Pawned horse trailers.  Courtesy Brad Cole  1999. 


Paul Begay:

I remember my mother and my father pawning, my grandfather pawning. There was times when you needed to do it.  Just because you had a hundred head of sheep don't mean that you had sheep to sell.  It's understood, the Navajo people took real good care of their sheep.  You don't sell your sheep.... So in the meantime, they resort to their jewelry, a set of beads, a concho belt, a bracelet.  They could pawn it for fifteen, twenty dollars.  Growing up, I remember watching Mom and Dad do that.  They would take off their bracelet and sell it--not sell it, but pawn it.  And they would get some money--fifteen, twenty dollars maybe.  And then, here again, that's a lot of money--you could buy a lot of stuff.


Elijah Blair:

First you gotta realize that the Navajo did not accumulate money.  His security and his wealth was all put into his jewelry, or livestock.  And his status symbol actually was either in the livestock he owned--the cattle, the sheep--or then into the jewelry that he had…. This was really how he accounted for money, where he stored his savings account, as I call it.  He put it in there, and that's where it was.  So as long as he had jewelry, he could take it to any trading post, where he'd ever seen a trader in his life, wherever the trading post was, and then he could pawn for anything that he could want--if he didn't have a lamb to sell or a cow to sell, it was out of wool season or lamb season, then he could bring it in and he could pawn for a saddle or groceries or whatever.


Jack Manning:

Well, there wasn't any banks.  And banks, years ago--they're still the same way today--they want security.  The Navajo people didn't own anything.  They don't own the land where their home's at.  And then a bank, they couldn't repossess anything.  You went back on the reservation....  Let's say they loaned money on cattle or livestock or something, and I don't pay, they can't come and pick 'em up anyway, 'cause the bureau will see that they don't do that.  So banks weren't in the picture very much.



Jewel McGee:

Cole: If you were to explain how trade worked in your post in the 1930's, to, say, someone like me that had no idea....

McGee: Well, we used to credit the stockmen and everybody like that. We'd give them credit accounts, and then we'd buy their lambs and their wool. Of course we always had their rugs. It was an item with 'em that we marketed and sold for 'em--bought 'em and sold 'em…. they had lots of--it was a good stock country out there, you know, between those creeks and mountains and the red wood. There was lots of stock in there. I used to buy about 4,000 lambs and 400 bags of wool every year. Talking about big bags, not little ones…. We herded 'em in, sold 'em, and shipped 'em on the railroad…. about eight days to come from the store to the railroad here at Farmington.

Cole: Could you describe the pawn and barter system, how that worked?

McGee: Well, generally, we'd take in pawn, you know. Of course we'd value it, like say what it was worth, and then we'd take it in for part of it. We didn't buy it to sell--we wanted him to redeem it. We had a six-month limit, but we never hardly sold any of the good stuff, 'cause we didn't want to. We'd hold it 'til he'd come and take it out. And it was mostly barter. I mean, he'd come in and pawn it for groceries. Or if he wanted cash, why, we'd charge him a percentage on it.

Cole: Was there much of a business in cash at that time?

McGee: You mean, Navajos have cash?

Cole: Right.

McGee: Not at first, no. We used to laugh about it--our pelt sales was about the only cash we got all during [the year]--outside of wool and lamb season.



Hank Blair:

[Red Mesa] was a bull pen store, old bull pen store….Everything was on credit, there was no cash money....  Even us, I remember going to Farmington, to the Farmington Mercantile, which was the wholesale house where we got everything.  I remember my dad, we wanted to go out and eat, my dad would go down to the wholesale house and draw ten dollars on their account, cash, so we could go eat.

I remember somebody comin' in when I was a kid, probably came home from working on the railroad or somethin', with a twenty-dollar bill and bought like a bottle of pop or something, and my dad and mom were emptying all the piggy banks and everything, trying to get change for a twenty-dollar bill.  Especially early on, it wasn't a cash business--it was all on the tab.  That's the way it was.



Paul Begay:

As far as the addition of money for interest, I never--I didn't know that existed.  But here again, I'm sure the Navajo person also understands--especially the older ones will say, "Well, I'll pawn this for forty dollars."  He expects to get it back for forty dollars….he doesn't understand that this person has to also make money, he is helping you by lending you forty dollars, but for a little price.

