FOMC Minutes

Meeting of Federal

Open Market

November 27,

Committee

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.,

on Monday, November 27,

1967, at 9:30 a.m.,

at the call of Chairman Martin.

PRESENT:

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

1/

Martin, Chairman1/

Brimmer

Francis

Maisel

Mitchell

Robertson

Scanlon

Sherrill

Swan

Wayne 1/

Messrs. Ellis, Hickman, and Galusha, Alternate

Members of the Federal Open Market Committee

Mr. Irons, President of the Federal Reserve Bank

of Dallas

Mr. Holland, Secretary

Mr. Sherman, Assistant Secretary

Mr. Kenyon, Assistant Secretary

Mr. Broida, Assistant Secretary

Mr. Hackley, General Counsel

Mr. Brill, Economist

Messrs. Baughman, Garvy, Hersey, Koch, Partee,

and Solomon, Associate Economists

Mr. Holmes, Manager, System Open Market Account

1/

Left the meeting at the point indicated.

11/27/67

Mr. Cardon, Legislative Counsel, Board of

Governors

Mr. Fauver, Assistant to the Board of Governors

Mr. Williams, Adviser, Division of Research and

Statistics, 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. Bilby, Eastburn, Mann, Brandt, and Tow,

Vice Presidents of the Federal Reserve Banks

of New York, Philadelphia, Cleveland,

Atlanta, and Kansas City, respectively

Mr. MacLaury, Assistant Vice President, Federal

Reserve Bank of New York

Mr. Deming, Manager, Securities Department,

Federal Reserve Bank of New York

Mr. Anderson, Financial Economist, Federal

Reserve Bank of Boston

Mr. Kareken, Consultant, Federal Reserve Bank

of Minneapolis

By unanimous vote, the System open market transactions in

foreign currencies during the period November 14 through 26, 1967,

were approved, ratified, and confirmed.

By unanimous vote, paragraphs 1B(3) and 1C(3) of the

authorization for System foreign currency operations were amended,

effective immediately, to read as follows:

Sterling purchased on a covered or

IB(3).

in terms of the dollar, under

basis

guaranteed

agreement with the Bank of England, up to $200

million equivalent.

1C(3). Other forward commitments to deliver

foreign currencies, up to $550 million equivalent.

11/27/67

By unanimous vote, the table contained in paragraph 2 of

the authorization for System foreign currency operations was amended,

effective immediately, to read as follows:

Foreign bank

Austrian National Bank

National Bank of Belgium

Bank of Canada

National Bank of Denmark

Bank of England

Bank of France

German Federal Bank

Bank of Italy

Bank of Japan

Bank of Mexico

Netherlands Bank

Bank of Norway

Bank of Sweden

Swiss National Bank

Bank for International Settlements

System drawings in Swiss francs

System drawings in authorized European

currencies other than Swiss francs

Amount of

Arrangement

(millions of

dollars equivalent)

100

225

500

100

1,350

100

400

750

450

130

225

100

200

250

250

600

Secretary's note: The effect of the action

indicated above was to change the amounts

of the reciprocal currency arrangements

with (1) the National Bank of Belgium,

from $150 million equivalent to $225 million

equivalent; (2) the Bank of Italy, from

$600 million equivalent to $750 million

equivalent; (3) the Netherlands Bank,

from $150 million equivalent to $225

million equivalent; (4) the Bank of Sweden,

from $100 million equivalent to $200

million equivalent; and (5) the Bank for

International Settlements (the arrangement

providing for System drawings in authorized

European currencies other than Swiss francs)

from $300 million equivalent to $600 million

equivalent.

11/27/67

By unanimous vote, the table contained in paragraph 2 of

the authorization for System foreign currency operations was amended

to change (1) the amount of the reciprocal currency arrangement with

the Bank of England from $1,350 million equivalent to $1,500 million

equivalent; (2) the amount of the arrangement with the German Federal

Bank from $400 million equivalent to $750 million equivalent; and

(3) the amount of the arrangement with the Bank of Japan from $450

million equivalent to $750 million equivalent, in each case to

become effective upon a determination by Chairman Martin that

the negotiations looking toward such change had been satisfactorily

completed.

Secretary's Note: Chairman Martin determined

that negotiations had been satisfactorily com

pleted with respect to the increases described

above in the reciprocal currency arrangements

with (1) the Bank of England, on November 28,

1967; (2) the Bank of Japan, on November 28,

1967; and (3) the German Federal Bank, on

November 30, 1967. Also on November 30, 1967,

Committee members approved a recommendation

by the Special Manager that the amount of the

reciprocal currency arrangement with the Bank

of Canada be increased from $500 million

equivalent to $750 million equivalent.

Accordingly, the table contained in para

graph 2 of the authorization for System

foreign currency operations was amended,

effective on the indicated dates, to give

effect to the indicated increases in the

four reciprocal currency arrangements.

Mr. Wayne left the meeting.

By unanimous vote, the open market transactions in Govern

ment securities, agency obligations, and bankers' acceptances during

11/27/67

-5

the period November 14 through 26, 1967, were approved, ratified,

and confirmed.

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 accord

ance with the following current economic policy directive:

System open market operations until the next

meeting of the Committee shall be conducted with a

view to facilitating orderly market adjustments to

the increase in Federal Reserve discount rates; but

operations may be modified as needed to moderate any

unusual pressures stemming from international financial

uncertainties.

Chairman Martin left the meeting in the course of the

discussion of the directive, after casting his vote.

It was agreed that the next meeting of the Federal Open

Market Committee would be held on Tuesday, December 12, 1967, at

9:30 a.m.

The meeting adjourned.

Secretary