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PAWNBROKING (O. Fr. pan, pledge, piec...
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See also:PAWNBROKING (O. Fr. See also:pan, See also:pledge, piece, from See also:Lat. pannus; for " broking " see See also:BROKER) , the business of lending See also:money on the See also:security of goods taken in See also:pledge . If we See also:desire to trace with minuteness the See also:history of See also:pawnbroking, we must go back to the earliest ages of the See also:world, since the business of lending money on portable security (see MONEY-LENDING, and See also:USURY) is one of the most See also:ancient of human occupations . The See also:Mosaic See also:Law struck at the See also:root of pawnbroking as a profitable business, since it forbade the taking of See also:interest from a poor borrower, while no See also:Jew was to pay another for timely See also:accommodation . And it is curious to reflect that, although the Jew was the almost universal usurer and money-lender upon security of the See also:middle ages, it is now very rare in See also:Great See also:Britain to find a See also:Hebrew pawnbroker . In See also:China the pawnshop was probably as See also:familiar two or three thousand years ago as it is to-See also:day, and its conduct is still regulated quite as strictly as in See also:England . The See also:Chinese conditions, too, are decidedly favourable to the borrower . He may, as a See also:rule, take three years to redeem his See also:property, and he cannot be charged a higher See also:rate than 3 % per annum—a regulation which would See also:close every pawnshop in England in a See also:month . Both See also:Rome and See also:Greece were as familiar with the operation of pawning as the See also:modern poor all the world over; indeed, from the See also:Roman See also:jurisprudence most of the contemporary law on the subject is derived . The See also:chief difference between Roman and See also:English law is that under the former certain things, such as wearing See also:apparel, See also:furniture, and See also:instruments of tillage, could not be pledged, whereas there is no such restriction in English legislation . The See also:emperor See also:Augustus converted the surplus arising to the See also:state from the confiscated property of criminals into a The Pledge fund from which sums of money were See also:lent, without See also:system. interest, to those who could pledge valuables equal to See also:double the amount borrowed . It was, indeed, in See also:Italy, and in more modern times, that the pledge system whichis now almost universal on the See also:continent of See also:Europe arose . In its origin that system was purely benevolent, the See also:early monts de piete established by the authority of the popes lending money to the poor only, without interest, on the See also:sole See also: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 See also:costs money to See also: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
.
Thus as early as 1198 something of the See also:kind was started at See also:Freising in See also:Bavaria; while in 1350 a similar endeavour was made at See also:Salins in Franche See also:Comte, where interest at the rate of 71% was charged
.
Nor was England backward, for in 1361 See also:Michael Northbury, or de Northborough, See also:bishop of See also:London, bequeathed l000 See also:silver marks for the See also:establishment of a See also:free pawnshop
.
These See also:primitive efforts, like the later See also:Italian ones, all failed
.
The Vatican was therefore constrained to allow the Sacri monti di pieta—no satisfactory derivation of the phrase has yet been suggested—to See also:charge sufficient interest to their customers to enable them to defray expenses
.
Thereupon a learned and tedious controversy arose upon the lawfulness of charging interest, which was only finally set at See also:rest by See also:Pope See also:Leo X., who, in the tenth sitting of the See also:Council of the Lateran, declared that the pawnshop was a lawful and valuable institution, and threatened with See also:excommunication those who should presume to See also:express doubts on the subject
.
