Gallagher was from a mining family of Scranton, PA. He served in the US Army in the First World War. In 1919 he developed tuberculosis and went to the White Haven sanitarium in PA. It was there a doctor noticed him drawing and suggested that he apply for a government scholarship to the Pennsylvania School of Industrial Design (later the University of the Arts). It was there he met Katharine McCollum; they were married in 1925, the same year he was graduated. He also studied with Earl Horter in Philadelphia, and Carl Dufner in New York.