A Property Rights Analysis of the Johnson County War Doug Wills University of Washington - Tacoma Campus, Dtwills@Uw.Edu

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3-2007 High Noon On the Western Range: A Property Rights Analysis of the Johnson County War Doug Wills University of Washington - Tacoma Campus, [email protected]

Randy McFerrin New Mexico State University - Main Campus

Follow this and additional works at: https://digitalcommons.tacoma.uw.edu/business_pub Part of the Economic History Commons, Property Law and Real Estate Commons, and the United States History Commons

Recommended Citation Wills, Doug and McFerrin, Randy, "High Noon On the Western Range: A Property Rights Analysis of the Johnson County War" (2007). Business Publications. 2. https://digitalcommons.tacoma.uw.edu/business_pub/2

This Article is brought to you for free and open access by the Milgard School of Business at UW Tacoma Digital Commons. It has been accepted for inclusion in Business Publications by an authorized administrator of UW Tacoma Digital Commons. HighNoon on theWestern Range. A PropertyRights Analysis of the JohnsonCounty War

RANDYMCFERRIN AND DOUGLAS WILLS

Wyoming'sJohnson County War of 1892 is thehistorical basis of laterpopular depictionsof the West as violent,and it influencedthe developmentof Wyo- ming.Many see thisera as theend of the open range system and theascendancy of stockranching and farming.Popular depiction argues that the event was an act of vigilantismof largeforeign-owned firms against small individual settlers. We arguethat the war was a conflictof property rights systems and use a model developedby Alston,Libecap, and Muellerto explainwhy violence broke out in JohnsonCounty in 1892.

Richer(the Rancher): We made thiscountry. Found it and we madeit ... Made a saferange out of this. Some us dieddoin' it. We made it. Thenpeople movein who neverheld a rawhide throughthe old days.Fenced offmy range. Fenced me offfrom water.Some of themlike you paw ditches,and takeout irriga- tionwater, and so thecreek runs dry sometimes, and I got to movemy stock because of it.And you say we have no rightsto therange.

Stark(the Homesteader): You talkabout rights.You thinkyou gotthe right to say thatnobody else has gotany. Well,that ain't theway the government looks at it. Shane[Paramount Pictures, 1953]

thespring of 1892,several prominent range cattle businessmen, all Inmembers of theWyoming Stock Growers' Association (WSGA), or- ganizeda smallarmed militia. The purposeof themilitia, as theorgan- izerslater claimed, was to clearnorthern Wyoming of rustlers-itwas simplyto protectthe private property of the range cattle firms. It was on thisbasis thatthe WSGA recruitedgunmen throughout the U.S. West and mobilizedin Cheyenne.However, the organizers had broadergoals thansimply to imposevigilante justice on rustlers.They wanted to over- throwthe newly emerging political structure in thecounty, take charge of the courthouse,and, as such, the legal process.With the rise in

TheJournal of Economic History, Vol. 67,No. 1 (March2007). ? TheEconomic History Association.All rights reserved. ISSN 0022-0507. RandyMcFerrin is AssistantProfessor of Economics, College of Business and Economics, NewMexico State University, Las Cruces,NM 88003.E-mail: [email protected]. Douglas Willsis AssociateProfessor ofFinance; Milgard School of Business; University ofWashington, Tacoma;Tacoma, WA 98402. E-mail: [email protected].

This content downloaded on Wed, 9 Jan 2013 13:03:15 PM All use subject to JSTOR Terms and Conditions 70 McFerrinand Wills homesteadersettlement and subsequentdecrease in politicalinfluence of thecattle industry, especially with the financial downturn of thein- dustryin thelate 1880s,these businessmen felt that their rights were in- adequatelyprotected. They had all butgiven up tryingto convictindi- vidualsof stealingtheir property, usually cattle, and decidedinstead to reestablishtheir influence via armedconflict. On 6 April1892 themilitia began its 120-milemarch to Buffalo,the seatof Johnson County. While in route,the militia came across some al- leged rustlersat a ranch50 miles southof Buffalo.After a heatedde- bate,the militia decided to deal withthe "rustlers" before continuing on to theirintended destination. Expected to lastbut a fewhours, it evolved intoa disastrousdaylong ordeal. This delaycost the militia the advantage of surpriseas thenews of the"invading" militia along with its in- tentreached Buffalo.' Red Angus,the county sheriff, quickly organized a counterforce of over200 menwho rode out to meetand neutralize the militia.Upon hearingof the approachingforce, the militiafortified themselvesat a local ranchhouse. When news of thesiege leakedout, Wyoming'sgovernor successfully petitioned President Harding to send governmenttroops to rescue the besiegedmilitia.2 All of the militia memberswere arrestedand held firstat FortMcKinney and thenin Cheyenne.While all wereeventually freed, many of theranches owned by theorganizers were ransacked and their property taken.3 Knowntoday as theJohnson County War of 1892,these events form the historicbasis formany of the popularfilm depictions of the U.S. West, startingwith the originalVirginian (1914) to Shane (1953) to Heaven's Gate (1980). Furthermore,historians argue that they were importantbecause they altered the political structure in Wyoming,influenc- ingthe fall elections.4 Moreover, D. F. Baberargues in thepreface to his bookthat the War is importantbecause it is ". .. theconflict which marks thedividing line betweenthe old West,under the rule of thebig cattle kings,and the new West of thepioneer homesteader."5 The stateRepub- licanParty was stronglyassociated with the interests of therange cattle industryand, as such,paid a politicalprice for the "war."

Whilethe operation was keptsecret to gainthe advantage of surprise,the leaders did notin- tendto remainanonymous. Reporters were included in themilitia entourage (Larson, History, p. 274). 2 The local ranchwas theTA ranchlocated 13 milessouthwest of Fort McKinney. The initial counterforce arrived at theranch on 11 April,and governmenttroops arrived on themorning of 13 April.A totalof twodays transpired between the arrival of thecounter force and thearrival ofgovernment troops. 3 Larson,History, p. 279 4 Ibid.,pp. 284-92. The warprompted the merging of theDemocratic and Populistsparties in Wyoming.After the election, Democrats carried all butLaramie County. 5 Baber,Longest Rope, preface.

