154 BUREAU OF AMERICAN ETHNOLOGY [BuU. 188 



tained annual profits. Basic to this transformation and indicative of 

 it was the transition from a barter to a commodity credit economy. 



Pawn was undoubtedly the earliest basis for Navaho credit, and 

 may possibly go back to the beginnings of the trading post system. 

 "Book" or imsecured credit was in all probability an outgrowth of 

 the rug trade after 1890, and may well have been introduced initially 

 as a device to insure a steady supply of rugs. By 1910 many traders 

 were definitely allowing large accounts against rugs. Decline of the 

 rug market and the substitution of raw wool as the primary com- 

 modity after World War I made the Navahos increasingly dependent 

 upon seasonal production, and undoubtedly further solidified the 

 credit system. 



Throughout the present century credit operation has become a neces- 

 sity to the Navaho trader no less than to the Navaho consumer. With 

 increasing development of the Navaho market and the multiplication 

 of trading posts the first concern of the modern trader is to protect 

 rather than to expand his consumer market. Territorial monopoly 

 which was once in itself a satisfactory guarantee of a captive market 

 has been of diminishing value in the days of new roads and auto- 

 mobiles. In general, modern traders have come to rely instead on 

 retail credit saturation to insure market control. In this operation the 

 trader has found a new benefit in territorial monopoly : he is the only 

 merchant close enough to the Navaho market and familiar enough 

 with it to be able to grant credit without security. 



Whatever the original motive for introducing credit in the Navaho 

 economy, it was in practice entirely effective. Characteristic Navaho 

 concentration upon immediate conditions and lack of concern for the 

 more distant future provided a climate favorable to unlimited ac- 

 ceptance. By the end of World War I it had become, as it remains, 

 the essential basis of trading-post operation. This development 

 clearly marks the end of the "frontier" period in Navaho trade and 

 probably in Navaho life generally. The trading post had become, 

 as it largely remains, a late version of the old general store which 

 was the cornerstone of the American rural economy throughout the 

 19th century. 



TRADING IN THE NOETHWESTERN NAVAHO AREA 



Although Navaho-Mormon trade beyond the Colorado River dates 

 back at least to the middle of the 19th century, permanent trading 

 posts were slow in coming to the northwestern Navaho country. 

 Probably because of the scattered and unstable population conditions, 

 the Mormon colonists in the region never pushed their trading ventures 

 beyond the limits of their own farming settlements. Until well into 

 the present century Tuba City was the only Navaho trading center 

 between the Colorado Eiver and Chinle Valley, and between the San 

 Juan and the Hopi villages. It remained for others to bring trade 



