Chicago Ph.D. alumnus and Columbia Professor of Banking, Henry Parker Willis
Columbia University’s professor of banking (1917-37), Henry Parker Willis was an early economics Ph.D. at the University of Chicago, a student of J. Laurence Laughlin. He played an important role in the founding and early years of the Federal Reserve System and later as a expert consultant on banking affairs for the U.S. Congress. Besides all this he served over a dozen years editing the N. Y. Journal of Commerce.
This posting begins with a biographical note I found at FRASER, goes on with the Journal of Commerce’s account of his work there, and concludes with the Columbia School of Political Science Memorial minute entered into its recorded minutes in 1938.
Henry Parker Willis
|1874, Aug. 14||Born, Weymouth, Massachusetts|
|A.B., University of Chicago
Ph.D., University of Chicago
|1897-98||Assistant, Monetary Commission|
|1898-1905||Washington and Lee University, successively adjunct professor, full professor, Wilson professor of economics and political science|
|1903, Dec. 24||Married Rosa Johnston Brooke (4 children—1 with FRB of Boston, 1 with FRB of New York)|
|1901-12||Leader writer, New York Evening Post|
|1902-03||Washington correspondent, N. Y. Journal of Commerce|
|1905-13||Washington correspondent, Engineering and Mining Journal|
|Professor of finance, George Washington Univ.; and
Dean, College of Political Sciences, 1910-12
|1909-10||Editor, U. S. Immigration Commission|
|1911-13||Expert, Ways and Means Committee, House of Representatives|
|1912-13||Expert, Banking and Currency Committee, House of Representatives (drafting Federal Reserve Act)|
|Associate editor, N. Y. Journal of Commerce
Editor in chief, N. Y. Journal of Commerce
|Lecturer, Columbia University
Professor of banking, Columbia University
|Secretary, Federal Reserve Board, Washington
Director of Research, Federal Reserve Board (moved office to New York for this period)
Consulting economist, Federal Reserve Board
|1916-17||President, Philippine National Bank|
|1919||Special commissioner in Australasia for Chase National Bank and Central Union Trust Company|
|1926-27||Chairman, Banking Commission of Irish Free State|
|1930-32||Technical adviser to U. S. Senate Banking and Currency Committee (drafting Banking Act of 1933)|
|1932-35||American representative to Le Temps, Paris|
|1937, July 18||Died|
Report of the Monetary Commission. 1898. (Joint author)
History of the Latin Monetary Union. 1901.
Reciprocity (with Prof. J. L. Laughlin). 1903.
Our Philippine Problem. 1905.
Principles and Problems of Modern Banking. 1910.
Principles of Accounting. 1910.
Life of Stephen A. Douglas. 1911.
The Federal Reserve. 1915.
American Banking. 1916.
The Modern Trust Company (with Kirkbride and Sterrett). 1919.
Banking and Business (with Geo. W. Edwards). 1922.
[Supplementary chapter “Federal Reserve Banks” in the fourth edition of Charles F. Dunbar and Oliver M. W. Sprague The Theory and History of Banking. 1922.]
The Federal Reserve System. 1923.
Federal Reserve Banking Practice (with W. H. Steiner). 1925.
Foreign Banking Systems (with B. H. Beckhart). 1929.
Investment Banking (with J. I. Bogen). 1929.
Contemporary Banking (with J. M. Chapman and R. W. Robey). 1933.
The Banking Situation (with J. M. Chapman). 1933.
Economics of Inflation (with J. M. Chapman). 1934.
Economic and other journals.
See: Who Was Who in America, 1897-1942, vol. I, Marguis
Source: FRASER. Committee on the History of the Federal Reserve System. Register of Papers: Willis, Henry Parker. Entry 176a, Box 1, Folder 2, Item 50.
The double life of H. Parker Willis
H. Parker Willis stayed busy. During his 29 years at The Journal of Commerce [JOC], there was rarely a moment when he was not also involved in shaping U.S. economic and banking institutions. The results of his efforts are still seen today.
Willis’ extracurricular work while a JoC employee would lead to the creation of the Philippine Central Bank and later the Philippine American Chamber of Commerce. Most important, his research and his brilliant insights led to the creation of the U.S. Federal Reserve System.