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Essentially,the war was a disputeover land, and it is commonto de- pictall such land disputesin thewest as resolvedviolently rather than peacefullythrough negotiation. On the otherhand, recentwork by economistshas shownthat the Westmay not have been as violentas popularlybelieved.6 Moreover, Terry Anderson and Fred McChesney arguethat what violence did occurresulted from the calculations of rational,utility-maximizing individuals.7 They demonstratethat not all land conflictsresult in violence.To understandthe resolutionof land disputes,they lay out thenecessary conditions for individuals to resort to violencerather than negotiation. This article follows that approach to analyzethe Johnson County War as a conflictbetween two rational an- tagonistsin a landdispute: ranchers, defined as largerange cattle firms, and homesteaders,defined as farmersand smallcattle ranchers. The fundamentalconflict was controlof the public domain.Over severaldecades, ranchers had developeduse rightsto therange. How- ever,in thelate 1880s,homesteaders began to migrateonto the public domainclaiming portions of therange under various federal land acts, themost notable being the Homestead Act of 1862. However,this mi- grationrarely lead to thetype of organizedviolence seen in theJohn- son CountyWar. To identifythe key parameters affecting whether the conflictends in violence,the article uses a variationof a modeldeveloped to analyzeland conflicts in theBrazilian Amazon.8 In thismodel, ranchersmust decide on thelevel of effortto expendin resistinginva- sion or evictinghomesteaders once occupancyoccurs. Simultaneously, homesteadersmust choose the level of effortto expendon invadingan occupiedrange or resistingeviction. We arguethat the probability of violenceincreases when effortsfor eviction and resistanceincreases. As such,the articleexplains why this violence took place in Johnson Countyand in 1892.

CATTLE, LAND, AND PROPERTY RIGHTS

The rangecattle industry dominated business in Wyomingduring the 1880s. For the time,cattle concerns were large enterprisesoften fi- nanced by foreigncapital. Productionmethods were land intensive based uponusufruct rights in landand feesimple title to cattle.Invested capitalconsisted almost entirely of cattlewith only a smallproportion of land held in fee simple.Moreover, the practice of grazingcattle on the range until ready for marketexhibits substantial economies of

6 Andersonand Hill, Not So Wild,Wild West. 7 Andersonand McChesney, "Raid." 8 Alston,Libecap, and Mueller, "Land ReformPolicies."

This content downloaded on Wed, 9 Jan 2013 13:03:15 PM All use subject to JSTOR Terms and Conditions 72 McFerrinand Wills scale.9To takeadvantage of this,cattlemen grazed cattle communally on thepublic range and conductedjoint roundups. This organizational structurewith its mix of publicand privateownership to the inputsof productionwas thedirect outcome of federal land laws. Marketimperfections such as minimumprice floors and acreagecon- straintsalong with bureaucratic impediments prevented market transac- tionsfrom solving the land ownershipissue. However,in theearly developmentof theindustry these were not binding constraints given the initialnonscarcity of land.Range use allocationsoccurred by thecom- monlaw doctrineof priorappropriation whereby individuals set up op- erationsby claiminga rangeand publicly stating their intent. Once such proclamationread

I, theundersigned, do herebynotify the public that I claimthe valley, branching offthe Glendive Creek, four miles east of Allard,and extendingto itssource on the Southside of the NorthernPacific Railroad as a stockrange. - Chas. S. Johnson.10

For themost part, an informalnetwork of codes andcustoms of the west evolvedto protectuse rights.These protectionswere credibleenough suchthat use rightsobtained market value andwere fully transferable." By the mid-1880s,conditions changed such thatinformal arrange- mentsbecame less effectivein protectingrights. Homesteaders, with the promiseof legal titleto land, came intothis existingsystem of use rightsand beganestablishing claims on rangesalready extensively used by cattlemen.As competitionincreased, cattlemen found it economi- cally viable to devoteadditional resources to alterthe existinginstitu- tional frameworkgoverning range use. Early on, cattlemenlobbied Congressto alterfederal land laws to alignbetter with the conditions of thearid west where a cow requiredfrom 20 to 40 acres.If successful, thiswould allow markettransactions to preventthis type of competi- tion.Yet, theirefforts failed in persuadingCongress. Gary Libecap arguesthat Congress and the General Land Officeintentionally obstructed westerncattlemen's efforts to gainlegal recognitionof theirestablished use rightsor to alterexisting land policies.'2 Federal land policy favored

9 See Eaton,"Wyoming Stock Growers Association," p. 136. 10 Osgood,Day, p. 183. " See Andersonand Hill, "Evolution"; and Ellickson, Order, for a discussionof informal networks.InWyoming, a set of rights sold for "something over $200,000," and one cattle com- panyreported a value of $85,000for range rights: Dennen, From Common to Private Property, p. 110.Fred Hesse obtained the use of 50,000 acres in exchange for debts from Morton Frewen: Sandoz,Cattlemen, p. 333. This suggests that early arrangements were effective in protecting rangerights. 12 Libecap,Locking Up theRange.

This content downloaded on Wed, 9 Jan 2013 13:03:15 PM All use subject to JSTOR Terms and Conditions HighNoon 73 smallclaimants over cattlemen in developingpolitical constituencies. In largepart, this reflected the desireto populateterritories with small- scale farmersfor admission as new statesrather than establishing a mo- nopolyover the public ranges controlled by a relativelyfew cattlemen.13 In contrast,the evolutionof federalmining and preemptionlaws did formallyrecognize established use rights,whereas the evolution of federal land laws neverrecognized cattlemen's use rights.This failureto alterexisting land laws effectivelyrendered cattlemen squatters on the publicdomain.14 Compoundingthis was the passage of a congressionalresolution in 1868 thatrepresented a shift in federalland policy from one of revenue generationto territorialsettlement. This effectivelyended cash sales and prohibitedcattlemen from securing private title to enoughland through thisavenue.15 Moreover, acreage limitations under the various land acts fellfar short of the minimum requirement for western conditions. Cattle- mencould only claim a totalof 1,120acres. The PreemptionAct of 1841 and theDesert Land Act of 1877 allowedthe purchase of 160 and 640 acresat a priceof $1.25 peracre respectively. Under the Homestead Act of 1862and the Timber Culture Act of 1873,an individualcould claim an additional320 acresat a zeroprice per acre. However, the price floor of $1.25 peracre under the acts wildly overpriced western land.'6 Yet theinability to securelegal titledid notprevent cattlemen from amendingtheir informal institutions in responseto increasedcompeti- tion.ivIn thiscontext, any such alteration must lower the costs of identi- fyingownership of rangecattle, of gatheringrange cattle for branding and marketingpurposes, of protectingownership rights to cattlein distantmarkets and of controllingaccess to the open range.18The Wyo- mingStock GrowersAssociation (WSGA), the mostsuccessful of all

