Pawnshop

Pawnbrokers are a class of shopkeepers whose business is the loaning of money on personal pledges.

Pawnbroking has existed in all parts of the world since ancient times, especially in densely populated areas. The usury and other abuses to which the necessities of borrowers are liable led to the establishment on the continent of Europe of charitable institutions where the business was conducted on benevolent principles (mont-de-piete). The object aimed at by monts-de-piete was accomplished in Great Britain and the United States by placing the pawnbroking trade under certain legal restrictions. In most Latin countries, and in Latin American nations, the pawnshops thrive to a degree unknown in English-speaking lands.

In the Middle Ages, lending upon pledges was a trade almost exclusively pursued by Jews and Lombards; the armorial bearings of the Medici bore the three golden balls which continue to be the sign of the pawnbroking business. During the French Revolution the monts-de-piete were at first abolished as a monopoly, but the abuses to which the restoration of private pledging gave rise soon led to their re-establishment and the prohibition of private pledging. One of the oldest of the state-owned pawnshops of Europe was that in Vienna known as the Imperial Pawnshop; it was founded in 1707 by Joseph 1. St. Petersburg and Moscow were the only two cities of Imperial Russia having national pawnshops, the business elsewhere being in the hands of individuals.

In English-speaking countries, the common law recognizes the property of the pawner in the goods he has pl edged, which cannot be forfeited by, or taken in pledge for, the debts of the pawnee, who is responsible for their safekeeping.

On the other hand, the pawnee is recognized as having a qualified property in the goods, which cannot be put in execution by a creditor of the pawner till the debts for which they are pawned are satisfied. Perishable goods are at the risk of the pawner, if he does not redeem them in time.

Goods pawned without a fixed time of redemption may be redeemed at any time within the life of the pawner. A broker who refuses to deliver goods pawned on tender of payment may be indicted. The pawnbroker must use books and schedules as provided by law, and the name and surname of the broker, together with the word "pawnbroker", are to be put in large characters over the outer door of the business premises. If a person offers an article in pawn without giving a satisfactory account of the way in which he became possessed of it, or attempts to redeem an article without title, he may be detained by the broker and handed over to the police to be dealt with according to law.

Goods entrusted by the owner to another for such purposes as manufacture or repair cannot be pawned; and the owner may, on making oath that he believes a pawnbroker to have taken such goods, obtain a warrant to search his premises.

In order to relieve the condition of legal usury in New York City, in 1891 the Charity Organization Society established the Provident Loan Society, where loans could be made at a reduced rate of interest. The society, which met with great popularity, was conducted at a small profit. The Provident Society rate of interest was 1 per cent a month or any fraction thereof, on small loans; and 10 per cent a year on large loans. A loan of $20 cost the borrower $2 a year, as against $6 charged by the pawnbroker.