I like the Outlaws version best, but this one is pretty good.
Jones had first heard the legend growing up in Arizona, where a Native American man had told him about spirits who haunt the skies. A few other elements connect the story to other events that make it seem as though it might not entirely be a legend. However, these remain mystified details barely caught by loose-lipped passersby who’d heard the stories of cattlemen passing through Texas killed when their cattle started stampeding out of nowhere.
It turned into folklore when people started saying it was the ghost riders wreaking havoc, distracting the cattle and unsettling them to their deaths, leading the cattlemen and other animals to the same fate. But when the 12-year-old Jones heard the story, something about it stayed with him. It came to his mind more intentionally some time later, when he was watching the clouds with his childhood friend. They noticed how the clouds looked like ghost riders, which eventually inspired him to turn the sentiment into a song.