13 Clawson,Uncle Sam 's Acres,p. 62. Libecapargues that the primary reason for the obstruc- tion was thatthe Land Office'sbudget depended on case loads processed.To increasetheir budget,the Land Officehad to increaseworkload. This favored the small land claimant over the land-intensiverancher. 14 Thisis notunlike the situation in muchof SouthAmerica as notedby Desoto,Mystery. 15 Hibbard,History, p. 111. Gates,"Homestead Law," arguesthat cash sale of landcontinued after1868 usingcommutation of homesteadentries under preemption, state land grants, Indian lands,and otherFederal lands. However, this does not appearto have been a viable optionin Wyoming.Only small fraction of the public domain was transferableunder these entries. 16Dennen estimates the open marketvalue of land at less thanten cents per acre. Dennen, FromCommon to Private Property, p. 9. 17 See Andersonand Hill, "Evolution"and "Race"; and Andersonand Grewell,"Property RightsSolutions," for a completediscussion of the evolutionof institutionson the western range. 18 Eaton,"Wyoming Stock Growers Association," p. 133. These issues are theresult of the communalgrazing on publicland. In particular,the issue of openaccess and thetragedy of the commonsthat could result from a failureto controlrange use.

This content downloaded on Wed, 9 Jan 2013 13:03:15 PM All use subject to JSTOR Terms and Conditions 74 McFerrinand Wills stockassociations in theU.S. West,emerged in thisrespect as thepri- maryinstitution to regulateWyoming ranges and dominated the Territo- rial Legislature.In 1882, 55 percentof the legislatorswere stockmen withat leastone-third being members of theWSGA, whilethe legisla- tivecommittee concerning the stock industry had an associationmem- beras itschair between 1875 and 1890.19 The WSGA, throughlegislative acts and internalactivities, created an institutionalframework to governthe Wyomingrange. Acts between 1869 and 1884 vestedcontrol over registeringof brandswith the WSGA, and the Maverick Law addressed ownershipof un- brandedrange cattle (mavericks) and thenegative externalities asso- ciated withindividual roundups.20 This law, passed in 1884, established a communalroundup under the legal controlof the WSGA. The associationhad theauthority to determinethe timing of and par- ticipationin a communalroundup along withthe branding of mavericks. Internally,the WSGA createdan inspectionand detectivebureau fundedprimarily from the sale of mavericksto protectrights on the rangeand in distantmarkets. At its height,the bureauemployed 22 inspectorsand detectives and had an operatingbudget of $946,916.21 Moreover,under the influenceof the association,Wyo- mingevolved intoa fenceout staterather than fence in as underthe commonlaw. Cattlemenwere liable fordamages only if theircattle breacheda lawful enclosure.This shiftingof the liabilitymade it costlyfor homesteaders to setup claimson therange given the initial highcost of traditionalfencing materials. By controllingparticipation in the annualroundup, the association controlledaccess to the range.Membership required the sponsorship of a currentWSGA memberand approvalof themembership commit- tee. The associationwas not shy aboutblacklisting or denyingmem- bershipto individualsit consideredof "bad character."This all buten- sured thatthe individualcould not participatein the roundup.All mavericksgathered during the roundupessentially became the prop- ertyof theWSGA and anynonmember's cattle gathered were confis-

19 See Jackson,"Wyoming Stock Growers' Association," for a fulldiscussion of thepolitical activitiesof the WSGA. 20 See WyomingStock Growers Association. By-Laws, for a completediscussion of Wyo- mingStock Laws. Communalroundups avoid excessivetrampling of grassand overstressing cattleassociated with individual roundups. However, communal grazing creates an incentiveto brandcattle first. Once branded,a maverickbecomes the property of theowner of thebrand. Initially,the doctrine of presumptiveownership addressed this incentive by allocatingmaver- icksunder various rules such as proportionalallotment. This agreementbegan to breakdown as theranges became crowded. The mavericklaw attemptedto overcamethis by vestingthe power to brandwith the WSGA. 21 2005 dollars.See Table 3.

This content downloaded on Wed, 9 Jan 2013 13:03:15 PM All use subject to JSTOR Terms and Conditions HighNoon 75 cated and sold at auction.22The effectiveresult of controlover the roundupmade it costlyto operatea cattlefirm on a rangewithout be- ingan associationmember. By 1884 the WSGA controlledaccess to the open rangethrough membershipand theMaverick Law. However,during the later part of the decade, the principlecompetition for range use was small stock ranchers,sheepherders, and farmersknown as "grangers."The largest grangercommunity developed in Sheridan,Johnson, and Crookcoun- ties were due to geographicalconditions.23 Farm operationsin the northeastwere smaller and devoteda largerproportion of farmacreage to traditionalcereal crops compared to thestatewide average.24 Farms in thesouthern portion of thestate were larger and primarilyused for winterhay forrange cattle. This patternof farmsettlement supports FrankCanton's assertion that "I expectto have a veryheavy race to run,as my opponentis a grangerand thatelement has themajority in thiscounty" when he ran forJohnson County Sheriff.25 By 1890 the patternof settlementindicates a higherproportion of thepopulation in thenortheast being direct competitors to theopen range system than in thesouth. Beginningin themid 1880s,several changes occurred that began to unravelthe institutional arrangement. The electionof PresidentCleve- land in 1884 and appointmentof WilliamSparks as Commissionerof theGeneral Land Officerepresented a shift in thefederal government's supportof homesteadersagainst ranchers.26 In addition,the winterof 1886/87left many cattlemen bankrupt, and many quit the business alto- gether.Membership in theWSGA droppedfrom 349 to 183 in 1889.As range competitionincreased, the confiscationof nonmember'scattle became a seriousissue and the MaverickLaw came underincreasing assaultin thelegislature. In 1891the legislature repealed the law, repre- sentinga significantreduction in the association'sability to protect rangerights and rightsin cattle.Additionally, the territorial legislature divestedthe WSGA of directcontrol over theroundup when it trans- ferredauthority to a newlycreated Board of LivestockCommissioners.

