FOMC Minutes

Meeting of Federal Open Market Committee

April 17, 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 Monday, April 17, 1972, at 4:30 p.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 and Bernard, Assistant

Secretaries

Mr. Hackley, General Counsel

Mr. Partee, Senior Economist

Mr. Axilrod, Economist (Domestic Finance)

Messrs. Boehne, Bryant, Green, Hersey,

and Hocter, Associate Economists

Mr. Holmes, Manager, System Open Market Account

4/17/72

Mr. Melnicoff, Deputy Executive Director,

Board of Governors

Mr. O'Connell, General Counsel, Board of

Governors

Messrs. Keir and Pierce, 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. Parthemos, Taylor, Scheld, Tow, and

Craven, Senior Vice Presidents, Federal

Reserve Banks of Richmond, Atlanta, Chicago,

Kansas City, and San Francisco, respectively

Messrs. Bodner and Nelson, Vice Presidents,

Federal Reserve Banks of New York and

Minneapolis, respectively

Mr. Garvy, Economic Adviser, Federal Reserve

Bank of New York

Mrs. Greenwald, Economist, Federal Reserve

Bank of Boston

The Secretariat's recommendations for making historical

Committee records available to the public, as contained in the

memorandum dated April 11, 1972, were approved.

By unanimous vote, paragraph 1(c) of the continuing authority

directive with respect to domestic open market operations was amended

to read as follows:

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 nonbank 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 that,

unless otherwise expressly authorized by the Committee,

shall be determined by competitive bidding, after applying

4/17/72

reasonable limitations on the volume of agreements with

individual dealers; provided that in the event Govern

ment 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.

By unanimous vote, guideline 6 for the conduct of System

operations in Federal agency issues was amended to read as follows:

System holdings of any one issue at any one time

will not exceed 20 per cent of the amount of the issue

outstanding. Aggregate holdings of the issues of any

one agency will not exceed 10 per cent of the amount of

outstanding issues of that agency.

The meeting adjourned.

Secretary