History of pawnbroking

[3] In the late Qing and Republican China era (1840-1949), Chinese pawnbrokers employed flexible strategies to extend their business to a wide range of social members.

[8] The emperor Augustus converted the proceeds from property confiscated from criminals into a fund from which the state lent money without interest to those who pledged valuables equal to double the amount borrowed.

[1] Jewish and Christian pawnbrokers and money-lenders, the latter often referred to as Cahorsins and Lombards, were common in medieval Europe, where they were often tolerated by authorities, despite opposition from the Catholic Church.

At the tenth sitting of the First Council of the Lateran, Leo declared that the pawnshop was a lawful and valuable institution and threatened dissenters with excommunication.

Monti di pietà were opened in Assisi, Mantua, Parma, Lucca, Piacenza, Padua, Vicenza, Pavia and a number of smaller towns.

It was argued that the usury laws had been abolished for the entire community except for pawnbrokers who loaned less than £10, who were prevented from lending money on bulky articles requiring large storage space.

In 1870 the House of Commons appointed a select committee on pawnbrokers, which heard testimony that during the previous year 207,780,000 pledges were lodged (30–40 million in London).

[1] An English mont de piété was once proposed by the Salvation Army and in 1894 the London County Council considered a municipal effort, but neither came to fruition.

[citation needed] The fact that on the continent of Europe monts de piété are almost invariably either a state or a municipal monopoly necessarily places them upon an entirely different footing from the British and American pawnshop.

The rules of the official institutions are very similar to those of the monts de pit in the Latin countries, and unredeemed pledges are sold publicly 15 months after being pawned.

It is, as a rule, managed by a committee or commission, and the regulations follow Italy fairly closely the lines of the one in Rome, which never lends less than fod.

Agencies of the mont de pit are scattered about Rome, and carry on their business under the same rules as the central office, with the disadvantage to the borrower that he has to pay an agent's fee.

The amount to be advanced by a municipal pawnshop is fixed by an official called the commissaire-priseur, who is compelled to load the scales against the borrower, since, should the pledge remain unredeemed and be sold for less than was lent upon it, he has to make good the difference.

[1] The National Assembly destroyed the monopoly of the Paris monti de pietà, but it struggled on until 1795, when the competition of the money-lenders compelled it to close its doors.

So great, however, were the extortions of the usurers that the people began to clamour for its reopening, and in July 1797 it recommenced business with a fund of ~20,000 found by five private capitalists.

In Paris the pledge-shop is, in effect, a department of the administration; in the French provinces it is a municipal monopoly; and this remark holds good, with modifications, for most parts of the continent of Europe.

A large proportion of the capital required for conducting the institutions has to be raised by loan, while some part of the property they possess is the product of gifts and legacies.

The profits of the Paris mont de pit are paid over to the Assistance Publique, the comprehensive term used by France to indicate the body of charitable foundations.

Counting the head office, the branches and the auxiliary shops, the Paris establishment has its doors open in some 50 or 60 districts; but the volume of its annual business is infinitely smaller than that transacted by the London pawnbrokers.

The great establishment in Paris obtains part of its working capital reserves and surplus forming the balance by borrowing money at a rate varying from 2 to 3% according to the loan term (duration).

The system grew until in 1840 the mont de pit began to receive the sums deposited in the savings bank, which had just been established, for which it paid 5% interest.

Private pawnbrokers were also common, especially in Madrid, often with much higher rates of interest but which made larger advances than their official rivals, and which did business during more convenient hours.

Its business consists chiefly in lending money upon marketable securities, but it also makes advances upon plate, jewelry, and precious stones, and it employs officially licensed valuers.

The pawnbroker is compelled to deposit a sum, in acceptable securities, equal to the capital he proposes to embark, and the register of his transactions must be submitted quarterly to the chief of the police for examination.

The bulk of this class of business in Russia was, however, conducted by private companies, which advance money upon all descriptions of movable property except stocks and shares.

[1] Pawnbroking in Denmark dates from 1753, when the Royal Naval Hospital was granted the monopoly of advancing money on pledges and of charging higher interest than the law permitted.

Sweden has no statutes specifically aimed at pawnbroking, with the exception of a proclamation by the governor of Stockholm that prohibits lending money on articles suspected being stolen.

Very few pawnbrokers existed in Switzerland, where it was more common for people to sell items to second-hand dealers in the hope of subsequently buying them back.

Throughout the Middle Ages, coats of arms bore three balls, orbs, plates, discs, coins and more as symbols of monetary success.