22 Ownersof confiscatedcattle could petition the WSGA forthe remittance of thefunds gen- eratedfrom their confiscated cattle. However, the WSGA controlledwhat evidence would be consideredproof of ownership. 23 Viable farmingin thearid West required steady water flows for irrigation along with low constructioncosts of irrigationcanals. NortheastWyoming provided adequate summer water flowand thecost of constructingcanals was lowerthan in therest of Wyoming:U.S. Census Bureau.Report on Agriculture,pp. 248-54. 24 Thisis evidentin Table 5. 25 Quoted in Larson,History, p. 188. FrankCanton was at one time a detectivefor the WSGA. 26 Libecap,Locking Up theRange, p. 32.

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The sentimentat the timeindicates that this shift of decision-making powerled to increasedcattle theft and mavericking.27 Withrespect to the illegal fencingquestion, the Justice Department handledearly cases, but with limited success.28 However, the passage of theIllegal InclosureAct in 1885 strengthenedthe government's ability to removeillegal inclosures.29In UnitedStates v. Bradford,the court usingthe Illegal Inclosure Act ruledthat individuals under the pretense ofinclosing their own land could not inclose public land as well.30 By theend of the 1880s,the WSGA had lostsubstantial control over access to therange and protectionof cattlefrom theft began to breakdown at an increasingpace.31 Indeed, the financialdifficulties of the WSGA afterthe winter storms of 1886/87forced the disbanding of the detectiveand inspectionbureau in 1888. The finalstraw was theforma- tionof theNorthem Wyoming Farmers and StockGrowers Association in 1892. This associationrepresented an allianceof smallstock growers and grangersthat was in directcompetition to the WSGA. They an- nounceda separateroundup one monthprior to thelegal roundup.This struckat theheart of WSGA powerand was theevent that triggered the effortsto organizea militiasetting the stage forthe aforementioned JohnsonCounty War of 1892.

A MODEL FOR ANALYZINGCONFLICT

Not all competitionover land use ends in violentconfrontation. In- deed,the history of Wyomingis a case in point.Except for isolated in- cidencesof lynchingand vigilantism, the vast majority of Wyoming and theU.S. Westpeacefully transferred from the public domain into privateownership.32 What, then, lead to theJohnson County War of 1892? To set outthese conditions, we use a modeldeveloped to analyzecon- flictin the BrazilianAmazon by Lee Alston,Libecap, and Bernardo Mueller.33

27 Larson,History, p. 269. 28 Ibid.,p. 179. Cattlemenbegan to constructfences in an effortto excludegrangers from theirranges. In theprocess, cattlemen inclosed substantial portions of the public domain as well. See Larson,History, p. 32, fora fulldiscussion of illegalfencing. 29 48thCong. Ch. 149; 23 Stat.321. 30 8 Utah 173,30 P 433. 31 Larson,History, p. 271. Smith,War, pp. 116-17. 32 See Andersonand Hill, Not So Wild,Wild West. 33Alston, Libecap, Mueller, "Land ReformPolicies." In Brazil,land reforms set up thepoten- tialfor conflict between individuals who heldlegal title to theland and landlesspeasants. Many timesthis conflict resulted in violence;their model lays outthe necessary conditions for an increasein theprobability of violence.However, the Homestead Act encouragedoccupation of landheld by theFederal government that was largelyunoccupied. In Brazil,the level of violent confrontationwas muchgreater than in theAmerican West. The levelof confrontationresulting

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In contrastto Brazil,Wyoming ranchers occupied large tracts of public land and homesteadersengaged in effortsto invadeand occupythis land. To simplifythe analysis,we assumethe antagonistsattempt to maximizeland value and only two outcomesare possible. Eithera ranchermaintains the use of theland and thehomesteader loses theuse of the land or homesteadersinvade and successfullyresist eviction, in whichcase therancher loses theuse of theland.34 In eithercase, neither receivescompensation for their lost use ofthe land. Therefore, the prob- lem facingboth ranchers and homesteadersis to choose the optimal level of effortto expendon obtaininguse of the disputedland. Let v representthe level of activityby ranchersto maintainthe use of land. These effortsinclude activities designed to resistinitial occupancy and effortsto evictonce occupancyoccurs.35 Let s denotethe level of effort expendedby homesteadersto occupythe range and resistcattlemen's effortsto evictthem from the range. If bothv ands increasesimultaneously,then the probabilityof resolvingland disputesthrough violent meansincreases. The importanttask is to determineunder what condi- tionsboth v ands increasesimultaneously. The probabilitythat ranchers maintain the use of disputedland dependson thelevel of v supplied,the level of supportfrom state and local government(both legislative and judicial) k, and the relative population(ranchers to homesteaders),n. We writethis probability as: where > > < < 0 fl(v,k, n) fv> O,fk O,fin O, vv 0,fkk < 0, fnn (1) Supportfrom state and local governmentaugments a rancher'sability to resistinvasion and to evicthomesteaders.36 During the earlydevelop- mentof Wyoming,the territorial legislature was instrumentalin devel- opingits stocklaws forthe protection of a rancher'scattle and estab- lishingentry barriers to therange. The MaverickLaw was theprimary stocklaw used by ranchersto controlentry. Judicial support further

fromthe Homestead Act wouldnot reach the level in Braziluntil the migration of farmersen- countereda systemdeveloped for the arid conditions of theWest. However, we believeit ap- propriateto use a modeldeveloped to analyzea situationwhere violence was morecommon to analyzea situationwhere violence was less commonas in theAmerican West. 34 These assumptionsare equivalentto the Alstonet al. model derivedin theirappendix. However,the homesteader has legal titleto the land ratherthan the rancheras in the Alston model. 35 This specificationof v is moregeneral than Alston's specification in thatefforts to protect cattlemen'suse rightsto land includeresisting homesteader's efforts to occupythe range and evictinghomesteaders once actualoccupation occurred rather than simple eviction efforts. 36In ourmodel k is an exogenousparameter that either enhances or diminishesthe efforts of ranchersin protectingtheir legal rightsto propertysuch as cattle.In theBrazilian context, the roleof the courts is theprotection of the owners' legal rights to theland itself.

