December 15, 1964 FOMC Minutes

FOMC minutes

the money supply, while seeking to avoid the emergence of inflationary pressures and to strengthen the international position of the dollar. To implement this policy, and recognizing that international uncertainties and year-end seasonal pressures continue to require a larger than usual degree of flexibility in operations, System open market operations shall be conducted with a view to about the same conditions in the money maintaining market as currently prevail. Votes for this action: Messrs. Martin, Balderston, Hickman, Mitchell, Robertson, Shepardson, Shuford, Swan, Wayne, and Treiber. Vote against this action: Mr. Mills. Mr. ills said that he dissented from this action for reasons given in the statement he had made earlier in the meeting. Chairman Martin then called for an expression of views on Mr. Clay's suggestion that the question.; and responses prepared by the staff for today's meeting be incorporated in the minutes. There was general agreement with this suggestion. It also was agreed that the substance of these staff materials, and of the members' views on them as expressed in the go-around, should be included in the policy record entry. In this connection, Mr. Mitchell said it would be helpful if a draft entry was available in advance of the next meeting. Mr. Young observed that the entry for today's meeting would be more difficult to draft than usually was the case but that the staff would endeavor to comply with Mr. Mitchell's suggestion.

It was agreed that the next meeting of the Committee would be held on Tuesday, January 12, 1965, at 9:30 a.m. The Chairman proposed that Committee members plan to devote the afternoon of that day, after adjournment of the meeting, to a general discussion of the desirability of quantification in the Committee's directives. No objections were made to this proposal. Thereupon the meeting adjourned. Secretary

Attachment A CONFIDENTIAL (FR) December 14, 1964 Draft language for current economic policy directive for consideration by the Federal Open Market Committee at its meeting on December 15, 1966. First Paragraph It is the Federal Open Market Committee's current policy to facilitate continued expansion of the economy by accommodating moderate growth in the reserve base, bank credit, and the money supply, while seeking to avoid the emergence of inflationary pressures and to strengthen the international position of the dollar. This policy takes into account the effects on the dollar of market uncertainties about the pound sterling and the persistence of sizable deficit in the U.S. balance of payments: the continued domestic expansion, currently receiving additional stimulus from recent and threatened work stoppages; the persistent margin of underutilized manpower; the upward drift of selected industrial commodities; and the continued prices for expansion of bank credit and money. Second Paragraph Alternative A To implement this policy, and recognizing that international uncertainties and year-end seasonal pressures continue to require a larger than usual degree of flexibility in operations, System open market operations shall be conducted with a view to accommodating expansion in aggregate bank reserves, while maintaining moderate conditions in the money market as currently prevail. about the same

Alternative B To implement this policy, and recognizing that international uncertainties and year-end seasonal pressures continue to require a larger than usual degree of flexibility in operations, System open market operations shall be conducted with a view to maintaining about the same conditions in the money market as currently prevail, while accommodating moderate expansion in aggregate bank reserves.