The elegant squash blossom necklace in the showcase catches your eye. It is distinctly southwestern. It costs $1,000 and is said to be finely handcrafted by an American Indian, with sky-blue turquoise stones and striking sterling silver.

Take another look. Is it really hand crafted by an American Indian, is the silver sterling, are the beads machine made, is the turquoise chemically treated or stabilized?

Nationwide, the Indian jewelry business is booming. Where once Indian handmade jewelry was fashionable only in the Southwest, today it has become popular from San Francisco to Washington.

Here in New Mexico, Indian jewelry manufacturing and sales constitute a major industry. But little hard information is available on the producers and the products. The Better Business Bureau in New Mexico does not have figures on the large number of paople involved in Indian jewelry. Nor are they abel to come up with figures that might show how many people are involved in misrepresentation and possible consumer fraud in selling Indian crafts. Quality handcrafted Indian jewelry still exists but purists now claim increased demand has resulted in inflated prices, decreased quality and the mass production of deceptive imitations.

Currently, fewer than 10 states have laws relating to the sale of Indian handicrafts. According to Robert Hilgendorf, director of the New Mexico attorney general's consumer protection office, New Mexico is the only one that has specifically appropriated funds for enforcement purposes.

New Mexico's "Indian Arts and Crafts Act" is comprehensive but controversial. In New Mexico, Indian jewelry sales reach as high as $750 million annually. State Attorney General Tony Anaya has promised to crack down on Indian crafts glutting New Mexico. Beginning May 27, 1976, Anaya began "vigorous enforcement" of the law with possible fines running as high as $5,000 per violation.

Essentially, New Mexico's law puts the burden of establishing authenticity on everyone from the Indian who makes the jewelry to the jobber, wholesaler and retailer who sell it. The law does not prohibit the sale of non-Indian-made crafts as long as those items are not represented as Indian-made.

Among the specific requirements is a provision that "authentic" Indian jewelry be entirely handcrafted by American Indians (i.e! "The skillful and expert use of the hand in making products solely by American Indians within the United States"). "Imitation" Indian jewelry is defined as any piece that is either not handcrafted by American Indians, produced (wholly or partially) by a machine or any item that includes synthetic materials.

Many New Mexico merchants believe this law is not enforceable, and one group, the Southwestern Jewelry Arts and Crafts Association, challenged the constitutionality of the law in federal court. But while serving to protect New Mexico consumers from misrepresentation, the "Indian Arts and Crafts Act" provides no protection for consumers outside New Mexico. There is no guarantee, for example, that once a jobber has purchased thousands of dollars of properly labeled merchandise in Albuquerque and then sells it in Washington that he would honestly represent the jewelry.

Outside the Southwest, comprehensive labeling of Indian jewelry is not common. Further, the unique quality of this merchandise and the limited number of dealers selling it in the East and Midwest has sometimes resulted in exorbitant prices, in some cases almost double New Mexico and Arizona prices. The overall result is that the nationwide marketplace is being flooded with jewelry that wittingly or unwittingly misleads the consumer. Few sales personnel have the actual expertise to differentiate manufacturing techniques and still fewer dealers label their merchandise fully.

Perhaps the major problem concerns the use of turquoise, a highly visible component of Indian jewelry. Retailers readily admit the use of natural turquoise in Indian jewelry occurs in only about 10 per cent of the jewelry manufactured today. Because the semiprecious stone is often dull in color and extremely brittle, chemical treatment of the stone is desirable to facilitate drilling and grinding.

While some natural turquoise is used in rings and bracelets, the great majority found in jewelry today is either stabilized, treated or reconstituted. Within the last few years simulated turquoise nuggets have increasingly appeared on the market. From outward appearance these stones look genuine but actually they are no more than dyed rocks. (One of these imitations, turquite, is advertised as, "The finest mineral-based man-made turquoise simulation available.")

Usually turquoise is stabilized when the stone has good color but is too porous to "work." The turquoise is injected with plastic chemicals to seal the pores, harden the stone and retain the natural color.

Turquoise that has been treated in generally low-grade with poor color (white to pale blue) and high porosity. The treating process involves dyes and more plastic chemicals to improve color and hardness.

