Solution Manual for Business Ethics Ethical Decision Making and Cases

11th Edition by Ferrell Fraedrich Ferrell ISBN 9781305500846 1305500849

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CHAPTER 2
Stakeholder Relationships, Social
Responsibility, and Corporate Governance

SUMMARY
In this chapter, first we identify stakeholders’ different roles in business ethics. We examine the relationships
between businesses and various stakeholder groups and examine how a stakeholder framework can help us
understand organizational ethics. Then we define social responsibility and examine the relationships between
having a stakeholder orientation and social responsibility. Next, we delineate how a stakeholder orientation
helps to create corporate social responsibility. We then examine corporate governance as a dimension of
social responsibility and its role in structuring ethics and social responsibility in business. The ethical
decision making process is covered in order to provide an understanding of the importance of oversight in
responding to stakeholders. Finally, we provide the steps for implementing a stakeholder perspective in
creating both social responsibility and ethical decisions in business.

INSTRUCTOR NOTES FOR “AN ETHICAL DILEMMA”

Megan’s dilemma is her involvement and knowledge of GAC’s tracking of employees and whether to report
this to higher authorities. GAC tracked one employee traveling ten miles to an area hospital every night after
work and planned to reprimand the employee for using the company car for personal use. According to the
company, GAC can legally place GPS devices in its company cars. Also, according to corporate policy,
company cars should only be used for business activities, and any personal needs should be done with the
employee’s own personal car. The instructor may want to ask students their opinion on how appropriate the
punishment is to the violation. The instructor could push the issue with questions such as what if this is the
employee’s first offense and he is otherwise a very productive worker? Could the company simply give the
employee a warning?
A second case involved GAC’s plans to fire another employee for sharing company secrets. Company evidence
included computer activity, cell phone usage, GPS tracking, audio and video of personal conversations, dinners,
and even hotel rooms. The instructor may want to ask students if GAC is within the law when obtaining this
evidence. Has GAC overstepped its bounds in tracking personal conversations? Could the fired employee sue
GAC for wrongful dismissal? Would it be different if the employee leaked national secrets instead of company
secrets concerning an app? The company has an established ethical
reputation, so one rogue employee should not tarnish that reputation if the company acts responsibly in how
it handles the employee. Megan’s boss brushes aside her concerns and reminds Megan how competitive the
industry is and how necessary it is to make sure employees are not sharing confidential information with
rivals. Megan is also reminded her job is simply to suggest appropriate action. Should Megan suggest what
she really thinks? Should she ‘suggest’ what she knows her boss wants to hear?

LECTURE OUTLINE
I. Stakeholders Define Ethical Issues in Business
A. Building effective relationships is considered one of the more important areas of business today.
A stakeholder framework helps identify the internal stakeholders such as employees, boards of
directors, and managers as well as external stakeholders such as customers, special interest
groups, regulators, and others who agree, collaborate, and have confrontations on ethical issues.
9 ChapterChap2:Stakeholderer2:StakehoRelationships,derRelationshcips,Soal Responsibility,SocialResponsibility,andCorporateandCorporateGvernancGovernance 9

