April 18, 1961 FOMC Minutes

FOMC minutes

continue to be a special authorization, and if the Committee should change this special authorization the language that Mr. Rouse proposed could be dropped from the directive or modified in whatever way was Mr. Sherman noted that it would, of course, be necessary appropriate. for any change in wording of the directive in to explain the reasons the policy record to be published in the Board's Annual Report. Also, if this addition were made to the directive, Messrs. Allen and Robertson presumably would wish to be recorded as voting against the directive, at least as far as this portion was concerned. With reference to the last comment by Mr. Sherman, Mr. Robertson said he would wish to be recorded as voting against the directive for indicated, if Mr. Rouse's suggestion should be adopted, but the reason that he would prefer to leave only in that respect. Mr. Allen indicated the suggested language out of the directive. whether there was any opinion that Mr. Wayne raised the question or desirable from a legal standpoint, the suggested change was necessary However, Mr. Rouse again was no indication to such effect. and there in the directive would be for the stated that the proposed change any misunderstanding on the part of the auditors, purpose of avoiding in the purchasing and selling of and that the personnel engaged securities for the Account would like it, it would be possible to conform Mr. Robertson commented that with that of the policy of the special authorization the wording

4/18/6l -66 directive without incorporating in the policy directive the suggestion of Mr. Rouse, following which Mr. Hayes commented that the Committee might be reluctant to change the wording of the special authorization because it had taken action originally in that manner and since that time had twice renewed the special authorization on the same basis as far as the particular wording in question was concerned. Mr. Robertson observed that if the special authorization had been adequate for the period to date, it would appear that it might also be adequate from this point forward. Mr. Hayes then suggested that it might be advisable to afford opportunity to think further about the suggestion of the Committee an and to bring the matter up again at the next Committee meeting. Mr. Rouse After others indicated concurrence, Mr. Wayne suggested that before the next meeting there be distributed to the Committee a memorandum on the matter which would include a statement of the reasons why it was felt language such as proposed be incorporated in the policy desirable that directive. There was agreement with this suggestion, and it was understood that Messrs. Sherman, Hackley, and Rouse would prepare such a memorandum for the Committee. Committee authorized the Thereupon, the Bank of New York, between Federal Reserve meeting of the 1961, and the next April 18, the terms and limitations Committee, within issued at this meeting, to of the directive

acquire intermediate and/or longer-term U. S. Government securities of any maturity, or to change the holdings of such securities, in an amount not to exceed $500 million. Votes for this action: Messrs. Hayes, Balderston, Irons, King, Mills, Shepardson, Swan, and Wayne. Votes against this action: Messrs. Allen and Robertson. Mr. Hayes inquired of Mr. Rouse whether the latter had any further comments or questions in the light of the discussion at this meeting, and Mr. Rouse replied in the negative. It was agreed that the next meeting of the Federal Open Market Committee would be held on Tuesday, May 9, 1961. Secretary's Note: For the reason discussed at a brief meeting of the Board members and Presidents that followed the Open Market Committee meeting, it was agreed that the May 9 Committee meeting would be held at 9:00 a.m. It was pointed out that if Committee meetings were held at three-week intervals, the meeting after May 9 would fall on Tuesday, May 30, which would be a holiday at most Federal Reserve Banks. After which reference was made to preliminary arrangements discussion, during been made for meetings of the Presidents' Conference and the that had the period June 19-21, it was Trustees of the Retirement System during that meetings of the Open Market Committee would be tentatively agreed June 6, and Tuesday, June 20. scheduled for Tuesday, The meeting then adjourned. Assistant Secretary

Member Bank Reserves -Board Series Total (Monthly Averages of Daily Figures) Billions of Dollars March 1961 Millions of Dollars Trend Line: 19.273 Reserves Unadjusted March 1961.