Now, today a lot of people understand that, you have to pay a little price to borrow some money.  But back in those days, it wasn't like that.  But as time went by, they began to be educated that this is the way it is.  They talk among each other--the Navajo people talk among each other.  ìHaash yití·o?  Why is it I pawned this for twenty dollars and then I had to pay twenty-three dollars to get it back?  And then the person that now understands how the system works will tell the Navajo, "JÛ!  Because he doesn't know you and you don't know him.  If you didn't know me, and I don't know you, would you give me twenty dollars, lend me twenty dollars and I tell you 'I'll give it back to you sometime later'?"  "No, I won't do that."

At least this man, he keeps it there, and he says he'll give it back to you, but for a small price.  In the meantime, you get your food or whatever you need, and you go.  See, it's a way of helping."  The Navajo now began to understand that you get help in this way.  And so three, four dollars or five dollars interest is a small price to pay for what you got.  They began to understand it.

But then again, there's a lot of people--especially the elders--they still believe that they should get it back the same way, because they don't understand.  He's looking at this man, this white man, the trader, and he drives around a car--especially probably Jaiyazhi, he's got his airplane sittin' out there--this is a rich man.  Why would he need an extra three, four dollars?  They don't understand that, see.

But he still needs it, probably to pay for his airplane or his pickup.  But through the years, as times changed, they began to understand it.  Today the majority of the Navajos, I believe, understand how the system works.



Carolyn Blair:

In the forties ….the jewelry was beautiful.  It was the real turquoise, the real silver, the real coral.  We would keep it for years and years because we'd know the situation of the family, whether the man was able to work or we're having a drought and they didn't have many lambs, or, you know, if there's sickness in the family or not.  And we were allowed to keep it for six months, but we usually kept it for years and years.



Elijah Blair:

The majority of our pawn on the reservation was actually trade pawn, which there were no interest charges on trade pawn.  All of our mark up was already marked up in the merchandise that you sold, the saddles all marked up that they pawn…. if you had a ceremony or something around Mexican Water Trading Post, for instance, and you had some guy came out from Rock Point or Chinle or somewhere like that--he was there doin' the dance or Squaw Dance, somethin' like that, and he saw that you had a wagon out front, or a saddle that he wanted--the other trader may not have this--with the pawn, see, it's just like money.  He could pawn that to that trader and he could buy anything that he wanted.  This was the way it worked….

It was a disadvantage to us to sell the pawn, because then if you did, then they didn't have the pawn to rotate and buy another saddle or another wagon or whatever.  This was a trade pawn, so it was really a good thing for us, and we would keep it forever….

With the ceremonies, they definitely like to have all of the jewelry and stuff on it, on the person, particularly the patient that was havin' it.  They wanted all of her jewelry on her.  And so many times the trader would loan back to the person his pawn, for, say, a five-day ceremony.  As soon as the ceremony was over, then they would bring it back and put it back….
In every store that I ever owned or worked in, the way [cash pawn] worked is a guy came in and he wants ten dollars, and we had a 20 percent charge, 20 percent interest rate.…simple interest.  If he pawned for ten dollars, you charged him twelve, ten dollar price plus two dollar interest.  So you put that on his piece of pawn and you stored it. Okay, you kept this for a year, and it was twelve dollars. If he came back the next day and took it out, it still was twelve dollars, because there was no pro-rated charge or set-up fee. In today's world, you have a set-up charge, and you have this and that. Now you go to the bank and you find out how many hidden charges there are, but none of these set-up charges are computed into an annual percentage rate.  We didn't ever hear about annual percentage rate….  This is what we did, we charged about 20 percent, kept the pawn for a year, and they paid it out, whenever they took it back out, they paid the two dollars.  And this was basic to the way it always was, in every store I have ever owned, this is what we charged for cash pawn….

The pawn system ….was safe keeping for them. …he would come in and he would say he would pawn a bracelet that's worth $500.  Well, he may only buy ten dollars' worth of stuff on his pawn, but see, we had his bracelet. It's just like an open-end account.

He came in a month later, said, "Well, I want some more flour."  So then you would just keep adding it to that bracelet as he came in.

And many times he would say, "Well, I don't really want to take it out, because you have this vault, and it is safe here. If I have it at home, my kids or relatives or whoever will try to get me to pawn it for something else.  But as long as it's here, then I don't have it, and I don't have to say 'no.'"

