FOMC Minutes

Meeting of Federal Open Market Committee

March 21, 1972

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, March 21, 1972, at

9:30 a.m.

PRESENT:

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Mr.

Burns, Chairman

Hayes, Vice Chairman

Brimmer

Coldwell

Daane

Eastburn

MacLaury

Maisel

Mitchell

Robertson

Sheehan

Winn

Messrs. Francis, Heflin, Mayo, and Swan,

Alternate Members of the Federal Open

Market Committee

Messrs. Morris, Kimbrel, and Clay, Presidents

of the Federal Reserve Banks of Boston,

Atlanta, and Kansas City, respectively

Mr. Holland, Secretary

Mr. Broida, Deputy Secretary

Messrs. Altmann, Bernard, and Molony,

Assistant Secretaries

Mr. Hackley, General Counsel

Mr. Partee, Senior Economist

Mr. Axilrod, Economist (Domestic Finance)

Mr. Solomon, Economist (International Finance)

Messrs. Boehne, Bryant, Gramley, Green,

Hersey, Hocter, Kareken, and Link,

Associate Economists

Mr. Holmes, Manager, System Open Market Account

Mr. Coombs, Special Manager, System Open Market

Account

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Mr. O'Connell, General Counsel, Board of

Governors

Messrs. Keir, Pierce, Wernick, and

Williams, Advisers, Division of

Research and Statistics, Board of

Governors

Mr. Wendel, Chief, Government Finance

Section, Division of Research and

Statistics, Board of Governors

Miss Eaton, Open Market Secretariat

Assistant, Office of the Secretary,

Board of Governors

Messrs. Eisenmenger, Parthemos, Taylor,

Scheld, Andersen, and Tow, Senior Vice

Presidents, Federal Reserve Banks of

Boston, Richmond, Atlanta, Chicago,

St. Louis, and Kansas City, respectively

Mr. Debs, Vice President, Federal Reserve

Bank of New York

Mr. Lynn, Director of Research, Federal

Reserve Bank of San Francisco

Mr. Cooper, Assistant Vice President,

Federal Reserve Bank of New York

The Secretary reported

that advices had been received of

the election by the Federal Reserve Banks of members and alternate

members of the Federal Open Market Committee for the term of one

year beginning March 1,

1972; that it

appeared that such persons

were legally qualified to serve; and that they had executed their

oaths of office.

The elected members and alternates were as follows:

Alfred Hayes, President of the Federal Reserve Bank of

New York, with William F. Treiber, First Vice President

of the Federal Reserve Bank of New York, as alternate;

David P. Eastburn, President of the Federal Reserve Bank

of Philadelphia, with Aubrey N. Heflin, President of

the Federal Reserve Bank of Richmond, as alternate;

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Willis J. Winn, President of the Federal Reserve Bank of

Cleveland, with Robert P. Mayo, President of the

Federal Reserve Bank of Chicago, as alternate;

Bruce K. MacLaury, President of the Federal Reserve Bank

of Minneapolis, with Eliot J. Swan, President of the

Federal Reserve Bank of San Francisco, as alternate;

Philip E. Coldwell, President of the Federal Reserve Bank

of Dallas, with Darryl R. Francis, President of the

Federal Reserve Bank of St. Louis, as alternate.

By unanimous vote, the following officers of the Federal

Open Market Committee were elected to serve until the election of

their successors at the first meeting of the Committee after

February 28, 1973, with the understandings (1) that in the event

of the discontinuance of their official connection with the Board

of Governors or with a Federal Reserve Bank, as the case might be,

they would cease to have any official connection with the Federal

Open Market Committee; and (2) that insofar as the titles of the

positions to which they were elected differed from those hereto

fore specified in the Committee's By-Laws and Rules of Organization,

conforming changes were to be made in those documents:

Arthur F. Burns

Alfred Hayes

Robert C. Holland

Arthur L. Broida

Murray Altmann,

Normand R.V. Bernard,

and Charles Molony

Howard H. Hackley

David B. Hexter

J. Charles Partee

Stephen H. Axilrod

Robert Solomon

Chairman

Vice Chairman

Secretary

Deputy Secretary

Assistant Secretaries

General Counsel

Assistant General Counsel

Senior Economist

Economist (Domestic Finance)

Economist (International

Finance)

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Edward G. Boehne, Ralph C.

