August 21, 1962 FOMC Minutes

FOMC minutes

The letter stated that an early answer to the Committee's question would be appreciated. Copies of Congressman Patman's letter and of the galley proof of the Joint Committee Print had been reproduced, and they were sent to the members of the Open Market Committee at Chairman Martin's request on August 16, 1962. In introducing a discussion of the type of reply that the Open Market Committee might make to Congressman Patman, Chairman Martin noted that the question presented in the letter gave rise to a number of related issues that warranted serious consideration. Among other things, Chairman Martin referred to questions that had been raised over a period of time concerning the adequacy of the policy record of the Federal Open Market Committee as published in the Board's Annual Report each year, in which connection he noted that the adequacy of such record for the year 1960 had been challenged at the hearings held by the Joint Economic Committee in following which Congressman Patman requested that the Open June 1961, full minutes for the year 1960 be made available to the Market Committee's Chairman Martin also pointed out that the ques Joint Economic Committee. adequacy of the policy record was closely related to the continuing tion of efforts of the Open Market Committee to devise the most suitable form of to the Federal Reserve Bank of New York. policy directive to another phase of the matter, Chairman Martin recalled Turning that on various occasions, once only recently, the Open Market Committee had given consideration to the possibility of publication in full of the

Committee's minutes for some past period. Thus far, he noted, that question had not been resolved. He did not propose that it be reopened at today's Committee meeting, but it should have further consideration. In the discussion that followed, comments were made to the effect that the short time available since distribution to the Committee members of the Joint Committee Print had not permitted careful study of the document by the Committee members. It was noted, also, that the galley proof referred at one point to a final chapter of the report that was not contained in the copy received by Chairman Martin from Congressman Patman. The suggestion was made, therefore, that it would seem desirable to ascertain whether such a final chapter was proposed to be included in the Joint Committee Print; and that, if so, it would seem appropriate for such chapter to be made available to the Open Market Committee for review before reply was made to Congressman Patman's letter. a substantive foregoing and other considerations, it was In view of the suggested that Chairman Martin make an interim reply to Congressman out that more time was required Patman, in which it would be pointed question presented in Mr. Patman's letter to consider carefully the Open Market Committee had con and that, in the circumstances, the desirable to carry over that question until cluded that it would be 11, 1962, following which the its next meeting, to be held on September the Joint Committee of its views. The Open Market Committee would advise the Joint Committee's plan to include letter would also inquire concerning chapter in the Print, with the statement that it would be an additional

helpful to the members of the Open Market Committee, if the Joint Com mittee planned to include such a chapter, to have an opportunity to review the galley proof thereof. At the conclusion of the discussion, it was the consensus that Chairman Martin should make an interim reply to Congressman Patman along the lines that had been suggested. It was understood that between this date and the date of the next Open Market Comittee meeting, scheduled for Tuesday, September 11, the members of the Open Market Committee would give further study to the question presented in Congressman Patman's letter and to the related questions of Open Market Committee practice and procedure raised thereby, with a view to deciding at the September 11 meeting what type of further reply should be made to Mr. Patman. In this connection, Chairman Martin noted that in the interim members of the Committee could, if they wished, submit comments with regard to various phases of the matter. Secretary's Note: Pursuant to the fore going understanding, the following letter was sent by Chairman Martin to Congressman Patman under date of August 21, 1962: "This refers to your letter of August 14, 1962, trans mitting a copy of a proposed Joint Committee Print entitled 'How Policies of the Federal Reserve System are Determined' and quoting a resolution adopted by your Committee to the effect that this Print be submitted to the Chairman of the of the Federal Reserve System with the Board of Governors your Committee be allowed 'to make it public.' request that "In my letter of July 21, 1961, transmitting to your Com mittee the minutes of the Federal Open Market Committee for 1960, there were set forth in some detail the reasons for which the Open Market Committee is convinced that the public interest would not be served by publication in whole or in part of

"detailed minutes of meetings of the Committee. The question whether it would be in the public interest to publish the Joint Committee Print which purports to contain an analysis and con densation of those minutes obviously involves considerations that require careful study by the members of the Open Market Committee. "Upon receipt of your letter, I immediately had the copy of the document transmitted by you reproduced and distributed by air mail to each member of the Open Market Committee. However, the members of the Committee did not receive copies of the in time for more than cursory reading before the regular Report Committee today (August 21, 1962). meeting of the Open Market of Chapter I of the Report "Moreover, the last paragraph appears to indicate that a last chapter of the Report has the highlighting 'the main points brought out by the purpose of minutes with respect to the actions of the Committee in 1960,' and of briefly discussing 'them from the point of view of the a more effective monetary policy.' Yet, the Joint achievement of form enclosed with your letter does not Committee Print in the include such a final chapter. If it is your Committee's plan to a chapter in the proposed Print, it would be helpful include such Open Market Committee also to have an to the members of the to review the galley proof of that chapter. opportunity here indicated, the Open Market Committee "For the reasons today concluded that it would be desirable to at its meeting until its next meeting, to be held on September 11, carry over in your letter concerning general publication the question raised Committee Print. Promptly follow of the proposed Joint Economic the Committee's views." will be advised of that meeting, you ing Federal Open Market next meeting of the was agreed that the It Tuesday, September 11, 1962. Committee would be held on meeting then adjourned. The Secretary