168 BUREAU OF AMERICAN ETHNOLOGY [BuU. 188 



of the Navahos to the modem United States mercantile economy the 

 trading post is thus in the position of bridging a 100-year gap in 

 economic development. The result, at the wholesale level, is a com- 

 plex and sometimes makesliift system of commercial and financial 

 relationships very different from those of the old general store (cf. 

 Carson, 1954, pp. 135-190; Atherton, 1939, pp. 47-82). 



The trading post, moreover, has been undergoing a period of tran- 

 sition reflecting that of its consumer market. The store, together 

 with its customers is becoming "acculturated," and the process in 

 both cases is replete with uncertainties. Increasing volume of cash 

 and short-term retail transactions is lessening the store's historic 

 dependence on long-term wholesale credit (cf. Nystrom, 1930, p. 81), 

 but at the same time undermining its competitive position in the 

 consumer market (see "Market Control," p. 169). Emergence of a 

 cash-based economy has the further effect of forcing the trader in- 

 creasingly to seek special markets for that part of his income which is 

 still received in the form of commodities — markets which are no longer 

 related to direct channels of supply and finance. 



Finally, the Indian trade has always involved inherent risks both 

 at the retail and wholesale levels which are almost without precedent 

 in American business practice. Because of their special legal status 

 the assets of Navahos and other reservation Indians are not subject to 

 lien or attachment of any kind, so that the trader, unlike the general 

 storekeeper, cannot deal in notes or crop mortgages, and has no legal 

 recourse of any kind in case of default. Except in the case of pawn, 

 trading post accounts receivable are entirely imsecured. 



The wholesale merchant who supplies and often finances the trader 

 inevitably absorbs much of the same risk, for the trader himself 

 has little or nothing to offer as credit security. His land, buildings, 

 and fixed assets belong legally to the Navaho tribe (see "Shonto 

 Trading Post," pp. 157-161), and his accounts receivable are largely 

 unsecured. The result is that the wholesaler must for the most part 

 carry the trader on the same terms as the latter carries the Navaho 

 consumer. Under these circumstances ultimate control of the Navaho 

 trade in the present century has passed very largely into the hands 

 of a small group of general wholesale houses in off-reservation towns 

 whose operation is especially adapted to the Navaho trade and capi- 

 talized accordingly. These "mercantilers," as they are commonly 

 called, are in every case branches of larger and more diversified whole- 

 sale organizations and thus infinitely better able to absorb the risks 

 of the Indian trade than is the retail trader. In nearly every respect, 

 both financial and commercial, they stand in the same relation to the 

 trader as the latter in turn stands to the Navaho consumer. 