B. In a business context, customers, investors and shareholders, employees, suppliers, government

agencies, communities, and others who have a “stake” or claim in some aspect of a company’s
products, operations, markets, industry, and outcomes are known as stakeholders.
1. The survival and performance of any organization is a function of its ability to create value
for all primary stakeholders. There are three approaches to stakeholder theory: normative,
descriptive, and instrumental.
a. The normative approach identifies ethical guidelines that dictate how firms ought to
treat stakeholders. Principles and values provide direction.
b. The descriptive approach focuses on the actual behavior of the firm and usually
addresses how decisions and strategies are made for stakeholder relationships.
c. The instrumental approach describes what will happen if firms behave in a particular way.
2. The relationship between companies and their stakeholders is a two-way street. Stakeholders
are influenced by business, but they also have the ability to affect businesses.
a. Stakeholders apply their values and standards to many diverse issues—working conditions,
consumer rights, environmental conservation, product safety, and proper information
disclosure—that may or may not directly affect an individual stakeholder’s own welfare.
b. Stakeholders provide both tangible and intangible resources that can be critical to a
firm’s long-term success.
3. When individual stakeholders share similar expectations about desirable business conduct,
they may choose to organize into communities.
4. Ethical misconduct can damage a firm’s reputation, causing stakeholders to withdraw
valuable resources. This gives stakeholders power over businesses.
C. Identifying Stakeholders
1. Stakeholders can be divided into two categories.
a. Primary stakeholders are those whose continued association is necessary for a
firm’s survival (employees, customers, investors, and stockholders, governments and
communities that provide necessary infrastructure).
b. Secondary stakeholders do not typically engage in transactions and are not essential
for its survival (the media, trade associations, and special-interest groups).
c. Although primary groups may present more day-to-day concerns, secondary groups
cannot be ignored or given less consideration in the ethical decision-making process.
2. The stakeholder interaction model indicates that there are two-way relationships between
the firm and a host of stakeholders.
D. A Stakeholder Orientation
1. The degree to which a firm understands and addresses stakeholder demands can be expressed as
a stakeholder orientation. A stakeholder orientation involves “activities and processes within a
system of social institutions that facilitate and maintain value through exchange relationships
with multiple stakeholders.”
2. A stakeholder orientation comprises three sets of activities.
a. The organization-wide generation of data about stakeholder groups and assessment of
the firm’s effects on these groups.
b. The distribution of this information throughout the firm.
c. The organization’s responsiveness as a whole to this intelligence.
3. Given the variety of employees involved in the generation of information about stakeholders,
it is essential the information gathered be circulated throughout the firm.
4. A stakeholder orientation is not complete unless it includes activities that address
stakeholder issues.
5. Responsiveness processes may involve the participation of the concerned stakeholder groups.
A stakeholder orientation can be viewed as a continuum as firms adopt the concept to varying
degrees.
10 ChapterChap2:Stakeholderer2:StakehoRelationships,derRelationshcips,Soal Responsibility,SocialResponsibility,andCorporateandCorporateGvernancGovernance 10

II. Social Responsibility and Ethics

A. The concepts of ethics and social responsibility are often used interchangeably, although each has a
distinct meaning.
1. Social responsibility is an organization’s obligation to maximize its positive impact on
stakeholders and minimize negative impacts. It can be viewed as a contract with society
2. Business ethics involves carefully thought-out rules or heuristics of business conduct that
guide decision making.
B. There are four levels of social responsibility—economic, legal, ethical, and philanthropic—and they
can be viewed as steps.
C. The term corporate citizenship is often used to express the extent to which businesses strategically
meet the economic, legal, ethical, and philanthropic responsibilities placed on them by their various
stakeholders.
1. Corporate citizenship has four interrelated dimensions:
a. Strong sustained economic performance
b. Rigorous compliance
c. Ethical actions beyond what the law requires
d. Voluntary contributions that advance the reputation and stakeholder commitment of
the organization.
D. Reputation is one of an organization’s greatest intangible assets with tangible value. The value of
a positive reputation is difficult to quantify, but it is very important.

III. Issues in Social Responsibility

A. Social responsibility rests on a stakeholder orientation.
1. Companies are looking at broader issues that consider the long-term welfare of society;
each stakeholder is given due consideration.
B. Long-term relationships with stakeholders develop trust, loyalty and the performance necessary
to maintain profitability.
C. Issues generally associated with social responsibility can be separated into four general
categories: social issues, consumer protection, sustainability and corporate governance.
1. Social issues are associated with the common good and deal with concerns that affect
large segments of society and the welfare of our entire society.
a. There is a need to reflect on issues indirectly related to business, such as jobs lost through
outsourcing, health issues, and gun rights when developing strategies in certain cases.
b. Issues that more directly relate to business include obesity, smoking, and exploiting
valuable or impoverished populations, as well as a number of other issues
c. Another major social issue involves internet tracking and privacy and may soon become a
consumer protection issue as the government is considering passing legislation limiting
the types of tracking companies can perform over the Internet without users’ permission.
2. Consumer protection often occurs in the form of laws passed to protect consumers from
unfair and deceptive business practices; these issues usually have an immediate impact on the
consumer after a purchase.
a. Major areas of concern include advertising, disclosure, financial practices, and
product safety
b. Because consumers are less knowledgeable, it is the responsibility of companies to
take precautions preventing consumers from being harmed by their products.
c. Deceptive advertising has been a hot topic in the consumer protection area, and
some advertising practices skirt the line between ethical and questionable behavior.
i. For example, native advertising blends digital advertisements or company promotions
with content on the website where it is featured. This may be construed as deceptive if
consumers cannot tell the difference between the ad and the content.
11 ChapterChap2:Stakeholderer2:StakehoRelationships,derRelationshcips,Soal Responsibility,SocialResponsibility,andCorporateandCorporateGvernancGovernance 11

d. Companies must be knowledgeable about consumer protection laws and recognize

whether their practices could be construed as deceptive or unfair.
3. Sustainability is defined as the potential for the long-term well-being of the natural
environment and businesses can no longer ignore the environment as a stakeholder.
a. Because sustainability is a major ethical issue, we will cover this topic in more detail
in chapter 12.
4. Corporate governance involves the development of formal systems of accountability,
oversight and control. Strong corporate governance mechanisms help remove the possibility for
employees to make unethical decisions.
a. Research has shown that corporate governance has a positive relationship with social
responsibility and we discuss corporate governance in more detail later in this chapter.

