appropriate during the next few weeks. He also said that he concurred in the view that reserve requirements could well be reduced from their pres ent levels. There should be no change in the discount rate at this time. Mr. Shepardson said that the general atmosphere seemed to have improved in recent weeks and that there was a little more optimism existed a month or so ago. Possibly there had been a little than in the money market during the past week or so, and he slackness some of this slack although he would would be inclined to take up or pressure on place greater restraint favor action that would not Mr. Shepardson standpoint of agriculture, market. From the the had suffered severely in their crop noted that a number of areas that he too had Shepardson said of drought. Mr. outlook because
been thinking about reserve requirements and had come to the con clusion that any change in the level of requirements should be deferred until later on. Mr. Mills called attention to the fact that at its last meet ing the Open Market Committee was influenced by the doubts that had been raised in many quarters about business prospects and that at that time it would have welcomed a more optimistic sentiment in the business community. In the face of improved business sentiment, he felt it would now be a mistake to shift System policy toward more severe credit restriction because of a hagridden fear of an inflation bogey. Inasmuch as the System previously indicated by word and action that credit would be available for the requirements of the economy, a shift at this time to a tighter monetary policy would be construed as a reversal of earlier policy declarations and could have damaging con sequences. Mr. Mills contended that as a matter of fact the reduction brought about in the level of negative free reserves in recent weeks has not resulted in the degree of ease that might have been expected so sizable a volume of new reserves, and for from having supplied employed the new reserves at their dis the reason that member banks at the Federal Reserve liquidation of their discounts posal to the the new reserves that were supplied It was brought out that as Banks. retirement of Federal out through the action were canceled by System the member banks had previously discounts, through which Reserve Bank a base for on their own initiative, with reserves supplied themselves
building a harmful expansion of credit had not been laid. The fact that the rate on Federal funds has held continuously at 2-3/4 per cent would seem to bear witness to a generally tighter money market condi tion than might have been indicated by only looking at the reduction effected in the level of negative free reserves. Mr. Mills went on to say that this experience suggested that under present conditions the volume of Federal Reserve Bank discounts might be a better indi cator of the degree of tightness in the money market than the level of negative free reserves and that System actions to vary the out standing volume of Federal Reserve Bank discounts could be construc tively used to achieve System policy objectives. of this reasoning, it was Mr. Mills' opinion that In the light for the System open market account direct purchases of Treasury bills promptly in order to prevent the shrinkage in should be undertaken would otherwise occur and reserves that it is estimated the supply of than in in a gradual increase--rather that would result by a process market account's Treasury bill increase--in the System open an abrupt agreements would this policy, repurchase In carrying out holdings. be treated as that could not out reserve situations be used to even bill purchases. of direct Treasury the vehicle well through free reserves of negative that a level had in mind Mr. Mills to the financial be visible evidence or less would of $200 million its policy System was not reversing that the and business community
and was prepared to supply such reserves as were necessary for the seasonal and growth requirements of the economy. He was inclined to believe that of late the factor of growth had been neglected in System policy thinking. And according to his reasoning, the current objectives of System policy in supplying reserves should therefore take into account both the seasonal and the growth requirements of the economy. As to the question of a reduction in reserve require ments, it was Mr. Mills' belief that the subject deserves study but that no such action should be taken at least until later in the year. Mr. Vardaman said he agreed with everything that Mr. Mills had said under existing circumstances. The attitude of the public during the last three weeks has been one of hope, he said, and the System should not do anything to dampen that feeling. Producers and con sumers seem to be moving pretty well together and nothing should be to get one or the other out of step. Policy should be continued done about as is, but there should be no indication in the slightest degree tightening at the present time. A reduction in reserve of any further this time would be magnified out of its importance, requirements at that reserve requirements on time Mr. Vardaman said; he was not sure he was confident that that should not be reduced, although deposits Consideration might, however, be should not be done at present. August or September. Mr. a proposal along in late given to such suggest negative free reserves around Vardaman said that he would first on outright pur would prefer to rely million. Also, he $200 be used as let repurchase agreements and would chases of securities
