Returns in the Western Range Cattle Industry: Reconstructing the Financial History of the Matador Land and Cattle Company, 1883-1920

Abstract

Much has been written concerning the rate of return earned by investors in cattle ranching during the open range era of the American West. Individual and foreign investors supplied large amounts of capital to stock the ranges; fortunes were made and lost in a short 20-year span. Financial histories abound in the literature regarding the return on investments. Most, if not all, rely on published financial data to determine performance. Yet, accounting practices of the time render any financial performance calculated from published financials problematic. This article estimates the financial performance of the Matador Land and Cattle Company for the years 1882-1920 by adjusting the published financial data to conform to modern accounting practices. In doing so, a more accurate picture of the financial performance of a large Scottish cattle firm operating on the open range emerges. Additionally, the article estimates the return that a typical investor earned holding stock in the Matador. Taken together, these measures provide a reflection of the rate of return during the open range era of the American West.