182 BUREAU OF AMERICAN ETHNOLOGY [Bull. 188 



It is a basic principle of modem Navaho trade tliat profit must be 

 based entirely on retail markup, since the commodity trade lias 

 become more hazardous than profitable (see "Commodity Exchange," 

 above) . Markups, moreover, are consistently high ; often double those 

 of ojff-reservation merchants (cf. Kluckhohn and Leighton, 1946, p. 

 39). Partly they reflect high freight rates, low turnover, and gener- 

 ally inefficient business methods (see Nystrom, 1930, p. 82; Dolva and 

 Beckley, 1950, p. 118) . Most of all, however, they are a consequence of 

 long-term credit operation, and result from the high interest rate 

 (normally 8 percent) which the trading post must pay on its long-term 

 mercantile accounts. The Navaho consumer thus pays interest in- 

 directly on his own credit accounts. 



In the early years of Navaho trading, markups were limited to 25 

 percent by government decree (Underhill, 1956, p. 182). In the 

 present day a 25 percent markup is considered inadequate even for 

 groceries (cf. Carson, 1954, pp. 93-94). Shonto's grocery markup 

 consistently averages 35 percent, while other average markups are 

 75 percent in dry goods, 100 percent in hardware, and 100 to 200 

 percent and even higher in remedies. (Such large profit margins 

 are traditional in the pharmaceutical line, and are sustained by 

 manufacturers' fair trade prices in many cases.) 



A distinctive feature of trading-post price policy is that all prices 

 are set at multiples of 5 cents, so that the trade can if necessary be 

 conducted without the use of pennies. Such a practice undoubtedly 

 originated in the days of scrip money (see "Early Trading Posts," 

 pp. 150-154) when 1-cent scrip was dispensed with as a nuisance. It 

 survives in modern times partly because older Navahos still consider 

 pennies a nuisance, and partly because the old system greatly simplifies 

 mental arithmetic for both customer and clerk. 



BOOKKEEPING 



Until as recently as a generation ago most traders kept no records 

 at all other than those of accounts receivable (see "Finance," pp. 171- 

 172) . The trader was content to feed and support himself and family 

 with merchandise from the store, and to find out from his mercantile 

 creditors once a year how much he had made or lost for the year. Such 

 other records as were kept were likely to be in the form of mnemonic 

 devices which reflected the trader's individuality and ingenuity rather 

 than any system. The walls and counters of many trading posts 

 today still exhibit quantities of undecipherable inscriptions and hiero- 

 glyphics, commemorating long-forgotten transactions. 



Recent developments, including the proliferation of suppliers, the 

 advent of short-term credit and net cash terms, and the necessity of 

 paying regular taxes and lease fees, have conspired to demand some- 