a means of meeting additional reserve needs, rather than to rely primarily on repurchase agreements to make reserves available in the period immediately ahead. Mr. Leach said that the month of June brought no appreciable change in business conditions in the Fifth District. He agreed with the staff that the third quarter now looks a little better than it did three weeks ago. Loan demand continues high in the Fifth Dis trict, he said. Although the loan-deposit ratio of the weekly re porting member banks is only 4 per cent compared with a national average of almost 56 per cent, many Fifth District banks have indi cated that they are at or above their desired goals in terms of the to deposits. During the last several days, some relation of loans of the larger banks of the district have returned to the discount window after having been out of debt for a period. Mr. Leach said that the Committee's actions to reassure the market of the availability of reserves over the tax date resulted in a much lower level of net borrowed reserves. He thought it de leave net borrowed reserves at this lower level for the sirable to presumably would require substantial additional time being. This in the near future to prevent purchases of Government securities Committee's directive was No change in the undesired tightening. consistent with this posi time, Mr. Leach said, and needed at this of directors of to the board propose to recommend tion he did not
the Richmond Bank a change in the discount rate at present. Mr. Leach said that he felt that reserve requirements are higher than they should be but he would not suggest a decrease at the present time. Mr. Leedy presented comparisons which showed that employment in the Tenth District during the first four months of 1956 had increased by significantly lower percentages than in the United States as a whole, in comparison with both the first four months of 1955 and the first four months of 1953. He also stated that agricultural conditions in the Tenth District this year are not quite as good as last year. On the national picture, Mr. Leedy suggested that the Committee's activi ties in furnishing additional reserves to the market may themselves have contributed to the recent improvement in business sentiment. The commentators may have gone too far in their interpretations of the Committee's operations and intentions in recent weeks, he said, and he noted that Mr. Treiber had expressed the view that market observers had appraised these actions as "bridging the gap" of the June tax period without coming to the conclusion that there had been any change in credit policy. Mr. Leedy said that he had a different impression, rather generally observers believed that there had been feeling that a change in policy in the direction of a very definite easing. At action could safely be undertaken to this juncture he felt that no he said; he would not favor any tightening correct this impression, a matter of fact he felt the pattern in the immediate future and as during recent weeks should be of operations that had been followed
continued. This would mean the level of net borrowed reserves should not be permitted to exceed $300 million and perhaps should trend down ward. Notwithstanding the optimism that seems to exist, Mr. Leedy said that he felt that uncertainties with respect to a steel strike, the layoffs that would take place during the summer because of vaca tions and for other reasons, and the uncertainties that must exist in the minds of many persons with respect to the President's intentions meant that this was not the time to be trending in any direction other than that in which the Committee has been moving during the past few weeks. He felt the System account should purchase bills to whatever extent they were expected to remain in the portfolio, and it should reserves through repurchase agreements to the extent supply additional that might be needed, particularly during the period until the Treas ury's financing is out of the way. Mr. Powell said that there was a very high level of economic activity in the larger cities of the Ninth District and in the mining of the district some areas were areas, but that in the Western part were already gone and replant with a severe drought--some crops faced Retail trade is up in the larger cities and employ ing was necessary. employment in largely because of increased ment is at a new high, such as industrial machinery and manufacturing of certain products over a year ago is up 26 per cent equipment. Construction electrical per cent. Retail about 4 building is down though residential even
trade in country areas is below a year ago and recently the figures have shown greater decreases than earlier in the year. Farm imple ment sales are down and the general agricultural outlook is not good. Mr. Powell said that he would favor a reduction in reserve requirements on time deposits, a move which would be particularly beneficial to country banks. He could not see that there would be any harm in such a reduction at an early date. The 3 per cent dis count rate of the Minneapolis Bank still seemed appropriate in view of the rather feverish activity in the principal cities of the Ninth District. However, there was growing concern about the position of banks in country areas where a number were now borrowing and addi tional banks would soon begin to borrow seasonally. Mr. Powell said he did not know what the directors of the Minneapolis Bank would decide about the discount rate at their meeting to be held in July, in view of the diverse conditions that he had described as prevailing in the Ninth District. With respect to open market operations, Mr. Powell felt that a middle of the road policy was indicated at this time. We had gotten through the June tax period successfully and there was no reason for time. A level of net borrowed reserves making money cheaper at this appropriate for the immediate $200-$00 million range seemed in the to do any substantial easing, Mr. future. If it seemed desirable in reserve requirements to a reduction Powell would be sympathetic where ease would means of easing the situation on time deposits as a be most needed.
