(2Q-2026) Walter Morris understood the tactics of market-based ideas reaching a wide audience. After Friedrich A. Hayek won the Nobel in 1974, Morris encouraged him to interact with Darryl Francis, a one-time Arkansas banker who served as president of the Federal Reserve Bank of St. Louis (1966-1976).

One tactic: the visual. Another: outreach to students, America’s next generation.

The St. Louis Federal Reserve

The Federal Reserve Bank of St. Louis serves the Eighth District, including Arkansas. Francis was unafraid to acknowledge mistakes by the Fed. In 1969, he told an Arkansas Bankers Association meeting in Hot Springs, “The recent record of national economic stabilization policy has left much to be desired. For almost five years we have had an accelerating inflation which we have not arrested either for lack of will or lack of knowledge as to how to do it.” (1)

Francis maintained monetary policy “should focus on maintaining a stable price level. In contrast, most policymakers believed it possible to exploit a tradeoff between unemployment and inflation.” Francis attributed “inflation directly to excessive growth of the money stock,” while other policymakers blamed labor and product market failures, fiscal policy, and commodity price shocks.” Francis argued inflation could be controlled “by limiting the growth of monetary aggregates.” Others promoted price controls or other schemes. Francis favored “stable money stock growth rate at a time when monetary policy was widely interpreted as involving the manipulation of interest rates.” (2)

A Fed history notes that under Francis’ leadership, the St. Louis bank’s research department expanded its work on monetary policy. All research “was readily available to the public.” Murray Weidenbaum was chairman of President Ronald Reagan’s first Council of Economic Advisers (1981-82), and said during Francis’s tenure, the St. Louis Fed’s publications were seen as “the best material available on the nation’s money supply.” (3) Under Francis, the St. Louis Fed’s Review publication considered the ideas of Hayek and Milton Friedman, another Nobel winner (1976), in their pages.

At Morris’ urging, Francis, in retirement, interviewed Hayek in the late 1970s. Arkansas public TV aired a video version. Students received printed transcripts.

Students who read Hayek’s works as high school, college or university students later became thought leaders, or, in modern terms: influencers. Others became policymakers. Hayek’s 1944 book, The Road to Serfdom sold millions of copies.

 

Interaction with Policymakers

Another tactic was interaction with policymakers. “Please hang in there,” Morris wrote Fed Chairman Paul Volcker (1979-1987). Chairman Volcker oversaw a monetary tightening that successfully reduced CPI from 13.5% (1980) to 3.2% (1983). Inflation remained relatively low for four decades before rising to unacceptable levels this decade. Morris encouraged policymakers to pursue sound policies that led to low inflation, economic growth, and broad prosperity.

Another Fed President’s Words

In 2009, another former St. Louis Federal Reserve president addressed Arkansas students. (4) At a forum organized by the Policy Foundation, William Poole (1998-2008) told Hendrix College students, “Centrally-planned economies fail because they prop up inefficient enterprises to the exclusion of new firms serving consumers.” Poole said, “Washington should not be propping up losing enterprises. He also warned that intermingling monetary policy with fiscal policy would threaten future independence of the Federal Reserve System.

Summary

The visual, student outreach, and interaction with policymakers were all tactics employed by Arkansas investor Walter Morris to advance market-based ideas.

–Greg Kaza

References

(1) Darryl R. Francis. “Monetary Policy and Inflation.” Speech to the 79th Annual Convention of the Arkansas Bankers Association, Hot Springs, Arkansas, May 12, 1969

(2) R.W. Hafer and David C. Wheelock. “Darryl Francis and the Making of Monetary Policy, 1966-1975.” Federal Reserve Bank of St. Louis Review, pp. 1-12.

(3) https://www.federalreservehistory.org/people/darryl-r-francis

(4) Arkansas Policy Foundation, April 2009. www.arkansaspolicyfoundation.org