FOMC Minutes

Meeting of Federal Open Market Committee November 14, 1967 MINUTES OF ACTIONS A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D. C., PRESENT: on Tuesday, November 14, 1967, at 9:30 a.m. Mr. Martin, Chairman Mr. Hayes, Vice Chairman Mr. Brimmer Mr. Daane Mr. Francis Mr. Maisel Mr. Mitchell Mr. Robertson Mr. Scanlon Mr. Sherrill Mr. Swan Mr. Wayne Messrs. Ellis and Hickman, Alternate Members of the Federal Open Market Committee Messrs. Bopp, Clay, and Irons, Presidents of the Federal Reserve Banks of Philadelphia, Kansas City, and Dallas, respectively Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Holland, Secretary Sherman, Assistant Secretary Kenyon, Assistant Secretary Broida, Assistant Secretary Molony, Assistant Secretary Hackley, General Counsel Brill, Economist Hersey, Associate Economist Holmes, Manager, System Open Market Account Coombs, Special Manager, System Open Market Account Mr. Sammons, Associate Director, Division of International Finance, Board of Governors -2 11/14/67 Messrs. Kimbrel and Strothman, First Vice Presidents of the Federal Reserve Banks of Atlanta and Minneapolis, respectively By unanimous vote, the minutes of actions taken at the meeting of the Federal Open Market Committee held on October 24, 1967, were approved. The memorandum of discussion for the meeting of the Federal Open Market Committee held on October 24, 1967, was accepted. By unanimous vote, and subject to a determination by Chairman Martin that such actions were in accordance with the position of the U.S. Government in the current international nego tiations concerning sterling, the Committee (a) approved an increase from $200 million to $300 million equivalent in the limit on System Account holdings of sterling purchased on a covered or guaranteed basis in terms of the dollar under agreement with the Bank of England; (b) approved an increase from $200 million to $350 million equivalent in the limit on outstanding System Account forward commitments to deliver foreign currencies to the Stabilization Fund, and thereby also effectively increased by a maximum of $150 million equivalent the amount of foreign currencies that could be held spot or purchased forward for the purpose of fulfilling outstanding System Account forward commitments; and (c) authorized forward commitments by the System Account to deliver to the Stabilization Fund foreign currencies in which the U.S. Treasury did not have outstanding indebtedness. 11/14/67 -3 In consequence of the foregoing action, and effective as of the date of the determination by Chairman Martin specified therein, the necessary amendments to paragraphs 1B(3) and 1C(1) of the authorization for System foreign currency operations were approved unanimously. With these amendments, on such a determination the affected paragraphs would read as follows: 1B(3). Sterling purchased on a covered or guaranteed basis in terms of the dollar, under agreement with the Bank of England, up to $300 million equivalent. * 1C(1). * Commitments to deliver foreign currencies to the Stabilization Fund, up to $350 million equivalent. Secretary's Note: The amendments to paragraphs 1B(3) and 1C(1) of the authorization described above became effective on November 21, 1967, and November 22, 1967, respectively, upon determinations by Chairman Martin that such actions were in accordance with the position of the U.S. Government. By unanimous vote, the System open market transactions in foreign currencies during the period October 24 through November 13, 1967, were approved, ratified, and confirmed. By unanimous vote, renewal for a period of twelve months of the $100 million basic swap arrangement and the $50 million supplementary arrangement with the National Bank of Belgium, both maturing December 22, 1967, and the consolidation of the two into a single arrangement, were approved. 11/14/67 By unanimous vote, renewal for a period of twelve months of the $400 million swap arrangement with the German Federal Bank, maturing December 15, 1967, was approved. By unanimous vote, renegotiation of the System's swap arrangements with the Bank for International Settlements and the central banks of Austria, Canada, Denmark, England, Japan, Mexico, Norway, Sweden, and Switzerland, to arrange for lines having twelve-month periods and December maturities, with no change in the size of the lines, was approved. By unanimous vote, the Federal Reserve Bank of New York was authorized and directed, until otherwise directed by the Committee, to execute transactions in the System Account in accordance with the following current economic policy directive: The information reviewed at this meeting indi cates that, while the direct and indirect effects of strikes have been retarding activity in some areas of the economy, prospects still favor more rapid economic growth in the months ahead. Although prices of farm products and foods have declined recently, upward pressures persist on industrial prices and costs. While there recently have been further inflows of liquid funds from abroad through foreign branches of U.S. banks, the balance of payments continues to reflect a substantial underlying deficit. Bank credit expansion has continued large. The volume of new private security issues has expanded further and interest rates remain under upward pressure,reflect ing in part increased doubts in financial markets concerning enactment of the President's fiscal program. In this situation, it is the policy of the Federal Open Market Committee to foster financial 11/14/67 conditions, including bank credit growth, conducive to sustainable economic expansion, recognizing the need for reasonable price stability for both domestic and balance of payments purposes. To implement this policy, System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining about the prevailing conditions in the money market; but opera tions shall be modified as necessary to moderate any apparent tendency for bank credit to expand significantly more than currently expected. The following members of the staff entered the meeting: Messrs. Baughman, Craven, Jones, and Koch, Associate Economists Mr. Fauver, Assistant to the Board of Governors Mr. Reynolds, Adviser, Division of International Finance, Board of Governors Mr. Axilrod, Associate Adviser, Division of Research and Statistics, Board of Governors Miss Eaton, General Assistant, Office of the Secretary, Board of Governors Miss McWhirter, Analyst, Office of the Secretary, Board of Governors Messrs. Eisenmenger, Link, Eastburn, Mann, Taylor, Tow, and Green, Vice Presidents of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Atlanta, Kansas City, and Dallas, respectively Mr. Monhollon, Assistant Vice President, Federal Reserve Bank of Richmond Mr. Geng, Manager, Securities Department, Federal Reserve Bank of New York Mr. Kareken, Consultant, Federal Reserve Bank of Minneapolis By unanimous vote, the open market transactions in Government securities, agency obligations, and bankers' acceptances during the period October 24 through November 13, 1967, were approved, ratified, and confirmed. 11/14/67 -6 It was agreed that the next meeting of the Federal Open Market Committee would be held on Tuesday, December 12, at 9:30 a.m. The meeting adjourned. Secretary 1967,

Federal Reserve (1967, November 13). FOMC Minutes. Fomc Minutes, Federal Reserve. https://whenthefedspeaks.com/doc/fomc_minutes_19671114

@misc{wtfs_fomc_minutes_19671114,
  author = {Federal Reserve},
  title = {FOMC Minutes},
  year = {1967},
  month = {Nov},
  howpublished = {Fomc Minutes, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/fomc_minutes_19671114},
  note = {Retrieved via When the Fed Speaks corpus}
}