Wallace was born in Columbus, Georgia in 1924. He attended the University of Alabama, where he was graduated in 1947 with a BA degree. After graduation, Wallace worked in his family's insurance business in Alabama until 1950. In 1950, he moved to West Virginia, where he worked at the United Mine Workers of America union for three years
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Wallace moved to Huntington, West Virginia in 1953, where he worked as a coal miner until his election as mayor of the city in 1966. While mayor of Huntington, Wallace was repeatedly arrested for violating federal desegregation laws after local school officials refused to admit black students. He spent most of 1963 in jail on contempt charges and was sentenced to 10 months imprisonment in 1964 for refusing to obey a federal court order to desegregate schools.