Ellis W. Tallman
A.B. Economics/English, Indiana University Bloomington, 1980
Executive Vice President and Director of Research, Federal Reserve Bank of Cleveland
Elmus Wicker influenced my study of economics and subsequently my career in the field starting when I took his course on Monetary Theory during the fall of 1979. It was a turbulent time for the field with active debates about effective approaches to tame high (double-digit) inflation. Paul Volcker was recently appointed Chairman of the Board of Governors of the Federal Reserve System and the press anticipated that the Federal Open Market Committee would soon implement monetarist policies, a dominant paradigm at that time. In a class with fewer than a dozen students, Wick encouraged students to discuss their viewpoints, most advocating the monetarist approach. As debate veered toward consensus, Wick interjected that the class made some good points, but the solution to the problem of inflation would likely not be so simple. I remember several years later reading Wick's paper entitled, "Terminating Hyperinflation in the Dismembered Habsburg Monarchy." The paper emphasized that disinflationary policies during these historical episodes were associated with significant declines in employment enlightening interpretations of the costs of disinflation found in the existing literature. His research demonstrated that problems in economics are challenging to solve, and complicating factors like the costs of disinflation are important to measure.
Wick wrote four influential books, three of them during his retirement. His first book, Federal Reserve Monetary Policy 1917-1933, was underappreciated when it was released. A Monetary History of the United States, 1867-1960 written by Friedman and Schwartz dominated the field. Over time, Wick's book has gained wider acceptance for its intensive study of private writings of Federal Reserve leaders, and for its central theme that distinguishes it from Friedman and Schwartz. Wick suggests that the monetarist paradigm guiding the analysis throughout the Monetary History was not sufficiently understood by or available to Federal Reserve policymakers. In fact, Wick demonstrates that as late as the mid-1920s there were members of the Federal Reserve Board who thought demand deposits were not "money" and should not be combined with currency, when that combination is an essential element of monetarist analysis. The economic framework discovered from the analysis of historical data in A Monetary History has produced insights for the benefit of future policy. However, Wick's work helps economists understand that applying those insights to historical instances may suggest that the policymakers at the time knew more than they were capable of knowing perhaps implying that they were incompetent, whereas from Wick's perspective, policymakers did their best given their limited knowledge and limited available data.
Of the three books that Wick wrote in his retirement, the Panics of the Great Depression has numerous research citations and provoked subsequent inquiries. Wick uncovered a notable "interconnection" between an intermediary Caldwell and Company in Tennessee and its related correspondent banks that held deposits with that firm. When Caldwell suspended in 1930 an extensive list of its correspondent banks were forced to suspend as well. Gary Richardson followed up this finding with intensive data work to demonstrate a distinctive difference between the temporary suspensions of banks in 1930 versus the extensive bank insolvencies during the later panics. I once asked Wick how he thought of Richardson's innovative work, and his response was, "I read Richardson as saying 'Wicker was right.'" In conversation with Richardson, I passed on Wick's interpretation—Gary agrees with it.
Wick was often quotable; he would occasionally express himself in his distinctive Southern accent in memorable short, pithy statements. In defense of my Economics/English double major, Wick told a skeptical colleague, "he'll be a literate economist." After he retired from the active faculty at IU, I met Elmus at a Southern Economics Association meeting. I asked him why he was attending given that he had just retired. In response, Wick said, "Ellis, retirement means doing ONLY what you want to do." He was in that way a role model.
Wick offered helpful guidance for my research in economic history in various ways. I was fortunate to present my research at Indiana University, and although retired, Wick attended and was available to join the faculty for lunch. Outside the seminar, he supported the research, but within the seminar, he was a challenging critic. Following the seminar, Wick argued that I should take a much stronger stand defending my views, a comment that still resonates for me. While he was working at the New York Clearing House (NYCH) gathering information for his book, Banking Panics of the Gilded Age, he uncovered data he knew would be useful for my research and sent me his hand-written transcription of them. He also indicated that the primary sources he found might offer more insights, which spurred my own visits to the NYCH and gave momentum to several subsequent research projects.
The Global Financial Crisis and the Great Recession 2007-09 brought financial economic history to the forefront of that policy conversation. Wick and I worked together on a paper aimed at putting that financial crisis in historical perspective. We worked "old school" by mailing each other paper drafts with handwritten comments and phone calls. My favorite memory from this effort was Wick beginning our phone conversation with something like, "you know Ellis, I may not remember as much as I might have once known." The conversation ended with me reminding Wick that in the span of a 30-minute conversation, Wick corrected my recollection of facts more than (at least) three times.
Wick's research citations have surged since 2008 and that is not a surprise. Over time, his contributions to our understanding of watershed monetary events are becoming more widely understood and appreciated. His retirement allowed him time to do the work that he wanted to do and I hope also to observe his increasing influence within the field.