The Council of See also:Trent inferentially confirmed this decision, and at a somewhat later date we find St See also: The See also:Dominicans endeavoured to preach down the " lending-See also:house," but without avail . See also:Viterbo obtained one of 1469, and See also:Sixtus IV. confirmed another to his native See also:town in See also:Savona in 1479 . After the See also:death of See also:Brother Barnabus in 1474, a strong impulse was given to the creation of these establishments by the preaching of another Franciscan, See also:Father Bernandino di See also:Feltre, who was in due course canonized . By his efforts monti di pieta were opened at See also:Assisi, See also:Mantua, See also:Parma, See also:Lucca, See also:Piacenza, See also:Padua, See also:Vicenza, See also:Pavia and a number of places of less importance . At See also:Florence the veiled opposition of the See also:municipality and the open hostility of the See also:Jews prevailed against him, and it was reserved to See also:Savonarola, who was a Dominican, to create the first Florentine pawnshop, after the See also:local theologians had declared that there was "no See also:sin, even venial," in charging interest . The readiness of the popes to give permission for pawnshops all over Italy, makes it the more remarkable that the papal capital possessed nothing of the kind until 1539, and even then owed the convenience to a Franciscan . From Italy the pawnshop spread gradually all over Europe . See also:Augsburg adopted the system in 1591, See also:Nuremberg copied the Augsburg regulations in 1618, and by 1622 it was established at See also:Amsterdam, See also:Brussels, See also:Antwerp and See also:Ghent . See also:Madrid followed suit in 1705, when a See also:priest opened a charitable pawnshop with a capital of fivepence taken from an See also:alms-See also:box . The institution was, however, very slow in obtaining a footing in See also:France . It was adopted at See also:Avignon in 1577, and at See also:Arras in 1624 . The doctors of the once powerful See also:Sorbonne Introduction could not reconcile themselves to the lawfulness In France . of interest, and when a pawnshop was opened in See also:Paris in 1626, it had to be closed within a year . Then it was that See also:Jean See also:Boucher published his Defense See also:des monts de piece . See also:Marseilles obtained one in 1695; but it was not until 1777 that the first mont de piete was founded in Paris by royal patent . The See also:statistics which have been preserved relative to the business done in the first few years of its existence show that in the twelve years between 1777 and the Revolution, the See also:average value of the pledges was 42 francs 50 centimes, which is double the See also:present average . The interest charged was 10% per annum, and large profits were made upon the sixteen million livres that were lent every year . The See also:National See also:Assembly, in an evil moment, destroyed the See also:monopoly of the mont de piece, 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 See also:people began to clamour for its reopening, and in See also:July 1797 it recommenced business with a fund of £20,000 found by five private capitalists . At first it charged interest at the rate of 36% per annum, which was gradually reduced, the gradations being 30, 24, 18, 15, and finally 12% in 1804 . In 18o6 it See also:fell to 9%, and in 1887 to 7 % . In 18o6 See also:Napoleon I. re-established its monopoly, while Napoleon III., as See also:prince-See also:president, regulated it by new See also:laws that are still in force . In Paris the pledge-See also:shop is, in effect, a See also:department of the See also:administration; in the See also:French provinces it is a municipal monopoly; and this remark holds See also:good, with modifications, for most parts of the continent of Europe . In England the pawnbroker, like so many other distinguished personages, " came in with the Conqueror." From that See also:time, indeed, to the famous legislation of See also:Edward I., the Jew Brent Britain. money-lender was the only pawnbroker .
Yet, despite
the valuable services which the class rendered, not infrequently to the See also:Crown itself, the usurer was treated with studied See also:cruelty—See also:Sir See also:Walter See also:Scott's See also:Isaac of See also:York was no See also:mere creation of fiction
.
These barbarities, by diminishing the number of Jews in the country, had, long before Edward's See also:decree of banishment, begun to make it See also:worth the while of the Lombard merchants to See also:settle in England
.
It is now as well established as anything of the kind can be that the three See also:golden balls, which have for so long been the See also:trade sign of the See also:pawn-See also:broker, were the See also:symbol which these Lombard merchants hung up in front of their houses, and not, as has often been suggested, the arms of the See also:Medici See also:family
.
