Pawnbroker
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A pawnbroker offers monetary loans in exchange for an item of value to the given pawn broker. The word pawn is derived from the Latin pignus, for pledge, and the items having been pawned to the broker are themselves called pledges or pawns, or simply the collateral. Within a certain contractual period of time, the pawner of the item may purchase it back for the amount of the loan plus some agreed upon fee. If the time elapses without payment, the pawnbroker is allowed to sell the pledged item to recoup the amount of his loan, which may have only been a fraction of its actual market value. Pawnbrokers often have a large number of formerly pawned objects for sale at their place of business, called a pawnshop.
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Pawnbrokers can also purchase an item outright for cash with no repayment expected; these can be immediately offered for sale. Because of the risk to the pawnbroker of receiving stolen property, and the interests of the community in not to allowing a legitimate businessman to act as a fence, laws to protect both these parties exist in some jurisdictions. A legal identification is often required to pawn an item, and the pawnbroken may have to hold the item until the police can verify the item has not been stolen. This hold lasts approximately 10 days, depending on location.[citation needed] Such regulation is necessarily imperfect. Unscrupulous pawnbrokers may buy goods from strangers with few questions; pawnbrokers claim few stolen items end up in pawnshops. While professional thieves may resort to eBay or flea markets, those in immediate need for cash are a constant temptation to the legitimate businessperson.
Pawnbroking is an ageless business, and like many money-lending professions, pawnbrokers throughout the ages have been accused of usury. A customer needing to pawn their worldly possessions may be poor or illiterate and unable to read their contract, and may be easy to take advantage of. However, in allowing someone to get an immediate, perhaps emergency, loan, pawnbrokers provide an important service.
[edit] Items of Monetary Value
Pawnbrokers are often willing to take in many types of items including jewelry, video game systems, musical instruments and tools. Gold is considered an item that is never to be turned away, because even if the item is of relatively low value it can still be sold in bulk to a smelter to be sold for scrap gold.
[edit] History
[edit] Ancient world
In the west, pawnbroking existed in the ancient Greek and Roman Empires. Most contemporary Western law on the subject is derived from the Roman jurisprudence. As the empire spread its culture, pawnbroking went with it.
Likewise, in the East, the business model existed in China 3000 years ago no different than today, through the ages strictly regulated by Imperial or other authorities.
[edit] Middle Ages
In spite of early Church prohibitions against charging interest on loans, there is some evidence that the Franciscans were permitted to begin the practice as an aid to the poor.[citation needed]
In England the pawnshop came in with William the Conqueror, with an Italian name, Lombard. 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 Tudor harried them a good deal. In the very first year of James I Stuart an Act against Brokers was passed and remained on the statute-book until Queen Victoria had been on the throne thirty-five years. It was aimed at the many counterfeit brokers in London. This type of broker was evidently regarded as a fence.
[edit] Modern time
The Chinese conditions are decidedly favorable to a borrower. He may, as a rule, take three years to redeem his property, and he cannot be charged a higher rate than 3% per annum.[citation needed]
In England, this rate is 6%-8%.[citation needed]
The pawnbroker in the United States is generally subject to considerable legal restriction. Each state has its own regulations regarding pawnbrokers, generally regulating the amount of interest that is allowed to be charged on a collateral loan.
[edit] Symbol
The pawnbroker's symbol is three spheres suspended from a bar. The three sphere symbol is attributed to the Medici Family of Florence, Italy, owing to its symbolic meaning of Lombard. This refers to the Italian province of Lombardy, where pawn shop banking originated under the name of Lombard banking. The three golden spheres were originally the symbol which medieval Lombard merchants hung in front of their houses, and not the arms of the Medici family. It has been conjectured that the golden spheres were originally three flat yellow effigies of byzants, or gold coins, laid heraldically upon a sable field, but that they were converted into spheres to better 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 moneylending 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".
Saint Nicholas is the patron saint of pawnbrokers. The symbol has also been attributed to the story of Nicholas and the three bags of gold.
[edit] Pawn shops in Hong Kong
Pawnbroking is a traditional trade of Thailand. In Hong Kong it follows the Chinese tradition, and the counter of the shop is typically higher than the average person for security. A customer can only hold up his hand to offer belongings and there is a wooden screen between the door and the counter for customers' privacy.
The symbol of a pawn shop in Hong Kong is a bat (the animal) holding a coin (Cantonese: fuk shu tiu kam chin; in Chinese letters: 蝠鼠吊金錢). The bat signifies fortune and the coin signifies benefits.
[edit] See also
[edit] Sources and external links
- This article incorporates text from the Encyclopædia Britannica Eleventh Edition, a publication now in the public domain.
- Roath's Pawn Shop: History of Pawnbrokering.