IV. Social Responsibility and the Importance of a Stakeholder Orientation

A. Many businesspeople and scholars have questioned the role of ethics and social responsibility
in business because legal and economic responsibilities are accepted as the most important
determinants of performance.
1. Milton Friedman said “the basic mission of business [is]…to produce goods and services at a
profit, and in doing this, business [is] making its maximum contribution to society and, in
fact, being socially responsible.” Friedman believes the market is a better deterrent to
wrongdoing than new laws and regulations.
2. Adam Smith, one of the founders of capitalism, established expectations for motives and
behaviors in his invisible hand theory. Smith distinguished justice as consisting of perfect or
inalienable rights, from beneficence, consisting of imperfect rights that should be performed
but cannot be forced.
B. Evidence suggests that caring about the well-being of stakeholders leads to increased profits. The
support stakeholders have for companies they perceive to be socially responsible can also serve to
enhance the firms’ profitability.

V. Corporate Governance Provides Formalized Responsibility to Stakeholders

A. Today, the failure to balance stakeholder interests can result in a failure to maximize
shareholders’ wealth.
1. Directors and corporate officers have a duty of care, or duty of diligence, to make informed
and prudent decisions.
2. Directors have a duty of loyalty, which means all their decisions should be in the best interests
of the corporation and its stakeholders.
3. Two major challenges for boards of directors are officer compensation and the temptation to
use knowledge about investments, business ventures, and the stock market to engage in insider
trading.
B. To remove the opportunity for employees to make unethical decisions, most companies have developed
formal systems of accountability, oversight, and control—known as corporate governance.
1. Accountability refers to how closely workplace decisions are aligned with a firm’s
stated strategic direction and its compliance with ethical and legal considerations.
2. Oversight provides a system of checks and balances that limit employees’ and
managers’ opportunities to deviate from policies and strategies and that prevent
unethical and illegal activities.
3. Control is the process of auditing and improving organizational decisions and actions.
4. A clear delineation of accountability helps employees, customers, investors, government
regulators, and other stakeholders understand why and how the organization chooses and
achieves its goals.
12 ChapterChap2:Stakeholderer2:StakehoRelationships,derRelationshcips,Soal Responsibility,SocialResponsibility,andCorporateandCorporateGvernancGovernance 12

5. Corporate governance establishes fundamental systems and processes for preventing and
detecting misconduct, for investigating and disciplining, and for recovery and
continuous improvement. The development of a stakeholder orientation should interface
with the corporation’s governance structure.
C. Views of Corporate Governance
1. The shareholder model of corporate governance is founded in classic economic
precepts, including the goal of maximizing wealth for investors and owners.
a. Focuses on developing and improving the formal system for maintaining
performance accountability between top management and the firms’ shareholders.
b. A shareholder orientation should drive a firm’s decisions toward serving the best
interests of investors.
2. The stakeholder model of corporate governance adopts a broader view of the purpose
of business because it must answer to other stakeholders, including employees, suppliers,
government regulators, communities, and special-interest groups.
a. Because of limited resources, companies must determine which of their stakeholders
are primary.
D. The Role of Boards of Directors
1. For public corporations, boards of directors hold the ultimate responsibility for their firms’
success or failure, as well as for the ethics of their actions. Board members have a fiduciary
duty to act in the best interests of those they serve
2. Traditionally, boards of directors rarely perform the management function. They are concerned
with monitoring the decisions made by executives on behalf of the company.
3. Compensation, both of organizational executives and board members themselves, is a difficult
ethical area because board members may place self-interest above those of shareholders.
4. Greater Demands for Accountability and Transparency
a. Directors are chosen for their expertise, competence, and ability to bring
diverse perspectives to strategic discussions.
b. Outside directors are thought to bring more independence to the monitoring function.
c. Many of the corporate scandals uncovered in recent years might have been prevented if
each of the companies’ boards of directors had been better qualified, more
knowledgeable, and less biased.
d. The concept of board members being linked to more than one company is known as
interlocking directorate. The practice is legal unless it involves a direct competitor.
5. Executive Compensation
a. Many boards spend more time discussing compensation than they do ensuring the
integrity of the firm’s financial reporting systems.
b. How executives are compensated has become a controversial topic, with many people
believing no executive is worth millions of dollars in annual salary and stock options,
while others argue that because executives assume so much risk, they deserve the rewards.
c. The topic of executive compensation is important to boards because it receives much
attention in the media, sparks shareholder concern, and is hotly debated in discussions
of corporate governance.
d. One area for board members to consider is the extent to which executive compensation
is linked to company performance.
e. Issues related to high compensation are excessive risk-taking, a focus on short-term
financial performance, and reduced transparency at the expense of long-term growth.
13 ChapterChap2:Stakeholderer2:StakehoRelationships,derRelationshcips,Soal Responsibility,SocialResponsibility,andCorporateandCorporateGvernancGovernance 13