Bryant, Lyle E. Gramley,

Ralph T. Green, A.B. Hersey,

William J. Hocter, John H.

Kareken, and Robert G. Link

Associate Economists

Secretary's Note:

In consequence of the

foregoing action, the opening sentences of

Sections 2, 3, and 6 of Article II of the

Committee's By-Laws, and the first sentence

of Section 3 of the Committee's Rules of

Organization, were amended to read as follows:

By-Laws:

*

*

*

ARTICLE II. OFFICERS

Section 2. Secretary and Deputy and Assistant

Secretaries - At its first meeting on or after March 1

of each year, the Committee shall elect a Secretary

and one or more Deputy and Assistant Secretaries to

serve until the first meeting on or after March 1 of

the next year. . .

Section 3. Economists - At its first meeting on

or after March 1 of each year, the Committee shall

elect one or more Economists to serve until the first

meeting on or after March 1 of the next year. The

Committee shall also from time to time, as it may decide,

designate one or more of its elected Economists as

Senior or Associate Economists, or otherwise qualify

their titles. The Economists shall prepare for the

use of the Committee and present to it such informa

tion about business and credit conditions as will

assist the Committee in the determination of open

market policies, and shall perform such other duties

as the Committee may require.

*

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Section 6. Filling Vacancies - At any meeting the

Committee may fill any vacancy in the offices described

in this Article.

Rules of Organization:

SECTION 3 -

PERSONNEL

(a) Official Staff.-The official staff of the Federal

Open Market Committee includes its Secretary, Deputy

Secretary, and Assistant Secretaries, General Counsel and

Assistant General Counsel, and Senior Economist, Economists,

and Associate Economists, who perform the duties indicated

by their titles . . .

By unanimous vote, the Federal Reserve Bank of New York was

selected to execute transactions for the System Open Market Account

until the adjournment of the first meeting of the Federal Open Market

Committee after February 28, 1973.

By unanimous vote, Alan R. Holmes and Charles A. Coombs

were selected to serve at the pleasure of the Federal Open Market

Committee as Manager of the System Open Market Account and as

Special Manager for foreign currency operations for such Account,

respectively, it being understood that their selection was subject

to their being satisfactory to the Directors of the Federal Reserve

Bank of New York.

Secretary's Note: Advice subsequently

was received that Messrs. Holmes and

Coombs were satisfactory to the Board of

Directors of the Federal Reserve Bank of

New York for service in the respective

capacities indicated.

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By unanimous vote, the action of Committee members on

February 29, 1972, increasing from $2 billion to $3 billion the

limit on changes between Committee meetings in System Account

holdings of U.S. Government and Federal agency securities specified

in paragraph 1(a) of the continuing authority directive, was ratified.

By unanimous vote, the limit on changes between Committee

meetings in System Account holdings of U.S. Government and Federal

agency securities specified in paragraph 1(a) of the continuing

authority directive was reduced from $3 billion to $2 billion.

By unanimous vote, the action of Committee members on

March 7, 1972, suspending until close of business on March 21,

1972, the lower limit on repurchase agreement rates specified in

1/

paragraph 1(c) of continuing authority directive, was ratified.

By unanimous vote, the minutes of actions taken at the

meeting of the Federal Open Market Committee on January 11, 1972,

were approved.

The memoranda of discussion for the meetings of the Federal

Open Market Committee on January 11 and February 14, 1972, were

accepted.

By unanimous vote, the System open market transactions in

foreign currencies during the period February 15 through March 20,

1972, were approved, ratified, and confirmed.

1/ Messrs. Brimmer and Robertson dissented from the March 7

action. Having so recorded their positions they did not consider

it necessary to dissent also from the ratification.

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By unanimous vote, renewal for further periods of three

months of the four System drawings on the National Bank of Belgium

maturing in the period April 4-28, 1972, was authorized.

It was agreed that a subcommittee, consisting of the

Chairman and Vice Chairman of the Committee and the Vice

Chairman of the Board of Governors, or designated alternates,

should be authorized to act on behalf of the Committee with

respect to the manner of effectuating the revaluation clause

in the System's swap contract with the National Bank of Belgium.

