Presentation at Ft. Smith, Ark. - Feb. 12, 2002Monetary policy ; Federal Reserve Bank of St. Louis

William Poole

English

Research Papers in Economics

1
Eulogy for Darryl R. Francis, 1912-2002
Fort Smith, Arkansas
February 12, 2002
Published in the Federal Reserve Bank of St. Louis Review, March/April 2002, 84(2), pp. 1-2
inflation and the money growth that was causing
it. I know that personally because I’ve read the
minutes of the FOMC for that period.
But Darryl did much more than speak against
inflation and excessive money growth at FOMC
meetings. With his research director, Homer
Jones, he built a research division of first rank
and encouraged research on the inflation issue.
Francis, Jones, and the research economists were
convinced that the analysis of the Chicago School
of monetary economics, led by Milton Friedman,
held the key to the inflation problem. Money
growth had to be restrained, and consistently
restrained over the long run.
The Chicago view is mainstream economics
today, but it wasn’t at that time. Darryl brought
this analysis into the Federal Reserve System.
More importantly, he brought the analysis to the
general public through his speeches and argued
the case to professional audiences through schol-
arly papers published by the Bank’s research
economists.
In speaking out, Darryl Francis took a public
stance that required great courage. In plain terms,
he said that the organization he worked for was
responsible for creating and maintaining infla-
tion. That was not a popular position at the Fed’s
Board of Governors in Washington, and I know
that a lot of pressure was applied to try to get
Darryl to be quiet. A great strength of the Federal
Reserve System is that the 12 regional Federal
Reserve Banks have substantial independence.
Darryl Francis used that independence for this
great cause of ending the scourge of inflation. He
helped shape the public debate. The policies he
advocated were not adopted during his term of
office, but later they were the basis of the policies
W
e are here today to celebrate a
life well led. I am honored that
Darryl’s widow, Sherrian, asked
me to speak this morning.
I came to know Darryl Francis personally
just a bit in the final years of his life, after I moved
to St. Louis four years ago. But long before then,
I knew him very well by reputation, through many
economists who worked at the St. Louis Fed
during his tenure. As a consequence of my close
tracking of monetary policy debates starting in
the 1960s, I came to appreciate how extremely
important Darryl was in this nation’s monetary
history.
Darryl was president of the Federal Reserve
Bank of St. Louis from 1966 to 1976. To under-
stand the importance of his role, I need to recount
just a bit of the economic history of that period.
Inflation began to rise in 1965, and year by year
became an increasingly difficult problem for the
United States until 1982. As president of the Bank,
Darryl sat on the Federal Reserve’s principal
monetary policy body, the Federal Open Market
Committee. Over the years of his membership on
the FOMC, his position was consistent and stated
often with quiet eloquence. The issue was simple:
to end the inflation, the Federal Reserve needed
to slow the rate of money creation. Controlling
money growth was and is the Fed’s responsibility;
no private party, no other organization can do it.
The FOMC did slow money growth in 1966,
but not for long. Money growth and inflation rose
in 1967. Subsequent policy tightenings in 1969
and 1973-74 were in each case followed by periods
of excessive money growth. Inflation rose and
became ever more intractable. In FOMC meetings,
Darryl Francis spoke again and again againstpursued by Paul Volcker, when he became Fed
Chairman in 1979. These policies were under-
stood by Ronald Reagan, without whose support
Volcker could not have stood the course through
the 1981-82 recession, at the time and still the
most serious U.S. recession since the Great
Depression.
Darryl’s courage in addressing the inflation
problem did more than contribute to solving it.
His example inspired the work of the St. Louis
Fed economists and led the entire Federal Reserve
System to become a much more open organiza-
tion. St. Louis came to be regarded as something
of a maverick among Reserve Banks, and the
Federal Reserve Bank of St. Louis came to be
known, and still is known, I believe, as the pre-
mier Fed bank in economics research.
I met Darryl once or twice while he was St.
Louis Fed president. One vivid memory of mine
was while I was a junior staff member at the
Board of Governors in the early 1970s. An occa-
sional junior staff member was permitted to attend
an FOMC meeting, and I got to go once. I don’t
remember now which meeting it was, but I do
remember watching and listening to Darryl at
that meeting. His was a lonely voice at that FOMC
meeting. As I confirmed later when reading the
FOMC minutes of the period, he rarely had other
FOMC members who shared his views. But he
was right, and the world eventually saw that he
was right.
In recent years I got to know Darryl just a bit.
I was especially pleased that he and Sherrian
could attend the Bank’s annual research confer-
ence in October 2000. We dedicated that con-
ference to him in recognition of his great
contribution to the Bank and to the nation.
As I’ve said before, and will say again, Darryl
is a hero of mine.
I’ll repeat a story one of his friends told me.
During his active years, Darryl had many hobbies,
each of which he pursued with considerable
energy and intensity. At the time he retired from
the St. Louis Fed and moved to Fort Smith, one
of those hobbies was collecting wine. He had
accumulated a substantial wine cellar, which the
moving company refused to move. So, Darryl had
to make quite a few trips in his station wagon to
transport his wine collection. Given that these
trips had to be squeezed between other work, at
the end of the process he was all but exhausted
from the many drives to Fort Smith and back to
St. Louis. He ended up with some knee problems,
which took quite some months to clear up. In
telling me the story, Darryl’s friend chuckled and
said that the knee problems were surely just ret-
ribution for moving all that wine to Arkansas,
which was a lot dryer state in the mid 1970s
than it is today.
Gene Leonard is a person who knew Darryl
for many years, and he regrets he could not be
here today. Gene served under Darryl in several
positions including as the First Vice President of
the Federal Reserve Bank of St. Louis. Gene sent
me a few words that I’ll read.
Darryl Francis was my boss for 15 years. He
was also my mentor, a father figure, and a
close friend. Ironically we met at a funeral, as
pallbearers for a professor at the University of
Missouri we had had in common a generation
apart, and to whom we had each become quite
close. A job offer followed, and a relationship
began.
Darryl was the best boss a person could
ever hope for. We wanted to work hard as
much to please Darryl and make him proud
as for our own paycheck. He didn’t have the
“ego problem” that characterizes many CEOs.
He led by inspiration, not by intimidation.
At the end of the working day, Darryl left
the problems of the banking world and the
economy at the door of his office, making
time to indulge with a passion whatever
hobby or interest he was pursuing at the time.
We learned not to be overly consumed by our
jobs—one’s success was not enhanced by being
the first to arrive and the last to leave. “Don’t
you have a family?” he would ask. The privi-
lege of working for him was an important part
of our compensation.
Darryl had a wonderful sense of humor—
sometimes we would laugh together till tears
came to our eyes. His verbal expressions
reflected his North Missouri rural upbringing,
and his wisdom. Once when a colleague made
an embarrassing mistake, Darryl said: “He
MONETARY POLICY AND INFLATION
2kinda tore his pants a little goin’ over the
fence.” I never forgot that because I had done
it myself—literally and figuratively. Darryl
led a long and productive life—a good life.
Let us be grateful for that. I miss him already.
Gene, I miss him too. Darryl will remain a
hero to me and we’ll all miss him. Now Darryl
will go to his final resting place. He was preceded
in death by his beloved first wife of 58 years,
Loretta France Smyth, and will be buried along-
side her here in Fort Smith.
Eulogy for Darryl R. Francis, 1912-2002
3

Eulogy-Darryl R. Francis, 1912-2002

http://fraser.stlouisfed.org/historicaldocs/1098/download/41150/20020212.pdf

Eulogy-Darryl R. Francis, 1912-2002

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