VI. Implementing a Stakeholder Perspective

A. An organization that develops effective corporate governance and understands the importance of
business ethics and social responsibility in achieving success should develop processes for
managing these important concerns.
B. Although there are many different approaches, there are some steps to follow that are effective
in utilizing the stakeholder framework in managing responsibility and business ethics.
1. Step 1: Assessing the Corporate Culture
a. To enhance organizational fit, a social responsibility program must align with the
corporate culture of the organization.
b. The purpose of this step is to identify the organizational mission, values, and norms that
are likely to have implications for social responsibility.
2. Step 2: Identifying Stakeholder Groups
a. In managing this stage, it is important to recognize stakeholder needs, wants, and desires.
b. Stakeholders have some level of power over a business because they are in the position
to withhold, or at least threaten to withhold, organizational resources.
3. Step 3: Identifying Stakeholder Issues
a. This step involves understanding the nature of the main issues of concern to
primary stakeholders.
4. Step 4: Assessing Organizational Commitment to Social Responsibility
a. Step 4 brings the previous three steps together to arrive at an understanding of
social responsibility that specifically matches the organization of interest.
5. Step 5: Identifying Resources and Determining Urgency
a. The prioritization of stakeholders and issues, along with the assessment of
past performance, provides guidance for allocating resources.
b. Two main criteria should be considered:
i. the level of financial and organizational investments required by different actions.
ii. the urgency when prioritizing social responsibility challenges.
6. Step 6: Gaining Stakeholder Feedback
a. Stakeholder feedback can be generated through a variety of means.
i. Satisfaction or reputation surveys
ii. Assessment of stakeholder-generated media (blogs, websites, podcasts,
and newsletters)
iii. Formal research using focus groups, observation, and surveys

VII. Contributions of a Stakeholder Perspective

A. Balancing stakeholder interests requires good judgment because broader societal interests can
create conflicts.
B. This chapter provides a good overview of the issues, conflicts, and opportunities of
understanding more about stakeholder relationships. The stakeholder framework helps recognize
issues, identify stakeholders, and examine the role of boards of directors and managers in
promoting ethics and social responsibility.

DEBATE ISSUE: TAKE A STAND

Have your students split into two teams. One team will argue for the first point, and the other will argue for the
opposing view. The purpose is to get students to realize that there are no easy answers to many of these issues.
This particular issue deals with whether a socially irresponsible product—in this case, a product that promotes
adultery—should be sold if it is legal. Students on the first team could argue that as long as the product is legal
and allows for freedom of choice, there should be no barriers to selling it. Students on the
14 ChapterChap2:Stakeholderer2:StakehoRelationships,derRelationshcips,Soal Responsibility,SocialResponsibility,andCorporateandCorporateGvernancGovernance 14

other team could argue that the product causes emotional harm to people. Since it is a detriment to society,
it should be banned. The instructor might also want to bring up the hacking attack that ended up revealing
the real names of customers because Ashley Madison refused to shut down. It would be interesting for
students who believe Ashley Madison is morally wrong to discuss whether the hackers were also wrong in
what they did.