When he joined the JoC in 1902 at the age of 28, he had already been a star professor of economics and political science at Washington and Lee University. He took an academic leave to travel to the Far East in 1903-05 as a correspondent for the JoC and the Engineering and Mining Journal.
In between his dispatches, Willis began a study that led to the creation of the Philippine National Bank. Willis would become the first head of the bank, which served as the nation’s central bank, while still on the staff of the JoC.
But he was just warming up. Returning to the U.S. in the fall of 1906, he became the first head of Washington and Lee’s School of Commerce, while still writing for the JoC. He also became the economic adviser to Rep. Carter Glass, D-Va. His work for the JoC and Glass took him to the nation’s capital so frequently that the university’s president complained, resulting in Willis’ resignation. The school’s student body sent the university’s board a vigorous declaration of support for the popular professor.
Willis continued to write for the JoC, and in 1912 he became executive director of the National Monetary Commission. The commission had been created at the behest of Glass, who had been elected to the Senate. Under Willis’ direction, the commission issued a study recommending creation of a U.S. central bank. After Woodrow Wilson was elected president, he asked Glass to begin working on legislation.
Together with Glass, Willis drafted the enabling legislation. The measure was opposed by big banks, which wanted no central authority over them. Willis came up with a solution – a Federal Reserve System consisting of regional Federal Reserve banks owned by member banks but run as “corporations operated for public service.”
The regional Fed directors would come from banking and industry, along with citizens appointed by the Federal Reserve Board in Washington. The president would appoint the Fed’s seven-member board of governors, with the Treasury secretary and comptroller of the currency as ex-officio members.
“Willis took the best of the existing proposals, together with a brilliant balance of public-private ownership and leadership, to fashion a unique central banking institution,” said Robert Bremner, who is writing a biography of William McChesney Martin Jr., the Fed’s chairman from 1951 to 1970.
Another of Willis’ innovations was to have the 12 regional banks serve as clearinghouses for checks written by the depositors of member banks. Willis reasoned that this would give the Fed a practical purpose, in addition to replacing the patchwork of inefficient regional systems with a unified national framework for check collection.
Without check-clearing duties, he later said, the Fed banks would have become “merely the holders of dead balances carried for the member banks without any service for them; and since the business public abhors any idle or unnecessary institution…it would not submit long to the needless burden created by such emergency institutions designed to put out financial fire.”
After the Federal Reserve Act was passed in 1913, Willis became the Federal Reserve Board’s first secretary from 1914-18. He became its director of research from 1918-22, which meant he was chief economist, although the position was not called that yet. “These two staff positions first held by Dr. Willis remain the most influential at the Fed today,” Bremner said.
All through this time, Willis was writing for the JoC as its Washington economic correspondent. As if that wasn’t enough, he also became a professor of economics at George Washington University and later dean of its college of political science. He also lectured at Columbia University and became a full professor of economics there in 1919.
Willis also became editor- in-chief of the JoC in 1919. He steered the paper’s coverage in a new direction. With his profound grounding in economics and political science, he believed the paper should place the coverage of business and commerce within the context of economics and government.
As he stated in the paper’s centennial issue in 1927: “Business (and) economic life as a whole is a unit essentially and hence demands a unified treatment, which is impossible where attention is solely concentrated on finance or upon some specialized branch of industry.”
It was this vision of business and economic coverage that would differentiate the JoC from other business papers with its broad coverage of the nation’s business activities within the context of what was going on in the economy.
Willis resigned as editor of the JoC in 1931, but he continued to teach at Columbia. He wrote a series of five books on his passion – banking and monetary policy. They were The Federal Reserve System (1923), Federal Reserve Banking Practice (1926), The Theory and Practice of Central Banking (1936), The Banking Situation, Post-War Problems and Developments (1934), and The Federal Funds Market (republished in 1970).
Willis’ contributions to economic and monetary theory and policy, the establishment of the Fed and the growth of the JoC are still remembered. In a speech at Washington and Lee last March, Roger W. Ferguson Jr., the Fed’s current vice chairman, paid tribute to Willis as “a leader in teaching economics and political science and a major contributor to the establishment of the Federal Reserve.”