Mr. Mangels said that economic conditions in the Twelfth District continued good with a fractional rise in employment and a decline in unemployment during May. Automobile plants in Southern California, at which layoffs took place earlier this spring, were now anticipating a reversal of that situation and additional employment was also expected in the aircraft, fruit packing, and other industries. The West Coast labor situation is very tight. New automobiles sales in May were 20 per cent below a year ago. The lumber situation in the Pacific Northwest appears a little brighter than a month ago and there have been some increases in prices of Douglas fir. A number of in dustries recently have granted wage increases. Bank loans continue to increase, Mr. Mangels said, and following of the increase in the reported before, a third the pattern he had banks during the four weeks of loans at reporting member national total On the other in the Twelfth District. mid-June took place ending in last Thursday were Reserve Bank at the San Francisco hand, borrowings of these banks $29 million. Both the amount of two banks in by only funds. Since are also using Federal borrowers and have been consistent have borrowed city banks the 25 reserve year, 21 of first of the the in other said, while Mr. Mangels Reserve Bank, the San Francisco from of the since the beginning have borrowed only 10 banks large cities Mr. that period. in have borrowed country banks Only three year. Bank week San Francisco held at the to a meeting Mangels referred
before last attended by the presidents of all banks in Los Angeles and San Francisco and to a discussion of the loan demand following the meeting. The general feeling was that banks needed more deposits and less loans, and some were concerned as to how they would meet the demand for loans. One banker thought that the demand for commercial and industrial loans had now reached its peak. Some of the bankers expressed the hope that reserve requirements would be reduced to assist them in meeting loan demands. Mr. Mangels also referred to comparisons made of the ratio of loans to deposits in the Twelfth District and in New York, and to a discussion regarding why Twelfth District banks should be penalized with a 3 per cent discount rate when banks in New York with a higher loan-deposit ratio had a lower rate. The comparisons which Mr. Mangels presented developed the fact in the ratio of loans, exclusive of real estate loans, that the increase in the San Francisco District than in the New York had been greater Mr. Mangels said that the San Francisco Bank's directors District. present 3 per cent discount rate at their June voted to maintain the not by a unanimous vote. The question would again meeting although at the meeting scheduled for July 11 and Mr. Mangels be considered would be taken. There has he did not know what action said that in recent weeks, Mr. Mangels definite improvement in psychology been a ago many were talking about a poor said, and whereas a short time look for a bright fourth attitude now is to third quarter, the general
quarter. Mr. Mangels said he did not think all the inflationary dangers were past but that, as Mr. Mills had indicated, it would not be desirable to move toward a more restrictive policy. On the whole, he would favor a continuation of the situation about as it had existed during the past three weeks. In response to a question from Mr. Leach as to why member banks in the Twelfth District would borrow from the Federal Reserve Bank at the 3 per cent rate when Federal funds were available at Mr. Mangels said that the two banks borrowing were 2-3/ per cent, using Federal funds, and they were discounting at the San Francisco to obtain the additional reserves which they needed. Reserve Bank in the Dallas District continue Mr. Irons said that conditions about seasonal. Employment is up strong. Department store trade is activity, and and in total nonagricultural both in manufacturing gain. Confidence is production show some estimates of industrial have deteriorated within the past strong. Agricultural conditions but in most agricultural of lack of rain five weeks because three to leases and other oil and gas produced from income is also areas weeks, as has improved in recent sales have activities. Automobile has in of chemicals dealers. Production attitude of automobile the Eleventh District in the economic conditions on the whole creased and usual seasonal about the expect Observers strong. are generally a good fourth year and of the third quarter during the movement points to strength, The national picture quarter.