This content downloaded on Wed, 9 Jan 2013 13:03:15 PM All use subject to JSTOR Terms and Conditions 78 McFerrinand Wills strengthenedproperty rights in cattle.Local courtscould eitherenforce the stocklaws such as theMaverick Law or choose to look the other way.Any increase in local governmentalsupport increases the probabilityof maintaining the use ofthe land by ranchers. The distributionof n affectsthe expected outcome of a violentconfrontation.At thetwo extremesof thedistribution, the outcome is cer- tain.If n is sufficientlyhigh, then homesteaders are notlikely to waste resourcesfighting eviction given thatthe expectedoutcome favors ranchers.On the otherhand, at sufficientlylow n rancherswould not wasteresources resisting and evictinghomesteaders given that the expectedoutcome favors homesteaders. Between these two points,however,the outcomeof a disputeis uncertainand the expectedoutcome favorsneither ranchers nor homesteaders. It is in thisrange that violent confrontationis likely.37 In otherwords, when the relative population is neithertoo "high"nor "low" theoutcome from using violence to settle disputesis uncertain. Whatis more,the probability that the federal government through ei- therthe Department of theInterior, the Justice Department, or themili- tarywill interveneon behalfof homesteadersalso affectsthe ability of ranchersto maintainthe use of disputedland. This is a functionof three variables;the level of s suppliedby homesteaders;the level of security of a rancher'sproperty rights, p; and thepolitical support for the princi- ples behindthe Homestead Act itself,g.38 The probabilityof thefederal governmentintervening against ranchers is givenby equation2.

O(s,p, g), whereOs > , OpsOp< , > 0, O < , Opp< 0, Ogg< 0 (2)

Combiningequations 1 and 2, one can writethe ranchers'expected value functionfrom maintaining the use ofthe range as = EVR P(v,k,n)L+ (1 -fl(v,k,n)[1 - O(s,P,G)]L - C(v), (3) whereCv > 0

37 This analysisis similarto thatof Allen ("Homesteading")where he arguedthat relative populationis a criticalcomponent of disputesbetween whites and Indiansin settlingthe West. He arguedthat the U.S. governmentused the Homestead Act as a methodof rushing settlers into a territory,increasing the relative population to a pointwhere the federal government could by- pass the zone of violence.In our context,we arguethat this zone of violenceexisted to the greatestextent in thenortheast portion of the state in 1892. 38 In Braziliancontext, g representsthe attitude of theLand Authoritytowards land reform in supportingthe efforts of squattersin theirattempt to expropriateprivately owned land. In our case, it is theattitude of theDepartment of theInterior towards the settler's efforts in invading and resistingeviction from land to whichthey may hold legal rights.In ourmodel, p has a dif- ferentinterpretation. It is thestrength of extralegalinstitutions that arose on theplains in pro- tectinga rancher'suse rights.The mostnotable institution for our studywas The Wyoming StockGrowers Association.

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The firstterm represents the expectedreturns from a successfulevic- tion,and the second term is theexpected loss ifeviction efforts fail. L is thevalue of land and C(v) is thecost function for supplying units of v, whichis increasingin v withC, > 0. The goal of the rancheris to choosethe level of v thatmaximizes equation 3. Differentiatingthe ob- jectivefunction with respect to v yieldsthe rancher's first order condi- tiongiven by equation4. = /f 0(s,p,G)]L- C(v) 0 (4)

Equation4 representsthe marginal benefit and cost of supplyingunits of v. 0(s,p,g)]Lis theexpected loss avoidedby therancher, and P, is the marginalincrease in theprobability of evicting the homesteader with re- spectto increasesin effort.The rancherbalances this gain againstthe marginalcost, C,. Simultaneouslythe homesteader will choosethe level of effort,s that maximizesthe following expected value function

EVH= (1 - f(v,k,n))O(s,p,g)]L- C(s), (5) whereCs> 0 and C, > 0

The firstterm in the equationrepresents the probabilityof a success- fullyoccupying the range, and thesecond term is theprobability of in- terventionby the federalgovernment. Together with the value of the landL, thisterm represents the expected payoff to thehomesteader from occupyingthe range and resistingeviction by ranchers.The lastterm is thecost function from the perspective of the homesteader. This function is increasingin s. The goal of thehomesteader is to choosethe optimal levelof s thatmaximizes equation 5. Differentiatingthis objective func- tionwith respect to s yieldsequation 6, whichis thefirst order condition forthe homesteader.

[(1 -Pf(v,k,n))]OsL- Cs = 0 (6)

A marginalincrease in theprobability of thefederal government inter- vening,0s, timesthe value of theland gives the marginal benefit of anotherunit of s. Cs is themarginal cost of anotherunit of homesteader effort.The homesteaderbalances the gain from the use ofthe land against thecost of invading and resisting eviction efforts. As in the Alstonet al. model,the joint solutionof the individual maximizationproblems produce a Nash equilibriumwhere the level of effortsv* and s* are such thatboth equation4 and equation6 hold

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TABLE1 IMPACTS OF CHANGES IN EXOGENOUS VARIABLES ON THE OPTIMAL LEVEL OF VAND S

Impacton ReactionCurve Impacton Rancher Homesteader v s

Increase in propertyrights, p + Increasein landvalue, L + + + + Increasein cost,C Increasein supportfrom federal government, g + + + + Increasein supportfrom local government,k + Increasein relativepopulation, n + Note:See equations1-6. simultaneously.Differentiating the first order conditions with respect to each parameterof themodel and solvingfor the underlying deriva- tivesyields the reaction function for each playerin the land dispute. Establishingtheir slope is criticalin understandinghow each player respondsto changesin the other'slevel of effort,holding the exogenous parametersconstant. It is straightforwardto demonstratethat the slope of the homesteader'sreaction function is negativewith re- spectto changesin v whereasthe rancher's is positivewith respect to changes in s forany given set of exogenousparameters.39 In other words,ranchers will respondto increasesin s by supplyingmore v but homesteaderswill supplyless s in responseto increasesin v, all else constant. Criticalfor analyzing the JohnsonCounty War is how the optimal levelsof s and v respondsto changesin theparameters n, k,p, g, L, and C. To ascertainthese effects, we conducteda comparativestatic analysis of each of the exogenousparameters. Table 1 containsthe results fromthis analysis.40 Changes in exogenousparameters shift each player'sreaction function. As a result,the change in eithers or v willbe unambiguousfor one butambiguous for the other. For example,an increase in n shiftsthe rancher'sfunction to the rightand the homesteader'sfunction to the leftas in Figure1. Homesteadersrespond by unambiguouslysupplying less s, butthe change in v is ambiguous.The sourceof the ambiguityis thattwo effectsoperate on therancher, the directand the indirect effect. The directeffect is theshift of thereaction

39 For a derivationof the slopes of each reactionfunction, see Alstonet al., "Land Reform Policies." 40 These resultsare identicalto theresults of theAlston model except that we deviatefrom theAlston model by explicitlymodeling the probability of an evictionas a functionof thepro- portionof ranchersto homesteaders.For a derivationof theresults with respect to n, see the Appendix.For the other parameters, see Alstonet al., "Land ReformPolicies."

