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Opened August, 1975
Oral History Interview with
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 werent 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 Roosevelts 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 Id 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 couldnt 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 wh