FOMC Minutes

Meeting of Federal Open Market Committee

October 29, 1968

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 Tuesday, October 29, 1968, at 9:30 a.m.

PRESENT:

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Martin, Chairman

Hayes, Vice Chairman

Brimmer

Daane

Galusha

Hickman

Kimbrel

Maisel

Mitchell

Morris

Robertson

Sherrill

Messrs. Bopp, Clay, Coldwell, and Scanlon,

Alternate Members of the Federal Open

Market Committee

Messrs. Heflin, Francis, and Swan, Presidents

of the Federal Reserve Banks of Richmond,

St. Louis, and San Francisco, respectively

Mr. Holland, Secretary

Mr. Sherman, Assistant Secretary

Mr. Kenyon, Assistant Secretary

Mr. Broida, Assistant Secretary

Mr. Molony, Assistant Secretary

Mr. Hackley, General Counsel

Mr. Brill, Economist

Messrs. Axilrod, Hersey, Kareken, Link,

Mann, Partee, Reynolds, Solomon, and

Taylor, Associate Economists

Mr. Holmes, Manager, System Open Market

Account

10/29/68

Mr. Coombs, Special Manager, System Open

Market Account

Messrs. Gramley and Williams, Advisers,

Division of Research and Statistics,

Board of Governors

Mr. Wernick, Associate Adviser, Division

of Research and Statistics, Board of

Governors

Mr. Keir, Assistant Adviser, Division of

Research and Statistics, Board of

Governors

Mr. Bernard, Special Assistant, Office of

the Secretary, Board of Governors

Miss Eaton, Open Market Secretariat

Assistant, Office of the Secretary,

Board of Governors

Messrs. Eisenmenger, Eastburn, Parthemos,

Baughman, Jones, Tow, Green, and Craven,

Vice Presidents of the Federal Reserve

Banks of Boston, Philadelphia, Richmond,

Chicago, St. Louis, Kansas City, Dallas,

and San Francisco, respectively

Mr. Meek, Assistant Vice President, Federal

Reserve Bank of New York

By unanimous vote, the minutes of actions taken at the

meeting of the Federal Open Market Committee held on October 8, 1968,

were approved.

The memorandum of discussion for the meeting of the Federal

Open Market Committee held on October 8, 1968, was accepted.

By unanimous vote, the System open market transactions in

foreign currencies during the period October 8 through 28, 1968, were

approved, ratified, and confirmed.

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By unanimous vote, renewal for further periods of one year

of the following swap arrangements, having the indicated amounts

and maturity dates, was approved:

Foreign bank

Amount of

agreement

(millions of

dollars)

Maturity of

latest authorized

renewal

Austrian National Bank

100

December 2, 1968

National Bank of Belgium

225

December 23,

1968

1,000

December 30,

1968

Bank of Canada

100

December 2,

1968

Bank of England

2,000

December 2,

1968

German Federal Bank

1,000

December 16, 1968

Bank of Italy

1,000

December 30, 1968

Bank of Japan

1,000

December 2,

National Bank of Denmark

1968

Bank of Mexico

130

December 2, 1968

Netherlands Bank

400

December 30, 1968

Bank of Norway

100

December 2,

1968

Bank of Sweden

250

December 2,

1968

Swiss National Bank

600

December 2, 1968

Bank for International

Settlements:

System drawings in Swiss

francs

System drawings in

authorized European

currencies other than

Swiss francs

1,000

December 2,

1968

December 2,

1968

10/29/68

By unanimous vote, the open market transactions in

Government securities, agency obligations, and bankers' acceptances

during the period October 8 through 28, 1968, were approved, rati

fied, and confirmed.

With Mr. Hayes dissenting, 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:

The information reviewed at this meeting suggests

that over-all economic expansion has moderated somewhat

from its very rapid pace earlier in the year, although

less than projected, and that upward pressures on prices

and costs are persisting. Market interest rates have

risen in recent weeks. Bank credit and time and savings

deposits have continued to expand rapidly, but savings

inflows to thrift institutions have remained moderate.

The money supply, after growing little on balance during

the summer, has increased in recent weeks. The U.S.

foreign trade balance and underlying payments position

continue to be matters of serious concern. In this

situation, it is the policy of the Federal Open Market

Committee to foster financial conditions conducive to

sustainable economic growth, continued resistance to

inflationary pressures, and attainment of reasonable

equilibrium in the country's balance of payments.

To implement this policy, while taking account of

the current Treasury financing, System open market

operations until the next meeting of the Committee shall

be conducted with a view to maintaining about the

prevailing conditions in money and short-term credit

markets; provided, however, that operations shall be

modified, to the extent permitted by the Treasury

financing, if bank credit expansion appears to be

exceeding current projections.

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It was agreed that the next meeting of the Committee would

be held on Tuesday, November 26, 1968, at 9:30 a.m.

The meeting adjourned.

Secretary