Mr. Irons stated that he would like to see no further easing of credit policy although he has been pleased with developments in the last three weeks. He would like to see the Federal Reserve main tain a condition of firmness in the market without moving toward further ease beyond what has already been attained. Mr. Irons said that he had decided to give up using figures of net borrowed reserves because he doubted their meaning. He did not feel that the easing in the money market in recent weeks had been as great as was indicated by a reduction from $600 million to $100 million in net borrowed re serves. Mr. Irons said he would not recommend a change in discount rate to his directors at the present time and that Mr. Treiber had expressed the view he held, that is, the Committee should attempt to stabilize money market conditions at their present state and to be in move in whatever manner was called for in the next few a position to weeks. in the First District still Mr. Erickson said that conditions favorable factors outweighed the unfavorable. remained strong and that Loans did not increase area is getting tight. in the Boston Employment been expected. Easing of June tax date as much as had prior to the in a turn-around weeks had resulted the past three restraints during less than half as many Boston Reserve Bank, with in borrowings at the said that at this Mr. Erickson a little earlier. borrowing as banks would directive, in the Committee's no change he would suggest time present level, and would remain at its the discount rate hope that
that he was inclined to agree with the view Mr. Shepardson had ex pressed that the Committee might take up some slack during the next two or three weeks. He would prefer net borrowed reserves in the $250-$300 million range. Reserve requirements are too high, Mr. Erickson said, but this question should be given further study before action was taken to make any change in the present level. Mr. Szymczak said that in his opinion the major question before the Committee at the present time was related to the Treasury's plans. a large refunding operation and Treasury is about to carry through The it will need to obtain new money shortly. This being the case, the of stability to the market so Committee should provide some measure be able to enter the market with its refunding that the Treasury will market will require in the way of cash offerings, knowing what the and available regarding eco Statistics that have become interest rates. were not de two ago show that conditions a month or nomic activity Committee was then inclined that time as much as the teriorating at not to become so be a warning to the Committee to think. This might On the other might suggest. reports and comments as some concerned had met the situa he felt the Committee said that hand, Mr. Szymczak thought the Committee period. He the recent tax properly during tion light of the in the over-all objectives on its should now concentrate stable as market as keep the seek to and should needs Treasury's securities by buying Government provide reserves It should possible.
outright and also by making repurchase agreements available, and by preparing to do whatever the situation called for as we move into July. Mr. Balderston said he shared the views expressed by most of the members of the Committee. The immediate problem is one of timing, because of the impending Treasury financing, and the Committee should look beyond the next meeting tentatively set for July 17. It would be comforting not to have to determine the degree of tightness until after we know whether there will be a steel strike; on the other hand, July 17 would be too late to change our posture. Business psychology seems to have improved recently as retail trade has gained and as plant con has continued to provide underlying support. The wage and struction plus the strong loan demand suggest price increases that are impending with the summer "doldrums" may that the slackness often associated have been offset. the discount rate would said he would hope that Mr. Balderston such action might have on public be lowered because of the effect not retain present discount like to see the System psychology: he would of about $250 million. reserve target aim at a net borrowed rates and to move in ther should permit us we adopt today Whatever posture the pressure on end. At that time comes to an direction as summer the Federal Reserve very heavy and loans may be and demand for prices However, if a prolonged apply the brakes vigorously. may wish to the System may to turn sour, business psychology steel strike causes
wish to give business a stimulus. Mr. Balderston said he would like to see the Committee adopt today a policy that can be adhered to throughout the period of the Treasury financing and also permit the Committee to move toward either tightness or relaxation without too much commotion in the press. He was very happy, he said, with de velopments of the past few weeks and he felt that the System had accomplished what it set out to do. It should now adopt a stance that will serve the Committee between now and late August. Chairman Martin said that he thought it apparent that the views expressed this morning were not far apart and, although the policy to be followed was not crystal clear, it was reasonably clear, He emphasized the factor of stability in relation to the Treasury financ ing, stating that we were now getting into one of those periods in which the Committee always seemed to find difficulty in gauging the market in terms of the phrases it uses--psychology, tone, and color. The Committee was seeking to foresee the needs and developments for the next several weeks, but it was not possible to judge precisely the results of the policy that might be agreed upon. could fully understand the went on to say that he The Chairman and Mangels regarding the discount views expressed by Messrs. Powell in discount rate to note that any change rate, but he also wished of the Treasury financ if it came in the midst would create a problem would be construed by know in advance how a change ing. We could not the comments of Messrs. Leedy and the public and, as indicated by
