Phase 2 or the second period of Navajo silversmithing is generally thought of as being between 1910 -1940. This period is characterized by the exertion of outside forces such as commercialization, exploitation and economics almost dealing a death blow to the Navajo traditions.
The second period is when the economy out side of the reservation became increasingly relevant to the Navajo people. When prices for the products they sold, wool, sheep and jewelry declined in the outside economy it resulted in a lower price being offered to them.
This period was also the beginning of a growing tourism industry. By 1915 Fred Harvey would open hotels in Gallup, Flagstaff, Albuquerque and other cities along the Santa Fe railroad. The growing mass of tourists demanded inexpensive Indian-made curios. New businesses opened in these cities to fulfill the demand and needs of the tourists. These new businesses also provided the Navajo people with new tools, materials and techniques. In the past this access to new tools and materials would have inspired the Navajo smiths to create new designs and techniques but in this period the demands of commercialization and exploitation squashed the expression of authentic designs.
Needing to provide for their families many Navajo silversmiths were forced to go to work in commercial shops. Inside of these shops the Navajo's were forced to make forms that were outside their norm. Items like boxes, letter openers, ashtrays, combs and more were being made. The benchwork made during this time can be characterized by their redundant forms, repetitive design and substantial decoration. Thisjewelry was adorned with non-authentic designs such as bows and arrows, swastikas, thunderbirds and other. The Navajo tradition of simplicity of design and proportion would give way to commercialization and it's result was technical and artistically inferior silverwork.
Perhaps the most significant development of this "railroad curio" phase is the misrepresentations that were purposely promoted by the curio industry. False stereotypes were propagated because of the lack of quality and artistic style of the jewelry they were coerced to make. The majority of traditional pieces created during this time period were made by Navajos who lived far away from these commercial centers. These items of jewelry reflect the Navajo's traditional sense of harmony and order. The number of these traditional pieces made were few as there existed no market for them among the tourists. As the nation entered the depression the market for tourist curios began to dry up and silver production began to diminish. The metalworking tradition among the Navajo was about to face it's most dire threat to it's continuity.
Silversmithing was not the only part of Navajo life to be affected by the depression. A lack of employment opportunities along with the governments forced reduction of sheep herds threatened the very nature of Navajo economic tradition and culture. During these hard times Navajo people began to pawn their jewelry more and more frequently than before. As the depression drug on many of the items of jewelry pawned were not redeemed. With an ever growing inventory of dead pawn jewelry the traders began to find a market with tourists, collectors and museums.
The condition of the Navajo economy did not improve until Congress passed the indian Reorganization Act in 1934. This legislation enabled the tribal nations to incorporate, self-govern and to hold their tribal lands as their own. Equally important was the fact that this act essentially ended the acculturation of tribal peoples. A year later in 1935 the Indian Arts and Crafts Board was established to open new markets and to improve the condition of tribal artists in general. Shortly after guilds were established to teach apprentices the traditional designs and techniques of Navajo metal working. Silversmiths also benefited from financial support from public institutions and museums which provided economic feasibility to their chosen career.