By unanimous vote, the open market transactions in

Government securities, agency obligations, and bankers' accept

ances during the period February 15 through March 20, 1972,

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

accordance with the following current economic policy directive:

The information reviewed at this meeting

suggests that real output of goods and services

is increasing in the current quarter at about the

stepped-up rate attained in the fourth quarter of

1971. Several measures of business activity have

strengthened recently and demands for labor have

improved somewhat, but the unemployment rate

remains high. Wholesale prices continued to rise

rapidly in January and February, in part because

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of large increases in prices of foods. However, the

advance in wage rates slowed markedly after the post

freeze surge in December. Following a period of slug

gish growth, the narrowly defined money stock increased

sharply in February, partly reflecting a substantial

reduction in U.S. Government deposits. Inflows of time

and savings funds at bank and nonbank thrift institutions

continued rapid in February, although below January's

extraordinary pace. Short-term interest rates have

risen considerably in recent weeks while yields on

long-term securities have changed little on balance.

Exchange rates for most major foreign currencies

against the dollar appreciated further in February and

early March, as recurrent speculative outflows of

capital added to the U.S. balance of payments deficit.

In light of the foregoing developments, it is the

policy of the Federal Open Market Committee to foster

financial conditions conducive to sustainable real

economic growth and increased employment, abatement

of inflationary pressures, and attainment of reason

able equilibrium in the country's balance of payments.

To implement this policy, while taking account of

international developments and possible Treasury

financing, the Committee seeks to achieve bank reserve

and money market conditions that will support moderate

growth in monetary aggregates over the months ahead.

It was agreed that the authorization for the lending of

Government securities from the System Open Market Account should

be retained at this time.

Consideration was then given to the continuing authori

zations of the Committee, according to the customary practice of

reviewing such matters at the first meeting in March of every year.

Secretary's Note: It had been agreed at

the meeting on March 10, 1970, that certain

authorizations among those that the Commit

tee had reviewed annually in the past would

remain effective until otherwise directed

by the Committee, and would no longer be

submitted routinely for review each year.

Instead, it was understood that these

authorizations would be called to the

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Committee's attention before the first

meeting in March of each year and that

members would be given an opportunity to

raise any questions they had concerning

them. Accordingly, copies of the autho

rizations in question (listed below) had

been distributed to the Committee on

February 28, 1972, with a request that

members advise the Secretariat if they

wished to have any placed on the agenda

for consideration at today's meeting. No

such requests were received.

The authorizations in question were as follows:

1.

2.

3.

4.

5.

Procedure for allocations of securities in the System

Open Market Account.

for periodic reports prepared by the

Distribution list

Federal Reserve Bank of New York.

Authority for the Chairman to appoint a Federal Reserve

Bank as agent to operate the System Account in case

the New York Bank was unable to function.

Resolutions providing for continued operation of the

Committee, and for certain actions by the Reserve

Banks, during an emergency.

Resolution relating to examinations of the System

Open Market Account.

It

was agreed to retain the existing procedure for making

minutes and other records of the Committee available to employees

of the

Board of Governors and the Federal Reserve Banks, including

authorization to the Secretary to act on the Chairman's behalf in

considering proposals for the addition of members of the Board's

staff to the list

of those having access to Committee minutes and

other records.

By unanimous vote, the continuing authority directive to

the Federal Reserve Bank of New York with respect to domestic open

market operations, as shown below, was reaffirmed;

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-10CONTINUING AUTHORITY DIRECTIVE WITH RESPECT TO

DOMESTIC OPEN MARKET OPERATIONS

1. The Federal Open Market Committee authorizes and

directs the Federal Reserve Bank of New York, to the extent

necessary to carry out the most recent current economic

policy directive adopted at a meeting of the Committee:

(a) To buy or sell U.S. Government securities

and securities that are direct obligations of, or

fully guaranteed as to principal and interest by,

any agency of the United States in the open market,

from or to securities dealers and foreign and inter

national accounts maintained at the Federal Reserve

Bank of New York, on a cash, regular, or deferred

delivery basis, for the System Open Market Account

at market prices and, for such Account, to exchange

maturing U.S. Government and Federal agency securities

with the Treasury or the individual agencies or to

allow them to mature without replacement; provided

that the aggregate amount of U.S. Government and

Federal agency securities held in such Account at the

close of business on the day of a meeting of the Com

mittee at which action is taken with respect to a

current economic policy directive shall not be increased

or decreased by more than $2.0 billion during the period

commencing with the opening of business on the day fol

lowing such meeting and ending with the close of busi

ness on the day of the next such meeting;