“RESOLVING ETHICAL BUSINESS CHALLENGES” NOTES

In this case, Demarco has to balance various stakeholder interests in his daily job while his employer is asking
him to exploit a vulnerable population. Xeon Natural Resources Incorporated hired Demarco right out of
college due to his heritage and strong language skills. Xeon plans to mine niobium in a Brazilian rainforest
and Demarco’s job, along with a small group of other employees, is to explain to the local indigenous tribes
how Xeon wants to strip mine their government issued land. The reader learns how manufacturers use
niobium and how much ($5 billion over 20 years) Xeon plans to make in profits.
Demarco soon learns his assigned indigenous tribe is one of the few left unaltered by western culture, but that
will soon change once Xeon begins strip mining. His boss agrees their culture will change forever but urges
him to think instead of the increase in the standard of living for the tribe. Demarco still feels uneasy and
believes the tribal elders are being steamrolled and do not understand the impact this mining will have on
their community. His boss says she too is worried about the interests of the various stakeholders, but the time
to move is now and the company is depending on these mining rights.
Instructors may ask students to name the various stakeholders and describe their interest in the project.
Which stakeholder has the largest interest in the project? This depends on which stakeholder the students
assign the greatest priority.
Demarco’s co-workers fear their jobs are in jeopardy. Now the tribal elders have raised concerns and have
called for meetings to obtain feedback from tribal members. While Xeon tries to mine using environmentally
friendly methods, there really is no such thing when it pertains to strip mining. Demarco is meeting with
tribal elders to discuss their concerns. He understands that some groups of stakeholders will suffer negative
effects no matter how the issue is decided. Demarco is not sure what he will tell the tribal elders when they
meet.
CASE 2

Starbucks Mission: Social Responsibility

and Brand Strength

CASE NOTES FOR INSTRUCTORS:

Students will likely have strong opinions regarding Starbucks. Many may be committed patrons who
view Starbucks as a socially responsible company committed to green practices and free-trade coffee.
Others might dislike Starbucks because it is a large chain that pushes out smaller local competitors.
Another possible reason students may be opposed to Starbucks are its prices, which are higher than
many of its competitors. Starbucks seems to be able to justify its higher prices because the company
sells more than just coffee—it sells an experience. Starbucks patrons can order specialty drinks and
hang out in what founder Howard Schultz envisioned to be the “third place” to be after home and
work. Love it or hate it, Starbucks has been very successful at branding.

Starbucks has had a profound influence on the U.S. coffee market. Before Starbucks came onto the scene,
people perceived coffee as an uninteresting product largely consumed by older people in the United States.
It did not have the “cool” factor or the cache that it does today. Starbucks entry in the market largely
changed how Americans consumed coffee—and what they thought about coffee shops. It all started in the
cold, gray climate of Seattle—the perfect setting for launching an appealing, warm, international beverage.
Starbucks emphasized quality while service and location became a critical issue.

In spite of its popularity, Starbucks faltered during the most recent recession, when many customers cut
back on discretionary purchases. This prompted the return of founder Howard Schultz as CEO. Schultz
implemented a restructuring process at Starbucks and closed hundreds of stores. He sought a return to
the value that initially made Starbucks a great company: quality. Today Starbucks is once again
thriving and expanding internationally.

No matter what one thinks of Starbucks, it is more involved in social causes and the care of its
workers than many comparable chains. Starbucks is committed to employee well-being, as one can
see in its employee health care system. Howard Schultz made employee health care a priority after
watching his father struggle with injuries because he had no access to employee health care or
worker’s compensation.

The company also has a history of giving to charities that affect its primary stakeholders. As part of its
commitment to ethics and sustainability, the company launched its Shared Planet website, which
communicates to interested stakeholders all of the company’s ethics and sustainability initiatives. The
company is a large purchaser of Fair Trade Certified coffee and has partnered with Conservation
International since 1998 to promote sustainable agricultural practices.

In spite of its professed commitment to caring for workers and for social causes, such a large company
always will be subject to criticism. From complaints that Starbucks pushes smaller competitors out of
markets, to criticisms that some of its coffee drinks are excessively fatty and caloric, Starbucks is
facing many challenges. For instance, disposable cups pose a problem as the company strives to
become more eco-friendly. In light of some of its weaknesses, instructors may ask students whether
they feel that Starbucks deserves its image as a socially responsible brand.
.
 Case 2: Starbucks Mission: Social Responsibility and Brand Strength 82

QUESTIONS AND DISCUSSION

1. Why do you think Starbucks has been so concerned with social responsibility in its
overall corporate strategy?
It should be obvious from examining the history of Starbucks that Schultz, the founder, was concerned
with social responsibility from the very beginning. Because he made it an original core value of the
company, it has remained a deeply ingrained part of the Starbucks culture. Starbucks also recognizes
the benefits of customers perceiving Starbucks as a socially responsible company. Employees who
receive health care are likely more satisfied because they feel that the company truly cares for them in
a time when many organizations are scaling back on employee benefits. Consumers may be inclined to
like Starbucks because of its many community and environmental initiatives.
Thus, social responsibility for Starbucks is translating into good business.

