A trader needed a license from the U.S. government and the permission of the local Navajo headman to establish a trading post. Traders did not own the land on which their posts were located. Many trading posts originated when a trader with a buggy load of goods began trading products in a tent and, if business was good, built an adobe or stone building with a store, lodging for himself and his family and employees, and a special room for showing and selling Navajo-made blankets and carpets. A storage warehouse, a corral for horses, and possibly other outbuildings were near the main building. Trading posts were usually unpretentious in appearance. The store consisted of a reception area, called a "bull pen," with a plank or dirt floor. Navajo customers lolled in this area and conducted business leisurely, availing themselves of free tobacco and paper to roll cigarettes. High wooden counters enclosed the bull pen on three sides behind which the wares for sale were displayed. By regulation (and for their safety) most licensed traders on the reservation did not sell firearms or whiskey, although
bootlegging of whiskey was common. Many traders kept a revolver behind the counter for protection. Many traders also dealt in horses which were pastured near the post. A Navajo dwelling, a
hogan, built at the trader's expense, was near the post for the free use of any customers who came from a distance. Sometimes a spring was nearby; if not the trader had a well dug. The most important goods the trader sold were flour, coffee and sugar. Plugs of tobacco and cloth for making clothes were next. Canned food goods became important items for sale in the 20th century. Sheep wool was the most important product traded or sold by the Navajo to the trader. By 1888, the Navajo were selling of wool for 8 to 10 cents per pound. They also sold sheep and goat skins to traders.
Pine nuts were a major Navajo product in the infrequent years in which the
pinyon pine produced large quantities of nuts. Resupply for the trading posts came from settlements around the periphery of the Navajo reservation. For some posts, resupply required only an ox-cart journey of a few days. For isolated posts, resupply took longer. Supplying the Oljato post of the Wetherills required a 21-day round trip from
Gallup, New Mexico in the early 1900s. Trading posts became more accessible with automobiles and road construction. Trader Clyde Colville constructed a road to his trading post at
Kayenta in 1914.
Money and a Navajo rug, 1911. Straight barter was common at posts, especially in the 19th century, but substitutes for cash, in short supply for traders and the Navajo, became necessary. In lieu of dealing with the Navajo in cash, many traders issued metal tokens valued at up to one dollar and redeemable for products at their trading post.
Mexican silver dollars were popular with the Navajo. They melted the coins down to make silver jewelry for their personal adornment and a store of wealth as well as serving a growing market for Navajo jewelry.
Pawnbrokering was practiced by many trading posts. Navajo income was seasonal, depending in the 19th century mostly upon harvests of wool, and Navajos would pawn their silver jewelry and other items in times when cash was short. The traders would hold the item until the customer could redeem it with a 10 percent interest charge. Pawn transactions were usually small. In 1909, the average pawn was valued at less than three dollars at one trading post. The use of tokens and the practice of pawning were both discouraged by the U.S. government. Traders were sometimes overextended. When
Richard Wetherill, better known for
archaeology than business acumen, was murdered in 1910, he was owed eleven thousand dollars by Navajos, Anglos, and Hispanics. Most of the money was never collected. By contrast, Hubbell had a virtual "empire" of trading posts and became also a prominent Arizona politician. ==Navajo weaving==