Open Market Committee of the Federal Reserve System
Section 14 of the Federal Reserve Act of 1913 authorizes open market operations in any of the assets acceptable as collateral for rediscounts and permits purchases and sales of gold and government bonds. Legislative hearings prior to adoption of the act note that the purpose of open market operations is to enable the "Federal Reserve banks to make their rate of discount effective in the general market at those times and under those conditions when rediscounts were slack and when there might have been accumulation of funds in the reserve banks without any motive on the part of member banks to apply for rediscounts or perhaps with a strong motive on their part not to do so." (House of Representatives, 1913, pp. 2317-18).