And that's basically what it was.  It was safe, and then they didn't have to turn down their relatives.  Besides being something as collateral for things that they needed, we kept it safe for them, and they wanted it that way.  They really wanted it safe there for them.

In cases of deaths, or something like that, if people had pawn in there, we always somehow made arrangement, because they always, you know, buried all the jewelry with the deceased, and we always somehow made arrangement to get it back to them.  May have to switch things around, but we definitely did it.


FTC/DNA Hearings in 1972


Peterson Zah: 

I got involved in DNA People's Legal Services, mostly from the cultural education perspective, where we had a lot of young, aggressive, non-Indian white lawyers that came to Navajo, but they didn't have all that many Navajo people that can be the ears and eyes of the Navajo people in the community to those white lawyers.  And I guess that was one reason why I was hired…. they needed guidance; they needed somebody that can guide them and somebody that can work with them to make sure that Navajo culture and Navajo taboos--if there is such a thing as taboos--are not violated.  And so my job was to help the lawyers that way….I just got kind of involved into that kind of a situation with DNA.


Bruce Burnham: 

In the early seventies they came in with the Fair Trade Commission laws....  We had a lot of warning, there was talk about it for two or three years before it ever really came to fruition.  It wasn't something that just all of a sudden they passed it in Congress and then the next day came out and enforced it.  They passed it into law, and that's all it was, was law.  It hadn't been implemented yet.  So they started waitin' for a chance to implement it.  And so what happened was some traders were very opportunistic--an opportunist to the nth degree.  They would take advantage of every situation that came along to make a little money.  And so they found violations here and violations there, but what they needed was one individual that they could really come down on.  And so the United Traders Association had a meeting and said, "Well, are we or are we not going to defend the traders in this issue?"  And what it was, it was to become a class-action suit.


Peterson Zah:

How the traders and the trading posts got involved in all of those kinds of legal activities at DNA was there were just too many complaints that were coming into DNA offices, all the offices, because by that time we had about seven or eight offices that were open among the Navajo agencies….

And so we were out there among the people, advocating to have Indian individuals who are indigent, to have them work in such a way that their legal rights are exercised and protected.  And so the more we told the community people about some of their legal rights, the more cases they brought to us.  And it was at that point, I think, the trading post problems came into existence, where just too many people were coming to our offices complaining about the traders.  And I'll use one or two examples of what kind of complaints.
One complaint was where the traders would only deal with some Navajo people insofar as getting work off the reservation.  Railroad jobs at that time were very popular among Navajo people who are not trained.  They were laborers.  So Union Pacific and Santa Fe Railroads would call the trading posts…. and say, "We want ten Navajos that are good workers."  Well, the way the trader made that decision was "good workers" meant the people who owed them the most money.  (laughter)  So what they did is that they ended up sending those people on a railroad job….
The other one was where the Navajo people who gave their local address--as you know, you don't have street addresses out there, so you use your local trading post as your local address.  And when Navajo people go out there, outside of the reservation, and work, they would always have some kind of a check coming, and following them after coming back into the Navajo [Reservation]--either in the form of severance pay or retirement check or last payment on the job, or something.  And the traders, as we understood it, based on the complaints, would always know which letter contained a check inside.  And the trader would put that check into a different box, and would leave all of the other mail in the box for the people to come and check.  But they would know that there's a check in here, so they would put it somewhere….and the trader worked in such a way that he always got his money back from that individual.  And the individuals were saying that "the trader should not hide the check from me," or "they should not open my mail," or "they should not put this over the light bulb and see if there's a check inside.  You know, that's my right.  They're violating my rights."  So we got into a big fight with the traders over that issue.  And I remember I was right in the middle of it.
And the third kind is where--and this is how the Federal Trade Commission got involved, FTC--and the third kind was where if you pawned something of value--jewelry, saddle, belt, beads, squash blossom, moccasins--when you pawned something at the trading posts, you were paying such a high, high interest rate on those pawned articles, to a point where it was described as unconscionable, that nowhere else in the country do you go to a pawn broker, for example, and do you pawn an article such as high as the trader would charging the interest on those.

And so we got into a big dispute with the traders over that issue.  And related to the same pawn article, was where if you have some good squash blossom and Navajo beads, for example, or sash belt, when the pawn became dead was always an issue.  The traders, as we understand it, through the complaints that were coming to our office, if there is some good valuable squash blossom, the trader worked in such a way, kept their records in such a way, that it became a dead pawn immediately.  So if there's a tourist coming by Keams Canyon, driving across the reservation, and if they're really interested in that bead [necklace], if it was labeled "dead pawn," they would sell it, and they would get a huge amount of money off that article.

