50 Years Ago: Wool market crashes; ranchers, traders reel

By Bill Donovan
Special to the Times

Navajo Tribal Chairman Peter MacDonald was facing his first crisis and it dealt with a problem he never even knew existed a month ago. His advisers warned him that if nothing was done thousands of Navajo ranchers would be facing enormous losses because the wool market had almost died in the past few months because of the increase in imported goods from overseas.

How bad was it? A survey of Indian traders on the reservation discovered that they had more than two million pounds of wool in storage that was purchased in 1970.

Traders said they expected to take heavy losses on the 1970 purchases because they were willing to accept as little as 25% of what they paid for it to reduce their stock. For that reason, the market for purchasing any more wool in 1971 was almost non-existent.

At that time, said an article on the Navajo Times, the only type of wool that was sellable was mohair.

One trader told the committee he was paying 30 cents a pound in 1970 for wool. This year, he said, he wouldn’t even pay a nickel a pound. And that was the case at all trading posts.

Because of this, the Council’s Resource Committee issued an urgent plea to Navajo ranchers to hold off any sale of their wool at this time. This would give the committee a chance to study the situation and come up with some kind of solution.

For many Navajo ranchers, the collapse of the wool market spelled disaster to their way of life. For generations, the reservation economy was built on the raising of sheep to pay off the credit they received during the year from their local trader.

As for the traders, they had given out hundreds of thousands of dollars in credit and now were facing the possibility of not being reimbursed for all the credit.

Of course, the ranchers had the option of selling their sheep but this would only result in the collapse of that market because of all of the sheep that were being dumped on the market at one time. And selling off all their sheep would give them no income in the future.

Tribal financial experts said having ranchers keep their wool off the market at this time would give the tribe and the United Indian Trader’s Association time to try to get the prices up.

Committee officials said they planned to do a formal survey among the traders to use when the tribe sought relief from Congress. The hope was that Congress would pass a relief bill before they adjourned for the summer.

If this wasn’t enough bad news for traders, the Navajo Times reported on its front page 50 years ago the opening of the first food co-op on the reservation. The co-op was developed by residents of the Piñon, Arizona, area who said they were upset at the prices charged at area trading posts for farm merchandise.

They said traders in and around Piñon charged twice as much for these kinds of products than was charged in the border communities.

According to Robert Salabye, the primary founder of the co-op, work had begun the previous August on the creation of the co-op. Aided by a $9,000 grant from the BIA and another $3,000 from the Office of Navajo Economic Opportunity, creation of the co-op proceeded smoothly. The co-op, which had been named Dine-Bi-Nan-Yei, would be open six days a week.

ONEO had agreed to fund the salaries of cashiers and others needed to handle the merchandise. Salabye said he expected the co-op to average $1,000 a day by the start of summer.

“The community interest has been utterly fantastic,” said Jed Reeves, director of the Consumers Co-operative Society of Palo Alto, California, which furnished its expertise in the development of the Piñon co-op. He said he had received several requests from other communities on the reservation who wanted to set up their own co-ops. He said he had put these requests on hold. “We want to get this co-op on firm standing before we start helping other communities,” he said.

The Navajo Times said Harvard University was looking for Navajos who wanted to get higher degrees in teaching in Indian Country because of studies that showed more than 95% of school administrators in charge of educating Indians were non-Indian. With tribes, including Navajo, stressing having control of the education of their children, Harvard had become the first Ivy League school to offer Native Americans the opportunity to get the credentials they needed to become administrators.

If you had a BA and decent grades as well as two years teaching at an Indian school, Harvard was opening the door for you to get a master’s degree in education. If you already had your master’s, Harvard would help you get your Ph.D. There was no mention of Harvard providing scholarships, but previous articles in the Navajo Times indicated that help to fund this type of schooling was being provided by the tribe’s scholarship office.

With a vast improvement in news quality since he had re-taken over the Times, the paper’s editor, Chet MacRorie, had a meeting with his circulation staff urging them to get the stores that carried the paper to increase the numbers of papers they took each week. He said reports he had seen of their sales showed that more than half sold out their copies each week. “That’s good,” said one of the drivers.

“No, it is not,” said MacRorie, “because it means that more papers could have been sold if the papers were available.” He then established a rule that continued for more than a decade for drivers to provide enough papers at each store to have three to five copies left over each week.

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