Cowboys and Capital: How the West Was Bankrolled

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Howdy. Chip Schweiger, here.

Welcome to another edition of Way Out West.

The podcast that takes you on a journey through the stories of the American West, brings you the very best cowboy wisdom, and celebrates the cowboys and cowgirls — who are feeding a nation.

There’s a sound the wind makes when it blows across an empty cow town — a hollow whistle through old wooden signs and broken windows.

It’s the echo of a time when dreams were measured not just in acres or head of cattle, but in dollars and dimes.

Because the frontier wasn’t just a place of dust and danger — it was an economy on horseback. Men staked everything they had on long shots and long drives.

They borrowed, they traded, they gambled on the promise that somewhere beyond the horizon, the payoff would be worth the risk.

Some found fortune.
Others lost it all.
And in between were the bankers, backers, and bold souls who bet on the West itself.

So today on the show, we’re talking about the side of cowboy life that doesn’t get sung about around the campfire — the money that made it all possible.
The loans, the ledgers, and the legends that bankrolled the American frontier. That’s what we’re discussing today.

After the episode, check out the show notes at WayOutWestPod.com/cowboys-and-capital

[MUSIC]

Welcome back. It’s good to be back in the saddle with you.

Season Four — can you believe that?

We’ve ridden through legends and landscapes, from lawmen and outlaws to trail bosses and cattle drives.

And every time, I’m reminded of what I love most about the West —
it’s not just the dust and the danger,
it’s the people who built something out of nothing.

Now, this season, we’re digging deeper.
Into the how behind the legends.
How the land was tamed.
How ranches rose.
And how the dreams of a young nation got bankrolled by risk, sweat, and a little bit of borrowed money.

Because today, we’re talking about something folks don’t usually think about when they picture cowboys —
we’re talking about capital.
The dollars, cents, and sometimes gold dust that kept the West moving.

So tighten your cinch, partner —
this is Cowboys and Capital: How the West Was Bankrolled.

CHAPTER 1: The Money Behind the Frontier

When we talk about the frontier, we tend to picture wide skies, longhorn cattle, and tough-as-rawhide cowboys pushing north.
But behind every herd, every railroad, and every stretch of barbed wire — there was money.

Big money.

The American West wasn’t just won by courage. It was financed.

See, after the Civil War, the nation’s attention turned westward. Land was cheap — sometimes free under the Homestead Act. Cattle roamed wild in Texas. Railroads were pushing steel across the plains. But opportunity doesn’t mean much without cash flow.

Cattle drives cost money.
You needed horses, wagons, chuckwagons, gear, hands to work the herd, and provisions for months on the trail.
Even a modest drive might run $10,000 in costs — a small fortune at the time.

So where did the money come from?
Some came from Eastern investors — bankers and businessmen who saw the West as the next great venture.
Others came from frontier entrepreneurs who bet the ranch, quite literally, on their cattle making it north in good condition.

One of my favorite examples?
A Texas rancher named Charles Goodnight. He and his partner Oliver Loving — yes, that Loving — drove cattle north into New Mexico and Colorado in the 1860s. But those drives were financed by loans, credit, and handshakes.
When Goodnight needed supplies, he got them on credit from merchants who believed in him.
That kind of trust — that reputation as collateral — was the real currency of the frontier.

And that’s something I see even today in business: sometimes, it’s not the cash you’ve got, but the credibility you’ve earned that keeps your operation moving forward.

CHAPTER 2: Bankers, Barons, and Shady Lenders

As towns sprang up, so did the banks.
They started small — one-room buildings with a safe, a desk, and maybe a deputy sitting outside with a shotgun.
But they were the heartbeat of boomtowns like Dodge City, Abilene, and Deadwood.

Now, not all bankers were honest.
Some were hustlers who showed up, opened a bank, and disappeared with the deposits when gold fever cooled.
Others were pioneers in their own right — men who took incredible risks to finance railroads, cattle empires, and mining operations.

You had cattle barons like Murdo Mackenzie at the Matador Ranch and John Chisum in New Mexico, both backed by serious capital from the East.
And you had local lenders — sometimes saloon owners or general store operators — who extended credit to cowhands and settlers when cash was tight.

But with opportunity came speculation.
During the silver boom of the 1870s, frontier towns were flooded with prospectors and investors alike.

Everybody was buying claims, swapping paper, and chasing fortunes underground.

And when the silver dried up — so did the banks.
Some collapsed overnight.
Others were robbed before they could close the doors.

Money on the frontier moved fast — like a stagecoach on a downhill run.
And if you weren’t holding on tight, it’d throw you clear off.

CHAPTER 3: Gold, Silver, and Greenbacks

Now, let’s talk about the money itself — the stuff that jingled in pockets and filled saddlebags.

In the early days, there wasn’t much “money” in the West.
Gold coins, silver dollars, and greenbacks from the East were rare.
Most transactions ran on credit, barter, or trust.
A ranch hand might be paid in scrip or in goods — maybe a new pair of boots, or a horse if he was lucky.