Source: Journal of Commerce website, A Proud History since 1827: The Journal of Commerce, page 11.
FACULTY OF POLITICAL SCIENCE
Memorial minute for Prof. H. Parker Willis
April 22, 1938
H. Parker Willis
Professor H. Parker Willis died on July 18th, 1937, in the 63rd year of his life.
Willis first became associated with us in the years immediately preceding the war when the first tentative steps were being taken in the formulation of a group of courses which was to become the offering of the School of Business. Although in only his 39th year, he brought to Columbia an equipment of training and experience that contributed richly to the success of that school and to the development of the field of money and banking. His foundations in the economic discipline had been firmly laid in his years of graduate work at Chicago, during the regime of Laughlin, and in his studies at Leipzig and Vienna. His remarkable skill as a teacher and administrator had been matured during fourteen years in professorial positions at other institutions, culminating in the deanship of the College of Political Sciences of George Washington University. His fluent pen had already produced a half-dozen scholarly volumes as well as an impressive output of more ephemeral writing which had established him as a brilliant economic journalist and editor. Finally, his capacity to analyze technical problems of public policy had been demonstrated in his service with the Monetary Commission and with the Congressional committee that drafted the Federal Reserve Act.
At Columbia Willis found an environment well suited to his particular talents and an opportunity commensurate with his capacity. Here there existed a firmly established tradition that the University should enlighten public opinion and apply its special skills to the solution of problems of public policy. Possessed of a fund of energy that was constantly a source of envious amazement to all who knew him, he came to us at the height of his powers and devoted twenty-four years of his life to investigation, instruction, and public service. His activities as an editor and a correspondent for financial journals, as director of research and consultant of the Federal Reserve Board, and as adviser to governments at home and abroad served not only to advance the public good but also to enrich and vivify his teaching and research.
By his contributions to science and polity Willis built for himself an imposing monument, the specifications of which we need not here detail. It stands for the world to see and admire. At the same time, he constructed, without conscious plan, an even more impressive and inspiring memorial in the hearts of his friends. We who knew him through long association will best remember him for the quality of his personal character.
There are those who take pride in the possession of a conscience which forbids them to shirk a duty. For Willis there seemed to be no duties, to be performed or shirked, but only opportunities, to be embraced with enthusiasm. In the academic round there was no one more faithful and dependable, no one more generous and unselfish. He stimulated each student to achieve the best of which he was capable and his interest and patience in guiding and molding even the least promising of them was the occasion for frequent remark. His attitude toward all his academic associates was one of kindliness and tolerance and the standards he used in judging himself were always more strict than those he applied to others.
One of his most appealing personal characteristics was his capacity for righteous indignation. He coupled an intense loyalty to those persons and principles in whose trustworthiness he had faith with an old-fashioned sense of individual obligation to defend the true and the good without counting costs or consequences. Incompetence, especially when linked with pretentiousness, and ignorance, especially when displayed by those who exercised arbitrary authority, were to Willis moral crimes which it was his personal duty to expose. His reaction in such cases was exactly that which he exhibited when, one evening, a misguided goot-pad [“good-bad” in a German-Jewish accent?] stopped him at the point of a pistol as he was hurrying toward the Staten Island Ferry. To comply with the demand that he surrender his valuables did not enter his mind as a possibility. Here was an enemy of society whose career should be expeditiously and firmly discouraged; and Willis proceeded to accomplish this end, instinctively and without hesitation, with the aid of a briefcase heavily loaded with financial documents. Truly he was a battler for the Lord, skillful but fair in the use of his weapons, and entirely without fear. Of him one could say, as Lord Bryce said of Dean Stanley, “You might think him right or wrong but you never doubted that he was striving after the truth.” And his joy in the strife was an inspiration to all who knew him.
Source: Columbia University Archives. Minutes of the Faculty of Political Science, 1920-1939. Bound, typed manuscript. Pages 827-8.
Image Source: Passport application of August 4, 1916 of Henry Parker Willis