2. Is Starbucks unique in being able to provide a high level of benefits to its employees?

Students should understand that, while Starbucks does provide very good benefits to most of its
workers, this is not exactly unique. While lauding Starbucks is fine, it is true that many comparable
sized chains do not treat their workers as well as Starbucks. For instance, many chains do not
provide any benefits to part-time workers. However, other companies also have a mission of
providing for their workers. Some examples students may cite are Green Mountain Coffee,
Wegmans, Whole Foods, Timberland, and the Gap.

3. Do you think that Starbucks has grown rapidly because of its ethical and socially responsible
activities or because it provides products and an environment that customers want?

Students’ answers to this question could provoke serious debate in class. If Starbucks had a poor
record in its activities, it would suffer from diminished reputation, which could lead to lower
profits and reduced customer loyalty. However, many customers likely go to Starbucks, not
because of its social mission, but because they like the coffee or the coffee shop atmosphere. Many
customers likely began frequenting Starbucks because the locations are convenient and continue to
go as long as Starbucks remains a readily available option. On the other hand, its record in
responsibility has been a major selling point for consumers who care where products come from
and under what conditions. These people may choose Starbucks because they offer Fair Trade
coffee and organic snack products when other local coffee shops do not. Most people probably will
agree that, at least to a point, Starbucks responsible activities have become a part of the total
Starbucks product—a product for which many are willing to pay a premium price. In other words,
both answers could be correct.

ADDITIONAL RESOURCES
For an overview of Starbucks’ Global Responsibility strategy and commitments, instructors
may want to direct students to Starbucks’ Global Responsibility Report, available online to
download .An extra benefit to employees that Starbucks has started offering is the chance to
go back to earn a bachelor’s degree at Arizona State University. The following link gives
more information about the Starbucks College Achievement Plan:
http://www.starbucks.com/careers/college-plan.

.
 Chapter 2
Stakeholder
Relationships,
Social
Responsibility, and
Corporate
Governance
.
Learning Objectives
Identify stakeholders’ roles in business
ethics Define social responsibility
Examine the relationship between stakeholder
orientation and social responsibility
Delineate a stakeholder orientation in
creating corporate social responsibility

.
Learning Objectives (continued)
Explore the role of corporate governance in
structuring ethics and social responsibility
in business
List the steps involved in implementing a
stakeholder perspective in social responsibility and
business ethics

