In the fourteenth century, the Lombards in the Netherlands paid to government rent for the houses in which they carried on their money transactions, and something besides for a permission. Of this we have instances at Delft in 1313, and at Dordrecht in 134251. As in the course of time the original Lombards became extinct, these houses were let, with the same permission, for the like employment52; but governments at length fixed the rate of interest which they ought to receive, and established regulations for them, by which usurious practices were restrained. Of leases granted on such conditions, an instance occurs at Delft in the year 1655. In 1578, William prince of Orange recommended to the magistrates of Amsterdam Francis Masasia, one of the Lombards, as they were then called, in order that he might obtain for him permission to establish a lending-house53, as many obtained permission to keep billiard-tables, and Jews letters of protection. In the year 1611, the proprietor of such a house at Amsterdam, who during the latter part of his lease had gained by his capital at least thirty-three and a half per cent., offered a very large sum for a renewal of his permission; but in 1614, the city resolved to take the lombard or lending-house into their own hands, or to establish one of the same kind. However odious this plan might be, a dispute arose respecting the legality of it, which Marets54 and Claude Saumaise endeavoured to support. The public lending-house or lombard at Brussels was established in 1619; that at Antwerp in 1620, and that at Ghent in 1622. All these were established by the archduke Albert, when he entered on the governorship, with the advice of the archbishop of Mechlin; and on this occasion the architect Wenceslaus Coberger was employed, and appointed inspector-general of all the lending-houses in the Spanish Netherlands55. Some Italians assert that the Flemings were the first people who borrowed money on interest for their lending-houses; and they tell us that this practice began in the year 161956. We are assured also, that after a long deliberation at Brussels, it was at length resolved to receive money on interest at the lending-houses. It however appears certain that in Italy this was never done, or at least not till a late period, and that the capitals of the lending-houses there were amassed without giving interest.
This beneficial institution was always opposed in France; chiefly because the doctors of the Sorbonne could not divest themselves of the prejudice against interest; and some in modern times who undertook there to accommodate people with money on the like terms, were punished by government57. A lending-house however was established at Paris under Louis XIII., in 1626; but the managers next year were obliged to abandon it58. In 1695, some persons formed a capital at Marseilles for the purpose of establishing one there according to the plan of those in Italy59. The present mont de piété at Paris, which has sometimes in its possession forty casks filled with gold watches that have been pledged, was, by royal command, first established in 177760.
[The following is the rate of profit or interest which pawnbrokers in this country are entitled to charge per calendar month. For 2s. 6d. one halfpenny; 5s. one penny; 7s. 6d. three halfpence; 10s. twopence; 12s. 6d. twopence halfpenny; 15s. threepence; 17s. 6d. threepence halfpenny; £1 fourpence; and so on progressively and in proportion for any sum not exceeding 40s. For every sum exceeding 40s. and not exceeding 42s. eightpence; and for every sum exceeding 42s. and not exceeding £10, threepence to every pound, and so on in proportion for any fractional sum. Where any intermediate sum lent on a pledge exceeds 2s. 6d. and does not exceed 40s., a sum of fourpence may be charged in proportion to each £1. Goods pawned are forfeited on the expiration of a year, exclusive of the date of pawning. But it has been held that the property is not transferred, but that the pawnbroker merely has a right to sell the article; and consequently that, on a claim after this period, with tender of principal and interest, the property must be restored if unsold (Walker v. Smith, 5 Barn. and Ald. 439). Pledges must not be taken from persons intoxicated or under twelve years of age. In Great Britain pawnbrokers must take out a license, which costs £15 within the limits of the old twopenny-post, and £7 10s. in other parts. No license is required in Ireland. A second license, which costs £5 15s., is required to take in pledge articles of gold and silver.
From 1833 to 1838 the number of pawnbrokers in the metropolitan district increased from 368 to 386; in the rest of England and Wales, from 1083 to 1194; and in Scotland, from 52 to 88; making a total of 1668 establishments, paying £15,419 for their licenses, besides the licenses which many of them take out as dealers in gold and silver. The business of a pawnbroker was not known in Glasgow until August 1806, when an itinerant English pawnbroker commenced business in a single room, but decamped at the end of six months; and his place was not supplied until June 1813, when the first regular office was established in the west of Scotland for receiving goods in pawn. Other individuals soon entered the business, and the practice of pawning had become so common, that in 1820, in a season of distress, 2043 heads of families pawned 7380 articles, on which they raised £739 5s. 6d. Of these heads of families 1375 had never applied for or received charity of any description; 474 received occasional aid from the relief committee, and 194 were paupers. The capital invested in this business in 1840 was about £26,000. Nine-tenths of the articles pledged are redeemed within the legal period. There are no means of ascertaining the exact number of pawnbrokers’ establishments in the large towns of England. In 1831, the number of males above the age of twenty employed in those at Manchester was 107; at Liverpool, 91; Birmingham, 54; Bristol, 33; Sheffield, 31.
The following curious return was made by a large pawnbroking establishment at Glasgow to Dr. Cleland, who read it before the British Association in 1836. The list comprised the following articles: – 539 men’s coats, 355 vests, 288 pairs of trowsers, 84 pairs of stockings, 1980 women’s gowns, 540 petticoats, 132 wrappers, 123 duffies, 90 pelisses, 240 silk handkerchiefs, 294 shirts and shifts, 60 hats, 84 bed-ticks, 108 pillows, 262 pairs of blankets, 300 pairs of sheets, 162 bed-covers, 36 tablecloths, 48 umbrellas, 102 bibles, 204 watches, 216 rings, and 48 Waterloo medals. There were about thirty pawnbrokers in Glasgow in 1840. In the manufacturing districts, during the prevalence of strikes, or in seasons of commercial embarrassment, many hundreds of families pawn the greater part of their wearing apparel and household furniture. The practice of having recourse to the pawnbrokers on such occasions is quite of a different character from the habits of dependence into which many of the working classes suffer themselves to fall, and who, “on being paid their wages on the Saturday, are in the habit of taking their holiday clothes out of the hands of the pawnbroker to enable them to appear respectably on the Sabbath, and on the Monday following they are again pawned and a fresh loan obtained to meet the exigencies of their families for the remainder of the week.” It is on these transactions and on such as arise out of the desire of obtaining some momentary gratification that the pawnbrokers make their large profits. It is stated in one of the reports on the poor laws that a loan of threepence, if redeemed the same day, pays annual interest at the rate of 5200 per cent.; weekly, 866 per cent.;
4d., annual interest 3900 per cent., or 650 p. c. weekly;
12d., annual interest 1300 per cent., or 216 p. c. weekly.
It is stated that on a capital of sixpence thus employed (in weekly loans), pawnbrokers make in twelve months 2s. 2d.; on five shillings they gain 10s. 4d.; on ten shillings, 22s. 3¼d.; and on twenty shillings lent in weekly loans of sixpence, they more than double their capital in twenty-seven weeks, and should the goods pawned remain in their hands for the term of twelve months (which seldom occurs), they then frequently derive 100 per cent.61]