November 16, 1964 marked the fiftieth anniversary of the Federal Reserve System. This half-century witnessed a transition in central bank policy from a simple, formalistic principle of using Bank Rate to influence the balance of payments and protect the gold reserve, to using central bank powers to achieve broad domestic economic goals as well as protect the external value of the currency. Official records of policymaking discussions of Federal Reserve authorities have not been available to outside scholars and students of central banking. Recently a major step was taken in this direction: the minutes of the Federal Open Market Committee from 1936 to 1960 were made available to scholars at the libraries of the Board of Governors and the Reserve Banks, and the Library of Congress. The primary purpose of this book is to bridge this gap; to make available a summary of the thinking of Federal Reserve officials about policy as it developed. The study is based almost entirely on the minutes of the meetings of the various policymaking bodies. The author's aim is an objective presentation of the principal views of the policymakers as they evolved in the course of a somewhat turbulent first fifty years. Karl R. Bopp President Federal Reserve Bank of Philadelphia