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so-SO

V0 V1

FIGURE1 THE EFFECTS OF AN INCREASE IN N

Note:Terms are defined in Table 1. functionthat increases v forany given level of s. However,s unambigu- ouslyfalls. Given the positive slope of therancher's reaction function, theyrespond to a decreasein s by reducingthe supply of v,which is the indirecteffect.41 As a result,the optimal level of v dependson therelative shiftsof thereaction curves. If thehomesteader's shift dominates the rancher's,then the impacton bothv and s is negative.In other words,an increasein therelative population makes the outcome of violence morecertain, which lowers the likelihoodof violenceand vice versa. To makedefinitive statements on theoptimal level of v* and s*,the relativeelasticity of thereaction curves with respect to changesin each exogenousvariable must be known.Clearly, the determination of which partyis moreresponsive is an empiricalissue. In theabsence of dataand

41 This resultof a directand indirecteffect is identicalto directand strategiceffects in the Alstonmodel.

This content downloaded on Wed, 9 Jan 2013 13:03:15 PM All use subject to JSTOR Terms and Conditions 82 McFerrinand Wills in orderto determineunambiguous effects from changes in parameters we assumethat homesteaders are alwaysmore sensitive to changesin pa- rametersthan ranchers. In otherwords, homesteader reaction curves are alwaysmore elastic than those for ranchers.42 The simplerationale for thisassumption is giventhat the homestead was, in mostcases, a homesteader'sentire capital whereas it was a smallfraction for a rancherthen homesteaderswill be moresensitive to changesin parameters. Table 1 laysout the necessary conditions for an increasein the probabilitythat individuals will resortto violencein resolvingland disputes. For thisto occur,the supplyof v and s mustincrease simultaneously. Both ranchersand homesteaders will increase their supply of v ands ifthe value ofland or the support from the federal government increases. Furthermore, theywill increase their supply of v ands ifproperty rights protection, cost of supplyingeffort, support from local government,or relative population decrease.We will arguethat all six parameterschanged in a mannerthat increasedthe probability that ranchers and homesteaderswould resort to violencein settlingtheir dispute over land in Johnson County.

EVIDENCE

In the followingsection, we lay out the shiftsfor each exogenous variablein themodel and theirimplication for the Johnson County war of 1892.

L, Land Values

The value ofland for agricultural purposes is a functionof three variables: thevalue of theoutput produced, cost of transportationto mar- kets,and themarginal productivity of land.In thiscontext, output values increased,transportation costs fell, and themarginal productivity of Wyomingland increasedrelative to surroundingterritories. We con- structedthree indexes to demonstratethe increasein thevalue of land with1880 thebase year.The firstis a weightedaverage of thevalue of the yieldper acre forprimary cereal crops,and the second and third measurechanges in cattlevalues and transportation costs respectively.43 Figure2 presentsthe indexes for 1880 through1900. Severaltrends are worthnoting. By 1891,cattle prices experienced a 29.16 percentdecline

42 This assumptionplays the same role as theAlston et al. assumptionthat the direct effect is alwaysgreater than the strategic effect. 43Acreages of com, oats, and wheat accounted for 97 percentof the cereal grains harvested in Wyomingin 1890. Oats accountedfor 67 percentof thetotal cereal grains harvested. Transpor- tationcosts are average freight charges per ton-mile.

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200.00

180.00 CattleValue

160.00

140 00 120.00 S000 ?iii 100.00 iiiiiiiCrop* Value

80 .00 ::iiiiiiiiiiii i:i i:i iiiiii

FreightCost 000 -

40.00

20.00

-.-- 0.00 1878 1880 1882 1884 1886 1888 1890 1892 1894 1896 1898 1900 1902

FIGURE 2 COMMODITY VALUES AND TRANSPORTATION COSTS, 1880 TO 1900

Source:Statistical Abstract of United States, 1900. fromtheir peak in 1884. Cropprices increased 37.7 percent,and transportationcosts fellby 37.45 percentbetween 1884 and 1891. As indi- cated in Figure2, changingoutput values and transportationcosts increasedthe rate of return to Wyominglands. Withrespect to the marginalproductivity of land in Wyoming,the importantfactor was themarginal productivity of landsin Nebraskaand Kansas. By 1892,the combined population of Kansas andNebraska ap- proached2.5 millionwith some 20 millionacres containedin home- steads.As populationincreased, the marginalproductivity of land in these statesdecreased. In turn,the marginalproductivity of land in Wyomingincreased relative to lands in Kansas and Nebraska.This changein relativemarginal productivity increased the value of land in Wyoming. Increasingland values shifted the reaction functions for both ranchers and homesteadersto theright. The impacton theoptimal level of v is unambiguouslypositive. Ranchers respond to thesechanges by increas- ingtheir efforts at resistingand evictinghomesteaders given the payoff to such activitiesincreased. On theother hand, the impact on s is ambiguous.The payoffto homesteadersincreased, but the optimallevel ofvalso increased.As long as the shiftof thehomesteader's function

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TABLE2 REAL COST OF BARBED WIRE FENCING, 1874-1897

Year Costper 100 Pounds 1874 308.17 1880 198.02 1885 86.21 1890 70.81 1897 39.88 Change1874-1897 (percent) -87 Source:Webb, Great Plains, p. 310. dominatesthe rancher's shift, then the impact on theoptimal levels of v ands willbe positiveincreasing the probability of violence.

C, Per UnitCost of Supplying Effort

One obstaclefacing both homesteaders and ranchersin maintaining theuse of landwas thecost of fencingwestern plains. Traditional ma- terialssuch as stoneand wood werescarce, raising their cost substan- tially.The inventionof a low costmethod of producing barbed wire in 1874 significantlylowered the cost of constructingfences on the plains.In turn,this lowered the cost forboth ranchers and homesteaders in assertingand defendingtheir claims to disputedland. Without this invention,the rate of returnto farmingin the West was much lowerdue to a farmer'sinability to protecthis cropsfrom damage due to trespassingcattle, given that Wyoming was a fence-outstate. Simul- taneously,ranchers could protecttheir existing ranges from intruding homesteaders. Table 2 presentsthe trendin the cost of barbedwire fencingfrom 1874 to 1897.The realcost of barbed wire fencing decreased 87 percent overthis period. This shiftedhomesteaders' reaction curve to theright increasingthe optimallevel of s. Theycould now move ontothe arid plainsof Wyoming,stake a homesteadclaim, and protecttheir invest- mentfrom damage caused by rangecattle at a reasonablylow cost, therebyincreasing the rate of returnto a Wyomingfarm. Ranchers respondto increasesin s by slidingup theirreaction curve given its posi- tiveslope. The dropin fencecosts increased the optimal supply of s and v leadingto an increasein theprobability of violence. p, PropertyRights