.
Relationships and Business
Relationships are associated with both
organizational success and misconduct
Businesses exist because of organizational
relationships between employees,
customers, shareholders, and the community
Stakeholder framework identifies the internal and
external stakeholders who agree, collaborate, and
engage in confrontations on ethical issues
Allows organizations to identify, monitor, and respond
to the needs and expectations of stakeholder groups
.
Another random document with
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and antelopes and packs of wolves went scampering off, alarmed by
the noise of the boat. There were two large wolf hounds on board,
partly greyhounds, being sent up to one of the trading posts.
On one occasion while the boat was landed to cut wood they
were taken on shore and turned loose to chase a large wolf, seen
not far off. The dogs put after him, soon running at full speed, in our
view for a mile or more, overtaking the wolf, but declining to seize
him, not having been yet trained for coursing wolves.
At the Mandan village, on the right bank, just above the present
site of Bismarck, we found the first abode of Indians having the
resemblance of permanency, their houses being of earth, supported
by timbers on the inside, rounded up like a big potato hill, so as turn
the rain. At this point Lewis and Clark spent the winter of 1804–5, on
their famous journey across the mountains to the Pacific Ocean. The
Rees, some distance above on the left bank of the river, had houses
of similar construction, all the other tribes having portable lodges of
poles and rawhides.
Forts Berthold, Clark and Union were the main trading posts
above, and at each of these we found numbers of Indians collected
to meet the agents, and at which we landed of course to hold the
usual council and talk followed by the delivery of their proper share
of the goods provided for them. As we approached nearer the British
possessions the Indians were pretty well supplied with guns,
obtained from the British traders, a short, smooth bore, cheap-
looking affair, but handy enough for killing buffalo on horseback,
while running.
Some of our passengers busied themselves during our stay at
these places in purchasing bows and arrows, pipes, shields,
moccasins, etc., to be preserved as mementoes of the Indians. The
young Englishman, Mr. Lace, was particularly active in the
acquisition of these articles of Indian make, and so was the
barkeeper of the boat, who acquired a general assortment to take
back with him to St. Louis.
The Indians along the upper Missouri were not then confined to
reservations and, in fact, roamed unrestrained from the Platte to the
North far beyond our boundary into the British possessions, and from
the Mississippi to the crest of the Rocky Mountains, subsisting
mainly upon the flesh of the buffalo.
The long twilight of this high latitude enabled the boat to run in
clear weather almost if not quite as late as 10 o’clock, and little time
was lost by darkness, and we were also favored with several
magnificent displays of the Aurora Borealis, exceedingly brilliant,
lighting the entire northern half of the sky for hours at a time.
On reaching the spurs or detached ranges of the mountains that
appear on either side of the river, navigation was rendered more
difficult by the shoals and rapids over which the boat could hardly
have passed but from the fact that she had been lightened by the
discharge of the greater part of her cargo, at points below.
In the latter part of June we landed at Fort Benton, the head of
navigation on the Missouri, where the boat remained several days.
 CHAPTER III.
Fort Benton was established by the American Fur Company, I
think in the year 1832. That same year the first steamboat ascended
the river to that locality, owned by the company. When we reached
the fort it was in charge of Alexander Culbertson, a prominent
employee of the fur company. Fifty-four years before this it took
Lewis and Clark nearly a year to make the journey from St. Louis to
the Great Falls, thirty miles above Fort Benton.
The remainder of the boat’s cargo, including the work oxen,
plows, harrows, etc., intended for the Blackfoot Agency, was
unloaded and the merchandise piled up on the river bank, a part
being stored in the fort, while arrangements were being made by
Colonel Vaughn for transportation to the Blackfoot Agency, on Sun
River, the supervision of which kept the colonel very busy for several
days.
The long voyage up the Missouri, together with my experience
and observation, gathered along the way, had convinced me that I
would not enjoy spending the whole winter at the Blackfoot Agency,
so I determined to return on the boat.
Mr. Lace, who had come up with the intention of going out to the
mountains, was so discouraged with the prospects of hunting under
existing conditions, that he also resolved to return on the boat. There
was no way of his getting back to the States at a later date in that
year, except to float down the river, a mode of traveling that had no
attractions for him. Mr. Holbrook, the young Harvard graduate, who
was traveling merely for recreation and health, had no intention of
remaining, so the boat was not entirely bereft of passengers.
On meeting Colonel Vaughn seven years afterwards, when he
was living on a ranch not far from Helena, Montana, he told me of his
distressing experience and narrow escape from death he had
encountered in a blizzard during the winter of 1858–9. While
hibernating quietly and comfortably at the Sun River Agency, a
courier or voyageur, arrived from Fort Benton, bringing the
intelligence that a band of Indians from over on the Marias River had
come in to Fort Benton, who were in a state of destitution and
threatened starvation, and that it was absolutely necessary for him to
visit the fort and have rations issued to them or they would starve.
He at once made preparations and started on horseback,
accompanied by his interpreter, a Canadian Frenchman, long a
resident of the Indian country. They started on a morning in February
when the weather was clear and pleasant, with but little snow lying
on the ground, not enough to hide the roadway or render riding
difficult.
At midday the sky became overcast, the clouds sweeping down
from the north, and they were soon enveloped by a heavy fall of
snow, driven and whirled about by a terrific wind, in fact, the worst
kind of a blizzard. The path was soon covered and the snow so
dense and drifting rapidly soon rendered progress slow and difficult,
the ravines being filled with snow when this blizzard began. Both