(b) To buy or sell prime bankers' acceptances of

the kinds designated in the Regulation of the Federal

Open Market Committee in the open market, from or to

acceptance dealers and foreign accounts maintained at

the Federal Reserve Bank of New York, on a cash, regu

lar, or deferred delivery basis, for the account of

the Federal Reserve Bank of New York at market dis

count rates; provided that the aggregate amount of

bankers' acceptances held at any one time shall not

exceed (1) $125 million or (2) 10 per cent of the

total of bankers' acceptances outstanding as shown in

the most recent acceptance survey conducted by the

Federal Reserve Bank of New York, whichever is the

lower;

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-11(c) To buy U.S. Government securities, obligations

that are direct obligations of, or fully guaranteed as

to principal and interest by, any agency of the United

States, and prime bankers' acceptances with maturities

of 6 months or less at the time of purchase, from non

bank dealers for the account of the Federal Reserve

Bank of New York under agreements for repurchase of

such securities, obligations, or acceptances in 15

calendar days or less, at rates not less than (1) the

discount rate of the Federal Reserve Bank of New York

at the time such agreement is entered into, or (2) the

average issuing rate on the most recent issue of 3

month Treasury bills,

whichever is the lower; provided

that in the event Government securities or agency issues

covered by any such agreement are not repurchased by

the dealer pursuant to the agreement or a renewal thereof,

they shall be sold in the market or transferred to the

System Open Market Account; and provided further that

in the event bankers' acceptances covered by any such

agreement are not repurchased by the seller, they shall

continue to be held by the Federal Reserve Bank or shall

be sold in the open market.

2.

The Federal Open Market Committee authorizes and

directs the Federal Reserve Bank of New York or, if the

New York Reserve Bank is closed, any other Federal Reserve

own

Bank, to purchase directly from the Treasury for its

account (with discretion, in cases where it seems desirable,

to issue participations to one or more Federal Reserve

Banks) such amounts of special short-term certificates of

indebtedness as may be necessary from time to time for the

temporary accommodation of the Treasury; provided that the

rate charged on such certificates shall be a rate 1/4 of

1 per cent below the discount rate of the Federal Reserve

Bank of New York at the time of such purchases, and pro

vided further that the total amount of such certificates

held at any one time by the Federal Reserve Banks shall

not exceed $1 billion.

3. In order to insure the effective conduct of open

market operations, the Federal Open Market Committee

authorizes and directs the Federal Reserve Banks to

lend U.S. Government securities held in the System

Open Market Account to Government securities dealers

and to banks participating in Government securities

clearing arrangements conducted through a Federal

Reserve Bank, under such instructions as the Committee

may specify from time to time.

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-12By unanimous vote, the authorization for System foreign

currency operations, as shown below, was reaffirmed:

AUTHORIZATION FOR SYSTEM FOREIGN CURRENCY OPERATIONS

1.

The Federal Open Market Committee authorizes and

directs the Federal Reserve Bank of New York, for System

Open Market Account, to the extent necessary to carry out

the Committee's foreign currency directive and express

authorizations by the Committee pursuant thereto:

A. To purchase and sell the following foreign

currencies in the form of cable transfers through spot

or forward transactions on the open market at home and

abroad, including transactions with the U.S. Stabilization

Fund established by Section 10 of the Gold Reserve Act

of 1934, with foreign monetary authorities, and with the

Bank for International Settlements:

Austrian schillings

Belgian francs

Canadian dollars

Danish kroner

Pounds sterling

French francs

German marks

Italian lire

Japanese yen

Mexican pesos

Netherlands guilders

Norwegian kroner

Swedish kronor

Swiss francs

B. To hold foreign currencies listed in paragraph

A above, up to the following limits:

(1) Currencies purchased spot, including

currencies purchased from the Stabliization Fund,

and sold forward to the Stabilization Fund, up to

$1 billion equivalent;

(2) Currencies purchased spot or forward,

up to the amounts necessary to fulfill other forward

commitments;

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-13(3) Additional currencies purchased spot or

forward, up to the amount necessary for System opera

tions to exert a market influence but not exceeding

$250 million equivalent; and

(4) Sterling purchased on a covered or

guaranteed basis in terms of the dollar, under agree

ment with the Bank of England, up to $200 million

equivalent.

