September 11, 1962 FOMC Minutes

FOMC minutes

In explanation of his abstention, Mr. Mills said he was con cerned that the sending of a letter along the lines that had been agreed upon would cause irritation in the Congress, particularly insofar as it made comparisons between the Open Market Committee and the Executive Branch of the Government, the courts, and committees of Congress. He did not feel that these comparisons were germane. In his view the record of the past three weeks provided an answer to the problem: there was a flurry of discussion when the proposed Joint Committee Print was leaked to the press, but the discussion appeared to have died away subsequently. If the Open Market Committee had agreed to the publication of the Joint Committee Print, expressing regret that such action was being taken and that Congressman Patman had not observed the Committee's request that the 1960 minutes be held confidential, Mr. Mills felt that the Open Market Committee would have been in a better position. If the publica tion of the Committee Print had produced serious challenges to the Committee's 1960 actions, which he doubted, the Committee would have been in a position to answer those challenges on its own ground and against the record of the minutes. Secretary's Note: There follows the text of the letter that was sent to Congressman Patman over Chairman Martin's signature under date of September 11, 1962, pursuant to the action taken by the Federal Open Market Committee at today's meeting:

"This is in further response to your letter of August 14, 1962, in which you informed me that the Joint Economic Committee is considering publication of a 'condensed report' evolved from the 1960 minutes of the Federal Open Market Committee. Your letter asks for my position regarding the publication of this document. After carefully considering your letter and the galley-proof version of the report that you sent with your letter, the Federal Open Market Committee today concluded that publication of the proposed report would not be in the public interest, a conclusion with which I agree, and with which I hope your Committee will agree when it reaches its final decision as to whether it will publish this document. "In weighing the considerations of public policy involved in your Committee's decision, it should be borne in mind that a complete record of all policy actions taken by the Federal Open Market Committee is maintained by the Board of Governors and is set out in full each year in the Board's Annual Report to Congress, as required by the Federal Reserve Act. Included in the report thus made public are: (1) a record, by name, of all votes cast by each member of the Committee in connection with the determination of open market policies; (2) summaries of the economic and financial developments and conditions taken into account in arriving at policy actions; (3) state ments of the reasons underlying the actions of the Committee; and (4) statements of the reasons underlying dissents, when there are dissents. "The statute does not, of course, require publication of the minutes of meetings of the Federal Open Market Committee; indeed, it does not prescribe the form of such minutes as may be kept by the Committee. It has been the practice of the Committee, nevertheless, to maintain full, detailed, often nearly verbatim minutes of its discussions and debates prior determinations of policy actions. In distinction to final from policy actions, for which the complete record has been stated, the discussions covered in the minutes published as have never been made public by the Open Market Committee. In that respect, the Committee has followed a principle long established and universally accepted in the public serviceby the Judicial and the Executive branches of the Government, and by the Committees of Congress as well, including your Committee, in respect to their own operations. the United States Supreme Court nor any other "Neither or State, makes public any record of discus court, Federal sions in chambers preceding the announcement of a decision,

although the courts do announce the underlying reasons therefor and the statements of dissents, if any, as does the Open Market Committee. The same privacy of pre-decision discussions extends to the jury room, for reasons that the late Mr. Justice Benjamin Cardozo of the United States Supreme Court put this way: 'Freedom of debate might be stifled and independence of thought checked if jurors were made to feel that their arguments and ballots were to be freely published to the world.' "The Executive Branch of the Government likewise dis tinguishes in respect to publication between the conversations taking place at a meeting and the decisions reached at it andin contrast to what the Open Market Committee has done in this instance--has declined many times, from the days of President Washington down to the present, to make the records of pre decision discussions at meetings in the White House or various departments or agencies available even to the Congress. As it was explained on one occasion by President Eisenhower, 'It is essential to effective administration that . . . the broadest range of individual opinions and advice be available in the formulation of decisions and policy . .. . The disclosure of conversations, communications or documents embodying or concern and advice can accordingly tend to impair or ing such opinions inhibit essential reporting and decision-making processes ... .' "The Congress, itself, in the Legislative Reorganization the need for privacy in working sessions of Act, recognized Committees, by excepting 'executive sessions for Congressional up bills or for voting' from the general requirement marking that Committee hearings be open to the public. Indeed, the committee meeting may be closed to same Act provides that any the public upon a majority vote of the members of the committee, as in fact they sometimes are. As a matter of practice, minutes of executive sessions of Congressional Committees are not made available to the public. the public service, the principle has been "Thus, throughout recognized that, in the absence of anything approaching widely or malfeasance in office--and no question as criminal conduct to either is involved here--internal deliberations (intra opinions, recommendations, tentative organizational advisory plans and proposals, minutes of committee meetings, oral advice, as distinct from official actions, must, in the et cetera), held confidential for the purpose of public interest, be candor on the part of officials and employees in encouraging speaking their minds freely and uninhibitedly. you have had prepared contains over one "The report that excerpted from the Federal Open Market Com hundred quotations mittee minutes, some of them of considerable length, plus accounts of conversations in literal selective but extensive or lightly paraphrased form. These quotations and paraphrasings

"are clearly inconsistent with our request, made in my letter of July 21, 1961, turning over the minutes to you, that these minutes not be disclosed 'in whole or in part.' Moreover, your document does not reveal a single policy action by the Open Market Committee that was not recorded in the Annual Report of the Board of Governors for 1960, along with the economic circumstances of the action, the votes of the Committee members, and the underlying reasons why the action was taken. "There is no question here of a denial of information to the Congress: your request for opportunity to examine the Market Committee was granted more than a minutes of the Open year ago. Neither is there question of hostility to criticism nor of unwillingness to improve upon the presentation of the policy record in the Board's Annual Report; the Committee's in fact is earnestly striving now to effectuate Committee further improvement. of your Committee in this instance will "The decision implications for the Judicial and Executive branches of have other governmental agencies, and the commit the Government, tees of Congress, including your Committee. It seems to us that to publicize to the world without a substantial time pre-decision discussions and conversations in any lapse the of these meetings would serve to institute a procedure--one either in weakening internal de virtually certain to result sake of the public record or in weakening the bate for the sake of the debate--that would do public mis record for the chief rather than public good. "For the reasons stated, the Federal Open Market Committee believes that to publish at this time the minutes of the preceding its 1960 actions--in whole or internal discussions of the proposed report--would be contrary to the in the form We therefore repeat our request, made in public interest. transmitting the 1960 minutes to my letter of July 21, 1961, Committee, that you hold their contents in confidence." your It was agreed that the next meeting of the Federal Open Market held on Tuesday, October 2, 1962. Committee would be The meeting then adjourned. Secretary