Creation
Arsenal was created by fan Roger Banham, of Whitehall, North Carolina for the Adventure Comics run of “Dial ‘H’ For Hero.” This run existed on the shoulders of a contest for readers to send in their own creations to be featured in the comic. Arsenal was likely tweaked and made ready for comics by Carmine Infantino and Marv Wolfman. He was introduced as one of the Evil Eight. The name was later reused by DC as an alias for Roy Harper.
Origin
It wasn’t truly explained until the end of the series, but Arsenal was created by The Master- an evil persona of original Dialer Robby Reed. When wrapping up the Dial “H” For Hero run in the back pages of New Adventures of Superboy, it was revealed that villains that failed The Master were consigned to a disintegration pit. Even though the terms of the contest submissions stipulated that DC owned any characters submitted, the disintegration pit insured that the characters would not appear again. However, in the 2012 Dial H series, it has been revealed that dialed personas exist in alternate universes. It could reasonably be assumed that the villains exist also, and could one day reappear in the DCU.