The primaryinstitution through which open range ranchers protected theirinvestment in cattleand rangerights was theWSGA thatprovided

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TABLE3 DETECTIVES, INSPECTORS AND REAL EXPENDITURES, 1880-1894

Year Detectivesand Inspectors DetectiveBureau a Inspectionsa 1880 3 1881 3 1882 7 126,968 1883 13 67,965 259,732 1884 12 439,827 278,466 1885 22 519,053 427,863 1886 14 312,041 484,187 1887 13 355,223 1888 10 348,097 287,156 1889 9 1890 8 206,688 1891 8 1892 8 1893 7 1894 7 222,355 a Blankcells indicatethat the data were not available for that year. Source:Financial Statements of the Wyoming Stock Growers Association essentialinspection and detectiveservices. Table 3 providesdata on the numberof inspectorsand detectivesand real expendituresfor these services.Data aremost complete for the number employed with a highof 22 in 1885 followedby a 68 percentdecline by 1894. Expendituresfor detectiveservices pertain to theyears 1883 to 1888. Real expendituresfor detectiveservices peaked in 1885 and declinedby 32 percentby 1888 whenthe WSGA disbandedthe bureau. Furthermore, between 1882 and 1894real expenditures for inspection services declined 54 percent. As is evidentin Table 3, expendituresfor enforcement activities stead- ily increaseduntil 1886. In the aftermathof thewinter storm of 1886, mostlarge cattle outfits were bankrupt. The WSGA founditself in similar financialshape and by 1887 couldno longerfinance the detective bureau due to decliningmembership and revenues.While expenditures for in- spectionservices continued, they never approached their high of 1886. These changesrepresent a decreasein theparameter P causingan out- wardshift of both the homesteader's and rancher's reaction functions. As a result,the optimallevels of bothv and s increasedleading to an increasein the probability of using violence to resolveland disputes. g,Federal GovernmentSupport

The primarychange in the probabilityof federalgovernment inter- ventionin thedispute between homesteaders and rancherswas thepas- sage of the 1885 Illegal InclosureAct. This act was theprimary legal

This content downloaded on Wed, 9 Jan 2013 13:03:15 PM All use subject to JSTOR Terms and Conditions 86 McFerrinand Wills vehicleused by the federalgovernment to preventcattlemen from in- closingthe public domain.Further supporting the homesteaderswere the electionof PresidentCleveland and the appointmentof Secretary Sparks.After this point, the federal government became more actively involvedin the disputebetween homesteaders and ranchers,and the 1885 act gave thefederal government a legal methodto intervene.This shiftedthe reaction functions of bothranchers and homesteadersto the right.Again, as long as the shiftof thehomesteader's function dominatesthe ranchers, the optimal level of boths and v will increase.As a result,the probability that homesteaders and ranchersresort to violence will increase. k,Local GovernmentSupport

Withrespect to protectionfrom the courts, the ability of cattlemento obtainconvictions in local courtsfor theft of cattlewas important.Evi- dencefrom Johnson County court records indicates that in 1885,of the ninecases of theftbrought to trial,five resulted in convictions.How- ever,in 1889,of the 14 cases broughtto trial,none led to a conviction, and thereafterno cases of theftappear in thecourt records.44 This indicates a substantialdecline in theability of cattlemento obtainconvic- tionsfor stock theft. Withdeclining conviction rates and legislativechanges such as the repeal of the MaverickLaw and creationof the Board of Livestock Commissioners,support of local governmentk, fell.As a result,the reactioncurve for homesteaders shifted out while the function for ranchers shiftedin. Unambiguously,the optimalamount of s suppliedby homesteadersincreased, but the effect on ranchersis ambiguous.With less support,the probabilitythat homesteaders will resisteviction ef- fortsincreases. Ranchers initially respond to thefall in k by reducingv, butthe increase in s inducesthem to supplymore efforts at eviction.As longas thereaction curve of the homesteaders dominates the shift of the rancher'scurve, the optimal value of v will increaseas well.As a result, boths and v increasedleading to an increasein theprobability of violencein settlingland disputes. n,Relative Population

To constructa measureof relativepopulations by county,one would liketo have data on individualsengaged in ranching and farming, however,

44 Smith,War, pp. 116-17.

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TABLE4 STATE LEVEL CHARACTERISTICS, 1890 Actual Predicted Numberof Numberof Percentage Relative Relative State Farmersa Cattlemena CropLand Population Population

Arizona 2,172 2,712 1.75 1.25 1.25 Colorado 20,294 5,297 7.64 0.26 0.44 Montana 5,623 4,427 3.93 0.79 0.95 Nevada 1,643 1,949 0.93 1.19 1.36 New Mexico 10,256 6,832 7.82 0.67 0.41 Utah 12,340 2,418 9.28 0.20 0.21 Wyoming 2,571 4,147 1.19 1.61 1.33 a U.S. CensusBureau, 1890 Census,Statistics of Population, table 79, pp. 306-41, and Special CensusReport, table 3, pp. 34-57. thesedata existsonly at thestate level forWyoming in 1890. To over- come thislimitation, we constructeda prediction equation based upon state-leveldata using the percentage of farmlanddevoted to cerealcrops suchas corn,wheat, and oats forseven western states as thepredictor. The presenceof cereal cropsis a strongindicator of a lowerrelative population.During this period, farmers grew cereal crops primarily for marketsale and notas feedfor cattle. We use theequation to predicta county'srelative population.45 Table 4 containsstate level characteris- ticsused to developthe prediction equation. States with a highpercent- age of farmlanddevoted to cerealcrop production also had low relative populations.Wyoming, Arizona, and Nevada were strongcattle states witha relativelyhigh proportion of cattlemento farmers,whereas the remainingstates had a largerproportion of farmersto cattlemen. Withrespect to themodel, the implications for violence in Wyoming are clear. Largerrelative populations led to the expectedoutcome of violence favoringranchers in the southernportion of the state,and lowerrelative populations led to an uncertainexpected outcome in the northeast.In thesouth, the reaction function for cattlemen shifted out- wards,but inwardsfor homesteaders. In the northeast,lower relative populationsshifted the reaction function for homesteaders outward and thatof ranchersinwards. As longas thehomesteaders' shift dominates theranchers' shift, both s andv will increasewith lower relative popula- tionsleading to a higherprobability of violence, whereas the opposite is truewith higher levels of n.

