Adams] SHONTO: ROLE OF NAVAHO TRADER 175 



result that operating margins are sometimes shaved to the bone. In 

 general they average about 5 percent. 



A few Navaho traders still attempt to speculate, particularly in 

 wool, when the market shows signs of advancing. "Making a killing" 

 in wool is still perhaps the trader's dream, but it has seldom been 

 possible in the face of a generally declining market, and the attempt 

 more often than not has been disastrous. A sudden decline in the 

 wool market in 1952 bankrupted several trading posts, and cost 

 Shonto's owner over $20,000. 



Very slow turnover in rugs and other crafts results in consistently 

 high markups in these items, and it is traditional to get as much as 

 the traffic will bear out of them. Saddle blankets normally bring 

 between 10 and 20 percent; larger rugs may be marked up as much 

 as 50 percent. 



Because of the inevitable markups necessary to cover costs of han- 

 dling commodities, most Navahos undoubtedly believe that traders 

 make a profit on them as producers as well as consumers (cf. Kapo- 

 port, 1954, p. 7) . There can be no doubt, moreover, that such was and 

 often still is the ideal of traders themselves. Nevertheless the average 

 trader's commodity transactions today are unlikely to do more than 

 pay their own way, and may even bring a loss as compared to cash 

 transactions. Plence the often stated axiom of the modern Navaho 

 trade that expected profit must be based entirely on retail markup. 



SUPPLT 



So long as it continued to produce chiefly commodities rather than 

 cash, the Navaho wholesale market remained almost exclusively under 

 the control of the handful of general mercantilers who were equipped 

 to underwrite the commodity trade with long-term credit. These 

 houses, in Flagstaff, Winslow, Gallup, and Farmington, had divided 

 up the entire reservation territory in a sort of cartel system, so that 

 each served an exclusive territory, and competition was virtually 

 absent. 



Increasing wage work and the circulation of large amounts of cash 

 on the reservation in recent years have had the effect of opening up 

 the Navaho wholesale market, freeing traders from total dependence 

 on the general mercantilers and attracting new and specialized whole- 

 sale enterprises to the territory. Today more than 20 wholsale houses 

 make regular sales calls at trading posts throughout the reservation, 

 and as many more sell the territory by mail. Included are specialty 

 dry goods and novelty houses, pharmaceutical manufacturers, curio 

 dealers, produce and feed dealers, coffee brokers, and even a mail-order 

 grocery house, in addition to the general merchandise wholesalers. 



