October 12, 1965 FOMC Minutes

FOMC minutes

objection to the experiment he would hope that it would not involve much curtailment of the present scope of the green book. Mr. Mitchell said he thought the reason the questions had become sterile was that they often were not closely related to the issues that in fact most concerned the Committee in its discussion at the meeting. He was not sure whether the staff could predict accurately the issues the Committee would focus on, but if it was possible to dc so and to work analyses of those issues into the green book he would favor such a course. In his opinion the green book had an excessive amount of verbalization of figures that could be obtained from tables. But he thought it had established itself as an extremely useful document and he would not want to lose any of its valuable content. Also, he would favor an effort to make it available earlier than at present. the green book had been substan Mr. Hickman said he thought there was room for further its earlier form, but tially improved over uneven; some parts contained helpful improvement. It was somewhat He was a little concerned but some were less useful. analysis, and comments into incorporate the questions the proposal to about of materials on important result in the omission it; that might every time, such as be before the Committee subjects that should conditions. Since and prices, and international developments in GNP would work out well, that the proposed experiment he was not sure

he would favor an effort to bring the weaker parts of the green book up to the level of the most useful parts. Mr. Maisel said he thought the green book should be organized around a series of standard questions, standard tables, brief com mentaries, and analytical appendixes. Much of the material now presented in full paragraphs could be compressed to advantage into single sentences. He would hope that the analytical appendixes covering nonrecurrent subjects would continue. Mr. Galusha said he found the green book tremendously useful and hoped that it would not be curtailed materially. To the extent that the questions were related to the subjects that the Committee actually discussed they also had been highly useful to him and to his staff in preparing for the meetings. Their main value was in pinpointing emerging issues. Chairman Martin commented that he thought this discussion to the staff in working out new procedures. would be of some help might find it desirable to Brill noted that the staff Mr. with possible formats. spend some time in experimenting meeting of the Committee would It was agreed that the next 2, 1965, at 9:30 a.m. be held on Tuesday, November meeting of the Committee and Mr. Hayes noted that both this were holidays in some scheduled for days that the next meeting were

He said that he hoped in working out of the Reserve Districts. next year's schedule, the Secretariat would keep in mind the that were observed in the various Reserve Districts. holidays Thereupon the meeting adjourned. Secretary

ATTACHMENT A CONFIDENTIAL (FR) October 11, 1965 Drafts of Current Economic Policy Directive for Consideration by the Federal Open Market Committee at its Meeting on October 12, 1965 Alternative A (no change) The economic and financial developments reviewed at this meeting indicate that overall domestic economic activity has expanded further in a continuing climate of optimistic business sentiment and firmer financial conditions, and that our international payments have deficit on the "regular transactions" basis since midyear. been in it remains the Federal Open Market Committee's In this situation, to strengthen the international position of the dollar, current policy avoid the emergence of inflationary pressures, while accommodat and to ing moderate growth in the reserve base, bank credit, and the money supply. this policy, and taking into account the Treasury To implement System open market operations until the next financing schedule, meeting of the Committee shall be conducted with a view to maintaining about the same conditions in the money market as have prevailed since the preceding meeting. Alternative B (firming) The economic and financial developments reviewed at this indicate that overall domestic economic activity has expanded meeting business sentiment, and in a continuing climate of optimistic further our international payments have been in deficit on the "regular that since midyear. In domestic credit markets demands transactions" basis rates have been under some upward pressure. have been strong and interest Federal Open Market Committee's current In this situation, it is the international position of the tc move further to strengthen the policy of inflationary pressures, by dollar, and to counter the emergence of growth in the reserve base, bank moderating somewhat the pace credit, and the money supply. taking into account the Treasury To implement this policy, while operations until the next meeting schedule, System open market financing with a view to reinforcing the of the Committee shall be conducted that developed in September. in the money market firmer conditions