It has, indeed, been conjectured that the golden balls were originally three See also:flat yellow See also:effigies of byzants, or See also:gold coins, laid heraldically upon a See also:sable See also: The See also:Civil War was approaching and supplies were badly needed, when a too ingenious Royalist proposed the establishment of a state " pawn-house." The See also:preamble of the See also:scheme recited how " the intolerable injuries done to the See also:poore subjects by brokers and usurers that take 30, 40, 50, 6o, 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 £1oo,000 was to be found by the See also:city of London . The reform of what See also:Shakespeare calls " broking pawn " was in the See also:air at that time,although nothing ever came of it, and in the early days of the See also:commonwealth it was proposed to establish a kind of mont de piece . The See also:idea was emphasized in a pamphlet of 1651 entitled Observations manifesting the Conveniency and Commodity of See also:Mount Pieteyes, or Public Bancks for See also:Relief of the Poor or Others in See also:Distress, upon Pawns . No doubt many a ruined See also:cavalier would have been glad enough of some such means of raising money, but this See also:radical See also:change in the principles of English pawnbroking was never brought about . It is said that the See also:Bank of England, under its See also:charter, has See also:power to establish pawnshops; and we learn from A See also:Short History of the Bank of England, published in its very early days, that it was the intention of the See also:directors, " for the ease of the poor," to See also:institute " a Lombard " " for small pawns at a See also:penny a See also:pound interest per month." Throughout both the 17th and 18th centuries the See also:general suspicion of the pawnbroker appears to have been only too well founded . It would appear from the references See also:Fielding makes to the subject in Amelia, which was written when See also:George II. was on the throne, that, taken in the See also:mass, he was not a very scrupulous tradesman . Down to about that time it had been customary for publicans to lend money on pledges that their customers might have the means of drinking, but the practice was at last stopped by act of See also:parliament . Nor was respect for the honesty of the business increased by the See also:attempt of " The Charitable See also:Corporation " to conduct pawnbroking on a large See also:scale . Established by charter in 1707, " this nefarious corporation," as See also:Smollett called it, was a swindle on a large scale . The directors gambled wildly with the shareholders' money, and in the end the common council of the city of London petitioned parliament for the See also:dissolution of this dishonest concern, on the ground that " the corporation, by affording an easy method' of raising money upon valuables, furnishes the thief and pickpocket with a better opportunity of selling their stolen goods, and enables an intending bankrupt to dispose of the goods he See also:buys on See also:credit for ready money, to the defrauding of his creditors." When the concern collapsed in 1731 its See also:cashier was Mr George See also:Robinson, M.P. for See also:Marlow . In See also:company with another See also:principal See also:official he disappeared, less than £30,000 being See also:left of a capital which had once been twenty times as much . The pawnbroker's See also:licence See also:dates from 1785, the See also:duty being fixed at £10 in London and £5 in the country; and at the same time the interest chargeable was settled at 1 % per Modern month, the duration of loans being confined to one Regulations year . Five years later the interest on advances in England. over £2 and under £10 was raised to 15% . The modern history of legislation affecting pawnbroking begins, however, in 1800, when the act of 39 & 40 Geo . III. c . 99 (1800) was passed, in great measure by the See also:influence of See also:Lord See also:Eldon, who never made any See also:secret of the fact that, when he was a See also:young See also:barrister without briefs, he had often been indebted to the timely aid of the pawnshop . The pawnbrokers were grateful, and for many years after Lord Eldon's death they continued to drink his See also:health at their trade dinners . The measure increased the rate of interest to a See also:halfpenny per See also:half-crown per month, or fourpence in the pound per mensem—that is to say, 20% per annum . Loans were to be granted for a year, although pledges might be redeemed up to fifteen months, and the first See also:week of the second month was not to See also:count for interest . The act worked well, on the whole, for three-quarters of a See also:century, but it was thrice found necessary to amend it . Thus in 1815 the licence duties were raised to £15 and £7, 1os. for London and the country respectively; another act of 184o abolished the See also:reward to the " common informer " for See also:reporting illegal rates of interest; while in 186o'the pawnbroker was empowered to charge a halfpenny for the pawn-See also:ticket when the See also:loan was under five shillings . As time went on, however, the See also:main provisions of the act of 1800 were found to be very irksome, and the Pawnbrokers' National Association and the Pawn-brokers' See also:Defence Association worked hard to obtain a liberal revision of the law . It was argued that the usury laws had been abolished for the whole of the community with the 20 single exception of the pawnbroker who advanced less than £1o . The limitations of the act of i800 interfered so considerably with the pawnbrokers' profits that, it was argued, they could not afford to lend money on bulky articles requiring extensive storage See also:room . In 1870 the House of See also:Commons appointed a Select See also:Committee on Pawnbrokers, and it was stated in See also:evidence before that See also:body that in the previous year 207,780,000 pledges were lodged, of which between thirty and See also:forty millions were lodged in London . The average value of pledges appeared to be about 4s., and the proportion of articles pawned