For example, a Navajo might pawn a bead necklace for $100, and the Navajo lady might be paying the interest on that on a monthly basis, so that it won't become dead.  The trader would maybe get tired of that, because so little money is coming off that pawn.  He would declare it dead pawn, and then sell it for $500, $800, $1,000, and they would keep all of that money.  Our claim from DNA was that that money belongs to the person who owns the beads or the necklace--that the person who owns the beads should get a good portion of that money, and not the trader.  The trader should only get back for the amount of the pawned article, and the other should go back to the owner.  So we got into a big hassle over that.
The hassle and the dispute relative to those pawned articles was such a big thing that we got the Federal Trade Commission involved to regulate the traders….

Now, that isn't saying anything about what the good services of the traders have meant to the Navajo people for all these years.  It was just a situation where the complaints have compounded during a certain period of time.

And the Navajos were going out.  More and more Navajos were going out to Flagstaff, Winslow, Cortez, and Farmington to shop. And they were beginning to see the difference between the trading post, what it has to offer, and the shopping centers out there.  They were beginning to compare prices, they were beginning to compare the quality of the merchandise they were buying.  And to me, it was just inevitable that this thing came about [in] the manner in which it did.  It was one of those things that it just had to come at that time, in the history of the Navajo people.


 Bruce Burnham:

It was certainly, in my lifetime, the biggest thing that ever affected Indian trading….

Nobody, nobody used that law to go by, or those rules to go by, because it was practically impossible to do pawn according to the way the BIA figured you needed to do it.  Everybody stayed within a pretty standard policy of charging 20 percent interest on a pawn transaction, but then holding that pawn for six months to a year before it went dead.

A lot of pawn that a trader had in his pawn vault was pawn that had been there for two or three years.  It was in those good old belts and good pawn--good old treasures of families that you dealt with.  The idea wasn't, "Oh, let's kill it so we can sell it."  The idea was, "Let's get it back into the family's hands."  The family knew that you had it in your pawn vault, and they knew you weren't sellin' it, you weren't threatening to sell it, so it was safe where it was at, so let's just leave it there.  So that was kinda the way it went.

The BIA said you couldn't do it that way, you could only charge 'em 2 percent to do pawn, and then you could charge 'em 1 percent--and I'm not sure on these percentages--but 1 percent per month thereafter.  Then if you sold it then, you couldn't sell it for less than fair market value, and you had to go back and give your customer the difference between what it went dead for and what the fair market value was.  It was ridiculous.
Well, a lot of these things like that happened--that, and the fact that you couldn't require that your customer get their check in your post office box in order to have credit.  That was illegal.  Just a lot of other little things that you couldn't do.  And it just seemed to encompass almost everything the traders did.  But they wrote those laws probably thinking they were dealing with a modern type of business.  Well, Indian trading has never been what you would call the normal mode of business.  There's some balance in there somewhere.
You know, I was thinking about Norman Rockwell's pictures that they used to have on "The Saturday Evening Post" magazines, and it would show the guy in the supermarket with a chicken on the scale, and the lady that's buying the chicken on the other side of the scale.  They're looking at each other smiling.  The grocer's got his thumb on the scale on one side, and the little old lady's got her finger under the scale on the other side, and they're just smiling at each other.  (chuckles)  There's a balance in there somewhere.
I've known very few traders that were downright scoundrels that I would consider as being thieves.  One popular thing for a dishonest trader to do was if a check came in--like in the early sixties there was a railroad retirement adjustment of benefits that went retroactive for several years.  And so the men that were working on the railroad and had been signing up for railroad retirement benefits got these huge checks.  I say "huge"--for the time and everything, they were big checks, like a $2,500 check.  And I know an individual that would cash those checks for those people, and a $2,500 check became a $250 check.  Those are the kind of guys that needed to be weeded out, but ironically enough, I don't think any of those traders were touched by FTC or anybody else.  They continued to do their outright dishonest acts, even after FTC.  They were blatantly illegal before and after, and they just continued on doing what they were doing.