Treiber this morning, our judgments of the public opinion differ. Chairman Martin said that he agreed with Mr. Irons in his de sire to get away from using net borrowed reserve figures. Perhaps these figures had led the Committee down a path that it would have been wiser not to have gotten on to. However, if we were to use these figures, the Chairman said that during the period just ahead he would prefer something around $200 million of net borrowed reserves, assuming that this would create stability. This would call for rather drastic action in view of the projections indicating that, without System operations, net borrowed reserves might rise to the $700 million level within the next two weeks. He recognized that instead of $200 million, the figure might range up to $300 or $400 million. Chairman Martin cautioned that the Committee not be misled by sentiment such as we have seen in the last few months. rapid shifts in had called attention to the fact that recent statistics Mr. Szymczak the sentiments that existed a few weeks of business had not borne out swings in sentiment such as these must be discounted by ago. Sharp way they go and even though business the Committee, no matter which at the moment. The summer doldrums people are influenced by the feeling said, but some slipping off during the are coming on us, Chairman Martin a reflection of the and is not necessarily is entirely normal summer his view was that with the Treasury state of business. On the whole, to resolve doubts it would be preferable coming up financing problem might be construed actions that than to take of ease rather on the side
as additional restraint. He would prefer this regardless of what commentators might say or misconstrue regarding System policy. He was referring to the summer period, he said, and could foresee the possibility that the System might find it desirable to move across the board toward substantially greater restraint in the fall. If it were not for the Treasury financing, he would be sympathetic to the view expressed by Mr. Shepardson that it would be desirable to take slack out of the market at this time. But the Treasury refunding would come at a time when there were other opportunities for use of funds and it might not be handled as easily as the Committee would hope. Chairman Martin said that his interpretation of this meeting was that none of those present wished to change the Committee's di the comments as desiring "stability" rective. He would also interpret Committee's daily operations. None of the or an "even keel" from the disagreement with Chairman Martin's members of the Committee indicated and he then called upon Mr. Rouse statements of policy to be followed, and operations for the the suggested policy for comments regarding the next three weeks. System account during would be stated by the Chairman said that the policy Mr. Rouse would be availed of the Repurchase agreements difficult to achieve. be outright purchases and there would to the extent needed next few days of Government securities. later on, sales account and, for the System
He felt that the Committee should have in mind that the market has been very conscious of the Treasury's doing financing in a relatively easy period followed almost immediately by tightening in the market. Dealers and participants generally feel they have had a raw deal in this respect. Mr. Rouse thought there would be an advantage in not permitting the market to get too easy during the next few days, particularly if there seemed to be a good chance of its tightening up fairly soon, because the Committee probably would be faced with the need for maintaining an even keel into the period of the Treasury's cash financing. Mr. Rouse also said in response to a question from Chairman Martin that he interpreted the sense of the meeting as calling for stability with around a quarter of a billion dollars of net borrowed reserves. As Chairman Martin had indicated, this would require judgments as to tone, color, and state of the market in general. Mr. Bryan said that he agreed with the comments on the importance of stability in this situation. However, he felt there had been an adequate demonstration that the Committee did not get stability for a on the basis of stability of free reserves or some Treasury financing that sort. Stability could be gotten in the market on a rate thing of is done on a rate basis, not on reserves. basis because financing the suggestion that some of the Mr. Bryan also referred to by a reduction in reserve would be needed be provided reserves that reasons why he believed the System might requirements, and he stated that presented itself to do something do well to take every opportunity
in the way of bringing requirements down to the statutory minimum. Chairman Martin stated that there was a good deal to what Mr. Bryan said but that in his judgment a reduction in reserve re quirements should not be made in connection with the Treasury refund ing. There was a problem of whether such action would be interpreted as an overt change of policy, Chairman Martin said, and his judgment was that the most opportune time to consider a reduction would be in connection with the Treasury's cash offering. He did not know whether the System would wish to change reserve requirements at that time but it should study the question and if a change were to be made, it could state openly and frankly the purpose of the reduction. Mr. Szymczak said that some of the instruments of credit were largely psychological in the interpretations placed upon them by the public. A reduction in reserve requirements at a time when a re strictive monetary policy was being pursued would almost inevitably confuse the public. One question was whether this was the time when the System wished to confuse the public. he agreed basically with the views Chair Mr. Treiber said that would be a mistake to reduce expressed. He thought it man Martin had this time. Generally speaking a change in reserve requirements at as a symbol of a is recognized by the public reserve requirements in the discount rate. more so than a change change in credit policy, this time that the to send up a signal at It would not be desirable in reserve require it would a change interpret as was likely to public ments.