dishonestly was found to be only r in 14,000 . Later official statistics show that of the forfeited pledges sold in London less than 20 per million are claimed by the See also:police . The result of the Select Committee was the Pawnbrokers Act of 1872, which repealed, altered and consolidated all previous legislation on the subject, and is still the measure which regulates the relations between the public and the " brokers of pawn." Based mainly upon the Irish law passed by the See also:Union Parliament it put an end to the old irritating restrictions, and reduced the See also:annual tax in London from £15 to the £7, ios. paid in the provinces . By the provisions of the act (which does not affect loans above £ro), a pledge is redeemable within one year, and seven days of See also:grace added to the year . Pledges pawned for See also:ros. or under and not redeemed in time become the property of the pawnbroker, but pledges above ros. are redeemable until sale, which must be by public See also:auction . In addition to one halfpenny for the pawn-ticket—which is sometimes not charged for very small pawns—the pawnbroker is entitled to charge as interest one halfpenny per month on every 2S. or See also:part of 2S. lent where the loan is under 4os., and on every 2S . 6d. where the loan is above 4os . " See also:Special contracts " may be made where the loan is above 4os. at a rate of interest agreed upon between lender and borrower . Unlawful pawning of goods not the property of the pawner, and taking in pawn any See also:article from a person under the See also:age of twelve, or intoxicated, or any See also:linen, or apparel or unfinished goods or materials entrusted to See also:wash, make up, &c., are, inter alia, made offences punishable by See also:summary conviction . A new pawnbroker must produce a See also:magistrate's certificate before he can receive a licence; but the permit cannot be refused if the applicant gives sufficient evidence that he is a person of good See also:character . The word " pawnbroker " must always be inscribed in large letters over the See also:door of the shop . Elaborate provisions are made to safeguard the interests of borrowers whose unredeemed pledges are sold under the act . Thus the sales by auction may take See also:place only on the first See also:Monday of See also:January, See also:April, July and See also:October, and on the following days should one not be sufficient . This legislation was, no doubt, favourable to the pawnbroker rather than to the borrower . The annual interest on loans of 2S. had been increased by successive acts of parliament from the 6% at which it stood in 1784 to 25% in 1800, and to 27 in 186o—a rate which was continued by the measure of 1872 . The annual interest upon a loan of half-a-crown is now 26o%, as compared with 173 in 186o and 86 in 1784; while the extreme point is reached in the See also:case of a loan of 1s. for three days, in which case the interest is at the rate of 1014% per annum . An English mont de piete was once projected by the Salvation See also:Army, and in 1894 the London See also:County Council considered the practicability of municipal effort on similar lines; but in neither case was anything done . The growth of pawnbroking in See also:Scotland, where the law as to pledge agrees generally with that of England, is remarkable . Scotland Early in the loth century there was only one pawn-and See also:Ireland. broker in that country, and in 1833 the number reached only 52 . Even in 1865 there were no more than 312 . It is probable that at the present moment See also:Glasgow and See also:Edinburgh together contain nearly as many as that See also: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 £r must be redeemed within six months, but nine months are allowed when the amount is between 3os. and £2 . For sums over £2 the See also: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 piete 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 . The pawnbroker in the See also: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 See also:Massachusetts may be taken as fairly representative . " Brokers of pawn " are usually licensed by the mayors, or by the mayors and aldermen, but in See also:Boston the police commissioners are the licensing authority . In the state of New York permits are renewable annually on See also:payment of $500, and the pawnbroker must See also:file a See also:bond with the See also:mayor, executed by himself and two responsible sureties, in the sum of $10,000 . The business is conducted on much the same Ines 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 r % respectively . To exact higher rates is a See also:misdemeanour . Unredeemed pledges may be sold at the end of a year . Pawnbrokers are not allowed to engage in any kind of second-See also:hand business . New York contains one pawn-shop to every 12,000 inhabitants, and most of the pawnbrokers are Jews . In the state of Massachusetts unredeemed pledges may be sold four months after the date of See also:deposit . The licensing authority may See also:fix the rate of interest, which may vary for different amounts, and in Boston every pawnbroker is See also:bound. to furnish to the police daily a See also:list of the pledges taken in during the preceding twenty-four See also:hours, specifying the See also:hour of each transaction and the amount lent . The fact that on the continent of Europe monts de piece are almost invariably either a state or a municipal monopoly necessarily places them upon an entirely different Mnniclpal footing from the See also:British pawnshop, but, compared pawns;ops. with the English system, the See also:foreign is very elabor- See also:ate and rather cumbersome . Moreover, in addition to being slow in its operation, it is, generally speaking, based upon the supposition that the borrower carries in his pockets " papers " testifying to his identity . On the other hand, it is argued that the English borrower of more than £2 is at the See also:mercy of the pawn-broker in the See also:matter of interest, that sum being the highest for which a legal limit of interest is fixed . The rate of interest upon a "special See also: |