Reconstituted turquoise cosists of turquoise fragments mixed with a plastic resin to form a solid stone. In New Mexico, treated and reconstituted turquoise must be labeled "unnatural" or "imitation."

Many merchants of Indian jewelry claim it is virtually impossible to ascertain conclusively whether turquoise is natural or unnatural. Others believe that since most turquoise used in Indian jewelry is stabilized or treated, it is foolish to label things as unnatural or even stabilized. According to the New Mexico attorney general's Consumer Protection Office, the consumer deserves to be told whether the stone, usually the most visible item on the jewelry, is natural or chemically doctored.

Now that Indian jewelry has become fashionable coast to coast, machine-made items have entered the market to fulfill the ever-increasing demand. Most common of these are rings, bracelets and belt buckles that can easily be cast by centrifugal force and mass produced at low cost. Often these items are sold as if they had been cast by hand, at high prices. While the trained eye can sometimes detect these copies, the casual consumer usually cannot. One Albuquerque merchant indicated he had Indians come into his store, purchase machine-cast ring shanks and then inlay stones in the mass-produced rings, selling them as wholly Indian-made. The situation is difficult to police.

A similar difficulty exists with machine-made silver beads used chiefly on squash blossom necklaces. Generally, it takes a skilled craftsman about 15 minutes to hand make a single silver bead. Considering the time and expense, most silversmiths opt for the less-expensive machine-made beads. However, too often the se mass-produced items are represented and sold as hand-made. In New Mexico, machine-made beads must be labeled as such although some merchants believe the use of the word "machine" might connote a cheapened value of the whole piece in question. Outside the Southwest, labeling of machine-made beads is almost nonexistent.

Another problem brought on by increased popularity is the manufacture of Indian-style jewelry by non-Indians. New Mexico's law requires a written statement be obtained for each piece, verifying the description of the turquoise, of all materials used in the jewelry, the method of production and whether it is Indian or non-Indian crafted. However, this requirement does not preclude any supplier from the craftsman to the jobber to the retailer misrepresenting any of the above.When an Indian silversmith walks into a store to sell handcrafted jewelry, his word is the only basis for verification of the necessary disclosure.

Some advertising can be read by some consumers as saying jewelry is made by American Indians. Such phrases as "traditional jewelry styles," "American Indian jewelry inspirations" or "traditional tribal patterns and motifs" can lead the purchaser to believe such jewelry is actually made by Indians. A brochure for one defunct Albuquerque jewelry manufacturing company displayed 26 pieces of authentic-appearing Indian jewelry. The manufacturer today admits Indians took no part in the crafting of his merchandise.

Another aspect of the Indian jewelry business rarely discussed is the use by some manufacturers of assembly-line techniques to improve quality, efficiency and production time. Where once a single craftsman might work on an individual piece for many hours under the shade of his hogan, now the big operations stress specialization. One person cuts the stone, another polishes, another casts the silver, another sets the stone, another solders and finally still another polishes and buffs the finished product. This method is entirely legal as long as all workers are Indian. But what if one person on the assembly line is Anglo? Should the final product be labeled "non-authentic" because it was not wholly made by American Indians?

Finally, some merchants dealing in Indian jewelry often hold deceptive, long-running bargain "sales." This practice, called "pre-ticketing," can allegedly save the consumer as much as 30 to 60 per cent on the price of Indian jewelry. However, according to Kathleen Conroy in her book, "What You Should Know About Authentic Indian Jewelry," in pre-ticketing the wholesaler sometimes sets an exorbitant suggested retail price on an item, which allows the retailer to sell it at an enticing "discount" price while still realizing a healthy profit. Be cautious of any dealer holding such "sales" that seem to last forever.

Interestingly, while New Mexico's attorney general has cracked down on misrepresentation of Indian jewelry, other Indian crafts go virtually unregulated. Within recent years, Navajo-style Mexican rugs and pueblo-style pottery have found their way into the American marketplace. Many of these imitations are also peddled as "Indian handmade."

By asking lots of questions and dealing with only reputable merchants the consumer can hope to avoid being mislead about a purchase that often involves hundreds of dollars. By putting pressure on retailers ot clearly label Indian merchandise as to its true components and provenance, authenticity can be better assured.