Jay Foutz:

When they took [pawn] out, they done the whole tribe an injustice. I mean, all the good pawn that we were used to handling is gone.  There ain't no more, there isn't any more ever.  I mean, there's a lot of good new stuff on the market, I'll grant you that, but all the old good coral beads and all the good belts and stuff that I would like to own, that I would like to have, it's gone, there's no more of it.  I mean, it's all been pawned off, and those people weren't under any guidelines--30, 60, 90 days, whatever.

We were bonded Indian traders, and we were obligated to do what we agreed to do, and that was it.  But when they took it off, when they took the pawn away from us, that was probably the biggest injustice they ever did to the Navajo people, except when they forced 'em to reduce all their livestock below what they should have done.


Bill Malone:

What really happened on the reservation was pawn went away.  That really scared all the traders who were doing pawn on the side, to get out of the pawn business.  All the pawn went to town, family heirlooms were probably lost….

A trader on the reservation would never, never kill somebody's good pawn, because they're gonna lose the whole family's business.  So they would always keep their pawn for 'em a year, two years, three years.

In town, when people go to town and pawn their pawn, they'd better get it out when the deadline is due.  There's a few pawn dealers that would let a family keep their pawn over the time limit.  I would say one would be Mr. Griswold in Tse Bonito.  That's off the Navajo Reservation line.  Probably Mr. Richardson in Gallup.  But there are very few of 'em, that if their pawn is on a deadline and it's a nice enough piece to go for a lot of bucks somewhere, it's gonna be dead and gone.  So when the FTC hearings were final, the traders on the reservation quit pawning.



Hank Blair:

Somebody asked me …."Why are all the trading posts turning into convenience stores?"  And I said, "Why do you think?"  And they said, "Well, because nobody wants to run a trading post," or this and that, "and the tribe shut down all the trading posts."

And I said, "The reason all the trading posts are turning into convenience stores is because you can make more money in a convenience store.  In a trading post, what you're doing, you're running twenty different little business."  You were doin' pawn, you're buyin' livestock, you're buyin' wool and mohair, you're sellin' hay, you're fixin' flats, you're writin' letters for people, you're runnin' a bank.  I mean, I still do that.  If people get to cash their checks on the first of the month, they leave $300-$400 in the vault, I dole it out to 'em $20 at a time.  They come in, and you're doin' this stuff.

Well, at a convenience store, you're sittin' there, somebody wants a pop, you just sell it.  They give you a dollar, you give 'em a pop.  There's none of this, "Let's charge that.  Let me pawn my bracelet for that car battery, $59.00."  Somebody just comes in, they want a car battery, they hand you sixty bucks, you give 'em a car battery.

I've had these guys like Thriftway and these guys [tell me], like a guy put it, "All this community service stuff costs you money.  So let's quit doin' that."  You don't go into the Safeway supermarket and say, "My husband's in jail, can you give me $400 to get him out?"  That doesn't work.  At the trading post, that's what happens.

People call up....  Yesterday a girl calls up, she's in Salt Lake City, her husband's going to school up there, "Please send my mail and everything up to Salt Lake City."  Well, that doesn't pay too much to go get an envelope and put sixty-eight cents' worth of stamps on it and send her check and her food stamps up to Salt Lake City, but that's what you did at the trading post.



Elijah Blair:

We also have the pawn shop off the reservation.  We mentioned pawn on the reservation, all the regulations for it.  I'd just like to mention, explain why a trader comes off the reservation if he does pawn.  See, the reason he's doin' pawn, he's still servicin' his customers.  The Navajo, Native American, particularly Navajo, see, he cannot go to conventional financial institutions and borrow money.  He has no collateral…. Some pawn shops hock, you know, trailers and stuff like that.  But basically, the Navajo cannot, through conventional financial institutions, cannot borrow money.... So they come to us to pawn to get money to pay car payments or buy food or whatever, because they cannot get money anywhere else.

That's why you have hundreds of pawn shops on border towns around the reservation.  We do it because anytime there's a need for a business, some entrepreneur will come in and put it in.  Well, us traders, that's what we are.  We know the business is there, we know that they need this, there's no place they can get it, so that's why we do the pawn shop.

 I had a lady here just recently come in and she says in Navajo, "Thank you, Jahi, for comin' and takin' care of us, because without you, we would never have any money." …

Pawn shops have historically been looked at as kind of a sleazy operation. To the Native American, it is a service that they have to have.  And we do it because we're still servicin'.