July 6, 1960 FOMC Minutes

FOMC minutes

memorandum were made, the principal concern at the time was with getting the statistical reporting program started and no action was taken on them. Chairman Martin noted that the matter of devising standardized accounting practices and reports involved difficult problems. He sug gested, however, that the Committee might wish to ask the Steering Group to explore the matter. This group, which would include Messrs. Young and Larkin and someone designated by the Treasury to replace Mr. Mayo, who had resigned from the Treasury staff, would be asked to bring back a recom mendation for the consideration of the Committee. The Chairman then turned to Mr. Rouse, and the latter said he would like to reiterate his comments on the subject earlier in the year. As far as data were concerned, the Desk was getting audited reports at from each nonbank dealer. From the credit least on an annual basis there was no problem. The Desk knew the condition standpoint, therefore, had been no problem with which and in all the years there of the dealers, did not know for what circumstances, he not deal. In the the Desk could be needed by the Desk. information might reason additional that would be some of the difficulties Mr. Rouse then described for the use of all Government standardized reports involved in developing System had no mandate out that the He also pointed securities dealers. a type of infor this was matter. Conceivably, Congress on this from the to have for use in responding to mation that the Treasury might like by Congressional sources, but questions that might be raised certain

there was a question in his mind regarding the propriety of undertaking a program such as had been suggested. Mr. Hayes said he had a good deal of sympathy with the view that Mr. Rouse had expressed. He could understand that the Treasury and the Federal Reserve might be in a stronger position to refute loose statements if composite figures for Government securities dealers were available, but he was impressed by the difficulties that Mr. Rouse had mentioned in developing standardized practices that would encompass the many diverse activities of the dealer group, and also he was disturbed about the interference in an area of free enterprise that would be involved in developing a system of standardized practices. If dealing in Government securities was as profitable as some were suggesting, he felt that it would be obvious that there would be more than seventeen Government securities dealers. In view of the burden of reporting that the System had placed on Government securities dealers recently, he felt that it to make additional reporting requests at this time, would be unwise particularly in an area where dealer reaction would be apt to be far of course, would not preclude the less sympathetic. These factors, from asking the Steering Group to look into the problem. Committee that the Steering Group had done a good Chairman Martin commented and that this was a loose statistical program together job in putting the that the Committee request was no objection, he proposed end. If there

the group, which would include a person designated by the Treasury to replace Mr. Mayo, to explore the matter further, with the understanding that a memo-. randum would be brought back to the Committee for consideration. There being no objection, it was agreed to proceed in the manner suggested by the Chairman. As an addendum to the foregoing discussion, Mr. Young noted that the Douglas Subcommittee last year sent rather elaborate forms to the Government securities dealers and obtained certain data covering a period of ten years. The Subcommittee now had obtained two university men for and had assigned them to analyze the data. It was understood the summer to submit a report based on their analysis later this that they were summer. meeting of the Federal Open Market It was agreed that the next on Tuesday, July 26, 1960, at 10:00 a.m. Committee would be held to the usual three-week noted that according Chairman Martin would be held on August meetings of the Committee schedule, succeeding the meeting which however, that 6, 1960. He suggested, 16 and September instead on September 13, on September 6 be held would normally be held meetings in the and August 16 at the July 26 subject to review 1960, desirability of any change. might indicate the of developments that light it was understood and with this suggestion, There was agreement Federal Reserve of the of Presidents of the Conference that a meeting 12, with a for Monday, September tentatively scheduled Banks would be

meeting of the Board and the Presidents following the Open Market Committee meeting on Tuesday, September 13. The meeting then adjourned. Secretary