Adams] SHONTO: ROLE OF NAVAHO TRADER 171 



FINANCE 



Small businesses iii general find bank financing difficult to obtain 

 (see Kaplan, 1948, p. 136), and for traders with their negligible assets 

 and unsecured accounts it is entirely unavailable. The trader, like 

 his retail clientele, requires long-term credit without security to oper- 

 ate throughout the year. Such credit is available only from the 

 mercantilers of Flagstaff, Gallup, and Farmington ; these institutions 

 provide not only the mercantile credit necessary to operate, but also 

 in many cases funds for improvement or expansion, and not infre- 

 quently carry trading posts through bad years. They are unquestion- 

 ably the financial backbone of the Navaho trade. 



The credit status of the trading post once depended directly upon 

 recorded and/or anticipated commodity trade, and rugs, wool, and 

 lambs went directly to the mercantile house in payment of account. 

 One trader of nearly 40 years' experience remarked, "We never used 

 to keep any kmd of books. We took our wool and our rugs to the 

 'mere' once a year, and they weighed them up and told us if we made 

 a profit or took a loss for the year." The trader of that era was in 

 a position of financial dependence exactly comparable to that of the 

 individual Navaho today.^' 



The flow of retail goods to the Navaho consumer, however, is no 

 longer paid for entirely by an equal flow of commodities to the 

 mercantiler. The credit status of the modern trading post is con- 

 siderably more complex. Livestock trade still necessitates and at the 

 same time furnishes a basis for mercantile credit, but rug and other 

 craft trade has declined to such an extent that these items are no longer 

 even convertible at the wholesale house. Cash volume, on the other 

 hand, not only furnishes a basis for additional credit at the wholesale 

 house, but also to some extent enables the modern trader to deal with 

 specialty wholesalers on short terms, and even in some cases to buy for 

 cash. It has become a regular practice to make monthly payments 

 even on long-term accounts, thereby considerably reducing the amount 

 of interest paid annually. 



Wliile wholesale trade has tended more and more toward a cash 

 basis, retail Navaho trade, particularly in the western Navaho area, 

 continues to be based on multiple media of exchange, with the result 

 that the burden of commodity transaction falls increasingly onto the 

 trader. The general mercantilers no longer handle even lambs and 

 wool in direct payment of account; instead they act as commission 

 agents in contracting the sale of these products directly from trader 

 to feeder or wool house, receiving whatever is due them out of the 

 proceeds of the sale. Rugs, piiion nuts and other commodities must 



" The regular relationship of the general merchandise wholesaler to the rural general 

 store is discussed in Beckman and Engle, 1951, pp. 201-202. 