Chairman Martin said that he hoped the Committee could get away from the use of net borrowed reserves in its discussions. How ever, if net borrowed reserves were suddenly to rise to the projected $750 million level, such a figure would attract a great deal of atten tion that a more modest figure would not attract. It would be unwise to permit the level to rise to anything like that figure because of the interpretations that would be put on it, particularly if a strike in the steel industry should take place. He then suggested that, un less there were further comments on the policy to be followed during the next three weeks the existing directive to the New York Bank be approved without change. Thereupon, upon motion duly made and seconded, the Committee voted unanimously to direct the Federal Reserve Bank of New York until otherwise directed by the Com mittee: (1) To make such purchases, sales, or exchanges (in cluding replacement of maturing securities, and allowing maturities to run off without replacement) for the System open market account in the open market or, in the case of maturing securities, by direct exchange with the Treasury, as may be necessary in the light of current and prospective economic conditions and the general credit situation of the a view (a) to relating the supply of funds in country, with the market to the needs of commerce and business, (b) to developments in the interest of restraining inflationary sustainable economic growth while taking into account any in the economy, and (c) to the deflationary tendencies account; provided that the administration of the practical in the System account of securities held aggregate amount or sale of securi commitments for the purchase (including this date, other than at the close of ties for the account) indebtedness purchased certificates of special short-term accommodation of the to time for the temporary from time
Treasury, shall not be increased or decreased by more than $1 billion; (2) To purchase direct from the Treasury for the account of the Federal Reserve Bank of New York (with discretion, in cases where it seems desirable, to issue participations to one or more Federal Reserve Banks) such amounts of special short-term certificates of in debtedness as may be necessary from time to time for the temporary accommodation of the Treasury; provided that the total amount of such certificates held at any one time by the Federal Reserve Banks shall not exceed in the aggregate $500 million; Treasury from the System To sell direct to the (3) account for gold certificates such amounts of Treasury securities maturing within one year as may be necessary from time to time for the accommodation of the Treasury; provided that the total amount of such securities so sold shall not exceed in the aggregate $500 million face amount, sales shall be made as nearly as may be practicable and such at the prices currently quoted in the open market. Mr, Sproul's suggestion, made prior Chairman Martin referred to memorandum prepared at the York, that a copy of the to his leaving New of September 29, 1955 en of New York under date Federal Reserve Bank of the Debt, and Credit Management, the Structure titled "Notes on Debt along with the memo the Treasury for consideration be sent to Policy" of April 10, 1956, on Mr. Riefler under date randum prepared by Debt. Chairman Short-Dated Federal the Accord with Experience Since well to let be just as it would that he thought on to say Martin went wish to trans would not he although the memorandum, have the Treasury of the of all members the endorsement bearing it as a memorandum mit on which raised questions view it in his since Committee Open Market the memorandum that therefore, He suggested, not agreement. there was at the as one prepared the Treasury of to the Secretary be transmitted
Federal Reserve Bank of New York and distributed to members of the Federal Open Market Committee by Mr. Sproul, who had suggested that a copy be furnished to the Treasury in order that it might have the benefit of the paper. Mr. Treiber stated that he thought this would be a good way to proceed, that the memorandum represented "thinking out loud", and that to whatever extent it might be helpful it seemed desirable to make it available to the Treasury without the endorsement of the Open Market Committee. It was understood that the pro cedure suggested by Chairman Martin would be followed. Secretary's note: Chairman Martin transmitted a copy of the memorandum referred to above to Secretary of the Treasury Humphrey under date of June 27, 1956. Chairman Martin noted that the proposal made by the New York it be authorized to engage in swaps in Treasury bills, Bank that originally suggested in Mr. Sproul's memorandum of May 3, 1956, had for discussion at this meeting. He said been placed on the agenda unable to attend this meeting held rather that Mr. Robertson who was and that in view of the lack of pressure firm views on this matter it over until a seem desirable to carry a decision it would for might be present. when Mr. Robertson meeting with this There was agreement suggestion.
Chairman Martin noted that the next meeting of the Committee would be held on Tuesday, July 17, In response to a question, Mr. Treiber commented briefly on the status of the proposed section 13b loan to Studebaker-Packard Corporation, referred to at the meeting held on June 5, 1956. Thereupon the meeting adjourned. Secretary
Also: Record of Policy Actions