The bark stripping in the upper branches of a large American elm tree is very likely caused by one or more fox squirrels. If the tree is isolated (squirrels cannot access the tree by jumping from another tree) then wrapping the trunk with an 18-inch-wide piece of sheet metal or tin placed four or more feet above the ground--so squirrels cannot jump over it--should eliminate their access to the tree. If squirrels are gaining access by jumping from another tree, consider trimming tree branches to eliminate access.
For information on reducing bark stripping, visit Bark Stripping