Financial History Issue 133 (Spring 2020) | Page 9

EDUCATORS’ PERSPECTIVE Wild West Finance: The Johnson County Range War (Part 1) By Brian Grinder and Dan Cooper The open range of the American West offered opportunities to thousands of indi- viduals rich and poor. Cattle offered a risk- free way to earn untold riches, if the uncle of World War I flying ace Manfred Baron von Richthofen (the Red Baron) was to be believed. Uncle Walter never engaged in cat- tle ranching himself, but he was not alone in his high praise for raising cattle on the open range. Ian McDonald, a highly respected journalist for the Edinburgh newspaper The Scotsman, toured the American West in 1877 1 and reported back to his fellow Scots: That stock-raising in Texas has been, and is, a profitable line of business there can be no doubt. Almost every- one who has entered into it with even a fair amount of care and earnestness, and had any knowledge of the work, has made money; while a great many have raised themselves from the hum- ble position of a herd-boy to the pos- session of great wealth. A gentleman who had been engaged in the stock- trade for many years in the south of Texas assured me that, though he had seen a few reckless Americans go to the wall at cattle-raising, he had never known a Scotchman or an Irishman to fail; “they all make money.” The same gentleman gave it as his opinion that, at the present day, capital invested in cattle-raising in Texas was paying more than 25% per annum. Many others promoted cattle raising in much the same way. Johnson County Range War chronicler Helen Huntington Smith believed that, “None of the authors was a soulless promoter out to fleece the unwary; none was even trying to float a cattle com- pany. They were simply honest boosters car- ried away by the euphoria of the great West.” Scottish 2 and English investors, along with East Coast capitalists, soon flooded the West with cattle companies. The Prai- rie Cattle Company, the Swan Land and “There is not the slightest element of uncertainty in cattle-raising… Since it was very well known that the cattle business is very safe, and that the larger the capital therein the greater the ratio of profit, as expenses do not increase at the same rate with the capital, the cattle- raiser has found no difficulty borrowing an amount of money equal to his investment; and, though he might pay from 10 to 15% per annum for the use of it, yet he might expect to realize there from 25 to 35%.” — Walter Baron von Richthofen, 1885 Cattle Company, and the Frontier Land and Cattle Company, among others, were soon operating in Wyoming Territory. Moreton Frewen, Winston Churchill’s uncle by marriage, became the first big- time rancher to run cattle in Johnson County, Wyoming, when he bought the 76 Ranch on Powder River in 1879. Frewen built a large log cabin on his ranch, which was dubbed “Frewen’s Castle” by the locals. According to Frewen, he could easily entertain 20 people at his Wyoming lodge. A veritable who’s who of British nobility found its way to the “Castle.” Frewen’s Powder River Cattle Company, Ltd. was backed by enthusiastic English investors. Smith writes, “In 1882 Frewen, then 29, went to London and with a flick of a wrist raised a million and a half dollars to extend his holdings on Powder River.” Unbeknown to Frewen, cattle prices would peak in 1882 and never recover. John Clay, manager of the Swan Land and Cattle Company and president of the Wyoming Stock Growers Associa- tion (WSGA) during the Range War, wrote, “The years 1882, 1883 and 1884 were remarkably successful ones in the western cattle business. The climatic conditions were excellent, prices were good and every condition was favorable for a company to make a good showing.” He also noted that the dividend his company paid in 1883 of 20.5% “…made a great sensation and carried a lot of people off their feet.” They would soon come crashing down to Earth when Wyoming showed its harsh side. The WSGA would play an integral part in the Range War. Organized by the large cat- tle ranchers in southeastern Wyoming, the WSGA handled the spring and fall round- ups when cattle were brought in from the open range. The Association also employed range detectives, such as Frank Canton in Johnson County, who were responsible for apprehending cattle rustlers. In the spring, calves were branded and the ownership of mavericks determined. A maverick was an unbranded calf that had been born and weaned out on the open range and was no longer with its mother. The unwritten law of the range was that the first person to locate a maverick and brand it became the owner of said calf. This wasn’t a problem in good times even if rustlers took advantage of the system, but when times were tough, the WSGA, which only represented the large ranchers, used its political influence to pass legisla- tion giving the WSGA sole authority to deal with Wyoming mavericks. During the spring roundup, all maver- icks were branded with an “M” and sold at auction to the highest bidder. Accord- ing to historian Bill O’Neal, only WSGA members “with at least $500 on deposit in a Wyoming bank” could bid. This left small ranchers out in the cold. Under this law, they were unable to recover their own mav- ericks even if they could prove ownership. During the roundups, cowboys who worked for WSGA ranches were undis- criminating when it came to mavericks. Although mavericks were free to wander, www.MoAF.org  |  Spring 2020  |  FINANCIAL HISTORY  7