Colonel Vaughn and the interpreter were perfectly acquainted with
the route, but they lost their reckoning even before they were
overtaken by darkness. The blizzard continued unabated during that
night and all the following day, and all this time they wandered about
completely bewildered by dense snow and severe cold. At last,
during the second night, they were apprised of their locality from the
sound of the Great Falls of the Missouri, and were farther from Fort
Benton than when the snow first struck them. By this time, both men
and horses were nearly worn out and benumbed with cold. When
within hearing of the falls they stopped under an overhanging rock
which sheltered them from the snow and wind, but drowsiness set in,
the certain precursor of death under such circumstances, so they
rode out again into the storm, the colonel taking the lead, and kept
their horses moving. Calling to the interpreter he answered not, and
after this the colonel himself lost consciousness, and while he
retained his seat in the saddle, he ceased to exercise any control
over the horse, and the horse left to his own guidance, carried the
colonel back to the agency, reaching there after daylight, the
morning of the third day, with him almost dead.
The men at the agency went out, lifted him down, carried him
into the house and proceeded to restore him to life again, eventually
their efforts proving successful.
The horse of the interpreter arrived at the agency before the
colonel, and when the colonel had so far regained his faculties as to
be able to talk, he told them where he had last seen the interpreter
near the Great Falls. Some Indians put off in search of him, and his
body was recovered by them, found sitting erect in the snow, frozen
solidly—almost as solid as the granite boulders surrounding it.
The stage of water being good, the boat descended the river
rapidly, running twenty miles an hour and making few landings.
At the Ree village below the mouth of the Yellowstone, a stop
was made to take on a large stock of buffalo robes, a half day being
required to load them, and in order to hasten the work, twenty or
thirty squaws were hired to aid in transferring the bales of robes from
a warehouse on a hill, two hundred yards perhaps from the river
bank, to the boat. These squaws, although of comparatively small
stature, to the bucks, would shoulder up or put on top of their heads
a bale of robes, and walk with it, apparently, with ease, laughing and
chattering with their companions as they went. All the while the
bucks were sitting or standing around, smoking their pipes, looking
on with composure and satisfaction. It did not comport with their
notions of dignity and propriety to engage in any such ignoble work
themselves, in fact the Indian bucks have never yet been able to
appreciate the “nobility” of labor.
Somewhere about Fort Pierre, while the boat was running, four
buffalo bulls were seen grazing quietly in the bottoms some distance
from the river bank. The captain gave orders for landing the boat
immediately. Tied up to the guards on the lower deck were a couple
of Indian ponies being sent down to some point below, as a present
from some chief, to his friends or relations (giving presents being a
very general custom among them), and as was stated when the
horses were brought on board, the horses were extra good buffalo
horses, fleet of foot and trained to the chase.
Among the passengers at that time was a solitary Sioux warrior,
going down on a visit, as he said. He had been with us for a day or
two, and it had been whispered around that he was a bad character
where he belonged. He was athletic and devilish-looking, but there
was little about his person to distinguish him from the general run of
Indian bucks and warriors. He had an ordinary bow and quiver of
arrows slung over his back.
The captain ordered one of the horses brought forward quickly,
and, with the aid of a dozen deck hands, the horse was put ashore.
Just as soon as the buffalo were seen this Indian volunteered with
great alacrity to go after them, and as yet they were grazing
undisturbed.
Having had experience in killing buffalo on horseback the
previous year, on the Santa Fé Trail, I suggested the propriety of
giving the Indian a pair of Colt’s navy revolvers, which I had used
effectively, but he declined them, signifying by signs that his bow and
arrow would answer the purpose better than the pistols, and we soon
discovered that he was a skillful buffalo hunter. The moment the
horse was on the river bank he mounted him, bareback, without any
trappings whatever save a short piece of rope tied around the
horse’s neck. We stood on the hurricane deck looking on, and it
immediately became apparent to us that the Indian well understood
the business at hand, needing no instructions whatever from us. The
horse at once showed speed and activity, the Indian, expertness in
riding him, swaying and guiding him without even using the rope,
galloping off, not towards the buffalo, but down the river bank, to a
point where he had the wind of the game, then turning towards them,
he got right up on them almost before they started. In a moment he
was abreast of one of them and sent an arrow into its side half its
length. Then the horse, it seemed, of his own will fell back to the
rear, then sprang forward on the opposite side when a second arrow
was shot into the buffalo deep enough to produce inward bleeding.
The animal being mortally wounded ran only a half-mile when
tumbled down to die. We had an unobstructed view of the whole
proceeding from the hurricane deck of the boat. A striking
performance, demonstrating the prowess of the Indian. The buffalo
was butchered and brought on board, furnishing fresh meat for
several days.
 Transcriber’s Notes
Punctuation, hyphenation, and spelling were made
consistent when a predominant preference was found in the
original book; otherwise they were not changed.
Simple typographical errors were corrected; unbalanced
quotation marks were remedied when the change was
obvious, and otherwise left unbalanced.
Illustrations in this eBook have been positioned between
paragraphs and outside quotations. In versions of this eBook
that support hyperlinks, the page references in the List of
Illustrations lead to the corresponding illustrations.
Transcriber added the Table of Contents and the List of
Illustrations. Page numbers in the List of Illustrations match
the positions in this eBook, not the ones in the original book.
 *** END OF THE PROJECT GUTENBERG EBOOK OVER THE
SANTA FÉ TRAIL, 1857 ***

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