C. To have outstanding forward commitments under

taken under paragraph A above to deliver foreign currencies,

up to the following limits:

(1) Commitments to deliver foreign currencies

to the Stabilization Fund, up to the limit specified

in paragraph 1B(1) above; and

(2) Other forward commitments to deliver

foreign currencies, up to $550 million equivalent.

D. To draw foreign currencies and to permit foreign

banks to draw dollars under the reciprocal currency arrange

ments listed in paragraph 2 below, provided that drawings by

either party to any such arrangement shall be fully liquidated

within 12 months after any amount outstanding at that time

was first drawn, unless the Committee, because of exceptional

circumstances, specifically authorizes a delay.

2. The Federal Open Market Committee directs the Federal

Reserve Bank of New York to maintain reciprocal currency

arrangements ("swap" arrangements) for System Open Market

Account for periods up to a maximum of 12 months with the

following foreign banks, which are among those designated

by the Board of Governors of the Federal Reserve System

under Section 214.5 of Regulation N, Relations with Foreign

Banks and Bankers, and with the approval of the Committee

to renew such arrangements on maturity:

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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:

Dollars against Swiss francs

Dollars against authorized European

currencies other than Swiss francs

Amount of

arrangement

(millions of

dollars equivalent)

200

600

1,000

200

2,000

1,000

1,000

1,250

1,000

130

300

200

250

1,000

600

1,000

3. Currencies to be used for liquidation of System

swap commitments may be purchased from the foreign central

bank drawn on, at the same exchange rate as that employed

in the drawing to be liquidated. Apart from any such pur

chases at the rate of the drawing, all transactions in

foreign currencies undertaken under paragraph 1(A) above

shall, unless otherwise expressly authorized by the Com

mittee, be at prevailing market rates and no attempt shall

be made to establish rates that appear to be out of line

with underlying market forces.

4. It shall be the practice to arrange with foreign

central banks for the coordination of foreign currency

transactions. In making operating arrangements with

foreign central banks on System holdings of foreign cur

rencies, the Federal Reserve Bank of New York shall not

commit itself to maintain any specific balance, unless

authorized by the Federal Open Market Committee. Any

agreements or understandings concerning the administration

of the accounts maintained by the Federal Reserve Bank of

New York with the foreign banks designated by the Board

of Governors under Section 214.5 of Regulation N shall be

referred for review and approval to the Committee.

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5. Foreign currency holdings shall be invested insofar

as practicable, considering needs for minimum working bal

ances. Such investments shall be in accordance with Sec

tion 14(e) of the Federal Reserve Act.

6. A Subcommittee consisting of the Chairman and the

Vice Chairman of the Committee and the Vice Chairman of

the Board of Governors (or in the absence of the Chairman

or of the Vice Chairman of the Board of Governors the

members of the Board designated by the Chairman as alter

nates, and in the absence of the Vice Chairman of the

Committee his alternate) is authorized to act on behalf

of the Committee when it is necessary to enable the Federal

Reserve Bank of New York to engage in foreign currency

operations before the Committee can be consulted. All

actions taken by the Subcommittee under this paragraph

shall be reported promptly to the Committee.

7. The Chairman (and in his absence the Vice Chairman

of the Committee, and in the absence of both, the Vice

Chairman of the Board of Governors) is authorized:

A. With the approval of the Committee, to enter

into any needed agreement or understanding with the Sec

retary of the Treasury about the division of responsibility

for foreign currency operations between the System and

the Secretary;

B. To keep the Secretary of the Treasury fully

advised concerning System foreign currency operations,

and to consult with the Secretary on such policy matters

as may relate to the Secretary's responsibilities; and

C. From time to time, to transmit appropriate

reports and information to the National Advisory Council

on International Monetary and Financial Policies.

