How oil and greed led to the 1923 centralization of Navajo government

In 1920, the San Juan Basin of northwest New Mexico and southwest Colorado teetered on the line between being an agrarian economy and an industrial one. It would, of course, end up being the latter, criss-crossed by so much oil and gas paraphernalia and pipelines that a Bureau of Land Management official once told me, “It’s like rebar under there. If we had an earthquake, this place wouldn’t even shake!” But first it would be the center of audaciously underhanded power-wrangling on the part of top government officials that would forever change not only the landscape in the Four Corners Country, but also the way the Navajo Nation governed itself.

That same year, Congress passed the Mineral Leasing Act, which opened up public land to oil, gas, and coal prospecting and leasing, with the royalties from extraction going back to state and federal governments. It was, one must admit, a step up from the General Mining Law of 1872, which allowed prospectors to “claim” parcels of land, extract limitless amounts of minerals, and pay no royalties, bonds, or anything else.

The San Juan Basin was and is a mix of tribal, public, private, and state land. And by that time, its hydrocarbon riches had been well-established, if not commercially developed. Coal had been gouged from the hills near Durango, Colorado, to fuel the hardrock mining rush in the nearby mountains since the 1880s. Folks drilling for water often struck natural gas, and an intrepid individual or two piped it to their homes for heat and light. In some places, methane just seeped out of the ground unbidden. In 1921, a crew of men drilled a well just outside Aztec, struck a gusher of gas, and piped it to town, sans pressure regulators. Several houses burnt down, but it would nevertheless be celebrated as the first commercial oil or gas well in the region, and would attract national attention.

Standard Oil of Indiana and Midwest Refining, two of the big national players, were soon hankering to drill for oil near where the San Juan River cuts through the Hogback formation, not far from where the Four Corners Power Plant now looms over the desert. There was one problem, though. The oil was on Navajo land, meaning the oilmen would need the go-ahead from local tribal leaders.

Prior to the Euro-American invasion of Navajo lands, the tribe was divided up into political units of a dozen or more families, each governed by their own naataanii, or headmen. That system collapsed during the brutality of the 1860s, when US soldiers oppressed, abused, and forced Navajos to march to southeastern New Mexico, where they were incarcerated for four years. After they returned, a system of governance somewhat similar to the old one re-emerged, with headmen leading six “agencies” across the reservation.

The Hogback oil was on the San Juan Agency based in Shiprock. The companies repeatedly begged the agency leaders to let them drill. The agency repeatedly refused. Finally, in late 1921, the agency’s headmen gave in on the condition that Midwest hire Navajo workers and pay higher-than-average wages. In September 1922 Midwest hit a gusher, which produced about 300 barrels per day of some of the highest grade oil in the United States at the time. Everyone wanted a piece of the action.

At the same time, Secretary of Interior Albert Bacon Fall, a New Mexican rancher, former senator, and friend of industry, saw that the Navajo’s decentralized system could hamper his goal of opening the West up as much as possible to development (and, apparently, solve some of his financial troubles in the process). 

Fall worked various channels in Washington D.C. to grease the skids for his friends in the oil business. Then he went to work on the tribe, itself. To sign off on leases on tribal lands, he created a Navajo Business Council, made up of three of his own appointees: Chee Dodge, Charlie Mitchell, and Daagha’chii Bikiss. All three were Navajos with strong links to the white business community, Fall, or both. He ordered that any royalties from drilling on Navajo land go to the entire tribe, not just the agency from which it came.

Bureau of Indian Affairs Commissioner Charles H. Burke saw that the Business Council was iffy from a democratic point of view, given that the members weren’t elected. So he and Fall set out to plan a centralized, representative-style Navajo tribal council, with delegates from each agency. They assigned New Mexican politician Herbert Hagerman to be the special commissioner to “negotiate with the Indians.” Then they laid their plan on the Navajos.  

These tricks didn’t go unnoticed. Up in Durango, Colorado, the gadfly Democrat newspaper saw the moves for what they were. A lengthy story on the matter — possibly by a correspondent from the Kansas City Star — in February 1923 was headlined, “Navajo Indians Almost on War Path As Result Of New Ruling.” This “2nd Teapot Dome” for Fall was not only a giveaway to Standard Oil and Midwest, but also tinkered with the Navajo’s traditional system of government: screen-shot-2016-12-21-at-10-15-13-am

To understand just what had taken place it is necessary to explain that the Navajos have governed themselves ever since the treaty of peace with the whites was signed in 1868 as a pure democracy. Every male of the age of 18 and upward was entitled to voice his sentiments in the councils of the tribe. Within the past few years squaws have been given the vote and in increasing numbers have been attending the councils and raising their hands on all votes the same as the warriors themselves.

Thus the government had become an absolute, equal suffrage democracy.

Oil leases were voted by the councils on such terms as the councils determined and no one, not even the secretary of the interior himself, had the power to alter those terms. The only fly in the Navajo ointment was the right of the department to do the calling of the councils upon due notice to the department as to the subject for which the council was to be held.

Today on the blackboard at the Shiprock agency was posted a departmental order doing entirely away with the old order of things and substituting a representative government for the democracy.

After some resistance and tinkering with the rules, a council made up of 24 delegates was elected, and in July 1923 the first tribal council was seated. It chose Chee Dodge as Chairman, and promptly gave Hagerman all oil and gas leasing negotiating power. So much for tribal sovereignty.

Fall resigned later that year, and was eventually tried and tossed in jail for accepting bribes in exchange for oil leases in the Teapot Dome scandal. Fall’s role in the Navajo situation was never similarly scrutinized, though its impacts were probably greater. Fall had managed to open the Navajo Nation’s door to the oilmen, their white commissioner handing out leases left and right, on his, not the Navajos’, terms. The reservation town of Shiprock was in the middle of all of it, but reaped few of the benefits — the oil and gas companies tended to put their local headquarters in the predominantly white towns of Farmington or Aztec. Royalties from leasing were managed by the feds, or rather mismanaged, and only a fraction made it back to the tribe, and even less to the agencies in which drilling took place. 

In 1934 Congress passed the Indian Reorganization Act, and the tribe started wresting power away from its federal minders, doing away with the special commissioner. It kept the centralized government, of course. Though it was arguably created for cynical reasons, it ultimately opened the way for self-governance. For decades, the BIA would continue to have a heavy hand in Indian Country energy leasing, and the oil and coal companies would manage to run roughshod over the tribes. In the 1970s, in parallel with the American Indian Movement, tribes rose up and started battling for more control over their energy resources. The fight continues today. 



  1. The Navajo people rejected the Indian Reorganization Act of 1934. That law gave the BIA the authority to hold lands in trust and the Navajos rejected it. So how did the BIA claim to hold Navajo Lands in Trust until 1990? I understand the trickery by the BIA was to have the three man Council it created to allow the BIA to exercise control over mineral leasing as their first official act.


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