1. Buffalo Hunt International Trade and the Virtual Extinction of the North American Bison M. Scott Taylor, April 2006

2. Emblematic of the West

4. Not all of History is pleasant Unprecedented slaughter of the American Bison or Buffalo.

5. Facts About the Slaughter Pre-European contact population of 25 to 30 million animals. Post civil war 1865 population of 10-15 million Slaughter on the “Great Plains”. In a little more than 10 years time, all but 200 killed.

6. Who Killed the Buffalo? Settlers came, bison habitat was reduced, buffalo numbers fell.

7. The Army came, wanted the bison dead to tame the Indians, they facilitated hunting, and buffalo numbers fell. “Kill every buffalo you can…every buffalo dead is an Indian gone” Colonel R.I. Dodge “Send them powder and lead, if you will; but for the sake of a lasting peace, let them kill, skin, and sell until the buffaloes are exterminated” General P. Sheridan

8. The Railroads came, they created a market for their meat, robes and hides, they facilitated hunting, and buffalo numbers fell.

9. New rifles came, allowing hunters to shoot from 600 meters away and kill 100 buffalo in a “stand”. The Sharp’s Big 50 facilitated hunting, and buffalo numbers fell.

10. Whiskey and White traders altered Native hunting practices. Native hunting & drought killed the buffalo.

11. What needs to be Explained? Why was the slaughter a slaughter? Why didn’t prices adjust to limit the slaughter? Why the 1870s and not 1880s or 1840s?

12. The Hypothesis 1.An innovation in tanning of buffalo hides 2.Open access to buffalo herds 3.Robust export market for industrial leather

13. Method of Proof Develop an economic model of Buffalo hunting. Construct buffalo export hide data. Cross-check with other Historical Data.

14. The Model G.E. Search & Hunting Model Large number of potential hunters Hunters are risk neutral Hunters hunt or produce outside good

15. Herds arrive at rate  dt Hunters draw hunting costs from G(c) Hunters lose herd at rate dt, Hunters discount the future at rate  dt

16. Define: V H (t) = expected pdv of hunting income at t V S (t) = expected pdv of searching at t p  S = value of today’s harvest w = value of employment in outside good c*=hunting cost for marginal hunter

17. Hunters

18. Searchers

19. Aggregate Conditions h = [θG(c*)]/[λ+θG(c*)]

20. Modeling the Slaughter System simplifies to two non-linear differential equations in (c*,S) System is Saddle-Path Stable Unanticipated innovation in tanning raises effective price for Buffalo products

21. Dynamics

22. The Model’s Answers Heterogenous costs & Rational expectations create slaughter International Trade fixes world prices ensuring new supply does not reduce incentive to hunt Innovation just hit in 1871

23. Could it really be Trade? Hide Exports from United States to all countries annually over 1850-1890 Period Data includes port of export, and country specific destination of exports Data mostly in value terms, but some quantity data as well. Cattle numbers in U.S. from 1865 Problem: Hides include cattle hides

24. Method Deflate hide values to Hide numbers using price index Eliminate cattle hides using model of the cattle industry (Rosen, Becker, Scheinkman JPE (1994). Cross-check constructed series against other historical data.

27. Texas Slaughter Montana Slaughter Battle of Adobe Walls Tanning Innovation Kansas Slaughter Southern Herd Gone 5,000,000 exported Northern Herd Gone 1,000,000 exported

28. Cross-Checks I. Timing of Destruction is correct for both North and South Southern Herd Destruction Greater than Northern Herd Destruction Blip at time of Adobe Walls – Buffalo War

29. Cross-Checks II. Pause from 1879 to 1881 as Hunters move North Export data shows exports to U.K. boom first, followed by Germany and then France. London Times Article of 1872 dates U.K innovation to 1871

30. Cross-Checks III Numerous Historic Accounts link W.C. Lobenstein with sales to England. J.N. Dubois with sales to Germany. Business Directories in 1870s list many tanneries offering Buffalo leather products

31. Who killed the Buffalo? Tanning Innovation created in Europe Robust demand comes from Europe. Is Europe responsible for the most shameful Environmental event in U.S. history?

32. Cross-Check IV Assume 10 million buffalo in Southern Herd Growth rate of 18% per year Exports to Europe alone will not extinguish the Southern herd by 1879. Exports to Europe are only 2/3 of total required kill. U.S. domestic consumption has to be the remaining 1/3.

33. Conclusion Standard accounts of the “Slaughter on the Plains” are incomplete. Theory suggests we need a mechanism to hold prices up and a reason for a frenzied slaughter. Simple search and hunt model delivers both when trade in buffalo hides is large.

34. Free trade, technology transfer, and little to no environmental regulation can produce devastating results in just a few short years. The greatest disaster in American Environmental history is, at bottom, not an American story – it is a European one!

38. The Railroads