Merchants extended credit through ledgers — literally writing down who owed what.
It was an economy built on the promise of future paydays.
And that required something you couldn’t mint or print: faith.

But when gold was discovered — first in California, then Colorado, the Black Hills, and Montana — the flow of money transformed everything.
Suddenly, banks had deposits.
Railroads had customers.
Towns had a reason to rise — and outlaws had something to rob.

The debate over gold and silver even became national politics — the famous “Free Silver” movement of the late 1800s.
It was a tug-of-war between debtors and creditors, miners and bankers, and the question was simple: should money be backed by gold alone, or by both gold and silver?

That debate didn’t just shape the economy — it shaped where the West went next.

Because when credit tightened, ranchers felt it first.
A bad cattle season, a harsh winter like the one in 1886, and suddenly loans couldn’t be repaid.
Banks foreclosed on ranches.
Families lost land.
And those with deep pockets — or Eastern investors — scooped it up cheap.

The frontier wasn’t always fair.
But it was always a lesson in risk and reward.

A Word About Robbie's Hope

Before we ride on, I want to take a quick moment to talk about something that matters just as much as these stories of the West — lending a hand when someone needs it.

Robbie’s Hope is an organization of teens dedicated to ensuring mental health resources are available to everyone, including folks in our rural communities. It’s tough to be a farmer or rancher, or the teenager of a ranching family, dealing with mental health issues. The tremendous group of teens at Robbie’s Hope have made it their mission to change that.

If you’d like to help, visit https://robbies-hope.com/. Even a few dollars can really help out. And a shout out to Sylvia Daugherty, a great Robbie’s Hope Ambassador, who attends Sargent High School in the San Luis Valley of Colorado. She’s the one who reached out about this. She’s quite a young lady.

Alright — let’s get back to the story.

CHAPTER 4: Outlaws and the Banks They Robbed

Of course, where there’s money — there’s someone trying to steal it.

The 1870s and ’80s saw the rise of a new kind of Western celebrity: the bank robber.

Jesse James and the Younger gang. Butch Cassidy and the Sundance Kid.
Men who saw a bank vault not as a symbol of security, but as an open invitation.

Their crimes became legend — even romanticized in dime novels.
But behind the stories were towns left shaken, lives lost, and a financial system always teetering between progress and chaos.

Some historians argue that bank robberies actually modernized frontier security.
Banks started building with brick and iron safes.
Towns formed posses faster.
And telegraph lines — that early form of instant communication — became tools of law enforcement.

Funny thing is, the same innovation that made robbing banks possible — fast horses, open land, and poor communication — also made chasing them easier as the West got more connected.

It’s a reminder that progress and peril often ride the same trail.

CHAPTER 5: Lessons from the Financial Frontier

When we look back now, it’s easy to think of the Old West as a place of dust and danger — a land ruled by guns and grit.
But in truth, it was also a massive financial experiment.

It tested what happens when capital, credit, and ambition all collide at the edge of civilization.
And more often than not, it worked — but not without cost.

Cowboys might’ve earned their pay by the mile,
but the men who financed them earned — or lost — fortunes by the handshake.
It took vision to see opportunity,
and courage to back it.

And that’s something I think about often in my line of work.
Whether it’s a ranch in 1880 or a business in 2025, growth always starts with the same ingredients:
Risk.
Capital.
And trust.

The West wasn’t just built on hard work — it was bankrolled by belief.
Belief in the land.
Belief in progress.
And belief that tomorrow could be better if you were willing to bet on it.

That’s as true today as it was then.

Chapter 6: Buster the Bull & The Cowboy Glossary Term of the Week

Ok, before we head back out to the dusty trail, we’ve got one more thing.

Yep, that distinctive call from Buster the Bull means it’s time for the Cowboy Glossary Term of the Week. And this week’s term is “Grubstake.”

A grubstake was the money or supplies someone advanced to a prospector, rancher, or cowboy — usually in exchange for a cut of whatever profit came later.
Kind of like early venture capital — only dustier, riskier, and without a fancy term sheet.

Chapter 7: Final Thoughts

And that’ll do it for this week’s ride.
Thanks for joining me as we kicked off Season Four of Way Out West with a look at how the frontier’s fortunes were made — and sometimes lost.

If you enjoyed this episode, tell a friend to saddle up and ride along with us next week. That helps us reach more fans of the cowboy way of life. 

And don’t forget you can find us on Instagram and Facebook, including our new-ish Facebook community, Way Out West Roundup. Links are in the show notes.

Next week, we’ve got plenty more stories to share from the trails, towns, and tough folks who built the American West.

Until then, this is Chip Schweiger —
reminding you that whether you’re running cattle or running a business,
the principles are the same: work hard, stay honest, and never bet the ranch on something you don’t understand.

We’ll see ya down the road.