Pawn broking is one of humankind’s oldest financial institutions, and the practice of procuring pawn loans ranges back to over 3,000 years from China to the early Greek and Roman Civilizations and was used as a method of granting short-term credit to peasants. Pawning has always appealed to all social classes and for thousands of years people have always found themselves in one problem in common – the need for quick cash.
In ancient times, few pawnbrokers used to operate independently, but over the times, these businesses were mostly run through pawn shops. Pawnbroking used to thrive in ancient Greece and Rome & gave merchants a way to set up small shops, but during the Middle Age, certain restrictions were imposed on charging interest by the Catholic Church, obstructing the growth of pawn shops. In the 14th & 15th centuries in Europe, these rules were relaxed as short-term loans became a crucial way of financing business enterprises & granting interim aid to the poor.
It is also said that King Edward III of England used to visit Pawn Stores across Europe. Queen Isabella also reportedly pawned her royal jewelry in order to finance Christopher Columbus’ expedition to the world and had pawned most of her assets even before that as well.
Though a majority of the pawn shops have mostly been privately owned, a few public ones were set up as a source of charitable funds in Europe in the 18th century that offered low interest cash loans to the poor to help curb debt.
The word Pawn originated from the Latin word “platinum”, which means cloth or clothing. It also comes from the French word “pan” which means skirt or blouse. During the 19th century, the practice of pawning clothes on Monday and redeeming them on Friday, called as “payday”, was the usual way for the poor to make it through the week. Since these people who were in need of quick cash were more susceptible to injustice at the hands of the lenders during this era, protections & regulations were put in place and also to prevent the pawning of stolen items. The Pawnbrokers Act of 1872 in England provided for regulations that protected the pawnbrokers who inadvertently sold stolen merchandise. This act also capped the amount of interest that could be charged on pawned items, & set forward comprehensive guidelines for the pawn industry, establishing a scheme plan of regulations that continues today.
The Forbes magazine in 1993 stated that over 25 million households or about 75 million people did not have any bank accounts without which, procuring a loan or even a credit card was extremely difficult. So they used to turn to pawnbrokers as their main source of cash loans.
In the last 100 years, the number of pawn shops has soared in the United States. During the Great Depression period, pawn shops were among the main establishments offering money as banks fizzled and individuals were compelled to surrender their cherished belongings to make ends meet. Today, regardless of whether you are in huge urban communities or residential areas, pawn shops are a primary place that individuals frequent in order to get cash for their collateral. These shops work as mini banks for innumerous Americans who don’t hold bank accounts, and they additionally act as a place of trade for individuals of all classes to purchase and sell exceptional & uncommon items. Jewelry, Musical Instruments, Electronics, Tools etc are most commonly pawned items.
Organizations like the National Pawnbrokers Association that were set up in 1988, profess that their industry offers a practical answer for those needing fast cash. Pawn shops are required to set clear regulations regarding the terms of the pawn contract and the amount of interest payable on the loans. Also every pawned item is also registered in order to prevent the sale of stolen items.
Pawn shops often have antiques, jewelry & furniture and other items that have been passed on from one generation to other and act as a repository of historic items. Their owners often offer tales of their origin and history. It’s obvious that pawn brokers do a thorough assessment of each item to estimate its age, authenticity & value in the open market. Along the way, they are bound to develop a unique set of skills, where they sniff out the authentic from the fake & the valuable from the worthless.
So if you don’t know what to do with your broken gold jewelry or unwanted items, perhaps it’s time to pay a visit to a Pawn Shop & turn them into quick cash!