ON THE WRONG SIDE OF THE FENCE

Chilson McCabe stands beside his wooden stock corral - it's a hand-built stockade with room for 300 cows, the scene in past years of many branding sessions, butcherings, and family rodeo contests. Except for Mr. McCabe's six-year-old riding horse, the corral is empty.

''My father,'' says McCabe, ''he built this land up, with his own hands. He built wells, he planted trees, he used to drive a wagon with two horses. He takes these Russian olives and plants them. We used to herd sheep right behind him. When he left, he left everything ready for us. It's up to us to keep it, and protect it. And that's what we intend to do.''

McCabe, his wife, and their three children face the same problem as thousands of other Navajo Indians in northeast Arizona: If they do not move from the land by July 8, 1986, the United States government will remove them by force.

Moreover, a vigorous livestock reduction program conducted by the US Bureau of Indian Affairs has shrunk the McCabe herd from 400 cattle to 25. The BIA says that overgrazing and erosion have made such a program necessary. But the cutback has made it more difficult for the family to earn a living on the land. The family splits its time between Flagstaff, where McCabe lives part-time and works as an auto mechanic, and the farm, which spreads across the top of a clay-colored mesa 50 miles north of the city.

The McCabes are part of a final resolution to a bitter, 100-year dispute involving the Navajos, the Hopis, and the federal government. At issue is ownership of 1.8 million acres occupied by both tribes since the 19th century.

In 1882, President Chester A. Arthur set aside the land for the Hopis and ''such other Indians as the Secretary of the Interior may see fit to settle thereon.'' Hopis had lived on part of this land, in villages atop high-cliffed mesas, since the 12th century. In the late 1800s, some Navajos lived outside Hopi villages in ''joint-use areas,'' and more came in following President Arthur's order.

Since then, the Navajo-Hopi land dispute has been marked by tribal negotiations, lawsuits, and a 1963 Supreme Court ruling establishing that both tribes had rights to the land. In 1974, a federal law ordered the joint-use area divided by a fence that separated Navajo land from Hopi land (see accompanying map).

The McCabes, 10,000 other Navajos, and 100 Hopis found themselves on the wrong side of that fence, and are now being told they must leave their land. Most are moving into new, federally financed homes provided in border communities off the reservation. A smaller number are leaving the Hopi partitioned land and are moving elsewhere on the Navajo reservation. It is one of the largest forced relocations in North American history.

''You're not going to find absolute right or wrong to any of the questions surrounding relocation,'' says Steve Goodrich, executive director of the federal Navajo and Hopi Relocation Commission.

On one hand, he explains, ''The Hopi tribe used our system through Congress and through the courts over a period of 20 years to affirm their rights to their reservation.

''The wrong of the situation,'' he continues, ''is that on that land base, there are . . . Navajo families that have lived (there) up to 150 years, generation to generation.''

Navajos from the Former Joint-Use Area (FJUA) claim their culture will be lost if they leave the land. The McCabes and several hundred other families in the FJUA are among the last holdouts for a traditional Navajo life style.

At dusk in Chilson McCabe's house, a Coleman lantern hangs from a hook on the ceiling. A steaming coffee pot sits on the wood-burning stove, and on the kitchen table, a tall stack of Navajo fry bread and a pot of mutton stew await family and visitors.

''I always wanted to be a rancher,'' says Chilson McCabe, looking down at his hands. ''But when somebody starts interfering with your dream, you lose your dream. When this relocation thing came along, . . . it just really took the whole family apart. It's turned some brothers against brothers.''

McCabe leaves the room briefly, and returns with a thick stack of snapshots from earlier days on the land - weddings, birthday parties, and cow-branding and butchering sessions with scores of McCabes on hand. In one picture, a row of seven pickup trucks is lined up at the corral, ready to take the livestock to market. ''All that's gone now,'' McCabe says.