8. Staff officers of the Committee are authorized to

transmit pertinent information on System foreign currency

operations to appropriate officials of the Treasury Depart

ment.

9. All Federal Reserve Banks shall participate in the

foreign currency operations for System Account in accord

ance with paragraph 3 G(1) of the Board of Governors'

Statement of Procedure with Respect to Foreign Relation

ships of Federal Reserve Banks dated January 1, 1944.

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10. The Special Manager of the System Open Market Account

for foreign currency operations shall keep the Committee

informed on conditions in foreign exchange markets and on

transactions he has made and shall render such reports as

the Committee may specify.

By unanimous vote,

the foreign currency directive,

as shown

below, was reaffirmed:

FOREIGN CURRENCY DIRECTIVE

1. The basic purposes of System operations in foreign

currencies are:

A. To help safeguard the value of the dollar in

international exchange markets;

B. To aid in making the system of international

payments more efficient;

C. To further monetary cooperation with central

banks of other countries having convertible currencies,

with the International Monetary Fund, and with other inter

national payments institutions;

D. To help insure that market movements in exchange

rates, within the limits stated in the International Monetary

Fund Agreement or established by central bank practices,

reflect the interaction of underlying economic forces and

thus serve as efficient guides to current financial decisions,

private and public; and

E. To facilitate growth in international liquidity

in accordance with the needs of an expanding world economy.

2.

Unless otherwise expressly authorized by the Federal

Open Market Committee, System operations in foreign currencies

shall be undertaken only when necessary:

A. To cushion or moderate fluctuations in the flows

of international payments, if such fluctuations (1) are

deemed to reflect transitional market unsettlement or other

temporary forces and therefore are expected to be reversed

in the foreseeable future; and (2) are deemed to be dis

equilibrating or otherwise to have potentially destabilizing

3/21/72

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effects on U.S. or foreign official reserves or on exchange

markets, for example, by occasioning market anxieties, un

desirable speculative activity, or excessive leads and

lags in international payments;

B. To temper and smooth out abrupt changes in

spot exchange rates, and to moderate forward premiums and

discounts judged to be disequilibrating. Whenever supply

or demand persists in influencing exchange rates in one

direction, System transactions should be modified or

curtailed unless upon review and reassessment of the sit

uation the Committee directs otherwise;

C. To aid in avoiding disorderly conditions in

exchange markets. Special factors that might make for

exchange market instabilities include (1) responses to

short-run increases in international political tension,

(2) differences in phasing of international economic

activity that give rise to unusually large interest rate

differentials between major markets, and (3) market rumors

of a character likely to stimulate speculative transactions.

Whenever exchange market instability threatens to produce

disorderly conditions, System transactions may be under

taken if the Special Manager reaches a judgment that they

may help to reestablish supply and demand balance at a

level more consistent with the prevailing flow of under

lying payments. In such cases, the Special Manager shall

consult as soon as practicable with the Committee or, in

an emergency, with the members of the Subcommittee designated

for that purpose in paragraph 6 of the Authorization for

System foreign currency operations; and

D. To adjust System balances within the limits

established in the Authorization for System foreign cur

rency operations in light of probable future needs for

currencies.

3. System drawings under the swap arrangements are

appropriate when necessary to obtain foreign currencies

for the purposes stated in paragraph 2 above.

4. Unless otherwise expressly authorized by the Com

mittee, transactions in forward exchange, either outright

or in conjunction with spot transactions, may be under

taken only (i) to prevent forward premiums or discounts

from giving rise to disequilibrating movements of short

term funds; (ii) to minimize speculative disturbances;

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(iii) to supplement existing market supplies of forward

cover, directly or indirectly, as a means of encouraging

the retention or accumulation of dollar holdings by private

foreign holders; (iv) to allow greater flexibility in

covering System or Treasury commitments, including com

mitments under swap arrangements, and to facilitate opera

tions of the Stabilization Fund; (v) to facilitate the use

of one currency for the settlement of System or Treasury

commitments denominated in other currencies; and (vi) to

provide cover for System holdings of foreign currencies.

It was agreed that the next meeting of the Federal Open

Market Committee would be held on Tuesday, April 18, 1972, at

9:30 a.m.

The meeting adjourned.

Secretary