Explore The History Of Pawn Broking
You might just be suprised.
In Imperial China, the pawnshop dates to about 2000 to 3000 years ago, and its business is regulated strictly. In particular, borrowers may take three years to redeem their property, and they cannot be charged a higher rate than 3% per annum.
Both Greece and Rome were as familiar with the operation of pawning as the modern poor all the world over; indeed, from the Roman jurisprudence most of the contemporary law on the subject is derived. The chief difference between Roman and English law is that under Roman law certain things, such as wearing apparel, furniture, and instruments of tillage, could not be pledged, whereas there is no such restriction in English legislation. The emperor Augustus converted the surplus arising to the state from the confiscated property of criminals into a fund from which sums of money were lent, without interest, to those who could pledge valuables equal to double the amount borrowed.
In Italy, but in more modern times, the pledge system which became almost universal on the continent of Europe arose. In its origin that system was purely benevolent, the early "monts de piete" established by the authority of the popes lending money to the poor only, without interest, on the sole condition of the advances being covered by the value of the pledges. This was virtually the Augustan system, but it is obvious that an institution which costs money to manage and derives no income from its operations must either limit its usefulness to the extent of the voluntary support it can command, or must come to a speedy end.
These primitive efforts, like the later Italian ones, all failed. The Vatican was therefore constrained to allow the Sacri monti di pieta (satisfactory derivation of the phrase has yet been suggested) to charge sufficient interest to their customers to enable them to pay for expenses. Thereupon a learned and tedious controversy arose upon the lawfulness of charging interest, which was only finally set at rest by Pope Leo X, who in the tenth sitting of the First Council of the Lateran, declared that the pawnshop was a lawful and valuable institution, and threatened with excommunication those who should presume to express doubts on the subject. The Council of Trent inferentially confirmed this decision, and at a somewhat later date we find St Charles Borromeo counselling the establishment of state or municipal pawnshops.
From Italy the pawnshop spread gradually all over Europe. Augsburg adopted the system in 1591, Nuremberg copied the Augsburg regulations in 1618, and by 1622 it was established at Amsterdam, Brussels, Antwerp and Ghent. Madrid followed suit in 1705, when a priest opened a charitable pawnshop with a capital of fivepence taken from an alms-box.
- Britain and Ireland
In England the pawnbroker, like so many other distinguished personages, came in with William the Conqueror. Yet, despite the valuable services which the class rendered, not infrequently to the Crown itself, the usurer was treated with studied cruelty, Sir Walter Scott's Isaac of York was no mere creation of fiction. These barbarities begun, by diminishing the number of Jews in the country, long before Edwards decree of banishment, to make it worth the while of the Lombard merchants to settle in England. In 1338 Edward III pawned his jewels to the Lombards to raise money for his war with France. An equally great king Henry V did much the same in 1415.
The Lombards were not a popular class, and Henry VII harried them a good deal. In the very first year of James I's reign an Act against Brokers was passed and remained on the statute-book until Queen Victoria had been 35 years on the throne. It was aimed at counterfeit brokers, of whom there were then many in London. This type of broker was evidently regarded as a mere receiver of stolen goods, for the act provided that no sale or pawn of any stolen jewels, plate or other goods to any pawnbroker in London or Westminster or Southwark shall alter the property therein, and that pawnbrokers refusing to produce goods to their owner from whom stolen shall forfeit double the value.
In the time of Charles I there was another act which made it quite clear that the pawnbroker was not deemed to be a very respectable or trustworthy person. Nevertheless a plan was mooted for setting that king up in the business. The Civil War was approaching and supplies were badly needed, when a too ingenious Royalist proposed the establishment of a state pawnhouse. The preamble of the scheme recited how "the intolerable injuries done to the poore subjects by brokers and usurers that take 30, 40, 50, 60, and more in the hundredth, may be remedied and redressed, the poor thereby greatly relieved and eased, and His Majestie much benefited". That the king would have been much benefited is obvious, since he was to enjoy two-thirds of the profits, while the working capital of �100,000 was to be found by the city of London. The reform of what Shakespeare calls "broking pawn" was in the air at that time, although nothing ever came of it, and in the early days of the commonwealth it was proposed to establish a kind of "mont de piet�". The idea was emphasized in a pamphlet of 1651 entitled "Observatsons manifesting the Conveniency and Commodity of Mount Pieteyes, or Public Bancks for Relief of the Poor or Others in Distress, upon Pawns". No doubt many a ruined cavalier would have been glad enough of some such means of raising money, but this radical change in the principles of English pawnbroking was never brought about. It is said that the Bank of England, under its charter, has power to establish pawnshops; and we learn from A Short History of the Bank of England, published in its very early days, that it was the intention of the directors, for the ease of the poor, to institute a Lombard for small pawns at a penny a pound interest per month (= 8.33333% per year).