In 1977, there were 160,000 sheep in the 1.8 million-acre disputed area. Today, because of the BIA's enforced stock reductions, there are less than 6,000 sheep on the 900,000 acres the Navajos must vacate.

Chilson McCabe says he believes the BIA's stock-reduction program is a deliberate attempt to starve his family off his land. Last year, while McCabe was at work in Flagstaff, the BIA drove stock trailers to his land and loaded the last of his livestock. McCabe threatened violent action, and eventually had his animals returned.

But BIA resource manager Ray Smith insists that livestock such as McCabe's ''are illegally there.'' The impoundment program, he says, ''is the result of Supreme Court rulings'' and congressional action.

''The land had been overgrazed, and that's the reason the laws were put into place,'' Mr. Smith says.

The bureau will not issue McCabe a grazing permit, and threatens to impound his cattle again if he doesn't sell them himself. ''We told them to just leave us alone,'' McCabe says.

The Hopis view the situation is quite differently. Few express a concern for Navajo cultural destruction.

''Navajos say, 'it's a cultural genocide.' In my situation, [notm relocating the Navajos is] cultural genocide for the Hopis,'' says Stanley Honanie, former vice-chairman of the Hopi Tribe. Mr. Honanie, now in charge of land development on the Hopi half of the FJUA, says Navajo disregard for sacred Hopi eagle shrines reflects their propensity to ''come barging in'' and act ''like tourists.''

''Navajos are nomadic. They can go elsewhere,'' said Honanie at his tribal office in Kykotsmovi, Ariz. ''Can we go out there and move our shrines? No.''

''It's a real heartbreaker,'' Ralph Watkins, chairman of the relocation commission, said of the program he oversees. Mr. Watkins, a businessman from Buckeye, Ariz., says the program is nevertheless positive. ''If we can all just get together . . . we're going to get that relocatee taken care of. If we can get the cooperation, we can get this job done in '86.''

Some 2,100 Indians, almost all of them Navajo, have relocated since 1977 - two-thirds to off-reservation border communities such as Flagstaff and Page, Ariz., and Gallup, N.M. Of those, nearly a third no longer own the homes bought for them with federal money.

One relocation official says many Navajos are having trouble adjusting to city life. One Navajo family, he says, slaughtered a sheep in the yard of their new suburban home.

But some families are staying put while the Navajo tribe negotiates the selection of about 400,000 acres of land for a new reservation adjacent to the current Navajo land. A 1980 amendment to the relocation law provides for the selection of an alternative plot for the relocatees, and 250,000 acres of the new area will be purchased with federal funds. The Navajo tribe plans to announce its land selection by June.

Others are finding it difficult to receive certification for relocation benefits. Only those now currently residing in the FJUA are considered eligible for new homes. Some Navajos say they were urged by the relocation commission to move to border towns where there is work, so they could enhance their job skills before receiving replacement homes. Now, these Navajos complain, they're told by the commission that they're ineligible because they no longer live in the FJUA.

Former relocation commission director Leon Berger, who quit to work for repeal of the law for the Navajo tribe, says problems surrounding the relocation prove it to be a failure.

''Their livestock's being taken away, they're not being moved, and those that are being moved are running into trouble,'' says Mr. Berger. ''It's a disaster. The whole thing.''

The Hopi tribe has fought all attempts to weaken the law or to give up land it won back in the courts. Today, the official Hopi position appears safe.

Peter MacDonald, former chairman of the Navajo tribe, launched a major public relations and lobbying campaign prior to last November's tribal election, to repeal the law and stop relocation. But Peterson Zah, the new Navajo chairman, is pledging cooperation with his Hopi counterpart, Ivan Sidney, in order to lessen tensions between the tribes and reduce the number of people facing relocation.

At a recent press conference in Phoenix, the two leaders said they would review pending litigation between the tribes to see what cases could be settled out of court.

Some Navajos from the FJUA applaud Mr. Zah's new, conciliatory approach. Others say the chairman is abandoning them by failing to push for repeal of the law - a prospect that now appears unlikely.