45 The 1890 Censusclassified cattlemen as individualsengaged as stockraisers, herders, and droverswhile farmers are individualswho are farmers,planters, and overseers.The correlation coefficientbetween percentage crops and relativepopulation is -0.927 and the coefficientof correlationis -0.7944, indicatinga strongnegative linear dependence between the two. The pre- dictionequation is Y= 1.493- 0.13802(X)with an adjustedR2 of0.861.

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TABLE 5 COUNTY CHARACTERISTICS, 1890

Percentageof Predicted Average TotalFarm FarmAcres in Relative County Population FarmSize Acres CerealGrains Population

Crook 2,338 236 127,245 2.93 1.09 Johnson 2,357 403 123,594 2.89 1.09 Sheridan 1,972 350 124,749 4.07 0.93 Albany 8,865 1,635 214,955 0.19 1.47 Carbon 6,857 452 133,241 1.11 1.34 Converse 2,738 916 45,400 1.38 1.30 Fremont 2,463 263 96,273 3.23 1.05 Laramie 16,777 1,912 774,161 0.27 1.46 Natrona 1,094 292 48,107 0.11 1.48 Sweetwater 4,941 207 4,757 0.55 1.42 Unita 7,881 362 130,330 0.46 1.43 Weston 2,422 811 7,470 0.54 1.42 StateWide 60,705 586 1,830,282 1.14 1.34 Source:Population is fromthe 1890 Census: Statistics of Population, table 4, p. 46.

As seen fromTable 5, Crook,Johnson, and Sheridancounties, com- prisingthe northeastportion of the state,had relativepopulations aroundone indicatinga relativelyequal distributionof cattlemenand homesteaders.This is consistentwith Frank Canton's assessment that grangerscomprised a majorityof JohnsonCounty.46 However, the re- mainingcounties had relativepopulations in excess of one indicating therelative strength of cattlemen.Based uponthe relative populations, bothranchers and homesteadersin thenortheast portion of thestate in- creasedtheir optimal level of s and v. This increaseled to an increased probabilityof violencein theregion. Moreover, the relative populations weresuch that farmers and ranchers could form reasonable expectations thatthey would prevail in anyviolent confrontation. The evidencepre- sentedin Table 5 shedslight on whythe level of organizedviolence oc- curredin thisregion and not in otherportions of the state.Cattlemen dominatedother areas, but their relative strength was less in thisarea.

CONCLUSION

For decades,historians and popular culture depicted the development of the AmericanWest as one of almostcontinual violence, a lawless domainwhere guns and lynchingsolved disputes. Recent literature has challengedthis characterizationarguing that the regionwas neither

46 Quotedin Larson,History, p. 188.

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"lawless"nor as violentas depicted.What is more,the violence that did occurwas relativelyrare and predictable. This article supports this view by arguingthat the JohnsonCounty War, the seminalevent between whites,that Baber describesas a transitionpoint between the old and new West was not the outcomeof irrationalvigilantism as popularly portrayed.Rather it was thedirect result of decisionsmade by rational utilitymaximizing individuals under conditions of uncertainty. The "war,"such as it was, was ultimatelythe result of incompatible propertyrights systems competing for the same land. Ranchersestab- lishedan economicsystem based uponusufruct rights to land and pri- vaterights to cattlecomplete with an institutionalstructure for the protection of these rights.However, the federal governmentnever recognizedranchers' claims on thepublic domain. Moreover, the federalgovernment actively encouraged small-scale settlement of theWest throughvarious land policies thatwere well suitedfor the humidre- gionsof America,but not the arid regions of thewest. This conflictbe- tweentwo propertyrights systems culminated in the JohnsonCounty Warin Wyomingduring the late nineteenth century. Using a modelthat specifiesthe conditions for violence, we demonstratethat every parame- teraffecting the probability of a disputeresulting in violenceshifted in a mannerthat increased that probability of violence.As such,this article supportsthe argumentthat the level of organizedviolence reached in the JohnsonCounty War was predictableand, furthermore,why this level of organizedviolence in theWest was a relativelyrare choice for resolvingdisputes.

Appendix

To determinethe slopes of thereaction functions, we differentiatedthe first order conditionswith respect each variable of the model and solvedfor the respective partial derivatives.Equations 7 and 8 representthe reaction functions.

asfvOL

This content downloaded on Wed, 9 Jan 2013 13:03:15 PM All use subject to JSTOR Terms and Conditions 90 McFerrinand Wills increasein effortsby rancherswhile ranchers respond positively to increasesin effort byhomesteaders for any given set of exogenousvariables. To analyzethe impact of each exogenousvariable on theoptimal level of s and v, we differentiatedthe reaction functions with respect to each exogenousvariable. What differentiatesour application from that of Alston et al. is themodeling of the probabilityof an evictionas a functionof therelative population n. Equation9 representsthe derivativeof the rancher's reaction function, and equation10 thatof the homesteader's withrespect to n.

dV - _ I (9) dN vnOsL(,vvL Cvv,)-- fvOsL(fvvnoL) > (8vviL Cvv,)2 O

dS - - - -_finsL[(1 /P)OssL Css ] f?vOsL(-nssL)10) dN [(1- fi)ssL - Cs )12

One can demonstratethat the sign of equation9 is positivewhile that of equation10 is negative.Increases in therelative population shifts rancher's reaction function to the right,but simultaneously shifts the homesteader's function to theleft. Withoutadditional structure imposed upon the model,the impacton the optimal level of v is indeterminant.To demonstratethis ambiguity, refer to Figure1. Initially, themodel is in equilibriumwith rancher's supply vo and homesteader'ssupplying so givena fixedlevel of n. Supposethat n increases.The reactionfunction of ranchers shiftsto theright, holding s constant.Ranchers respond by supplyingvl. Homestead- ers respondto the increasein v by movingdown their reaction function and supply less s. However,an increasein n shiftshomesteaders reaction function to theleft. The resultis an unambiguousdecline in theoptimal supply of s, butan ambiguouschange in theoptimal supply of v. If one assumes,which we do, thatthe shift of thehomesteader'sreaction function dominates that of the rancher's, then the result will be a de- clinein boths and v.

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