Throughout both the 17th and 18th centuries the general suspicion of the pawnbroker appears to have been only too well founded. During George II's reign Fielding wrote a book Amelia; references in that book seem to show that, taken in the mass, Fielding was not a very scrupulous tradesman. Before about that time it was customary for publicans to lend money on pledges so their customers could drink, but the practice was at last stopped by Act of Parliament.
- Pawnbroker's licence law, 1785
The pawnbroker's licence dates from 1785, the duty being fixed at �10 in London and �5 in the country; and at the same time the interest chargeable was settled at �% per Modern month, the duration of loans being confined to one Regulations year. Five years later the interest on advances in England between 2 and 10 was raised to 15%.
The Pawnbrokers Act of 1872 repealed, altered and consolidated all previous legislation on the subject, and is still the measure which regulates the relations between the public and pawnbrokers. It was based mainly on the Irish law passed by the Union Parliament. It put an end to the old irritating restrictions, and reduced the annual tax in London from �15 to the �7.50 paid in the provinces. By the provisions of the Act (which does not affect loans above �10):-
These made offences punishable by summary conviction:-
Early in the 19th century there was only one pawnbroker in Ireland, and in 1833 there were only 52. Even in 1865 there were no more than 312. It is probable that Glasgow and Edinburgh together contain nearly as many as that total. In Ireland the rates for loans are practically identical with those charged in England, but a penny instead of a halfpenny is paid for the ticket. Articles pledged for less than Li must be redeemed within six months, but nine months are allowed when the amount is between 3os. and 2. For sums over 2 the period is a year, as in England. In Ireland, too, a fraction of a month is calculated as a full month for purposes of interest, whereas in England, after the first month, fortnights are recognized. In 1838 there was an endeavour to establish monts de pit in Ireland, but the scheme was so unsuccessful that in. 1841 the eight charitable pawnshops that had been opened had a total adverse balance of 5340. But 1847 only three were left, and eventually they collapsed likewise.
- USA
The pawnbroker in the United States is, generally speaking, subject to considerable legal restriction, but violations of the laws and ordinances are frequent. Each state has its own regulations, but those of New York and Massachusetts may be taken as fairly representative.
Brokers of pawn are usually licensed by the mayors, or by the mayors and aldermen, but in Boston the police commissioners are the licensing authority. In the state of New York permits are renewable annually on payment of $500, and the pawnbroker must file a bond with the mayor, executed by himself and two responsible sureties, in the sum of $10,000. The business is conducted on much the same lines as in England, and the rate of interest is 3% per month for the first six months, and 2% monthly afterwards. Where, however, the loan exceeds, $100 the rates are 2 and I % respectively. To enact higher rates is a misdemeanor. Unredeemed pledges may be sold at the end of a year. Pawnbrokers are not allowed to engage in any kind of second-hand business. New York contains one pawnshop to every 12,000 inhabitants. In the state of Massachusetts unredeemed pledges may be sold four months after the date of deposit. The licensing authority may fix the rate of interest, which may vary for different amounts, and in Boston every pawnbroker is bound, to furnish to the police daily a list of the pledges taken in during the preceding twenty-four hours, specifying the hour of each transaction and the amount lent.
- Symbol of pawnbrokers.
The pawnbroker's symbol shows three balls suspended from a bar. The three ball symbol is attributed to the Medici Family of Florence, Italy, because of its symbolic meaning of Lombard, referring to the Italian province of Lombardy, where pawn shop banking originated under the name of Lombard banking. It is now as well established as anything of the kind can be that the three golden balls, which have for so long been the trade sign of the pawnbroker, were originally the symbol which medieval Lombard merchants hung up in front of their houses, and not, as has often been suggested, the arms of the Medici family. It has, indeed, been conjectured that the golden balls were originally three flat yellow effigies of byzants, or gold coins, laid heraldically upon a sable field, but that they were presently converted into balls the better to attract attention.
Most European towns called the pawn shop the "Lombard". The House of Lombard was a banking family in medieval London, England. According to legend, a Medici employed by Charles the Great slew a giant using three bags of rocks. The three ball symbol became the family crest. Since the Medicis were so successful in the financial, banking, and money-lending industries, other families also adopted the symbol. Throughout the Middle Ages, coats of arms bore three balls, orbs, plates, discs, coins and more as symbols of monetary success. Pawnbrokers (and their detractors) joke that the three balls mean "Two to one, you won't get your stuff back".