single exception of the pawnbroker who advanced less than
£10. The limitations of the act of 1800 interfered so considerably
with the pawnbrokers' profits that, it was argued, they could
not afford to lend money on bulky articles requiring extensive
storage room. In 1870 the House of Commons appointed a
Select Committee on Pawnbrokers, and it was stated in evidence
before that body that in the previous year 207,780,000 pledges
were lodged, of which between thirty and 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 1 in 14,000. Later official statistics show
that of the forfeited pledges sold in London less than 20 per
million are claimed by the 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The result of the Select Committee was the Pawnbrokers Act of 1872, which repealed, altered and consolidated all previous legislation on the subject, and is still the measure which regulates the relations between the public and the " brokers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 Union Parliament it put an end to the old irritating restrictions, and reduced the annual tax in London from £15 to the £7, 10s. paid in the provinces. By the provisions of the act (which does not affect loans above £10), a pledge is redeemable within one year, and seven days of grace added to the year. Pledges pawned for 10s. or under and not redeemed in time become the property of the pawnbroker, but pledges above 10s. are redeemable until sale, which must be by public 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 part of 2s. lent where the loan is under 40s., and on every 2s. 6d. where the loan is above 40s. “Special contracts” may be made where the loan is above 40s. 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 article from a person under the age of twelve, or intoxicated, or any linen, or apparel or unfinished goods or materials entrusted to wash, make up, &c., are, inter alia, made offences punishable by summary conviction. A new pawnbroker must produce a 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 character. The word " pawnbroker " must always be inscribed in large letters over the 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 place only on the first Monday of January, April, July and 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 1860 — a rate which was continued by the measure of 1872. The annual interest upon a loan of half-a-crown is now 260%, as compared with 173 in 1860 and 86 in 1784; while the extreme point is reached in the case of a loan of is. for three days, in which case the interest is at the rate of 1014% per annum. An English mont de piété was once projected by the Salvation Army, and in 1894 the London County Council considered the practicability of municipal effort on similar lines; but in neither case was anything done.
The growth of pawnbroking in Scotland, where the law as to pledge agrees generally with that of England, is remarkable. Early in the 19th century there was only one pawn Ireland, broker in that country, and in 1833 the number reached only 52. Even in 1865 there were no moreScotland and Ireland. than 312. It is probable that at the present moment Glasgow and Edinburgh together contain nearly as many as that 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 £1 must be redeemed within six months, but nine months are allowed when the amount is between 30s. and £2. For sums over £2 the 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 piété 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 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 Massachusetts may be taken as fairly representative.United States. " Brokers of pawn " are usually licensed by the mayors, or by the mayors and aldermen, but in Boston the police commissioners are the licensing authority. In the state of New York permits are renewable annually on payment of $500, and the pawnbroker must file a bond with the mayor, executed by himself and two responsible sureties, in the sum of $10,000. The business is conducted on much the same lines 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 1% respectively. To exact higher rates is a misdemeanour. Unredeemed pledges may be sold at the end of a year. Pawnbrokers are not allowed to engage in any kind of second-hand business. New York contains one pawnshop 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 deposit. The licensing authority may fix the rate of interest, which may vary for different amounts, and in Boston every pawnbroker is bound to furnish to the police daily a list of the pledges taken in during the preceding twenty-four hours, specifying the hour of each transaction and the amount lent.
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 pawnshop, but, compared with the English system, the foreign is very elaborateMunicipal Pawnshops. 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 mercy of the pawnbroker in the matter of interest, that sum being the highest for which a legal limit of interest is fixed. The rate of interest upon a “special contract” may be, and often is, high. For the matter of that, indeed, this system of obtaining loans is always expensive, either in actual interest or in collateral disadvantages, whether the lender be a pawnbroker intent upon profit, or the official of a mont de piété. In Paris the rate charged is 7%, and even then the business is conducted at a loss except in regard to long and valuable pledges. Some of the French provincial rates are as high as 12%, but in almost every case they are less than they were prior to the legislation of 1851 and 1852. The French establishments can only be created by decree of the president of the Republic, with the consent of the local conseil communal. In Paris the prefect of the Seine presides over the business; in the provinces the mayor is the president. The administrative council is drawn one-third each from the conseil communal, the governors of charitable societies, and the townspeople. 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 piété are paid over to the “Assistance Publique,” the comprehensive term used by France to indicate the body of charitable foundations. Originally this was the rule throughout France, but now many of them are entirely independent of the charitable institutions. Counting the head office, the branches and the auxiliary shops, the Paris establishment has its doors open in some fifty or sixty districts; but the volume of its annual business is infinitely smaller than that transacted by the London pawnbrokers. The amount to be
