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Dr. Arthur N. Young Oral History Interview

Oral History Interview with
Arthur N. Young

An economist and financial expert, beginning in 1912, principally as an adviser to the U.S. Government and to the governments of various other countries, including service as an economic adviser in the U.S. Dept. of State, 1922-28; financial adviser to the Chinese Government and to the Central Bank of China, 1929-46; a member of the Chinese delegation to Bretton Woods financial conference, 1944; director of Point IV program in Saudi Arabia, 1951-52; and financial adviser and chief of financial mission to Saudi Arabia, 1951-52.
Pasadena, California
February 21, 1974
James R. Fuchs

[Notices and Restrictions | Interview Transcript | Appendix | List of Subjects Discussed]


This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

As an electronic publication of the Truman Library, users should note that features of the original, hardcopy version of the oral history interview, such as pagination and indexing, could not be replicated for this online version of the Arthur N. Young transcript.

This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened August, 1975
Harry S. Truman Library
Independence, Missouri

[Top of the Page | Notices and Restrictions | Interview Transcript | Appendix | List of Subjects Discussed]


Oral History Interview with
Arthur N. Young


Pasadena, California
February 21, 1974
James R. Fuchs


FUCHS: I thought we might begin, Dr. Young, with you giving a little of your background; where you were born, and some of your education up to the time that you went into Government service.

YOUNG: Well, I was born in Los Angeles in 1890 when it had about fifty thousand population, and graduated from Occidental College, and took postgraduate work at Princeton College, in economics and finance. And then later on in the twenties when I was in the State Department, I took a law degree at George Washington University by night school.


FUCHS: I believe you had a rather close connection at Occidental College, you were telling me.

YOUNG: My father called the meeting that led to the founding of the college in 1887, and was a trustee all the rest of his life, and at one time was president.

FUCHS: Did you feel at an early age that you wanted to go into the economic field--has it always been…

YOUNG: Well, at the age of fifteen , when I was graduating from the old Occidental Academy, which was then preparation for college, because high schools weren’t too good at that time, I had to make the valedictory speech. I suggested the topic of "Problems of the Twentieth Century."

And my father said, "Well, you'd better call it 'Some Problems of the Twentieth Century." I still have a copy of that speech and it dealt with various pending political and economic questions


arising out of, pretty largely, President Theodore Roosevelt’s drive for conservation and that sort of thing, It was perhaps significant as to attitudes of 1906 that it centered on , American problems, not international.


YOUNG: So, I think at that age of fifteen, I manifested interest in public affairs and economics. I majored in economics at Occidental, where I graduated in 1910, but I didn't decide to go into economics definitely until I tried out teaching for one year after I’d had two years of postgraduate work at Princeton. I was offered a post of teaching in the Presbyterian College in South Carolina. I decided to go down there and teach for a year and see how I liked that, and I did. I got drafted into coaching athletics also at the same time, and was probably more successful in that than in teaching. But,


in any case I went back to Princeton and finished my doctor's degree the next year, 1914, and was invited to stay on and teach at Princeton. And then, after the war came, I started officer's candidate training. But, then I was asked to go to Mexico, because there was some trouble down there and there was a mission being organized to work on the Mexican finances, and I was asked to join that mission. So I was excused from the draft and went to Mexico, and worked on the Mexican tax system for several months; and then that mission ended, just before the World War I ended, because of some complication in relations between Washington and President [Venustiano] Carranza of Mexico.

I came back and, after work with the War Trade Board, joined the Department of Commerce for a mission in Spain at the end of the war, to look into the finances. After I came back from that I joined the Department of State.


After a few months there, the Department asked me to go to Honduras as financial adviser. The President of Honduras had asked for a financial adviser, and I spent a little over a year there trying to reorganize their finances. I pressed rather hard on that, and finally after the Government passed the laws for carrying out the reforms on which we had agreed, they started to go back on the laws and depart from them in a way that was placing financial stability in trouble. I had to have a showdown, which I could not possibly win, and I knew I couldn’t win it, so I left and came back to the United States.

Secretary [Charles Evans] Hughes then asked me to rejoin the Department of State, which I did in 1921. And, after a few months there, I became the Economic Adviser in charge of the Economic Office of the State Department. I stayed there until 1928, when I was asked to go to China. I went to China for a year, but managed to stay


all through the war. And after that came back here, and after some recuperation have been engaged in consulting work, with various missions for the Government and for foreign governments, the last of which was in 1962 and ’63, when I went to Argentina to advise on the tax system.

FUCHS: You had a long and distinguished career in the Department of State.

Just a little bit more about this Mexican mission. How did it come about that you went down there on such a mission?

YOUNG: It was arranged with Mexico by Henry Bruere who was, or had been, in the city government of New York, as the chief accountant--I think--comptroller of the City of New York. He also had mining interests in Mexico, and he got on very well with President Carranza. Mexico's finances were in trouble and at Bruere's suggestion he asked for an American mission to


go down to Mexico. One of the members of that mission was Professor [Edwin W.] Kemmerer who had been my teacher and then my colleague at Princeton University. He was the rather famed "money doctor" who had worked on finances first of the Philippines. As a very young man he had charge of the currency reform in the Philippines, and then returned to academic work and had various other missions. He asked me to go down there as the expert on taxation. I had been teaching taxation--public finance at Princeton. And so, we went down there and had a very interesting experience in Mexico for several months.

FUCHS: Your mission to Honduras, is there anything that stands out in your memory about that? Anecdotes other than purely professional matters.

YOUNG: Well, it took twenty-one days to go from Los Angeles to Honduras in those days on the good ship


CuraÇao--about fifteen hundred tons. It put in at every little port along the coast of Mexico and Central America.

I remember we stopped at Acapulco, which was just a little muddy village. We called on the American consul there and walked up on the hill to the place where he was living--came back and we went on the boat.

We got to Honduras after twenty-one days, and we had a launch to take us from Amapala the port, which was on an island. We crossed to the mainland and traveled up the road at night to Tegucigalpa, and stayed in Honduras for thirteen months.

A really most interesting experience. It was very primitive at that time. The finances were in disorder because, although the government had larger revenues than it ever had, it was paying it out largely in graft and corruption to the Army and people who had phony claims for


having organized troops to put through the great revolution for the benefit of the country and so forth.

The first thing I did was to get the accounts brought up to date. And then I called to the attention of the President the fact that these wasteful expenditures were eating up the revenues and the government would be in deep trouble unless things were changed.

I got him to call a series of cabinet meetings and I met with him and the cabinet for three days. We decided that they would issue instructions through the minister of finance, and through the minister of war, that such and such numbers of troops would be in each place throughout the country, and such numbers would be paid. We reduced the expenditures for the Ministry of War to about forty percent of what they had been.

And, at that time, I found that the school teachers and many other employees had not been


paid. Some of them were twelve months in arrears. Within a few months, by cutting military payments, we were able to save enough money gradually to pay those salaries, and they were up to date before I left. So that, after about a year, the government was up to date in its finances.

FUCHS: That's very interesting. Were those overtures made--of course the invitation came from the President of Honduras--but were these made solely at the initiative of that government, or did we have something to do...

YOUNG: As I understand it, the Department of State suggested through the American legation in Tegucigalpa that it would be helpful if Honduras would request the services of a financial adviser. But, I knew nothing about that at the time until one day I had a call from the Chief of the Latin-American Division of the State Department asking whether I’d be interested in going down there as


financial adviser. I had been in Spain, as well as in Mexico, and was able to speak Spanish. And so, with my financial background and knowledge of Spanish, it seemed to be a natural. So, I came home one night and said that we were probably going to Tegucigalpa. It was cleared with the Honduras Government, and I went down there.

FUCHS: Did your wife welcome that journey?

YOUNG: Very much. She was always adventurous, and we had two small children at that time, ages one and three. When we came to this good ship Curaçao, docked at San Pedro, we found that there was no protection on the deck except two lines of pipe railing all the way around the decks of this boat. So we hurried out and got some leather straps and got some harnesses made to put on these children. We never let them off leash all the time we were on board, and we didn’t leave them alone in the cabin overnight


even. One of us would sleep on a mattress on the floor at the entrance to the cabin so they wouldn’t be dashing out and falling overboard. So, that was life in those days.

FUCHS: Very interesting. Acapulco wasn't full of "beautiful people" then like now?

YOUNG: No, it was not.

FUCHS: Well, do you think the same sort of thing occurred in connection with the Mexican and the Spanish missions in that...

YOUNG: In Mexico, things were so disturbed that I couldn't take the family with me. In fact, the train on which I went from the border to Mexico City had been shot up on the way north from Mexico City, and going down they sent an exploradora train ahead of us with a carload of soldiers at the end of our train. One exploring train going ahead; a carload of soldiers attached to the rear of the train to


protect us from bandits, but we got though all right. But, when we were in Mexico City, at times there was no communication with the outside by train because all the lines were cut by various rebels, and Mexico City was not safe. At one time, bandits shot up a train on the outskirts of Mexico City and plundered the train, and killed scores of people. It wasn't safe to go out in Mexico City at night, except in a group and with arms. I remember I would go out carrying a loaded gun in the pocket of my overcoat, so it would be all ready to use, and others did the same.

FUCHS: Did the State Department--or was this the Department of Commerce? Did they provide any…

YOUNG: No, this was private arranged by Henry Bruere. He got Professor Kemmerer to help to organize this mission, which was favored by the American Government. We were engaged and


paid by the Mexican Government, but with the approval of the Department of State to such extent that I was exempted from the draft to go down there.

FUCHS: Did they provide you with a gun?

YOUNG: Yes. And I also carried it in Honduras. At that time there, a part of every well-dressed gentleman's equipment was to wear a cartridge belt with a gun. But, I never had to fire the gun in anger in either country.

FUCHS: The mission to Spain, how was that arranged?

YOUNG: That was through the Department of Commerce, to investigate the financial and economic situation of Spain at the